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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported): February 10, 1999
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AK STEEL HOLDING CORPORATION
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(Exact Name of Registrant as Specified in its Charter)
DELAWARE
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(State or Other Jurisdiction of Incorporation)
1-13696 31-1401455
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(Commission File Number) (I.R.S. Employer Identification No.)
703 CURTIS STREET,
MIDDLETOWN, OHIO 45043
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(Address of Principal Executive Offices) (Zip Code)
(513) 425-5000
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(Registrant's Telephone Number, Including Area Code)
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(Former Name or Former Address, if Changed Since Last Report)
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NYFS07...:\55\38055\0019\1948\8-K2129R.11A
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ITEM 2. OTHER EVENTS.
On February 10, 1999 AK Steel Corporation ("AK Steel") consummated the
sale of $450.0 million aggregate principal amount of its 7-7/8% Senior Notes Due
2009 (the "7-7/8% Notes"). The 7- 7/8% Notes are governed by an Indenture, dated
as of February 10, 1999, among AK Steel, its parent company, AK Steel Holding
Corporation, and Fifth Third Bank, as Trustee, and are guaranteed by AK Steel's
parent company on a senior unsecured basis.
The net proceeds from the sale of the 7-7/8% Notes will be used to fund
the redemption on April 1, 1999 of all $325.0 million of AK Steel's 10-3/4%
Senior Notes Due 2004 (the "10-3/4% Notes") and for general corporate purposes.
Notice of redemption of the 10-3/4% Notes was given on February 17, 1999.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Financial Statements of Business Acquired.
Not applicable.
(b) Pro Forma Financial Information.
Not applicable.
(c) Exhibits.
(1) Indenture, dated as of February 10, 1999, among AK Steel
Corporation, AK Steel Holding Corporation and Fifth Third
Bank, as Trustee, with respect to AK Steel's 7-7/8% Senior
Notes Due 2009.
(2) Notice of Redemption, dated February 17, 1999, of AK Steel's
10-3/4% Senior Notes Due 2004.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
AK Steel Holding Corporation
(Registrant)
Date: February 17, 1999 By: /s/ John G. Hritz
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Name: John G. Hritz
Title: Executive Vice President,
General Counsel and Secretary
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EXHIBIT INDEX
Exhibit No. Description
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1 Indenture, dated as of February 10, 1999, among AK Steel
Corporation, AK Steel Holding Corporation and Fifth Third
Bank, as Trustee, with respect to AK Steel's 7-7/8% Senior
Notes Due 2009.
2 Notice of Redemption, dated February 17, 1999, of AK Steel's
10-3/4% Senior Notes Due 2004.
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EXHIBIT 1
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AK STEEL CORPORATION
7-7/8% Senior Notes Due 2009
INDENTURE
Dated as of February 10, 1999
Fifth Third Bank,
Trustee
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<PAGE>
CROSS-REFERENCE TABLE
<TABLE>
<CAPTION>
TIA Indenture
Section Section
------- -------
<S> <C> <C>
310 (a) (1) ................................................. 7.10
(a) (2) ................................................. 7.10
(a) (3) ................................................. N.A.
(a) (4) ................................................. N.A.
(b) ................................................. 7.8; 7.10
(c) ................................................. N.A.
311 (a) ................................................. 7.11
(b) ................................................. 7.11
(c) ................................................. N.A.
312 (a) ................................................. 2.5
(b) ................................................. 11.3
(c) ................................................. 11.3
313 (a) ................................................. 7.6
(b) (1) ................................................. N.A.
(b) (2) ................................................. 7.6
(c) ................................................. 11.2
(d) ................................................. 7.6
314 (a) ................................................. 4.3; 4.18;
................................................. 11.2
(b) ................................................. N.A.
(c) (1) ................................................. 11.4
(c) (2) ................................................. 11.4
(c) (3) ................................................. N.A.
(d) ................................................. N.A.
(e) ................................................. 11.5
(f) ................................................. N.A.
315 (a) ................................................. 7.1
(b) ................................................. 7.5; 11.2
(c) ................................................. 7.1
(d) ................................................. 7.1
(e) ................................................. 6.11
316 (a) (last sentence) ................................................. 11.6
(a) (1) (A) ................................................. 6.5
(a) (1) (B) ................................................. 6.4
(a) (2) ................................................. N.A.
(b) ................................................. 6.7
317 (a) (1) ................................................. 6.8
(a) (2) ................................................. 6.9
(b) ................................................. 2.4
318 (a) ................................................. 11.1
</TABLE>
N.A. means Not Applicable.
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Note: This Cross Reference Table shall not, for any purpose, be deemed to be
part of the Indenture.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
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ARTICLE 1
Definitions and Incorporation By Reference
<S> <C> <C>
SECTION 1.1 Definitions.................................................................................1
SECTION 1.2 Other Definitions..........................................................................15
SECTION 1.3 Incorporation by Reference of Trust Indenture Act..........................................16
SECTION 1.4 Rules of Construction......................................................................16
ARTICLE 2
The Securities
SECTION 2.1 Form and Dating............................................................................17
SECTION 2.2 Execution and Authentication...............................................................17
SECTION 2.3 Registrar and Paying Agent.................................................................18
SECTION 2.4 Paying Agent To Hold Money in Trust........................................................18
SECTION 2.5 Securityholder Lists.......................................................................18
SECTION 2.6 Transfer and Exchange......................................................................19
SECTION 2.7 Replacement Securities.....................................................................19
SECTION 2.8 Outstanding Securities.....................................................................19
SECTION 2.9 Temporary Securities.......................................................................20
SECTION 2.10 Cancellation...............................................................................20
SECTION 2.11 Defaulted Interest.........................................................................20
SECTION 2.12 CUSIP Numbers..............................................................................20
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ARTICLE 3
Redemption
SECTION 3.1 Notices to Trustee.........................................................................21
SECTION 3.2 Selection of Securities to be Redeemed.....................................................21
SECTION 3.3 Notice of Redemption.......................................................................21
SECTION 3.4 Effect of Notice of Redemption.............................................................22
SECTION 3.5 Deposit of Redemption Price................................................................22
SECTION 3.6 Securities Redeemed in Part................................................................22
ARTICLE 4
Covenants
SECTION 4.1 Payment of Securities......................................................................22
SECTION 4.2 Maintenance of Office or Agency............................................................23
SECTION 4.3 SEC Reports................................................................................23
SECTION 4.4 Taxes......................................................................................23
SECTION 4.5 Limitation on Debt.........................................................................24
SECTION 4.6 Limitation on Debt and Preferred Equity Interests of Subsidiaries..........................25
SECTION 4.7 Limitation on Restricted Payments..........................................................26
SECTION 4.8 Limitation on Issuance and Sale of Equity Interests of Subsidiaries........................28
SECTION 4.9 Limitation on Restrictions on Distributions from Subsidiaries..............................29
SECTION 4.10 Limitation on Sales of Assets and Equity Interests of Subsidiaries.........................29
SECTION 4.11 Limitation on Transactions with Affiliates.................................................32
SECTION 4.12 Limitation on Liens........................................................................33
SECTION 4.13 Limitation on Sale/Leaseback Transactions..................................................34
SECTION 4.14 Corporate Existence........................................................................35
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SECTION 4.15 Lines of Business..........................................................................35
SECTION 4.16 Restrictions on Activities of Holding......................................................35
SECTION 4.17 Change in Control..........................................................................36
SECTION 4.18 Compliance Certificate.....................................................................37
SECTION 4.19 Further Instruments and Acts...............................................................37
SECTION 4.20 Maintenance of Properties..................................................................37
SECTION 4.21 Insurance..................................................................................37
ARTICLE 5
Successor Company
SECTION 5.1 When AK Steel or any of its Subsidiaries May Merge or Transfer Assets......................38
SECTION 5.2 Successor Corporation Substituted..........................................................39
ARTICLE 6
Defaults and Remedies
SECTION 6.1 Events of Default..........................................................................39
SECTION 6.2 Acceleration...............................................................................41
SECTION 6.3 Other Remedies.............................................................................41
SECTION 6.4 Waiver of Past Defaults....................................................................41
SECTION 6.5 Control by Majority........................................................................41
SECTION 6.6 Limitation on Suits........................................................................42
SECTION 6.7 Rights of Holders to Receive Payment.......................................................42
SECTION 6.8 Collection Suit by Trustee.................................................................42
SECTION 6.9 Trustee May File Proofs of Claim...........................................................42
SECTION 6.10 Priorities.................................................................................43
SECTION 6.11 Undertaking for Costs......................................................................43
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SECTION 6.12 Waiver of Stay or Extension Laws...........................................................43
ARTICLE 7
Trustee
SECTION 7.1 Duties of Trustee..........................................................................44
SECTION 7.2 Rights of Trustee..........................................................................45
SECTION 7.3 Individual Rights of Trustee...............................................................45
SECTION 7.4 Trustee's Disclaimer.......................................................................46
SECTION 7.5 Notice of Defaults.........................................................................46
SECTION 7.6 Reports by Trustee to Holders..............................................................46
SECTION 7.7 Compensation and Indemnity.................................................................46
SECTION 7.8 Replacement of Trustee.....................................................................47
SECTION 7.9 Successor Trustee by Merger................................................................47
SECTION 7.10 Eligibility; Disqualification..............................................................48
SECTION 7.11 Preferential Collection of Claims Against Company..........................................48
ARTICLE 8
Discharge of Indenture; Defeasance
SECTION 8.1 Discharge of Liability on Securities; Defeasance...........................................48
SECTION 8.2 Conditions to Defeasance...................................................................49
SECTION 8.3 Application of Trust Money.................................................................50
SECTION 8.4 Repayment to Company.......................................................................50
SECTION 8.5 Indemnity for Government Obligations.......................................................50
SECTION 8.6 Reinstatement..............................................................................50
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ARTICLE 9
Amendments
SECTION 9.1 Without Consent of Holders.................................................................51
SECTION 9.2 With Consent of Holders....................................................................51
SECTION 9.3 Compliance with Trust Indenture Act........................................................52
SECTION 9.4 Revocation and Effect of Consents and Waivers..............................................52
SECTION 9.5 Notation on or Exchange of Securities......................................................53
SECTION 9.6 Trustee to Sign Amendments.................................................................53
SECTION 9.7 Payment for Consent........................................................................53
ARTICLE 10
Senior Note Guarantees
SECTION 10.1 Unconditional Senior Note Guarantees.......................................................53
SECTION 10.2 Limitation of Guarantor's Liability........................................................55
SECTION 10.3 Execution and Delivery of Senior Note Guarantees...........................................55
SECTION 10.4 Addition of Guarantor......................................................................55
SECTION 10.5 Release of the Senior Note Guarantee.......................................................56
ARTICLE 11
Miscellaneous
SECTION 11.1 Trust Indenture Act Controls...............................................................57
SECTION 11.2 Notices....................................................................................57
SECTION 11.3 Communication by Holders with Other Holders................................................57
SECTION 11.4 Certificate and Opinion as to Conditions Precedent.........................................57
SECTION 11.5 Statements Required in Certificate or Opinion..............................................58
SECTION 11.6 When Securities Disregarded................................................................58
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SECTION 11.7 Rules by Trustee, Paying Agent and Registrar...............................................58
SECTION 11.8 Legal Holidays.............................................................................58
SECTION 11.9 Governing Law..............................................................................58
SECTION 11.10 No Recourse Against Others.................................................................59
SECTION 11.11 Successors.................................................................................59
SECTION 11.12 Multiple Originals.........................................................................59
SECTION 11.13 Table of Contents; Headings................................................................59
SECTION 11.14 Separability Clause........................................................................59
SECTION 11.15 Benefits of Indenture......................................................................59
</TABLE>
APPENDIX A Provisions Relating to Initial Securities, Private
Exchange Securities and Exchange Securities
EXHIBIT 1 TO
APPENDIX A Form of Initial Security
EXHIBIT A Form of Exchange Security or Private Exchange Security
EXHIBIT B Form of Notation on Security Relating to Senior Note
Guarantees
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THIS INDENTURE is dated as of February 10, 1999, among AK STEEL
CORPORATION, a Delaware corporation ("AK Steel"), AK STEEL HOLDING CORPORATION,
a Delaware corporation ("Holding"), as Guarantor, and Fifth Third Bank, an Ohio
banking corporation (the "Trustee").
Each party agrees as follows for the benefit of the other parties and
for the equal and ratable benefit of the Holders of AK Steel's 7-7/8% Senior
Notes Due 2009 (the "Initial Securities") and, if and when issued pursuant to a
registered exchange for Initial Securities, AK Steel's 7-7/8% Senior Notes due
2009 (the "Exchange Securities"), and if and when issued pursuant to a private
exchange for Initial Securities, AK Steel's 7-7/8% Senior Notes due 2009 (the
"Private Exchange Securities" and, together with the Initial Securities and the
Exchange Securities, the "Securities"):
ARTICLE 1
Definitions and Incorporation By Reference
SECTION 1.1 Definitions.
"Accounts Receivable" of any Person means any and all accounts,
contract rights, chattel paper, instruments, documents, general intangibles and
other obligations of any kind relating to the sale or lease of goods and the
rendering of services by such Person, all rights relating thereto, all deposit
accounts containing the proceeds thereof, all books and records relating thereto
and the proceeds thereof.
"Affiliate" of any specified Person means (a) any other Person that,
directly or indirectly, 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 (i) of such specified Person, (ii) of any Subsidiary of such specified
Person or (iii) of any Person described in clause (a) above. For purposes of
this definition, control of a Person means 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"
have meanings correlative to the foregoing.
"Asset Disposition" means any sale, lease, transfer or other
disposition (or series of related sales, leases, transfers or dispositions) of
Equity Interests of a Subsidiary (other than directors' qualifying shares),
property or other assets (each referred to for the purposes of this definition
as a "disposition") by AK Steel or any of its Subsidiaries, including any
disposition by means of a merger, consolidation or similar transaction, other
than (a) a disposition by AK Steel or a Subsidiary to AK Steel or a Wholly Owned
Guarantor Subsidiary, (b) a disposition of property or assets at Fair Market
Value (as determined in good faith by the Board of Directors of Holding) in the
<PAGE>
ordinary course of business, (c) a disposition of obsolete assets in the
ordinary course of business, (d) a disposition that constitutes a Restricted
Payment or a Sale/Leaseback Transaction, (e) a sale of Accounts Receivable under
a Permitted Credit Facility and (f) a transfer of Accounts Receivable that
constitutes a Permitted Investment under clauses (e) or (f) of the definition of
"Permitted Investments".
"Attributable Debt", in respect of a Sale/Leaseback Transaction, means,
as of the date of determination, the present value (discounted at the lower of
the interest rate of such Sale/Leaseback Transaction and the interest rate borne
by the Securities, compounded annually) of the total obligations of the lessee
for rental payments during the remaining term of the lease included in such
Sale/Leaseback Transaction (including any period for which such lease has been
extended).
"Average Life" means, as of the date of determination, with respect to
any Debt, the quotient obtained by dividing (a) the sum of the products of the
numbers of years from the date of determination to the dates of each successive
scheduled principal payment of such Debt multiplied by the amount of such
principal payment by (b) the sum of all such principal payments.
"Bankruptcy Law" means title 11, U.S. Code or any similar Federal or
state law for the relief of debtors.
"Board of Directors" of a Person means the Board of Directors of that
Person or any committee thereof duly authorized to act on behalf of such Board
of Directors.
"Business Day" means any day that is not a Saturday, a Sunday or a day
on which banking institutions are required to close in the State of New York.
"Capital Lease Obligations" of a Person means any obligation which is
required to be classified and accounted for as a capital lease on the face of a
balance sheet of such Person prepared in accordance with generally accepted
accounting principles; the amount of such obligation shall be the capitalized
amount thereof, determined in accordance with generally accepted accounting
principles; 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.
"Cash Equivalents" means:
(a) Investments in U.S. Government Obligations
maturing within 365 days of the date of acquisition thereof;
(b) Investments in certificates of deposit or
Eurodollar deposits maturing within 365 days of the date of acquisition
thereof issued by a bank or trust company which is organized under the
laws of the United States or any state thereof and which has a combined
capital and surplus of at least $1.0 billion and rated at least A3 by
Moody's Investors Service, Inc.;
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(c) Investments in repurchase agreements, involving
Investments in U.S. Government Obligations or other Cash Equivalents,
entered into with any bank, trust company or investment bank rated at
least A- and A-1 by Standard & Poor's and at least A3 and P-1 by
Moody's Investors Service, Inc.;
(d) Investments in commercial paper maturing not more
than 90 days from the date of acquisition thereof and having one of the
two highest ratings obtainable from each of Standard & Poor's and
Moody's Investors Service, Inc. issued by a corporation (except AK
Steel or an Affiliate of AK Steel) that is organized under the laws of
any state of the United States or the District of Columbia; and
(e) Investments in money market accounts or funds
whose assets consist solely of cash or Cash Equivalents.
"Change in Control" means the occurrence of any of the following
events:
(a) any "Person" (as such term is used in Sections
13(d) and 14(d) of the Exchange Act) is or becomes the beneficial owner
(as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except
that a Person shall 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 more than 40% of the total voting power of
the Voting Equity Interests of Holding; provided, however, that the
Person shall not be deemed the "beneficial owner" of shares tendered
pursuant to a tender or exchange offer made by that Person or any
Affiliate of that Person until the tendered shares are accepted for
purchase or exchange;
(b) during any period of two consecutive years,
individuals who at the beginning of such period constituted the Board
of Directors of Holding (together with any new directors whose election
by such Board of Directors of Holding, or whose nomination for election
by the shareholders of Holding, as the case may be, 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 of Holding
then in office; or
(c) Holding fails to own 100% of the Equity Interests
of AK Steel; provided, however, that it shall not be deemed a Change in
Control if Holding merges into AK Steel except that, in such case, AK
Steel shall be substituted for Holding for purposes of this definition
of "Change in Control" and this clause (c) shall no longer be
applicable.
"Consolidated EBITDA Coverage Ratio" as of any date of determination
means 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 the
date of such determination to (b) Consolidated Interest Expense for such four
fiscal quarters; provided, however, that (i) if AK Steel or any Subsidiary has
issued any Debt since the beginning of such period that remains outstanding or
if the transaction giving rise to the need to calculate the Consolidated EBITDA
Coverage Ratio is an issuance of Debt, or both, EBITDA and 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 issued on the first day of such
3
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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 AK Steel or any Subsidiary shall have made any Asset Disposition, the
EBITDA for such period shall be reduced by an amount equal to the EBITDA (if
positive) directly attributable to the assets that are the subject of such Asset
Disposition for such period, or increased by an amount equal to the EBITDA (if
negative), directly attributable thereto for 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 AK Steel or
any Subsidiary repaid, repurchased, defeased or otherwise discharged with
respect to AK Steel and its continuing Subsidiaries in connection with such
Asset Dispositions for such period (or, if the Equity Interests of any
Subsidiary are sold, the Consolidated Interest Expense for such period directly
attributable to the Debt of such Subsidiary to the extent AK Steel and its
continuing Subsidiaries are no longer liable for such Debt after such sale),
(iii) if since the beginning of such period AK Steel or any Subsidiary (by
merger or otherwise) shall have made an Investment in any Subsidiary (or any
Person that becomes a Subsidiary) or an acquisition of assets, including any
acquisition of assets occurring in connection with a transaction causing a
calculation to be made hereunder, that 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 issuance 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 Subsidiary or was merged with or into AK
Steel or any Subsidiary since the beginning of such period) shall have made any
Asset Disposition or any Investment that would have required an adjustment
pursuant to clause (ii) or (iii) above if made by AK Steel or a 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
Disposition or Investment 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 assets, the amount of income or earnings relating thereto, and the amount of
Consolidated Interest Expense associated with any Debt issued in connection
therewith, the pro forma calculations shall be determined in good faith by a
responsible financial or accounting Officer of AK Steel. If any Debt bears a
floating rate of interest and is being given pro forma effect, the interest 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 Protection Agreement applicable to such Debt if such
Interest Rate Protection Agreement has a remaining term in excess of 12 months).
"Consolidated Interest Expense" means, for any period, the total
interest expense of Holding and its consolidated Subsidiaries (other than
Non-Recourse Subsidiaries), including (a) interest expense attributable to
capital leases, (b) amortization of debt discount and debt issuance cost, (c)
capitalized interest, (d) non-cash interest payments, (e) commissions, discounts
and other fees and charges owed with respect to letters of credit and bankers'
acceptance financing, (f) net costs under Interest Rate Protection Agreements
(including amortization of fees), (g) Preferred Equity Interests dividends or
distributions in respect of all Preferred Equity Interests held by Persons other
than AK Steel or a Wholly Owned Subsidiary, (h) interest allocated in connection
with investments in discontinued operations and (i) interest actually paid by
Holding or any of its consolidated Subsidiaries (other than Non-Recourse
Subsidiaries) under any guarantee of Debt or other obligation of any other
Person.
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"Consolidated Net Income" means, for any period, the net income (or
loss) of Holding and its consolidated Subsidiaries; provided, however, that
there shall not be included in such Consolidated Net Income:
(a) any net income (or loss) of any Person if such
Person is not a Subsidiary of AK Steel, except that AK Steel'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
actually distributed by such Person during such period to AK Steel or a
Subsidiary (other than a Non-Recourse Subsidiary) as a dividend or
other distribution (subject, in the case of a dividend or other
distribution to a Subsidiary, to the limitations contained in clause
(c) below);
(b) any net income (or loss) of any Person acquired
by AK Steel or a Subsidiary in a pooling of interests transaction for
any period prior to the date of such acquisition;
(c) any net income of any Subsidiary if such
Subsidiary is subject to restrictions, directly or indirectly, on the
payment of dividends or the making of distributions by such Subsidiary,
directly or indirectly, to AK Steel, except that (i) AK Steel's equity
in the net income of any such Subsidiary for such period shall be
included in such Consolidated Net Income up to the aggregate amount of
cash actually distributed by such Subsidiary during such period to AK
Steel or another Subsidiary as a dividend or other distribution
(subject, in the case of a dividend or other distribution to another
Subsidiary, to the limitation contained in this clause) and (ii) AK
Steel's equity in a net loss of any such Subsidiary for such period
shall be included in determining such Consolidated Net Income;
(d) any gain or loss realized upon the sale or
other disposition of any property, plant or equipment of AK Steel or
its consolidated Subsidiaries (including pursuant to any Sale/Leaseback
Transaction) that is not sold or otherwise disposed of in the ordinary
course of business and any gain or loss realized upon the sale or other
disposition of any Equity Interests of any Person;
(e) any net income (or loss) of any Non-Recourse
Subsidiary, except that AK Steel's equity in the net income of any such
Non-Recourse Subsidiary for such period shall be included in such
Consolidated Net Income up to the aggregate amount of cash actually
distributed by such Non-Recourse Subsidiary during such period to AK
Steel as a dividend or other distribution; and
(f) the cumulative effect of a change in accounting
principles.
"Consolidated Net Tangible Assets" of any Person means the total assets
of such Person and its consolidated Subsidiaries after deducting therefrom all
intangible assets, current liabilities (excluding any thereof which are by their
terms extendible or renewable at the option of the obligor thereon to a time
more than 12 months after the time as of which the amount thereof is being
computed) and minority interests, if any, in any assets of such Person's
Subsidiaries.
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"Consolidated Net Worth" of any Person means the total of the amounts
shown on the balance sheet of such Person and its consolidated subsidiaries,
determined on a consolidated basis in accordance with generally accepted
accounting principles, as of the end of the most recent fiscal quarter of such
Person 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 Equity Interests of such Person plus (b) paid-in capital or capital
surplus relating to such Equity Interests plus (c) any retained earnings or
earned surplus less (i) any accumulated deficit, (ii) any amounts attributable
to Redeemable Equity Interests and (iii) any amounts attributable to
Exchangeable Equity Interests.
"Corporate Trust Office" of the Trustee means the address of the
Trustee specified in Section 11.2 hereof or such other address as to which the
Trustee may give notice to AK Steel and the Guarantors.
"Debt" of any Person means, without duplication,
(a) the principal of and premium (if any) in
respect of (i) indebtedness of such Person for money borrowed and (ii)
indebtedness 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;
(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 clauses (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 third 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
Redeemable Equity Interests (but excluding any accrued dividends);
(f) all obligations of such Person under interest
rate swap or similar agreements, or foreign currency or commodity
hedge, exchange or similar agreements of such Person;
(g) all obligations of the type referred to in
clauses (a) through (f) of other Persons and all dividends of other
Persons for the payment of which, in either case, such Person is
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responsible or liable, directly or indirectly, as obligor, guarantor or
otherwise, including by means of any Guarantee; and
(h) all obligations of the type referred to in
clauses (a) through (g) 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.
"Default" means any event which is, or after notice or passage of time
or both would be, an Event of Default.
"EBITDA" for any period means the Consolidated Net Income of Holding
for such period (but without giving effect to adjustments, accruals, deductions
or entries resulting from purchase accounting, extraordinary losses or gains and
any gains or losses from any Asset Dispositions), plus (a) the following to the
extent deducted in calculating such Consolidated Net Income: (i) income tax
expense, (ii) Consolidated Interest Expense, (iii) depreciation expense, (iv)
amortization expense, (v) the non-cash portion of post retirement benefits other
than pensions, and (vi) special charges taken after December 31, 1996 in respect
of which Holding has delivered to the Trustee (1) an Officers' Certificate
setting forth estimates, made in good faith by a responsible financial or
accounting Officer of Holding, of the cash costs estimated, at the time such
special charges are recorded, to be paid during any period for such special
charges and containing an undertaking of Holding to deliver to the Trustee, as
soon as practicable after Holding determines that such estimates are not
appropriate, a supplemental Officers' Certificate setting forth appropriate
adjustments to such estimates and (2) together with any Officers' Certificate or
supplemental Officers' Certificate referred to in clause (1), a report prepared
by Holding's independent auditors setting forth the procedures performed by such
auditors in connection with such special charges and the related cash costs
estimated to be paid during any period for such charges minus (b) to the extent
not deducted in calculating such Consolidated Net Income, cash costs estimated
to be paid during such period for special charges taken during any period as set
forth in the Officers' Certificate most recently delivered to the Trustee in
respect of such special charges pursuant to clause (a)(vi) of this definition.
"Equity Interests" means any and all shares, interests, rights to
purchase, warrants, options, participations or other equivalents of or interests
in (however designated) corporate stock or other equity participations,
including partnership interests, whether general or limited, including any
Preferred Equity Interests.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchangeable Equity Interests" of any Person means any Equity Interest
which is exchangeable for or convertible into another security (other than any
Equity Interest of such Person which is neither an Exchangeable Equity Interest
nor a Redeemable Equity Interest).
"Fair Market Value" means, with respect to any asset or property, the
sale value that would be obtained in an arm's-length transaction between an
informed and willing seller under no compulsion to sell and an informed and
willing buyer.
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"Guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Debt or other obligation 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 or other obligation of such other Person (whether such
obligation to purchase or pay such Debt or other obligation of such other Person
arises by virtue of partnership arrangements, or by agreement 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 purposes of
assuring in any other manner the obligee of such Debt or other obligation of the
payment thereof or to protect such 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.
"Guarantors" means Holding and each Guarantor Subsidiary.
"Guarantor Subsidiary" means any Subsidiary (other than a Non-Recourse
Subsidiary) that executes a supplement to this Indenture pursuant to which such
Subsidiary jointly and severally unconditionally guarantees the due and punctual
payment and performance of the Obligations and assumes the other obligations of
a Guarantor Subsidiary pursuant to this Indenture, in the manner provided by
this Indenture.
"Holder" or "Securityholder" means the Person in whose name a Security
is registered on the Registrar's books.
"Indenture" means this Indenture as amended or supplemented from time
to time.
"Interest Rate Protection Agreement" means any interest rate swap
agreement, interest rate cap agreement or other financial agreement or
arrangement designed to protect AK Steel or any Subsidiary against fluctuations
in interest rates.
"Inventory" of any Person means any and all inventory of any kind of
such Person, including without limitation, any or all of the following:
inventory, merchandise, goods and other tangible personal property that are held
for sale or lease by such Person; all materials used or consumed in the business
of such Person, but excluding from the foregoing equipment of such Person; all
trademarks, servicemarks, trade names and similar intangible property owned or
used by such Person in its business, together with the goodwill of the business
symbolized thereby and all rights relating thereto ("Intangible Property"); and
all books and records relating to the foregoing and the proceeds thereof.
"Investment" in any Person means any loan or advance to, any
acquisition of Equity Interests, equity interest, obligation or other security
of, or capital contribution or other investment in, such Person.
"issue" means issue, assume, guarantee, incur or otherwise become
liable for; provided, however, that any Debt or Equity Interests of a Person
existing at the time such Person becomes a Subsidiary (whether by merger,
consolidation, acquisition or otherwise) shall be deemed to be issued by such
Subsidiary at the time it becomes a Subsidiary.
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"JV Subsidiary" means a Guarantor Subsidiary which (a) was created or
became a Subsidiary after the date on which the Securities were originally
issued and (b) has not acquired any assets directly or indirectly from AK Steel
or any Subsidiary, other than (i) cash constituting a Restricted Payment or (ii)
assets, in an Asset Disposition, which were acquired by AK Steel and its
Subsidiaries within one year prior to such Asset Disposition.
"Lien" means any mortgage, pledge, security interest, conditional sale
or other title retention agreement or other similar lien or encumbrance of any
kind.
"Net Available Cash" from an Asset Disposition means cash payments
received (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 such
properties or assets or received in any other noncash form) therefrom, in each
case net of 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 generally accepted
accounting principles, as a consequence of such Asset Disposition, and in each
case net of all payments made on any Debt that is secured by any assets subject
to such Asset Disposition, in accordance with the terms of any lien upon or
other security agreement of any kind with respect to such assets, or that must
by its terms, or in order to obtain a necessary consent to such Asset
Disposition, or by applicable law be repaid out of the proceeds from such Asset
Disposition, and net of all distributions and other payments required to be made
to minority interest holders in Subsidiaries or joint ventures as a result of
such Asset Disposition.
"Net Cash Proceeds" with respect to any issuance or sale of Equity
Interests means 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.
"Non-Convertible Equity Interests" means, with respect to any Person,
any non-convertible Equity Interests of such Person and any Equity Interests of
such Person convertible solely into non-convertible Equity Interests of such
Person; provided, however, that Non-Convertible Equity Interests shall not
include any Redeemable Equity Interests or Exchangeable Equity Interests.
"Non-Recourse Debt" means Debt or that portion of Debt (a) issued to a
Person other than Holding, AK Steel or any Subsidiary (other than a Non-Recourse
Subsidiary) and (b) no default with respect to which (including any rights which
the holders thereof may have to take enforcement action against a Non-Recourse
Subsidiary) would permit (upon notice, lapse of time or both) any holder of any
other Debt of Holding, AK Steel or any Subsidiary (other than a Non-Recourse
Subsidiary) to declare a default on such other Debt or cause the payment thereof
to be accelerated or payable prior to its Stated Maturity.
"Non-Recourse Subsidiary" means a Subsidiary of AK Steel in respect of
any obligation of which neither Holding, AK Steel nor any Subsidiary (other than
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another Non-Recourse Subsidiary) has issued a Guarantee, and which (a) has not
acquired any assets directly or indirectly from Holding, AK Steel or any
Subsidiary (other than (i) cash constituting a Restricted Payment and (ii)
Accounts Receivable that have been sold or otherwise transferred to such
Subsidiary in an Accounts Receivable financing for AK Steel or such other
Subsidiary), (b) only owns properties acquired after the date on which the
Securities were originally issued and (c) has no Debt other than (i)
Non-Recourse Debt and (ii) Debt issued to AK Steel or a Significant Subsidiary
which constitutes a Permitted Investment under clause (e) of the definition of
"Permitted Investments".
"Normal Replacement Assets" means any assets other than Special Assets.
"Obligations" means the principal of, premium, if any, and interest on
the Securities and all other amounts due and payable under this Indenture and
the Securities and all other obligations and liabilities of AK Steel whether
direct or indirect, absolute or contingent, due or to become due, now existing
or hereafter issued, which may arise under, out of or in connection with this
Indenture and the Securities or any other documents made, delivered or given in
connection therewith, whether on account of principal, premium, if any,
interest, reimbursement obligations, fees, indemnities, costs, expenses
(including without limitation all fees and disbursements of counsel to the
Trustee or the Holders for which AK Steel has become obligated pursuant to the
terms of this Indenture) or otherwise whether or not an allowable claim against
AK Steel under the Bankruptcy Law or otherwise enforceable against AK Steel, and
including, in any event, interest and other liabilities accruing or arising
after the filing by or against AK Steel of a petition under the Bankruptcy Law
or that would have so accrued or arisen but for the filing of such a petition.
"Officer" means the Chairman of the Board, the President, any Vice
President, the Treasurer, an Assistant Treasurer, the Secretary or an Assistant
Secretary of AK Steel or any Guarantor.
"Officers' Certificate" means a certificate signed by two Officers.
"Opinion of Counsel" means a written opinion from legal counsel who is
reasonably acceptable to the Trustee. The counsel may be an employee of or
counsel to AK Steel, Holding or the Trustee.
"Permitted Credit Facility" or "Facilities" means any agreement or
agreements providing for (a) the making of a loan or the advancing of credit,
(b) the sale of Accounts Receivable of AK Steel or any Significant Subsidiary
under any asset securitization facility or other financing facility for the
financing of Accounts Receivable of AK Steel or any Significant Subsidiary or
(c) the issuance of letters of credit and/or the creation of bankers'
acceptances, under which the aggregate amount that may be issued or otherwise
obtained, in the case of clauses (a), (b) and (c), is based upon eligible
Accounts Receivable and eligible Inventory and the aggregate principal amount of
Debt, or (in the case of clause (b)) aggregate Investments outstanding,
excluding Permitted Investments under clause (e) or (f) of the definition of
"Permitted Investments" in respect of any such asset securitization facility,
shall not at any time exceed the greater of (i) $75.0 million and (ii) an amount
equal to (1) 100% of the book value of the consolidated Accounts Receivable of
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AK Steel and its Significant Subsidiaries that are Guarantor Subsidiaries or
Non-Recourse Subsidiaries plus (2) 100% of the book value (excluding
last-in-first-out reserves) of the consolidated Inventory of AK Steel and its
Subsidiaries that are Guarantor Subsidiaries, minus (3) the aggregate principal
amount of outstanding Debt secured by any Accounts Receivable or Inventory of AK
Steel or any of its Subsidiaries, other than Debt outstanding under any
Permitted Credit Facility, minus (4) other outstanding Investments (other than
Debt under a Permitted Credit Facility or Debt described in clause (3) above or
Permitted Investments under clauses (e) and (f) of the definition of "Permitted
Investments") under any asset securitization or similar facility in respect of
Accounts Receivable or Inventory of AK Steel or any of its Subsidiaries.
"Permitted Investments" means:
(a) Cash Equivalents;
(b) Investments in AK Steel or a Wholly Owned
Guarantor Subsidiary (or any Person which will become a Wholly Owned
Guarantor Subsidiary as a result of such Investment);
(c) Loans and reasonable advances to employees of AK
Steel or its Subsidiaries for travel, entertainment and relocation
expenses in the ordinary course of business;
(d) Investments in obligations the interest on which
is excluded from income for Federal or state income tax purposes and
that have been issued or guaranteed by any state of the United States
of America or the District of Columbia or the Commonwealth of Puerto
Rico or any political subdivision, agency, authority or instrumentality
of any of the foregoing, provided, that at the date of acquisition of
any such obligation (i) its remaining life to maturity shall be less
than one year and (ii) the issuer or guarantor thereof shall have one
of the two highest short-term debt ratings obtainable from each of
Standard & Poor's and Moody's Investors Service, Inc.
(e) Investments resulting from the transfer of
Accounts Receivable of AK Steel or its Significant Subsidiaries that
are Guarantor Subsidiaries to a Non-Recourse Subsidiary, the only
business of which is the acquisition and financing of such Accounts
Receivable under a Permitted Credit Facility; and
(f) Investments resulting from the transfer of
Accounts Receivable of AK Steel or its Significant Subsidiaries that
are Guarantor Subsidiaries (or Non-Recourse Subsidiaries) to a trust,
the only purpose of which is the acquisition and financing of such
Accounts Receivable, provided that the aggregate amount of outstanding
Debt issued by such trust to, and outstanding Investments in such trust
made by, Persons other than AK Steel and its Significant Subsidiaries
that are Guarantor Subsidiaries or Non-Recourse Subsidiaries shall not
at any time exceed the greater of (i) $75.0 million and (ii) an amount
equal to (1) 85% of the book value of the consolidated Accounts
Receivable of AK Steel and its Significant Subsidiaries that are
Guarantor Subsidiaries or Non-Recourse Subsidiaries plus (2) 100% of
the book value (excluding last-in-first-out reserves) of the
consolidated Inventory of AK Steel and its Subsidiaries that are
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Guarantor Subsidiaries, minus (3) the aggregate principal amount of
outstanding Debt secured by any Accounts Receivable or Inventory of AK
Steel or any of its Subsidiaries, other than to the extent included in
clause (4) below, minus (4) other outstanding Investments (other than
Investments in such trust) under any asset securitization or similar
facility in respect of Accounts Receivable or Inventory of AK Steel or
any of its Subsidiaries.
(g) Until December 31, 1999, Investments not to exceed $200.0
million at any time, in publicly traded debt obligations issued or
guaranteed by a corporation (other than AK Steel) organized under the
laws of any state of the United States of America and subject to the
reporting requirements of Section 13 or 15(d) of the Exchange Act,
provided that (i) such debt obligations are acquired by AK Steel in the
open market and not directly from the issuer thereof or an affiliate of
such issuer or from an underwriter thereof, (ii) such debt obligations,
at the date of acquisition thereof by AK Steel, shall have a remaining
life to maturity of not more than five years, shall provide for
payments of principal and interest solely in cash and shall be rated at
least BB by Standard & Poor's and Ba2 by Moody's Investors Service,
Inc. and (iii) not more than $15.0 million of such Investments at any
time shall consist of debt obligations issued or guaranteed by the same
corporation and not more than 20% of such Investments at any time shall
consist of debt obligations issued or guaranteed by corporations within
the same industry (as determined by Primary Standard Industrial
Classification Code).
"Permitted Liens" means, with respect to any Person, (a) pledges or
deposits by such Person under workers' compensation laws, unemployment insurance
laws or similar legislation, or good faith deposits in connection with bids,
tenders, contracts (other than for the payment of Debt) or leases to which such
Person is a party, or deposits to secure public or statutory obligations of such
Person or deposits or cash or United States government bonds to secure surety or
appeal bonds to which such Person is a party, or deposits as security for
contested taxes or import duties or for the payment of rent, in each case
incurred in the ordinary course of business; (b) Liens imposed by law, such as
carriers', warehousemen's and mechanics' Liens, in each case for sums not yet
due or being contested in good faith by appropriate proceedings; or other Liens
arising out of judgments or awards against such Person with respect to which
such Person shall then be proceeding with an appeal or other proceedings for
review or time for appeal has not yet expired; (c) Liens for property taxes not
yet subject to penalties for non-payment or which are being contested in good
faith by appropriate proceedings; (d) Liens in favor of issuers of surety bonds
or letters of credit issued pursuant to the request of and for the account of
such Person in the ordinary course of its business; provided, however, that such
letters of credit do not constitute Debt; (e) survey exceptions, encumbrances,
easements or reservations of, or rights of others for, licenses, rights of way,
sewers, electric lines, telegraph and telephone lines and other similar
purposes, or zoning or other restrictions as to the use of real properties or
liens incidental to the conduct of the business of such Person or to the
ownership of its properties which were not incurred in connection with Debt and
which do not in the aggregate materially adversely affect the value of said
properties or materially impair their use in the operation of the business of
such Person; (f) Liens securing an Interest Rate Protection Agreement so long as
the related Debt is, and is permitted to be under this Indenture, secured by a
Lien on the same property securing the Interest Rate Protection Agreement; and
(g) leases and subleases of real property which do not interfere with the
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ordinary conduct of the business of AK Steel or any of its Subsidiaries, and
which are made on customary and usual terms applicable to similar properties.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization, government or any agency or political subdivision
thereof or any other entity.
"Preferred Equity Interests" as applied to the Equity Interests of any
Person means Equity Interests of any class or classes (however designated) that
is preferred as to the payment of dividends or distributions, or as to the
distribution of assets upon any voluntary or involuntary liquidation or
dissolution of such Person, over Equity Interests of any other class of such
Person.
"principal" of a security means the principal of the security plus the
premium (if any) payable on the security which is due or overdue or is to become
due at the relevant time.
"Public Equity Offering" means an underwritten primary public offering
of common stock of Holding pursuant to an effective registration statement under
the Securities Act.
"Redeemable Equity Interests" means any Equity Interest that by its
terms or otherwise is required to be redeemed on or prior to the first
anniversary of the Stated Maturity of the Securities or is redeemable at the
option of the holder thereof at any time on or prior to the first anniversary of
the Stated Maturity of the Securities.
"Refinancing Debt" means Debt issued by AK Steel issued in exchange
for, or the net proceeds of which are used to extend, refinance, renew, replace,
defease or refund, any Debt of AK Steel, including Debt that is issued by AK
Steel in exchange for, or the net proceeds of which are used to extend,
refinance, renew, replace, defease or refund, Refinancing Debt; provided,
however, that (a) the principal amount of the Debt so issued shall not exceed
the principal amount of, and premiums, if any, and accrued interest with respect
to, the Debt so exchanged, extended, refinanced, renewed, replaced, defeased or
refunded by application of the net proceeds of the Debt so issued, and
reasonable fees, expenses, commissions and costs incurred in connection with the
issuance of such Debt and (b) the Debt so issued (i) shall not mature prior to
the Stated Maturity of the Debt so exchanged, extended, refinanced, renewed,
replaced, defeased or refunded and (ii) shall have an Average Life equal or
greater than the remaining Average Life of the Debt so exchanged, extended,
refinanced, renewed, replaced, defeased or refunded.
"Rockport Works" means AK Steel's flat rolled steel finishing
facilities located at Rockport, Indiana.
"Sale/Leaseback Transaction" means an arrangement relating to property
now owned or hereafter acquired whereby AK Steel or a Subsidiary transfers such
property to a Person and AK Steel or a Subsidiary leases it from such Person.
"SEC" means the Securities and Exchange Commission.
"Significant Subsidiary" means (a) any domestic Subsidiary of AK Steel
(other than a Non-Recourse Subsidiary) that, at the time of determination,
either (i) had assets that, as of the date of Holding's most recent quarterly
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consolidated balance sheet, constituted at least 5% of Holding's total assets on
a consolidated basis as of such date, or (ii) had revenues for the 12-month
period ending on the date of Holding's most recent quarterly consolidated
statement of income which constituted at least 5% of Holding's total revenues on
a consolidated basis for such period, (b) any foreign Subsidiary (other than a
Non-Recourse Subsidiary) of AK Steel that at the time of determination either
(i) had assets which, as of the date of Holding's most recent quarterly
consolidated balance sheet, constituted at least 5% of Holding's total assets on
a consolidated basis as of such date, in each case determined in accordance with
generally accepted accounting principles or (ii) had revenues for the 12-month
period ending on the date of Holding's most recent quarterly consolidated
statement of income which constituted at least 5% of Holding's total revenues on
a consolidated basis for such period, or (c) any Subsidiary (other than a
Non-Recourse Subsidiary) of AK Steel that, if merged with all Defaulting
Subsidiaries of AK Steel, would at the time of determination either (i) have had
assets which, as of the date of Holding's most recent quarterly consolidated
balance sheet, would have constituted at least 10% of Holding's total assets on
a consolidated basis as of such date or (ii) have had revenues for the 12-month
period ending on the date of Holding's most recent quarterly consolidated
statement of income which would have constituted at least 10% of Holding's total
revenues on a consolidated basis for such period (each such determination being
made in accordance with generally accepted accounting principles). "Defaulting
Subsidiary" means any Subsidiary of AK Steel (other than a Non-Recourse
Subsidiary) with respect to which a Default has occurred.
"Special Assets" means a capital asset, or series of related capital
assets, with an aggregate purchase price in excess of $20.0 million that
enhances the competitiveness or productivity of the business of AK Steel and its
Subsidiaries or is required so that AK Steel and its Subsidiaries will be able
to remain in compliance with all material requirements of applicable law.
"Stated Maturity" means, with respect to any security, the date
specified in such security as the fixed date on which the 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 unless such contingency has occurred).
"Subordinated Obligation" means any Debt of AK Steel (whether
outstanding on the date on which the Securities were originally issued or
thereafter issued) which is subordinate or junior in right of payment to the
Securities.
"Subsidiary" of any Person means any corporation, association,
partnership or other business entity of which more than 50% of the total voting
power of Equity Interests 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, through one or more intermediaries, or both,
by such Person. Unless otherwise qualified, all references to a "Subsidiary" or
to "Subsidiaries" shall refer to a Subsidiary or Subsidiaries of AK Steel.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. ss.ss.
77aaa-77bbbb) as in effect on the date of this Indenture, except as provided in
Section 9.3 hereof.
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"Trustee" means the party named as such in the caption of this
Indenture until a successor replaces it and, thereafter, means the successor.
"Trust Officer" means any Vice President, trust officer or authorized
signatory of the Trustee assigned by the Trustee to administer its corporate
trust matters.
"Uniform Commercial Code" or "UCC" means the New York Uniform
Commercial Code as in effect from time to time.
"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 at the issuer's option.
"Voting Equity Interests" of a corporation or other entity means all
classes of Equity Interests of a corporation or other entity then outstanding
and normally entitled to vote in the election of directors or other governing
body of such corporation or other entity.
"Wholly Owned Guarantor Subsidiary" means any Wholly Owned Subsidiary
that is a Guarantor Subsidiary.
"Wholly Owned Non-Recourse Subsidiary" of a Person means a Non-Recourse
Subsidiary of such Person all the Equity Interests (other than non-voting, money
market preferred shares) of which (other than directors' qualifying shares) are
owned by such Person or another Wholly Owned Non-Recourse Subsidiary of such
Person. Unless otherwise qualified, all references to a "Wholly Owned
Non-Recourse Subsidiary" or to "Wholly Owned Non-Recourse Subsidiaries" shall
refer to a Wholly Owned Non-Recourse Subsidiary or Wholly Owned Non-Recourse
Subsidiaries of AK Steel.
"Wholly Owned Subsidiary" of a Person means a Subsidiary of such Person
(other than a Non-Recourse Subsidiary) all the Equity Interests (other than
non-voting, money market preferred shares) of which (other than directors'
qualifying shares) are owned by such Person or another Wholly Owned Subsidiary
of such Person. Unless otherwise qualified, all references to a "Wholly Owned
Subsidiary" or to "Wholly Owned Subsidiaries" shall refer to a Wholly Owned
Subsidiary or Wholly Owned Subsidiaries of AK Steel.
SECTION 1.2 Other Definitions
Defined in
Term Section
- ---- -------
"Change in Control Offer" 4.17
"Change in Control Payment Date" 4.17
"Change in Control Payment Price" 4.17
"covenant defeasance option" 8.1
"Custodian" 6.1
"defeasance trust" 8.2
"Event of Default" 6.1
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"Intangible Property" 1.1; definition
of "Inventory"
"legal defeasance option" 8.1
"Legal Holiday" 11.8
"Offer" 4.10(a)
"Offer Amount" 4.10(d)
"Offer Period" 4.10(d)
"Paying Agent" 2.3
"Purchase Date" 4.10(d)
"Registrar" 2.3
"Restricted Payment" 4.7
"Senior Note Guarantee" 10.1
SECTION 1.3 Incorporation by Reference of Trust Indenture Act. Whenever
this Indenture refers to a provision of the TIA, the provision is incorporated
by reference in and made a part of this Indenture. The following TIA terms used
in this Indenture have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means AK Steel 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 1.4 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 generally accepted accounting
principles as in effect on the date of this Indenture;
(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 generally accepted accounting principles
and accretion of principal on such security shall be deemed to be the
issuance of Debt; and
(8) the principal amount of any Preferred Equity Interest
shall be (i) the maximum liquidation value of such Preferred Equity
Interest or (ii) the maximum mandatory redemption or mandatory
repurchase price with respect to such Preferred Equity Interest,
whichever is greater.
ARTICLE 2
The Securities
SECTION 2.1 Form and Dating. Provisions relating to the Initial
Securities, the Private Exchange Securities and the Exchange Securities are set
forth in Appendix A, which is hereby incorporated in and expressly made part of
this Indenture. The Initial Securities and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit 1 to Appendix A
hereto, which is hereby incorporated in and expressly made a part of this
Indenture. The Exchange Securities, the Private Exchange Securities and the
Trustee's certificate of authentication shall be substantially in the form of
Exhibit A, which is hereby incorporated in and expressly made a part of this
Indenture. The Securities may have notations, legends or endorsements required
by law, stock exchange rule, agreements to which AK Steel or any Guarantor is
subject, if any, or usage (provided that any such notation, legend or
endorsement is in a form acceptable to the Trustee and AK Steel). Each Security
shall be dated the date of its authentication. The terms of the Securities set
forth in Exhibit 1 to Appendix A and Exhibit A hereto are part of the terms of
this Indenture.
SECTION 2.2 Execution and Authentication. Two Officers shall sign the
Securities for AK Steel by manual or facsimile signature. AK Steel's seal shall
be impressed, affixed, imprinted or reproduced on the Securities and may be in
facsimile form.
If an Officer whose signature is on a Security no longer holds that
office at the time the Trustee authenticates the Security, the Security shall be
valid nevertheless.
A Security shall not be valid until an authorized signatory of the
Trustee manually signs the certificate of authentication on the Security. The
signature shall be conclusive evidence that the Security has been authenticated
under this Indenture.
The Trustee shall authenticate and make available for delivery
Securities for original issue in an aggregate principal amount of $450,000,000,
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upon a written order of AK Steel signed by two Officers of AK Steel. Such order
shall specify the amount of the Securities to be authenticated and the date on
which the original issue of Securities is to be authenticated. The aggregate
principal amount of Securities outstanding at any time may not exceed that
amount except as provided in Section 2.7 hereof.
The Trustee may appoint an authenticating agent reasonably acceptable
to AK Steel to authenticate the Securities. Unless limited by the terms of such
appointment, an authenticating agent may authenticate Securities whenever the
Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent has the
same rights as any Registrar, Paying Agent or agent for service of notices and
demands.
SECTION 2.3 Registrar and Paying Agent. AK Steel shall maintain an
office or agency where Securities may be presented for registration of transfer
or for exchange (the "Registrar") and an office or agency where Securities may
be presented for payment (the "Paying Agent"). The Registrar shall keep a
register of the Securities and of their transfer and exchange. AK Steel may have
one or more co-registrars and one or more additional paying agents. The term
"Paying Agent" includes any additional paying agent.
AK Steel shall enter into an appropriate agency agreement with any
Registrar, Paying Agent or co-registrar not a party to this Indenture, which
shall incorporate the terms of the TIA. The agreement shall implement the
provisions of this Indenture that relate to such agent. AK Steel shall notify
the Trustee of the name and address of any such agent. If AK Steel fails to
maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be
entitled to appropriate compensation therefor pursuant to Section 7.7 hereof. AK
Steel or any of its domestically incorporated Wholly Owned Subsidiaries may act
as Paying Agent, Registrar, co-registrar or transfer agent.
AK Steel initially appoints the Trustee as Registrar and Paying Agent
in connection with the Securities.
SECTION 2.4 Paying Agent To Hold Money in Trust. Prior to, or not later
than 10:00 a.m., New York City time, on each due date of the principal of and
premium, if any, and interest on any Security, AK Steel shall deposit with the
Paying Agent a sum sufficient to pay such principal, premium and interest when
so becoming due. AK Steel shall require each Paying Agent (other than the
Trustee) to agree in writing that the Paying Agent shall hold in trust for the
benefit of Securityholders or the Trustee all money held by the Paying Agent for
the payment of principal of or interest on the Securities and shall notify the
Trustee of any default by AK Steel in making any such payment. If AK Steel or a
domestically incorporated Wholly Owned Subsidiary acts as Paying Agent, it shall
segregate the money held by it as Paying Agent and hold it as a separate trust
fund. AK Steel at any time may require a Paying Agent to pay all money held by
it to the Trustee and to account for any funds disbursed by the Paying Agent.
Upon complying with this Section 2.4, the Paying Agent shall have no further
liability for the money delivered to the Trustee.
SECTION 2.5 Securityholder Lists. The Trustee shall preserve in as
current a form as is reasonably practicable the most recent list available to it
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of the names and addresses of Securityholders. If the Trustee is not the
Registrar, AK Steel shall furnish to the Trustee, in writing at least 15 days
before each interest payment date and at such other times as the Trustee may
request in writing, a list in such form and as of such date as the Trustee may
reasonably require of the names and addresses of Securityholders.
SECTION 2.6 Transfer and Exchange. The Securities shall be issued in
registered form and shall be transferable only upon the surrender of a Security
for registration of transfer. When a Security is presented to the Registrar or a
co-registrar with a request to register a transfer, the Registrar shall register
the transfer as requested if the requirements of Section 8-401(a) of the Uniform
Commercial Code are met. When Securities are presented to the Registrar or a
co-registrar with a request to exchange them for an equal principal amount of
Securities of other denominations, the Registrar shall make the exchange as
requested if the same requirements are met. To permit registration of transfers
and exchanges, AK Steel shall execute and the Trustee shall authenticate
Securities at the Registrar's or co-registrar's request. AK Steel may require
payment of a sum sufficient to pay all taxes, assessments or other governmental
charges in connection with any transfer or exchange pursuant to this Section
2.6. AK Steel shall not be required to make and the Registrar need not register
transfers or exchanges of (a) Securities (or portions thereof) selected for
redemption or (b) any Securities for a period of 15 days before (i) a selection
of Securities to be redeemed or (ii) an interest payment date.
Prior to the due presentation for registration of transfer of any
Security, AK Steel, the Trustee, the Paying Agent, the Registrar or any
co-registrar may deem and treat the Person in whose name a Security is
registered as the absolute owner of such Security for the purpose of receiving
payment of principal of and interest on such Security and for all other purposes
whatsoever, whether or not such Security is overdue, and none of AK Steel, the
Trustee, the Paying Agent, the Registrar or any co-registrar shall be affected
by notice to the contrary.
All Securities issued upon any transfer or exchange pursuant to the
terms of this Indenture will evidence the same debt and will be entitled to the
same benefits under this Indenture as the Securities surrendered upon such
transfer or exchange.
SECTION 2.7 Replacement Securities. If a mutilated Security is
surrendered to the Registrar or if the Holder of a Security claims that the
Security has been lost, destroyed or wrongfully taken, AK Steel shall issue and
the Trustee shall authenticate a replacement Security if the requirements of
Section 8-405 of the Uniform Commercial Code are met and the Holder satisfies
any other reasonable requirements of the Trustee. Such Holder shall furnish an
indemnity bond sufficient in the judgment of AK Steel and the Trustee to protect
AK Steel, the Trustee, the Paying Agent, the Registrar and any co-registrar from
any loss that any of them may suffer if a Security is replaced. AK Steel and the
Trustee may charge the Holder for their expenses in replacing a Security.
Every replacement Security is an additional obligation of AK Steel.
SECTION 2.8 Outstanding Securities. Securities outstanding at any time
are all Securities authenticated by the Trustee except for those canceled by it,
those delivered to it for cancellation and those described in this Section 2.8
as not outstanding. A Security does not cease to be outstanding because AK Steel
or an Affiliate of AK Steel holds the Security.
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If a Security is replaced pursuant to Section 2.7 hereof, it ceases to
be outstanding unless the Trustee and AK Steel receive proof satisfactory to
them that the replaced Security is held by a bona fide purchaser.
If the Paying Agent segregates and holds in trust, in accordance with
this Indenture, on a redemption date or maturity date money sufficient to pay
all principal and interest payable on that date with respect to the Securities
(or portions thereof) to be redeemed or maturing, as the case may be, and the
Paying Agent is not prohibited from paying such money to the Securityholders on
that date pursuant to the terms of this Indenture, then on and after that date
such Securities (or portions thereof) cease to be outstanding and interest on
them ceases to accrue.
SECTION 2.9 Temporary Securities. Until definitive Securities are ready
for delivery, AK Steel may prepare and the Trustee shall authenticate temporary
Securities. Temporary Securities shall be substantially in the form of
definitive Securities but may have variations that AK Steel considers
appropriate for temporary Securities. Without unreasonable delay, AK Steel shall
prepare and the Trustee shall authenticate definitive Securities and make them
available for delivery in exchange for temporary Securities. Until such
exchange, temporary Securities shall be entitled to the same rights, benefits
and privileges as definitive securities.
SECTION 2.10 Cancellation. AK Steel at any time may deliver Securities
to the Trustee for cancellation. The Registrar and the Paying Agent shall
forward to the Trustee any Securities surrendered to them for registration of
transfer, exchange or payment. The Trustee shall cancel all Securities
surrendered for registration of transfer, exchange, payment or cancellation and
deliver such canceled Securities to AK Steel. AK Steel may not issue new
Securities to replace Securities it has redeemed, paid or delivered to the
Trustee for cancellation.
SECTION 2.11 Defaulted Interest. If AK Steel defaults in a payment of
interest on the Securities, AK Steel shall pay such defaulted interest (plus
interest on such defaulted interest to the extent lawful) in any lawful manner.
AK Steel may pay the defaulted interest to the Persons who are Securityholders
on a subsequent special record date, which date shall be at least five Business
Days prior to the payment date. AK Steel shall fix or cause to be fixed any such
special record date and payment date, and, at least 15 days before any such
special record date, AK Steel shall mail to each Securityholder a notice that
states the special record date, the payment date and the amount of defaulted
interest (and interest payable on such defaulted interest) to be paid.
SECTION 2.12 CUSIP Numbers. AK Steel in issuing the Securities 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 Securityholders;
provided that any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the Securities or as contained
in any notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Securities, and any such redemption shall
not be affected by any defect in or omission of such numbers. AK Steel shall
promptly notify the Trustee of any change in the "CUSIP" numbers.
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ARTICLE 3
Redemption
SECTION 3.1 Notices to Trustee. If AK Steel elects to redeem Securities
pursuant to paragraph 5 of the Securities, it shall notify the Trustee in
writing of the redemption date and the principal amount of Securities to be
redeemed.
AK Steel shall give each notice to the Trustee provided for in this
Section 3.1 at least 60 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 AK Steel to the effect that such
redemption will comply with the conditions herein. If fewer than all the
Securities are to be redeemed, the record date relating to such redemption shall
be selected by AK Steel and given to the Trustee, which record date shall be not
less than 15 days after the date of notice to the Trustee.
SECTION 3.2 Selection of Securities to be Redeemed. If fewer than all
the Securities are to be redeemed, the Trustee shall select the Securities to be
redeemed pro rata or by lot or by a method that complies with applicable legal
and securities exchange requirements, if any, and that the Trustee considers
fair and appropriate and in accordance with methods generally used at the time
of selection by fiduciaries in similar circumstances. The Trustee shall make the
selection from outstanding Securities not previously called for redemption. The
Trustee may select for redemption portions of the principal of Securities that
have denominations larger than $1,000. Securities and portions of them the
Trustee selects shall be in amounts of $1,000 or a whole multiple of $1,000.
Provisions of this Indenture that apply to Securities called for redemption also
apply to portions of Securities called for redemption. The Trustee shall notify
AK Steel promptly of the Securities or portions of Securities to be redeemed.
SECTION 3.3 Notice of Redemption. At least 30 days but not more than 60
days before a date for redemption of Securities, AK Steel shall mail a notice of
redemption by first-class mail to each Holder of Securities to be redeemed.
The notice shall identify the Securities to be redeemed and shall
state:
(a) the redemption date;
(b) the redemption price;
(c) the name and address of the Paying Agent;
(d) that Securities called for redemption must be surrendered
to the Paying Agent to collect the redemption price;
(e) if fewer than all the outstanding Securities are to be
redeemed, the identification and principal amounts of the particular
Securities to be redeemed;
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(f) that, unless AK Steel defaults in making such redemption
payment or the Paying Agent is prohibited from making such payment
pursuant to the terms of this Indenture, interest on Securities (or
portion thereof) called for redemption ceases to accrue on and after
the redemption date;
(g) the paragraph of the Securities pursuant to which the
Securities called for redemption are being redeemed; and
(h) the CUSIP number, if any, of the Securities and 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 Securities.
At AK Steel's request, the Trustee shall give the notice of redemption
in AK Steel's name and at AK Steel's expense. In such event, AK Steel shall
provide the Trustee with the information required by this Section 3.3.
SECTION 3.4 Effect of Notice of Redemption. Once notice of redemption
is mailed, Securities called for redemption become due and payable on the
redemption date and at the redemption price stated in the notice. Upon surrender
to the Paying Agent, such Securities shall be paid at the redemption price
stated in the notice, plus accrued interest to the redemption date. 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.
SECTION 3.5 Deposit of Redemption Price. Prior to the redemption date,
AK Steel shall deposit with the Paying Agent (or, if AK Steel or a domestically
incorporated Wholly Owned Subsidiary is the Paying Agent, shall segregate and
hold in trust) money sufficient to pay the redemption price of and accrued
interest on all Securities to be redeemed on that date other than Securities or
portions of Securities called for redemption which have been delivered by AK
Steel to the Trustee for cancellation.
SECTION 3.6 Securities Redeemed in Part. Upon surrender of a Security
that is redeemed in part, AK Steel shall execute and the Trustee shall
authenticate for the Holder (at AK Steel's expense) a new Security equal in
principal amount to the unredeemed portion of the Security surrendered.
ARTICLE 4
Covenants
SECTION 4.1 Payment of Securities. AK Steel shall promptly pay the
principal of and premium, if any, and interest on the Securities on the dates
and in the manner provided in the Securities and in this Indenture. Principal,
premium, if any, and interest shall be considered paid on the date due if on
such date the Trustee or the Paying Agent holds in accordance with this
Indenture money sufficient to pay all principal, premium, if any, and interest
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then due and the Trustee or the Paying Agent, as the case may be, is not
prohibited from paying such money to the Securityholders on that date pursuant
to the terms of this Indenture.
AK Steel shall pay interest on overdue principal at the rate specified
therefor in the Securities, and it shall pay interest on overdue installments of
interest at the same rate to the extent lawful.
SECTION 4.2 Maintenance of Office or Agency. AK Steel will maintain an
office or agency (which may be an office of the Trustee, Registrar or
co-registrar) where Securities may be surrendered for registration of transfer
or exchange and where notices and demands to or upon AK Steel or any Guarantor
in respect of the Securities, any Guarantee enclosed thereon and this Indenture
may be served. AK Steel and the Guarantors will give prompt written notice to
the Trustee of the location, and any change in the location, of such office or
agency. If at any time AK Steel shall fail to maintain any such required office
or agency or shall fail to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee, and AK Steel and each Guarantor hereby
appoint the Trustee as their Agent to receive all such presentations,
surrenders, notices and demands.
AK Steel may also from time to time designate one or more other offices
or agencies where the Securities may be presented or surrendered for any or all
such purposes and may from time to time rescind such designations. AK Steel will
give prompt written notice to the Trustee of any such designation or rescission
and of any change in the location of any such other office or agency. AK Steel
hereby designates the agency of the Trustee, care of Corporate Trust
Administration, as one such office or agency of AK Steel in accordance with
Section 2.3 hereof.
SECTION 4.3 SEC Reports. Holding shall file with the Trustee and
provide Securityholders, within 15 days after it files them with the SEC, copies
of its annual report and of the information, documents and other reports (or
copies of such portions of any of the foregoing as the SEC may by rules and
regulations prescribe) which Holding is required to file with the SEC pursuant
to Section 13 or 15(d) of the Exchange Act. Notwithstanding that Holding may not
be required to remain subject to the reporting requirements of Section 13 or
15(d) of the Exchange Act, Holding shall continue to file with the SEC and
provide the Trustee and Securityholders with such annual reports and such
information, documents and other reports (or copies of such portions of any of
the foregoing as the SEC may by rules and regulations prescribe) which are
specified in Sections 13 and 15(d) of the Exchange Act. Holding also shall
comply with the other provisions of TIA ss. 314(a). Delivery of such reports,
information and documents to the Trustee is for informational purposes only and
the Trustee's receipt of such shall not constitute constructive notice of any
information contained therein or determinable from information contained
therein, including AK Steel's or Holding's compliance with any of its covenants
hereunder (as to which the Trustee is entitled to rely exclusively on Officers'
Certificates).
SECTION 4.4 Taxes. Holding and AK Steel shall, and shall cause each of
the Subsidiaries to, pay prior to delinquency all material taxes, assessments
and governmental levies except as contested in good faith and by appropriate
proceedings.
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SECTION 4.5 Limitation on Debt. AK Steel shall not issue, directly or
indirectly, any Debt unless, immediately after giving effect to the issuance of
such Debt and the receipt and application of the proceeds thereof, the pro forma
Consolidated EBITDA Coverage Ratio would be greater than 2.5 to 1.0.
Notwithstanding the foregoing limitation, AK Steel may issue the
following Debt:
(a) Debt issued by AK Steel pursuant to the Permitted Credit Facilities
and Guarantees by AK Steel of obligations in respect of bonds or notes (in an
aggregate principal amount not exceeding $60.0 million) payable solely from the
proceeds of (i) taxes payable by AK Steel on real or depreciable personal
property relating to the Rockport Works or (ii) charges payable by AK Steel for
sewer and water services relating to the Rockport Works and, to the extent that
such taxes or charges are insufficient to make such payments, payments under
such Guarantees (provided that the payments under such bonds or notes or such
Guarantees are not required to be prefunded by more than an aggregate amount
equal to one year of debt service on such bonds or notes and are not subject to
acceleration by the express terms thereof or otherwise);
(b) Debt issued by AK Steel owed to and held by a Wholly Owned
Subsidiary; provided, however, that any subsequent issuance or transfer of any
Equity Interests that results in such Wholly Owned Subsidiary ceasing to be a
Wholly Owned Subsidiary or any transfer of such Debt (other than to another
Wholly Owned Subsidiary) shall be deemed, in each case, to constitute the
issuance of such Debt by AK Steel;
(c) The Securities;
(d) Debt (other than Debt described in subsections (a) or (b) of this
Section 4.5) outstanding on the date on which the Initial Securities were
originally issued;
(e) Debt issued by AK Steel, whether or not secured by a Lien,
constituting all or a part of the purchase price of assets or property acquired
or constructed after the date on which the Initial Securities were originally
issued; provided, however, that Debt issued under this subsection (e) in any
calendar year shall not exceed in aggregate principal amount the sum of (i)
$50.0 million for each of 1999, 2000 and 2001, and $35.0 million for each
calendar year from and including 2002 to and including 2008 plus (ii) the excess
of the aggregate principal amount otherwise permitted to be issued under this
subsection (e) in all previous calendar years to and including the calendar year
in which the Initial Securities were originally issued over the aggregate
principal amount actually issued by AK Steel during such period under this
subsection (e);
(f) Refinancing Debt in respect of any Debt permitted pursuant to the
first paragraph of this Section 4.5 or any Debt permitted pursuant to subsection
(c), (d) or (e) of this Section 4.5 or this subsection (f);
(g) Obligations of AK Steel pursuant to (i) interest rate swap or
similar agreements designed to protect AK Steel against fluctuations in interest
rates in respect of Debt of AK Steel to the extent the notional principal amount
of such obligation does not exceed the aggregate principal amount of the Debt to
which such interest rate contracts relate, and (ii) foreign exchange or
commodity hedge, exchange or similar agreements designed to protect AK Steel
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against fluctuations in foreign currency exchange rates or commodity prices in
respect of foreign exchange or commodity exposures incurred by AK Steel in the
ordinary course of its business; or
(h) Debt (not otherwise permitted to be issued pursuant to subsections
(a) through (g) of this Section 4.5) in an aggregate principal amount which,
together with (i) any other outstanding Debt issued by AK Steel pursuant to this
subsection (h) and (ii) Debt issued and Preferred Equity Interests then
outstanding and issued by Subsidiaries pursuant to subsection (h) of Section 4.6
hereof does not exceed $100.0 million at any one time outstanding.
Notwithstanding the foregoing, AK Steel shall not issue any Refinancing
Debt in respect of Subordinated Obligations unless such Refinancing Debt shall
be subordinated to the Securities to at least the same extent as such
Subordinated Obligations.
SECTION 4.6 Limitation on Debt and Preferred Equity Interests of
Subsidiaries. AK Steel shall not permit any Subsidiary to issue, directly or
indirectly, any Debt or Preferred Equity Interests except:
(a) Debt or Preferred Equity Interests issued to and held by AK Steel
or a Wholly Owned Subsidiary; provided, however, that (i) any subsequent
issuance or transfer of any Equity Interests that results in any such Wholly
Owned Subsidiary ceasing to be a Wholly Owned Subsidiary or (ii) any subsequent
transfer of such Debt or Preferred Equity Interests (other than to AK Steel or a
Wholly Owned Subsidiary) shall be deemed, in each case, to constitute the
issuance of such Debt or Preferred Equity Interests by the issuer thereof;
(b) Debt or Preferred Equity Interests, other than any described in
subsection (a) of this Section 4.6, outstanding on the date on which the Initial
Securities were originally issued;
(c) Debt or Preferred Equity Interests of a Subsidiary issued and
outstanding on or prior to the date on which such Subsidiary became a Subsidiary
(other than Debt or Preferred Equity Interests issued as consideration in, or to
provide all or any portion of the funds or credit support utilized to
consummate, the transaction or series of related transactions pursuant to which
such Subsidiary became a Subsidiary);
(d) Debt or Preferred Equity Interests issued in exchange for, or the
net proceeds of which are used to extend, refinance, renew, replace, defease or
refund, Debt or Preferred Equity Interests referred to in subsection (b) or (c)
of this Section 4.6; provided, however, (i) the principal amount or liquidation
value of such Debt or Preferred Equity Interests so issued shall not exceed the
principal amount of, and premiums, if any, and accrued interest, or the
liquidation value and premiums, if any, and accumulated dividends, with respect
to the Debt or Preferred Equity Interests so exchanged, extended, refinanced,
renewed, replaced, defeased or refunded by application of the net proceeds of
the Debt or Preferred Equity Interests so issued and reasonable fees, expenses,
commissions and costs incurred in connection with the issuance of such Debt or
Preferred Equity Interests and (ii) the Debt or Preferred Equity Interests so
issued (1) shall have a Stated Maturity later than the Stated Maturity of the
Debt or Preferred Equity Interests being exchanged, extended, refinanced,
renewed, replaced, defeased or refunded and (2) shall have an Average Life equal
to or greater than the remaining Average Life of the Debt or Preferred Equity
Interests being exchanged, extended, refinanced, renewed, replaced, defeased or
refunded;
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(e) Non-Recourse Debt or Preferred Equity Interests of a Non-Recourse
Subsidiary issued after the date on which the Securities were originally issued;
provided, however, that if any such Debt or Preferred Equity Interests
thereafter ceases to be Non-Recourse Debt or Preferred Equity Interests of a
Non-Recourse Subsidiary, then such event will be deemed to constitute the
issuance of such Debt or Preferred Equity Interests by the issuer thereof;
(f) Guarantees of the Securities, or Refinancing Debt in respect of
Debt permitted under subsection (c) of Section 4.5 hereof;
(g) Guarantees issued by any Guarantor Subsidiary of any Debt issued by
AK Steel as permitted under Section 4.5 hereof; or
(h) Debt or Preferred Equity Interests not otherwise permitted to be
issued pursuant to subsections (a) through (g) of this Section 4.6, which,
together with (i) any other outstanding Debt or Preferred Equity Interests
issued pursuant to this subsection (h) and (ii) Debt issued by AK Steel pursuant
to subsection (h) of Section 4.5 hereof does not exceed $60.0 million at any one
time outstanding.
SECTION 4.7 Limitation on Restricted Payments. (a) Holding shall not,
and shall not permit any Subsidiary of Holding to, directly or indirectly:
(i) declare or pay any dividend or make any distribution on or in
respect of, or make any distribution to the holders of, Equity Interests of
Holding (except dividends or distributions payable solely in its Non-Convertible
Equity Interests or in options, warrants or other rights to acquire its
Non-Convertible Equity Interests and except dividends or distributions payable
to a Wholly Owned Guarantor Subsidiary);
(ii) purchase, redeem or otherwise acquire or retire for value any
Equity Interests of Holding;
(iii) declare or pay any dividend or make any distribution on or in
respect of, or make any distribution to holders of, Equity Interests of any
Subsidiary of Holding (other than with respect to any such Equity Interests held
by Holding, AK Steel, any Wholly Owned Guarantor Subsidiary or any Wholly Owned
Non-Recourse Subsidiary) or purchase, redeem or otherwise acquire or retire for
value any Equity Interests of any Subsidiary of Holding (other than such Equity
Interests held by Holding, AK Steel, any Wholly Owned Guarantor Subsidiary or
any Wholly Owned Non-Recourse Subsidiary);
(iv) purchase, repurchase, redeem, defease or otherwise acquire or
retire for value, prior to scheduled maturity, scheduled repayment or scheduled
sinking fund payment, any Subordinated Obligations (other than the purchase,
repurchase or other acquisition of Subordinated Obligations 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
(v) make any Investment other than Permitted Investments (any such
dividend, distribution, purchase, redemption, repurchase, defeasance, other
acquisition, retirement or Investment being herein referred to as a "Restricted
Payment") if:
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(1) a Default shall have occurred and be continuing (or would
result therefrom);
(2) upon giving effect to such Restricted Payment, on a pro forma
basis, AK Steel is not able to issue an additional $1.00 of Debt
pursuant to the Consolidated EBITDA Coverage Ratio as set forth in the
first paragraph of Section 4.5 hereof; or
(3) upon giving effect to such Restricted Payment, the aggregate
amount of such Restricted Payment and all other Restricted Payments
since October 1, 1996 would exceed the sum of:
(A) 50% of the Consolidated Net Income of Holding accrued
during the period (treated as one accounting period) from October
1, 1996 through the last full fiscal quarter for which quarterly
or annual financial statements are available prior to the date of
such Restricted Payment (or, in case such Consolidated Net Income
shall be a deficit, minus 100% of such deficit), plus
(B) the aggregate Net Cash Proceeds received by AK Steel from
the issue or sale of its Equity Interests (other than Redeemable
Equity Interests or Exchangeable Equity Interests) subsequent to
October 1, 1996 (other than to a Subsidiary of AK Steel or an
employee stock ownership plan or similar trust), plus
(C) the aggregate Net Cash Proceeds received by AK Steel from
the issue or sale of its Equity Interests (other than Redeemable
Equity Interests or Exchangeable Equity Interests) to an employee
stock ownership plan subsequent to October 1, 1996, provided,
that, if such employee stock ownership plan issues any Debt only
to the extent that any such proceeds are equal to any increase in
the Consolidated Net Worth of Holding resulting from principal
repayments made by such employee stock ownership plan with respect
to Debt issued by it to finance the purchase of such Equity
Interests, plus
(D) the amount by which consolidated Debt of AK Steel is
reduced on Holding's balance sheet upon the conversion or exchange
(other than by a Subsidiary), subsequent to October 1, 1996, of
any Debt of AK Steel or any of its Subsidiaries convertible or
exchangeable for Equity Interests (other than Redeemable Equity
Interests or Exchangeable Equity Interests) of AK Steel (less the
amount of any cash, or other property, distributed by AK Steel or
any of its Subsidiaries upon such conversion or exchange).
(b) So long as no Default shall have occurred and be continuing (or
would result therefrom), the provisions of this Section 4.7 shall not prohibit
the following:
(i) any purchase or redemption of Equity Interests of Holding or
Subordinated Obligations made by exchange for, or out of the proceeds of the
substantially concurrent sale of, Equity Interests of Holding (other than
Redeemable Equity Interests or Exchangeable Equity Interests and other than
Equity Interests issued or sold to a Subsidiary or an employee stock ownership
plan); provided, however, that (1) such purchase or redemption shall be excluded
in the calculation of the amount of Restricted Payments and (2) the Net Cash
Proceeds from such sale shall be excluded from subsections (a)(v)(3)(B) and
(a)(v)(3)(C) of this Section 4.7;
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(ii) any purchase or redemption of Subordinated Obligations (other than
Redeemable Equity Interests) made by exchange for, or out of the proceeds of the
substantially concurrent sale of, Debt of AK Steel other than to a Subsidiary;
provided, however, that such Debt (1) shall be subordinated to the Securities to
at least the same extent as the Subordinated Obligations so exchanged, purchased
or redeemed, (2) shall have a Stated Maturity later than the Stated Maturity of
the Securities and (3) shall have an Average Life greater than the remaining
Average Life of the Securities; provided further, however, that such purchase or
redemption shall be excluded in the calculation of the amount of Restricted
Payments;
(iii) any purchase or redemption of Subordinated Obligations from Net
Available Cash to the extent permitted under Section 4.10 hereof; provided,
however, that such purchase or redemption shall be excluded in the calculation
of the amount of Restricted Payments;
(iv) dividends paid within 60 days after the date of declaration if at
such date of declaration such dividend would have complied with this Section
4.7; provided, however, that at the time of payment of such dividend, no 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;
(v) any repurchase by Holding of employee stock granted under an
employee stock option plan; provided, however, that the aggregate amount of such
repurchase in any calendar year shall not exceed $1.0 million per employee and
the aggregate amount of all repurchases in any calendar year shall not exceed
$5.0 million (it being understood that the excess of any such amounts permitted
to be expended under this subsection (v) during any calendar year over the
amount actually expended during such period shall not be carried forward);
provided further, however, that such repurchase shall be included in the
calculation of the amount of Restricted Payments; or
(vi) any purchase, repurchase, redemption, defeasance or other
acquisition by any Non-Recourse Subsidiary of Non-Recourse Debt of such
Non-Recourse Subsidiary; provided, however, that the amount of such purchase,
repurchase, redemption, defeasance or other acquisition shall be excluded in the
calculation of the amount of Restricted Payments.
(c) So long as none of the conditions described in clause (1) and (2)
of subsection (a) hereof exists, the foregoing limitations on Restricted
Payments shall not prohibit the declaration and payment of one or more dividends
on or before February 28, 2001 in an aggregate amount not to exceed $50.0
million; provided, however, that all such dividends shall be excluded in the
calculation of the amount of Restricted Payments.
SECTION 4.8 Limitation on Issuance and Sale of Equity Interests of
Subsidiaries. AK Steel shall not permit any Subsidiary to issue or sell any
Equity Interests to any Person, or permit any Person, in either case, other than
AK Steel and its Subsidiaries, to own or hold an interest, other than any
interest owned or held on the date on which the Securities were originally
issued by a Person other than AK Steel and its Subsidiaries, in any Equity
Interests, of any Subsidiary (other than a Non-Recourse Subsidiary or a JV
Subsidiary); provided, however, that the foregoing limitation shall not apply to
(a) the sale of all but not less than all of the Equity Interests of any
Subsidiary made in accordance with Section 4.10 hereof, (b) issuances of
Preferred Equity Interests permitted pursuant to subsections (c), (e) and (g) of
Section 4.6 hereof, and (c) the ownership or holding of an interest by any
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Person, other than AK Steel and its Subsidiaries, in any Equity Interests of any
Subsidiary issued pursuant to subsection (b) of this Section 4.8.
SECTION 4.9 Limitation on Restrictions on Distributions from
Subsidiaries. (a) AK Steel shall not, and shall not permit any Subsidiary to,
create or permit to exist or become effective any consensual encumbrance or
restriction on the ability of any Subsidiary to (i) pay dividends or make any
other distributions on its Equity Interests or pay any Debt or other obligation
owed to AK Steel or any Subsidiary, (ii) make any Investment in AK Steel or any
Subsidiary or (iii) transfer any of its property or assets to AK Steel or any
Subsidiary.
(b) Notwithstanding the foregoing, AK Steel may, and may permit any
Subsidiary of AK Steel to, suffer to exist any such encumbrance or restriction:
(i) pursuant to an agreement in effect at or entered into on the
date on which the Initial Securities were originally issued;
(ii) with respect to a Subsidiary pursuant to an agreement
relating to any Debt issued by such Subsidiary on or prior to the date
on which such Subsidiary became a Subsidiary (other than Debt issued as
consideration in, or to provide all or any portion of the funds
utilized to consummate, the transaction or series of related
transactions pursuant to which such Subsidiary became a Subsidiary) and
outstanding on such date;
(iii) pursuant to an agreement effecting a refinancing of Debt
issued pursuant to an agreement referred to in subsection (b)(i) or
(b)(ii) of this Section 4.9 or contained in any amendment to an
agreement referred to in subsection (b)(i) or (b)(ii) of this Section
4.9; provided, however, that the encumbrances and restrictions
contained in any such refinancing agreement or amendment are no less
favorable to the Holders of Securities than encumbrances and
restrictions contained in such agreements;
(iv) consisting of customary nonassignment provisions in leases
governing leasehold interests to the extent such provisions restrict
the transfer of the lease;
(v) in the case of subsection (a)(iii) of this Section 4.9,
restrictions contained in security agreements securing Debt of a
Subsidiary otherwise permitted under this Indenture, to the extent such
restrictions restrict the transfer of the property subject to such
security agreements; or
(vi) relating to a Non-Recourse Subsidiary.
SECTION 4.10 Limitation on Sales of Assets and Equity Interests of
Subsidiaries. (a) AK Steel shall not, and shall not permit any Subsidiary (other
than Non-Recourse Subsidiaries) to, make any Asset Disposition unless:
(i) AK Steel or such Subsidiary receives consideration at the time
of such Asset Disposition at least equal to the Fair Market Value, as
determined in good faith by the Board of Directors of Holding
(including as to the value of all non-cash consideration), of the
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shares and assets subject to such Asset Disposition and at least 75% of
such consideration is in the form of cash or Cash Equivalents; and
(ii) an amount equal to 100% of the Net Available Cash from such
Asset Disposition is applied by AK Steel or such Subsidiary, as the
case may be, (1) first, to the extent AK Steel elects (or is required
by the terms of any Debt), to prepay, repay or purchase Debt (other
than any Redeemable Equity Interests or Non-Recourse Debt) of AK Steel,
such Subsidiary or a Wholly Owned Guarantor Subsidiary (in each case
other than Debt owed to AK Steel or an Affiliate of AK Steel) within 60
days from the later of the date of such Asset Disposition or the
receipt of such Net Available Cash; (2) second, to the extent of the
balance of such Net Available Cash after application in accordance with
subsection (a)(ii)(1) of this Section 4.10, at AK Steel's election, to
the investment by AK Steel or such Subsidiary or any Wholly Owned
Guarantor Subsidiary in assets to replace the assets that were the
subject of such Asset Disposition or an asset that (as determined by
the Board of Directors of Holding) will be used in the business of AK
Steel and the Wholly Owned Guarantor Subsidiaries existing on the date
on which the Initial Securities were originally issued or in businesses
reasonably related thereto, in each case within the later of one year
from the date of such Asset Disposition or the receipt of such Net
Available Cash; and (3) third, to the extent of the balance of such Net
Available Cash after application in accordance with subsections
(a)(ii)(1) and (2) of this Section 4.10, to make an offer (the "Offer")
to purchase Securities at par in accordance with the procedures set
forth in subsection (d) of this Section 4.10; provided, however, that
in connection with any prepayment, repayment or purchase of Debt
pursuant to subsection (a)(ii)(1) of this Section 4.10, AK Steel shall
cause the related loan commitment (if any) to be permanently reduced in
an amount equal to the principal amount so prepaid, repaid or
purchased.
(b) Notwithstanding the requirement in subsection (a)(i) of this
Section 4.10 that at least 75% of consideration consist of cash or Cash
Equivalents, AK Steel and its Subsidiaries may make one or more Asset
Dispositions for which the consideration, in addition to the non-cash
consideration permitted by such subsection, consists of or includes (i) non-cash
consideration, the aggregate Fair Market Value (as determined in good faith by
the Board of Directors of Holding) of which, for all Asset Dispositions made
after the date on which the Initial Securities were originally issued, does not
exceed $10.0 million, and (ii) non-cash consideration, the aggregate Fair Market
Value (as determined in good faith by the Board of Directors of Holding) of
which, for all Asset Dispositions made after the date on which the Initial
Securities were originally issued, does not exceed $50.0 million, consisting of
the cancellation of Debt of AK Steel or any Subsidiary existing on the date on
which the Initial Securities were originally issued; provided, however, that in
connection with any such cancellation of Debt, AK Steel or such Subsidiary shall
cause the related loan commitment (if any) to be permanently reduced in an
amount equal to the principal so canceled.
(c) Notwithstanding the provisions of subsection (a)(ii) of this
Section 4.10, in the event that the Net Available Cash resulting from any Asset
Disposition is less than $25.0 million, the application of an amount equal to
such Net Available Cash in accordance with this Section 4.10 may be deferred
until such time as such Net Available Cash from any prior or subsequent Asset
Dispositions not otherwise applied in accordance with this Section 4.10, is at
least equal to $25.0 million. In the event that the Net Available Cash resulting
from any Asset Disposition, after giving effect to subsections (a)(ii)(1) and
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(2) of this Section 4.10, is less than $10.0 million, the application of such
amount equal to such Net Available Cash to make the Offer to purchase Securities
in accordance with subsection (a)(ii)(3) of this Section 4.10 may be deferred
until such time as such Net Available Cash, together with Net Available Cash
from any prior or subsequent Asset Dispositions not otherwise applied in
accordance with this Section 4.10, is at least equal to $10.0 million. Pending
application of Net Available Cash pursuant to this Section 4.10, such Net
Available Cash shall be invested in Cash Equivalents. To the extent any portion
of the amount of Net Available Cash remains after compliance with this Section
4.10, and provided that all Holders of Securities have been given the
opportunity to tender their Securities for repurchase as provided in subsection
(a)(ii)(3) of this Section 4.10, AK Steel may use such remaining amount for
general corporate purposes.
(d)(i) Promptly, and in any event within 90 days after the occurrence
of an Asset Disposition requiring AK Steel to offer to purchase Securities
pursuant to the Offer, AK Steel shall be obligated to deliver to the Trustee and
send, by first-class mail to each Holder, a written notice stating that the
Holder may elect to have his Securities purchased by AK Steel either in whole or
in part (subject to prorationing as hereinafter described in the event the Offer
is oversubscribed) in integral multiples of $1,000 of principal amount, at the
applicable purchase price. The notice shall specify a purchase date not less
than 30 days nor more than 60 days after the date of such notice (the "Purchase
Date") and shall contain information concerning the business of AK Steel which
AK Steel in good faith believes will enable such Holders to make an informed
decision (which at a minimum will include (1) the most recently filed Annual
Report on Form 10-K (including audited consolidated financial statements) of
Holding, the most recent subsequently filed Quarterly Report on Form 10-Q and
any Current Report on Form 8-K of Holding filed subsequent to such Quarterly
Report, other than Current Reports describing Asset Dispositions otherwise
described in the offering materials (or corresponding successor reports), (2) a
description of material developments in the AK Steel's business subsequent to
the date of the latest of such Reports, and (3) if material, appropriate pro
forma financial information and all instructions and materials necessary to
tender Securities pursuant to the Offer, together with the information contained
in subsection (d)(iii) of this Section 4.10.
(ii) Not later than the date upon which written notice of an Offer is
delivered to the Trustee as provided in subsection (d)(i) of this Section 4.10,
AK Steel shall deliver to the Trustee an Officers' Certificate as to (1) the
amount of the Offer (the "Offer Amount"), (2) the allocation of the Net
Available Cash from the Asset Dispositions pursuant to which such Offer is being
made and (3) the compliance of such allocation with the provisions of subsection
(a) of this Section 4.10. On such date, AK Steel shall irrevocably deposit with
the Trustee or with the Paying Agent (or, if AK Steel or a domestically
incorporated Wholly Owned Subsidiary is acting as the Paying Agent, segregate
and hold in trust) funds in an amount equal to the Offer Amount to be held for
payment in accordance with the provisions of this Section 4.10. The amount so
deposited, at the option of, and pursuant to the specific written direction of,
AK Steel, may be invested in Cash Equivalents the maturity date of which is not
later than the Purchase Date. AK Steel shall be entitled to any interest or
dividends accrued, earned or paid on such Cash Equivalents. Upon the expiration
of the period for which the Offer remains open (the "Offer Period") AK Steel
shall deliver to the Trustee the Securities or portions thereof which have been
properly tendered to and are to be accepted by AK Steel. The Trustee 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
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the Securities delivered by AK Steel to the Trustee is less than the Offer
Amount, the Trustee shall deliver the excess to AK Steel promptly after the
expiration of the Offer Period.
(iii) Holders electing to have a Security purchased will be required to
surrender the Security, with an appropriate form on the back of the Security
entitled "Option of Holder to Elect Purchase" duly completed, to AK Steel at the
address specified in the notice at least 10 Business Days prior to the Purchase
Date. Holders will be entitled to withdraw their election if AK Steel receives
not later than three Business Days prior to the Purchase Date, a facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of the Security which was delivered for purchase by the Holder and a
statement that such Holder is withdrawing his election to have such Security
purchased. If at the expiration of the Offer Period the purchase price of
Securities surrendered by Holders exceeds the Offer Amount, AK Steel shall
select the Securities to be purchased on a pro rata basis (with such adjustments
as may be deemed appropriate by AK Steel so that only Securities in
denominations of $1,000, or integral multiples thereof, shall be purchased).
Holders whose Securities are purchased only in part will be issued new
Securities equal in principal amount to the unpurchased portion of the
Securities surrendered. AK Steel shall promptly execute, and the Guarantors
shall promptly execute their Guarantees to be endorsed thereon and thereafter
the Trustee shall promptly authenticate and mail or make available for delivery
to such Holders a new Security equal in principal amount to any unpurchased
portion of the Security surrendered. Any Security not accepted for payment shall
be promptly mailed or delivered by AK Steel to the Holder thereof. AK Steel
shall publicly announce the results of the Offer on or as soon as practicable
after the Purchase Date.
(iv) At the time AK Steel delivers Securities to the Trustee which are
to be accepted for purchase, AK Steel will also deliver an Officers' Certificate
stating that such Securities are to be accepted by AK Steel pursuant to and in
accordance with the terms of this Section 4.10. A Security shall be deemed to
have been accepted for purchase at the time the Trustee, directly or through an
agent, mails or makes available for delivery payment therefor to the
surrendering Holder.
(e) AK Steel shall 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 Securities pursuant to this
Section 4.10.
SECTION 4.11 Limitation on Transactions with Affiliates. AK Steel shall
not, and shall not permit any Subsidiary to, conduct any business or enter into
any transaction or series of similar transactions (including the purchase, sale,
lease or exchange of any property or the rendering of any service) with any
Affiliate of AK Steel or any legal or beneficial owner of 5% or more of any
class of Equity Interests of Holding or with an Affiliate of any such owner
(other than a Wholly Owned Subsidiary or any employee stock ownership plan for
the benefit of AK Steel or a Subsidiary's employees) unless the terms of such
business, transaction or series of transactions are (a) set forth in writing,
(b) not less favorable to AK Steel or such Subsidiary, as the case may be, than
terms that would be obtainable at the time for a comparable transaction or
series of similar transactions in arms-length dealings with an unrelated third
Person, (c) if such business or transaction or series of transactions involves
in excess of (i) $5.0 million, the Board of Directors of Holding has, by
resolution, determined in good faith that such business or transaction or series
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of transactions meets the criteria set forth in subsection (b) of this Section
4.11, and (ii) $25.0 million and as to which there are no disinterested
directors, AK Steel has obtained an opinion of a nationally recognized expert
with experience in appraising the terms and conditions of the type of business
or transaction or series of transactions stating that such business or
transaction or series of transactions is fair (from a financial point of view)
to AK Steel or such Subsidiary, as the case may be; provided, however, that the
provisions of this Section 4.11 do not apply to performance of contractual
obligations with respect to Eveleth Mines existing as of the date of this
Indenture.
SECTION 4.12 Limitation on Liens. AK Steel shall not, and shall not
permit any Subsidiary to, create or permit to exist any Lien upon any of its
property or assets, now owned or hereafter acquired, securing any obligation
unless concurrently with the creation of such Lien effective provision is made
to secure the Securities equally and ratably with such obligation for so long as
such obligation is so secured; provided, that if such obligation is a
Subordinated Obligation, the Lien securing such obligation shall be subordinated
and junior to the Lien securing the Securities with the same or lesser relative
priority as such Subordinated Obligation shall have with respect to the
Securities. The preceding restriction shall not require AK Steel or any
Subsidiary to equally and ratably secure the Securities if the Lien consists of
the following:
(a) Liens created by this Indenture, Liens existing as of the date on
which the Initial Securities were originally issued and Liens to secure Debt in
respect of AK Steel's Senior Secured Notes Due 2004 on the Pledged Assets, the
Pledged Assets Site and the other Mortgaged Property (each as defined in the
Note Purchase Agreement dated as of December 17, 1996 among AK Steel, Holding
and the Purchasers listed in Schedule A thereto, as in effect on the date the
Initial Securities were originally issued);
(b) Permitted Liens;
(c) Liens to secure Debt issued by AK Steel for the purpose of
financing all or a part of the purchase price of assets or property acquired or
constructed after the date on which the Initial Securities were originally
issued; provided, however, that (i) the aggregate principal amount (or accreted
value in the case of Debt issued at a discount) of Debt so issued shall not
exceed the lesser of cost or Fair Market Value, as determined in good faith by
the Board of Directors of Holding, of the assets or property so acquired or
constructed, (ii) either (x) the Debt secured by such Liens shall have been
permitted to be issued under subsection (e) of Section 4.5 hereof or (y)
additional Debt secured by such Liens, at the time of determination on a pro
forma basis, would not exceed, in the case of Normal Replacement Assets, 50%, or
in the case of Special Assets, 100%, of the aggregate principal amount of Debt
which AK Steel would have been permitted to issue at such time under the
Consolidated EBITDA Coverage Ratio as set forth in the first paragraph of
Section 4.5 hereof at an interest rate equal to the rate of interest on the
additional Debt to be secured by such Liens and (iii) such Liens shall not
encumber any other assets or property of AK Steel or any of its Subsidiaries
other than such assets or property or any improvement on such assets or property
and shall attach to such assets or property within 90 days of the construction
or acquisition of such assets or property;
(d) Liens on the assets or property of a Subsidiary existing at the
time such Subsidiary became a Subsidiary and not issued as a result of (or in
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connection with or in anticipation of) such Subsidiary becoming a Subsidiary;
provided, however, that such Liens do not extend to or cover any other property
or assets of AK Steel or any of its other Subsidiaries;
(e) Liens on the Inventory or Accounts Receivable of AK Steel or any
Significant Subsidiary that is a Guarantor Subsidiary securing Debt under any
Permitted Credit Facility; provided that any Lien on Intangible Property shall
limit the rights of the holder of such Lien to the use of such Intangible
Property to manufacture, process and sell the Inventory with respect to which
such holder has a Lien;
(f) Liens securing industrial revenue or pollution control bonds issued
by AK Steel; provided, however, that (i) the aggregate principal amount of Debt
secured by such Liens shall not exceed the lesser of cost or Fair Market Value,
as determined in good faith by the Board of Directors of Holding, of the assets
or property so financed, and (ii) such Liens do not encumber any other property
or assets of AK Steel or any of its Subsidiaries;
(g) Liens securing Debt issued to exchange, extend, refinance, renew,
replace, defease or refund Debt which has been secured by a Lien permitted under
this Indenture and is permitted to be exchanged, extended, refinanced, renewed,
replaced, defeased or refunded under this Indenture; provided, however, that
such Liens do not extend to or cover any property or assets of AK Steel or any
of its Subsidiaries not securing the Debt so exchanged, extended, refinanced,
renewed, replaced, defeased or refunded, and the principal amount (or accreted
value) of the Debt so secured is not increased except as otherwise permitted
pursuant to this Indenture;
(h) Liens on the Equity Interests, assets or property of a Non-Recourse
Subsidiary securing Non-Recourse Debt; or
(i) Liens securing Debt which, together with all other Debt secured by
Liens (excluding Debt secured by Liens permitted by subsections (a) through (h)
of this Section 4.12) at the time of determination do not exceed the greater of
(x) $100.0 million and (y) 5% of Consolidated Net Tangible Assets of Holding, in
each case, at any one time outstanding; provided, however, that the Attributable
Debt in connection with Sale/Leaseback Transactions permitted under subsection
(c) of Section 4.13 hereof will be included in the determination and treated as
Debt secured by a Lien not otherwise permitted by subsections (a) through (h) of
this Section 4.12.
For the avoidance of ambiguity, it is understood that Liens referred to
in clauses (a) through (i) of this Section 4.12 may secure, in addition to
principal of and premium, if any, on Debt referred to in such clauses, interest
and all other obligations on and in respect of such Debt.
SECTION 4.13 Limitation on Sale/Leaseback Transactions. AK Steel shall
not, and shall not permit any Subsidiary to, enter into, Guarantee or otherwise
become liable with respect to any Sale/Leaseback Transaction unless at least one
of the following conditions is satisfied:
(a) the lease is between AK Steel and a Wholly Owned Guarantor
Subsidiary, or between Wholly Owned Guarantor Subsidiaries; provided, however,
that upon either (i) the transfer or other disposition by such Wholly Owned
Guarantor Subsidiary of any such lease to a Person other than AK Steel or
another Wholly Owned Guarantor Subsidiary or (ii) the issuance, sale, lease,
transfer or other disposition of Equity Interests (including by consolidation or
merger) of such Wholly Owned Guarantor Subsidiary to a Person other than AK
Steel or another such Wholly Owned Guarantor Subsidiary, the provisions of this
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subsection (a) shall no longer be applicable to such lease and such lease shall
be deemed for purposes of this subsection (a) to constitute the entering into of
such Sale/Leaseback Transaction by the parties thereto;
(b) AK Steel or such Subsidiary under subsections (b) through (h) of
Section 4.12 hereof could create a Lien on the property to secure Debt in an
amount at least equal to the Attributable Debt in respect of such Sale/Leaseback
Transaction and AK Steel or such Subsidiary, as the case may be, receives
consideration at least equal to the Fair Market Value, as determined in good
faith by the Board of Directors of Holding, of the property transferred;
(c) AK Steel or such Subsidiary could create a Lien under subsection
(i) of Section 4.12 hereof on the property to secure Debt at least equal to the
Attributable Debt in respect of such Sale/Leaseback Transaction and AK Steel or
such Subsidiary, as the case may be, receives consideration at least equal to
the Fair Market Value, as determined in good faith by the Board of Directors of
Holding, of the property transferred; or
(d) the Sale/Leaseback Transaction is treated as an Asset Disposition
and all the conditions of Section 4.10 hereof are satisfied with respect to such
Sale/Leaseback Transaction (without giving effect to the exceptions for Net
Available Cash in amounts less than $25.0 million or $10.0 million, as set forth
in subsection(c) of Section 4.10 hereof).
SECTION 4.14 Corporate Existence. Subject to Article 5 hereof, Holding
and AK Steel will do or cause to be done all things necessary to preserve and
keep in full force and effect the corporate existence, rights (charter and
statutory), licenses and franchises of Holding, AK Steel and each Guarantor
Subsidiary; provided, however, that this Section 4.14 shall not be applicable to
Holding if Holding merges into AK Steel and that, in such case, all mention of
Holding shall be deleted from this Section 4.14..
SECTION 4.15 Lines of Business. AK Steel shall not, and shall not
permit any of its Subsidiaries to, enter into any business, either directly or
through any Subsidiary, except for those businesses in which AK Steel and its
Subsidiaries were engaged on the date on which the Initial Securities were
originally issued or businesses reasonably related thereto.
SECTION 4.16 Restrictions on Activities of Holding. Holding (a) shall
not engage in any activities or hold any assets other than (i) holding 100% of
the Equity Interests of AK Steel and debt securities of AK Steel that were held
by Holding at the date of the Indenture and (ii) those activities incidental to
maintaining its status as a public company, and (b) it will not incur any
liabilities other than liabilities relating to its Senior Note Guarantee or any
Guarantees by Holding of any Permitted Credit Facility, any other Debt of AK
Steel or any Debt of any Significant Subsidiary that is Guaranteed by AK Steel
and any other obligations or liabilities incidental to holding 100% of the
Equity Interests of AK Steel and those liabilities incidental to its status as a
public company; provided, however, that, for purposes of this Section 4.16, the
term "liabilities" shall not include any liability for the declaration and
payment of dividends on any Equity Interests of Holding; and provided further,
however, that if Holding merges into AK Steel, this Section 4.16 shall no longer
be applicable.
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SECTION 4.17 Change in Control. (a) Upon the occurrence of a Change in
Control, each Holder of Securities shall have the right to require AK Steel to
repurchase such Holder's Securities in whole or in part in integral multiples of
$1,000 at a purchase price (the "Change in Control Payment Price") in cash in an
amount equal to 101% of the principal amount of such Securities plus accrued and
unpaid interest thereon, if any, to and including the Change in Control Payment
Date (as defined below), in accordance with the procedures set forth in this
Section 4.17 (a "Change in Control Offer").
(b) Within 30 days following any Change in Control, AK Steel
shall send by first-class mail, postage prepaid, to the Trustee and to each
Holder of the Securities, at his address appearing in the Security register, a
notice stating:
(i) that a Change in Control has occurred and that
such Holder has the right to require AK Steel to repurchase such
Holder's Securities in whole or in part in integral multiples of $1,000
at the Change in Control Purchase Price;
(ii) the circumstances and relevant facts regarding
such Change in Control (including but not limited to information with
respect to pro forma historical income, cash flow and capitalization
after giving effect to such Change in Control);
(iii) a payment date (the "Change in Control Payment
Date") which shall be a date no earlier than 45 days nor later than 60
days from the date such notice is mailed or such later date as may be
necessary for AK Steel to comply with the requirements under the
Exchange Act;
(iv) that any Security not tendered will continue to
accrue interest; and
(v) the instructions a Holder must follow in order to
have its Securities repurchased in accordance with subsection (d) of
this Section 4.17.
(c) Holders electing to have Securities purchased will be
required to surrender such Securities with an appropriate form on the back of
the Security entitled "Option of Holder to Elect Purchase" duly completed to AK
Steel at the address specified in the notice at least three Business Days prior
to the Change in Control Payment Date. Any Holder will be entitled to withdraw
his or her election if AK Steel receives, not later than three Business Days
prior to the Change in Control Payment Date, a facsimile transmission or letter
setting forth the name of the Holder, the principal amount of the Securities
delivered for purchase by the Holder as to which his or her election is to be
withdrawn and a statement that such Holder is withdrawing his or her election to
have such Securities purchased. Holders whose Securities are purchased only in
part will be issued new Securities equal in principal amount to the unpurchased
portion of the Securities surrendered.
(d) On the Change in Control Payment Date, AK Steel shall (i)
accept for payment Securities or portions thereof tendered pursuant to the
Change in Control Offer, (ii) deposit with the Paying Agent money sufficient to
pay the purchase price of all Securities or portions thereof so tendered, and
(iii) deliver to the Trustee Securities so accepted together with an Officers'
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Certificate stating the Securities or portions thereof tendered to AK Steel. The
Paying Agent shall promptly mail to the Holder of Securities so accepted payment
in an amount equal to the purchase price, and the Trustee shall promptly
authenticate and mail to such Holders a new Security equal in principal amount
to any unpurchased portion of the Security surrendered.
(e) AK Steel will comply with the applicable tender offer rules,
including Rule 14e-1 under the Exchange Act, and any other applicable securities
laws or regulations in connection with a Change in Control Offer.
SECTION 4.18 Compliance Certificate. (a) AK Steel and the Guarantors
shall deliver to the Trustee, within 90 days after the end of each fiscal year,
an Officers' Certificate, one of the signers of which shall be the principal
executive officer, principal financial officer or principal accounting officer,
stating whether or not to the best knowledge of the signers thereof AK Steel or
the Guarantors, as the case may be, has fulfilled all its obligations hereunder,
is not in default in the performance and observance of any of the terms, and if
AK Steel or the Guarantors, as the case may be, shall be in default, specifying
all such defaults and the nature and status thereof of which they may have
knowledge. For purposes of this Section 4.18, such compliance or default shall
be determined without regard to any period of grace or requirement of notice
provided under this Indenture.
(b) AK Steel, Holding and each Guarantor Subsidiary shall
deliver to the Trustee, as soon as possible and in any event within 10 days
after AK Steel, Holding or any Guarantor Subsidiary becomes aware or should
reasonably become aware of the occurrence of an Event of Default or an event
which, with notice or the lapse of time or both, would constitute an Event of
Default, an Officers' Certificate setting forth the details of such Event of
Default or default, and the action which AK Steel, Holding or any Guarantor
Subsidiary proposes to take with respect thereto.
SECTION 4.19 Further Instruments and Acts. Upon request of the Trustee,
AK Steel, Holding and each Guarantor Subsidiary 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.
SECTION 4.20 Maintenance of Properties. AK Steel will cause all
properties owned by AK Steel or any Subsidiary or used or held for use in the
conduct of the business of AK Steel or any Subsidiary to be maintained and kept
in good condition, repair and working order (other than where failure to do so
would be immaterial or in the case of ordinary wear and tear) and supplied with
all necessary equipment and will cause to be made all necessary repairs,
renewals, replacements, betterments and improvements thereof, all as in the
judgment of AK Steel may be necessary so that the business carried on in
connection therewith may be properly and advantageously conducted at all times;
provided, however, that nothing in this Section shall prevent AK Steel from
discontinuing the maintenance of any of such properties if such discontinuance
is, in the judgment of AK Steel, desirable in the conduct of the business of AK
Steel or any Subsidiary and not disadvantageous in any material respect to the
Holders.
SECTION 4.21 Insurance. AK Steel will at all times keep all of the
properties of AK Steel and the Subsidiaries which are of an insurable nature
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insured with insurers, believed by AK Steel to be responsible, or insured
through a program of self-insurance, against loss or damage to the extent that
property of similar character is usually so insured by corporations similarly
situated and owning like properties.
ARTICLE 5
Successor Company
SECTION 5.1 When AK Steel or any of its Subsidiaries May Merge or
Transfer Assets. AK Steel shall not (a) consolidate with or merge with or into
any other Person, (b) permit any other Person to consolidate with or merge into
(i) AK Steel or (ii) any of its Subsidiaries in a transaction in which such
Subsidiary (or successor Person) remains (or becomes) a Subsidiary, (c) directly
or indirectly, transfer, convey, sell, lease or otherwise dispose of all or
substantially all of its properties and assets, (d) directly or indirectly, (i)
acquire Equity Interests or other ownership interests of any other Person, other
than as a Permitted Investment as defined in clause (e) of the definition of
"Permitted Investments", such that such Person becomes a Subsidiary or (ii)
purchase, lease or otherwise acquire all or substantially all of the property
and assets of any Person or any existing business (whether existing as a
separate entity, subsidiary, division, unit or otherwise) of any Person, or (e)
permit any of its Subsidiaries to enter into any such transaction unless:
(1) AK Steel or such Subsidiary shall be the continuing entity or the
resulting, surviving or transferee Person (if not AK Steel or such Subsidiary)
shall be a Person organized and existing under the laws of the United States of
America, any State thereof or the District of Columbia and such Person shall
expressly assume, by an indenture supplemental to this Indenture, executed and
delivered to the Trustee, all the obligations of AK Steel or such Subsidiary, as
the case may be, under the Securities and this Indenture;
(2) immediately after giving effect to such transaction (and treating
any Debt that becomes an obligation of the resulting, surviving or transferee
Person or any Subsidiary as a result of such transaction as having been issued
by such Person or such Subsidiary at the time of such transaction), no Default
shall have occurred and be continuing;
(3) immediately after giving effect to such transaction, on a pro forma
basis, AK Steel (or the resulting, surviving or transferee Person (if not AK
Steel)) would be able to issue at least $1.00 of Debt pursuant to the
Consolidated EBITDA Coverage Ratio set forth in the first paragraph of Section
4.5 hereof;
(4) immediately after giving effect to such transaction, Holding shall
have Consolidated Net Worth which is not less than the Consolidated Net Worth of
Holding immediately prior to such transaction;
(5) each Guarantor, unless it is the other party to the transactions
described above, shall expressly confirm, by an indenture supplemental to this
Indenture, executed and delivered to the Trustee, that its Guarantee shall apply
to such Person's obligations under the Securities; and
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(6) AK Steel shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such consolidation,
merger or transfer and such supplemental indentures (if any) comply with this
Indenture;
provided, however, that subsections (3) and (4) of this Section 5.1 shall not
apply to (A) the consolidation or merger of any Wholly Owned Subsidiary with or
into any other Wholly Owned Subsidiary or AK Steel, (B) the transfer,
conveyance, sale, lease or other disposal (including any disposition by means of
a merger, consolidation or similar transaction) of all or substantially all of
the properties or assets of a Non-Recourse Subsidiary or a Subsidiary which is
not a Significant Subsidiary or (C) the merger of Holding into AK Steel.
If after the date on which the Securities were originally issued any
Person shall become a Subsidiary (other than a Non-Recourse Subsidiary), such
Person shall (a) unconditionally guarantee, by an indenture supplemental to this
Indenture, executed and delivered to the Trustee, all of AK Steel's obligations
under the Securities on the terms set forth in this Indenture and (b) deliver to
the Trustee an Opinion of Counsel stating that such supplemental indenture has
been duly authorized and constitutes the enforceable obligation of such Person.
SECTION 5.2 Successor Corporation Substituted. Upon any consolidation
or merger, or any transfer, conveyance, sale, lease or other disposition of all
or substantially all of the assets of AK Steel or any Subsidiary, in accordance
with Section 5.1 hereof, the successor corporation formed by such consolidation
or into or with which AK Steel or any Subsidiary is merged or to which such
transfer, conveyance, sale, lease or other disposition is made shall succeed to,
and be substituted for, and may exercise every right and power of, AK Steel or
such Subsidiary, as the case may be, under this Indenture and the Securities
with the same effect as if such successor Person has been named as AK Steel or
such Subsidiary herein, and thereafter, except in the case of a transfer,
conveyance, sale, lease or other disposition, the predecessor Person shall be
released from all obligations and covenants under this Indenture.
ARTICLE 6
Defaults and Remedies
SECTION 6.1 Events of Default. "Event of Default", wherever used
herein, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be 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):
(a) default in any payment of interest on any Security when the same
becomes due and payable, and such default continues for a period of 30 days;
(b) default in the payment of the principal of any Security when the
same becomes due and payable at its Stated Maturity, upon redemption, upon
declaration or otherwise;
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(c) failure to redeem or purchase Securities when required pursuant to
this Indenture and the Securities;
(d) failure to (i) comply with the provisions of Section 5.1 hereof,
(ii) make or consummate an Offer in accordance with the provisions of Section
4.10 hereof or (iii) make or consummate a Change in Control Offer in accordance
with the provisions of Section 4.17 hereof;
(e) failure to observe or comply with any of the agreements in the
Securities or this Indenture (other than those referred to in subsection (a),
(b), (c) or (d) of this Section 6.1), which continues for 60 days after there
has been given to AK Steel by the Trustee or to AK Steel and the Trustee by the
Holders of at least 25% in principal amount of Securities then outstanding a
written notice specifying such failure;
(f) Debt of AK Steel or any Significant Subsidiary is not paid within
any applicable grace period after final maturity or is accelerated by the
holders thereof because of a default, and the total amount of such Debt unpaid
or accelerated exceeds $10.0 million or its foreign currency equivalent;
(g) any Senior Note Guarantee issued by Holding or any Significant
Subsidiary ceases to be in full force and effect other than in accordance with
its terms, or Holding or any Significant Subsidiary or any Person acting on
behalf of Holding or such Significant Subsidiary shall deny or disaffirm its
obligations under its Senior Note Guarantee;
(h) AK Steel 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 all or substantially all of its property,
(iv) makes a general assignment for the benefit of its
creditors, or
(v) admits in writing its inability to pay debts as the same
become due;
(i) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(i) is for relief against AK Steel, Holding or any
Significant Subsidiary in an involuntary case,
(ii) appoints a Custodian of AK Steel, Holding or any
Significant Subsidiary or for all or any substantial part of
its property, or
(iii) orders the liquidation of AK Steel, Holding or any
Significant Subsidiary,
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and the order or decree remains unstayed and in effect for 60 days; or
(j) any judgment or decree for the payment of money in excess of $10.0
million is rendered against Holding, AK Steel or any Significant Subsidiary and
is not discharged and either (i) an enforcement proceeding has been commenced by
any creditor upon such judgment or decree or (ii) there is a period of 60 days
following such judgment during which such judgment or decree is not discharged,
waived or the execution thereof stayed.
The term "Custodian" means any receiver, trustee, assignee, liquidator
or similar official under any Bankruptcy Law.
SECTION 6.2 Acceleration. If an Event of Default shall occur and be
continuing, either the Trustee or the Holders of at least 25% in principal
amount of the Securities then outstanding may accelerate the maturity of all
Securities and thereupon the principal of, premium, if any, and any accrued and
unpaid interest on the Securities shall become due and payable immediately;
provided, that if any Event of Default specified in subsection (h) or (i) of
Section 6.1 hereof occurs, such amount shall become immediately due and payable
without any declaration or other act on the part of the Trustee or any Holder.
The Holders of at least a majority in principal amount of the then outstanding
Securities by notice to the Trustee may rescind such acceleration and its
consequences if the rescission would not conflict with any judgment or decree
and if all Events of Default, other than the nonpayment of accelerated principal
of, premium, if any, and interest on Securities, have been cured or waived as
provided in this Indenture. No such rescission shall affect any subsequent
Default or impair any right consequent thereto.
SECTION 6.3 Other Remedies. If an 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 Securities or to enforce the performance of
any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Securityholder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.
SECTION 6.4 Waiver of Past Defaults. Holders of at least a majority in
principal amount of the then outstanding Securities by notice to the Trustee may
waive an existing Default or Event of Default and its consequences except (a) a
Default or Event of Default in the payment of the principal of or premium, if
any, and interest on any Security or (b) a Default or Event of Default in
respect of a provision that under Section 9.2 hereof cannot be amended without
the consent of each Holder affected. When a Default is waived, it is deemed
cured, but no such waiver shall extend to any subsequent or other Default or
impair any consequent right.
SECTION 6.5 Control by Majority. The Holders of a majority in principal
amount of the then outstanding Securities may direct the time, method and place
of conducting any proceeding for any remedy available to the Trustee or
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exercising any trust or power conferred on the Trustee. However, the Trustee may
refuse to follow any direction that conflicts with law or this Indenture, that
the Trustee determines is unduly prejudicial to the rights of other
Securityholders or would involve the Trustee in personal liability; provided,
however, that the Trustee may take any other action deemed proper by the Trustee
that is not inconsistent with such direction. Prior to taking any action
hereunder, the Trustee shall be entitled to indemnification satisfactory to it
in its sole discretion against all losses and expenses caused by taking or not
taking such action.
SECTION 6.6 Limitation on Suits. No Holder of any Security will have
any right to pursue any remedy with respect to this Indenture or the Securities
unless:
(a) such Holder shall have previously given to the Trustee written
notice of a continuing Event of Default;
(b) the Holders of at least 25% in principal amount of the Securities
shall have made written request to the Trustee to pursue the remedy;
(c) such Holder shall have offered the Trustee reasonable indemnity
against any liability;
(d) the Trustee shall have failed to comply with the request within 60
days after the receipt of such request and the offer of indemnity; and
(e) no written direction inconsistent with such request shall have been
given to the Trustee during such 60-day period by the Holders of at least a
majority in principal amount of the Securities.
A Securityholder may not use this Indenture to prejudice the rights of
another Securityholder or to obtain a preference or priority over another
Securityholder.
SECTION 6.7 Rights of Holders to Receive Payment. Notwithstanding any
other provision of this Indenture, the right of any Holder of a Security to
receive payment of principal and interest on the Securities held by such Holder,
on or after the respective due dates expressed in the Securities, or to bring
suit for the enforcement of any such payment on or after such respective dates,
shall not be impaired or affected without the consent of such Holder.
SECTION 6.8 Collection Suit by Trustee. If an Event of Default
specified in subsection (a) or (b) of Section 6.1 hereof occurs and is
continuing, the Trustee may recover judgment in its own name and as trustee of
an express trust against AK Steel for the whole amount of principal and interest
remaining unpaid (together with interest on such unpaid interest to the extent
lawful) on the Securities and the amounts provided for in Section 7.7 hereof.
SECTION 6.9 Trustee May File Proofs of Claim. The Trustee may file such
proofs of claim and other papers or documents as may be necessary or advisable
in order to have the claims of the Trustee and the Securityholders allowed in
any judicial proceedings relative to AK Steel, its creditors or its property
and, unless prohibited by law or applicable regulations, may vote on behalf of
the Holders in any election of a trustee in bankruptcy or other Person
performing similar functions, and any Custodian in any such judicial proceeding
is hereby authorized by each Holder to make payments to the Trustee and, in the
event that the Trustee shall consent to the making of such payments directly to
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the Holders, to pay to the Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and its counsel, and any other amounts due the Trustee under Section 7.7 hereof.
SECTION 6.10 Priorities. If the Trustee collects any money pursuant to
this Article 6, it shall pay out the money in the following order:
FIRST: to the Trustee for amounts due under Section
7.7 hereof;
SECOND: to Securityholders for amounts due and unpaid
on the Securities for principal, premium and interest, ratably, without
preference or priority of any kind, according to the amounts due and
payable on the Securities for principal, payment and interest,
respectively; and
THIRD: to AK Steel.
The Trustee may fix a record date and payment date for any payment to
Securityholders pursuant to this Section 6.10. At least 15 days before such
record date, AK Steel shall mail to each Securityholder and the Trustee a notice
that states the record date, the payment and amount to be paid.
SECTION 6.11 Undertaking for Costs. In any suit for the enforcement of
any right or remedy under this Indenture or in any suit against the Trustee for
any action taken or omitted by it as a Trustee, a court in its discretion may
require the filing by any party litigant in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys' fees and expenses, against any party
litigant in the suit, having due regard to the merits and good faith of the
claims or defenses made by the party litigant. This Section 6.11 does not apply
to a suit by the Trustee, a suit by a Holder pursuant to Section 6.7 hereof, or
a suit by Holders of more than 10% in principal amount of the then outstanding
Securities.
SECTION 6.12 Waiver of Stay or Extension Laws. AK Steel (to the extent
it may lawfully do so) shall not at any time insist upon, or plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay or
extension law wherever enacted, now or at any time hereafter in force, which may
affect the covenants or the performance of this Indenture; and AK Steel (to the
extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law, and shall not hinder, delay or impede the execution
of any power herein granted to the Trustee, but shall suffer and permit the
execution of every such power as though no such law had been enacted.
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ARTICLE 7
Trustee
SECTION 7.1 Duties of Trustee. (a) If an Event of Default has occurred
and is continuing, the Trustee shall exercise the rights and powers vested in it
by this Indenture and use the same degree of care and skill in their exercise as
a prudent Person would exercise or use under the circumstances in the conduct of
such Person's own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Trustee undertakes to perform such duties and
only such duties as are specifically set forth in this Indenture and no
implied covenants or obligations shall be read into this Indenture
against the Trustee; and
(ii) in the absence of bad faith on its part, the
Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture. However, in the case of any such certificates or
opinions that by any provision hereof are specifically required to be
furnished to the Trustee, the Trustee shall be under a duty to examine
the same to determine whether or not they conform to the requirements
of this Indenture (but need not confirm or investigate the accuracy of
mathematical calculations or other facts stated therein).
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(i) this subsection (c) does not limit the effect of
subsection (b) of this Section 7.1;
(ii) the Trustee shall not be liable for any error of
judgment made in good faith by a Trust Officer unless it is proved that
the Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to
any action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 6.5 hereof.
(d) Every provision of this Indenture that in any way relates
to the Trustee is subject to subsections (a), (b) and (c) of this Section 7.1.
(e) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with AK Steel.
(f) Money held in trust by the Trustee need not be segregated
from other funds except to the extent required by law.
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(g) No provision of this Indenture shall require the Trustee
to expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers if it shall have reasonable grounds to believe that repayment
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it.
(h) Every provision of this Indenture relating to the conduct
or affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section 7.1 and to the provisions of the TIA.
SECTION 7.2 Rights of Trustee. (a) The Trustee may rely on any document
believed by it to be genuine and to have been signed or presented by the proper
Person. The Trustee need not investigate any fact or matter stated in the
document.
(b) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel. The Trustee shall not
be liable for any action it takes or omits to take in good faith in reliance on
the Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be
responsible for the misconduct or negligence of any agent appointed with due
care.
(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or within its
rights or powers; provided, however, that the Trustee's conduct does not
constitute willful misconduct, negligence or bad faith.
(e) The Trustee may consult with counsel of its selection, and
the advice or opinion of such counsel with respect to legal matters relating to
this Indenture and the Securities shall be full and complete authorization and
protection from liability in respect to any action taken, omitted or suffered by
it hereunder in good faith and in accordance with the advice or opinion of such
counsel.
(f) The Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request or
direction of any of the Securityholders pursuant to this Indenture, unless such
Securityholders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which might be incurred by
it in compliance with such request or direction.
(g) The Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document, but
the Trustee, in its discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit, and, if the Trustee shall
determine to make such further inquiry or investigation, it shall be entitled to
examine the books, records and premises of AK Steel, personally or by agent or
attorney.
SECTION 7.3 Individual Rights of Trustee. The Trustee in its individual
or any other capacity may become the owner or pledgee of Securities and may
otherwise deal with AK Steel, Holding or their Affiliates with the same rights
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it would have if it were not Trustee. Any Paying Agent, Registrar, co-registrar
or co-paying agent may do the same with like rights. However, the Trustee must
comply with Sections 7.10 and 7.11 hereof.
SECTION 7.4 Trustee's Disclaimer. The Trustee shall not be responsible
for and makes no representation as to the validity or adequacy of this Indenture
or the Securities, it shall not be accountable for AK Steel's use of the
proceeds from the Securities, and it shall not be responsible for any statement
of AK Steel in this Indenture or in any document issued in connection with the
sale of the Securities or in the Securities other than the Trustee's certificate
of authentication.
SECTION 7.5 Notice of Defaults. If a Default occurs and is continuing
and if it is known to the Trustee, the Trustee shall mail to each Securityholder
notice of the Default within 90 days after it occurs. Except in the case of a
Default in payment of principal of or interest on any Security (including
payments pursuant to the mandatory redemption provisions of such Security), the
Trustee may withhold the notice if and so long as a committee of its Trust
Officers in good faith determines that withholding the notice is in the
interests of Securityholders.
SECTION 7.6 Reports by Trustee to Holders. If required by TIA ss.
313(a), as promptly as practicable after each March 15 beginning with the March
15 following the date on which the Securities were originally issued, and in any
event prior to May 15 in each year, the Trustee shall mail to each
Securityholder a brief report dated as of March 15 that complies with such TIA
ss. 313(a). The Trustee also shall comply with TIA ss. 313(b).
A copy of each report at the time of its mailing to Securityholders
shall be filed with the SEC and each stock exchange (if any) on which the
Securities are listed. AK Steel agrees to notify promptly the Trustee whenever
the Securities become listed on any stock exchange and of any delisting thereof.
SECTION 7.7 Compensation and Indemnity. AK Steel shall pay to the
Trustee from time to time such compensation as AK Steel and the Trustee shall
from time to time agree in writing for its services. The Trustee's compensation
shall not be limited by any law on compensation of a trustee of an express
trust. AK Steel shall reimburse the Trustee upon request for all reasonable
out-of-pocket expenses incurred or made by it, including costs of collection, in
addition to the compensation for its services. Such expenses shall include the
reasonable compensation and expenses, disbursements and advances of the
Trustee's agents, counsel, accountants and experts. AK Steel shall indemnify
each of the Trustee or any predecessor Trustee against any and all loss,
liability, damage, claim or reasonable expense (including attorneys' fees and
expenses) incurred by it in connection with the acceptance and administration of
this trust and the performance of its duties hereunder. The Trustee shall notify
AK Steel promptly of any claim for which it may seek indemnity. Failure by the
Trustee to so notify AK Steel shall not relieve AK Steel of its obligations
hereunder. AK Steel shall defend the claim and the Trustee may have separate
counsel and AK Steel shall pay the fees and expenses of such counsel. AK Steel
need not reimburse any expense or indemnify against any loss, liability or
expense incurred by the Trustee through the Trustee's own willful misconduct,
negligence or bad faith.
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To secure AK Steel's payment obligations in this Section 7.7, the
Trustee shall have a Lien prior to the Securities on all money or property held
or collected by the Trustee other than money or property held in trust to pay
principal of and interest on particular Securities.
AK Steel's payment obligations pursuant to this Section 7.7 shall
survive the discharge of this Indenture. When the Trustee incurs expenses after
the occurrence of a Default specified in subsection (h) or (i) of Section 6.1
hereof with respect to AK Steel, Holding or a Significant Subsidiary, the
expenses are intended to constitute expenses of administration under the
Bankruptcy Law.
SECTION 7.8 Replacement of Trustee. The Trustee may resign at any time
by so notifying AK Steel. The Holders of at least a majority in principal amount
of the Securities may remove the Trustee by so notifying the Trustee and may
appoint a successor Trustee. AK Steel shall remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) the Trustee is adjudged bankrupt or insolvent;
(c) a receiver or other public officer takes charge of the Trustee or
its property; or
(d) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason (the Trustee in such event being referred to
herein as the retiring Trustee), AK Steel shall promptly appoint a successor
Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to AK Steel. Thereupon the resignation
or removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture. The successor Trustee shall mail a notice of its succession to
Securityholders. The retiring Trustee shall promptly transfer all property held
by it as Trustee to the successor Trustee, subject to the lien provided for in
Section 7.7 hereof.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, AK Steel or the
Holders of at least a majority in principal amount of the Securities may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
If the Trustee fails to comply with Section 7.10 hereof, any
Securityholder may petition any court of competent jurisdiction for the removal
of the Trustee and the appointment of a successor Trustee.
Notwithstanding the replacement of the Trustee pursuant to this Section
7.8, AK Steel's obligations under Section 7.7 hereof shall continue for the
benefit of the retiring Trustee.
SECTION 7.9 Successor Trustee by Merger. If the Trustee consolidates
with, merges or converts into, or transfers all or substantially all its
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corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation without any
further act shall be the successor Trustee.
In case at the time such successor or successors by merger, conversion
or consolidation to the Trustee shall succeed to the trusts created by this
Indenture and any of the Securities shall have been authenticated but not
delivered, any such successor to the Trustee may adopt the certificate of
authentication of any predecessor trustee, and deliver such Securities so
authenticated; and in case at that time any of the Securities shall not have
been authenticated, any successor to the Trustee may authenticate such
Securities either in the name of any predecessor hereunder or in the name of the
successor to the Trustee.
SECTION 7.10 Eligibility; Disqualification. The Trustee shall at all
times satisfy the requirements of TIA ss. 310(a). The Trustee shall have a
combined capital and surplus of at least $50,000,000 as set forth in its most
recent published annual report of condition. The Trustee shall comply with TIA
ss. 310(b); provided, however, that there shall be excluded from the operation
of TIA ss. 310(b)(1) any indenture or indentures under which other securities or
certificates of interest or participation in other securities of AK Steel are
outstanding if the requirements for such exclusion set forth in TIA ss.
310(b)(1) are met.
SECTION 7.11 Preferential Collection of Claims Against Company. The
Trustee shall comply with TIA ss.311(a), excluding any creditor relationship
listed in TIA ss.311(b). A Trustee who has resigned or been removed shall be
subject to TIA ss. 311(a) to the extent indicated.
ARTICLE 8
Discharge of Indenture; Defeasance
SECTION 8.1 Discharge of Liability on Securities; Defeasance. (a) When
(i) AK Steel delivers to the Trustee all outstanding Securities (other than
Securities replaced pursuant to Section 2.7 hereof) for cancellation or (ii) all
outstanding Securities have become due and payable, or are by their terms to
become due and payable within one year or are to be called for redemption within
one year under arrangements satisfactory to the Trustee for the giving of notice
of redemption, and AK Steel irrevocably deposits with the Trustee funds
sufficient to pay at maturity or redemption, as the case may be, all outstanding
Securities, including interest thereon (other than Securities replaced pursuant
to Section 2.7 hereof), and if in either case AK Steel pays all other sums
payable hereunder by AK Steel, then this Indenture shall, subject to subsection
(c) of this Section 8.1 and Section 8.6 hereof, cease to be of further effect.
The Trustee shall acknowledge satisfaction and discharge of this Indenture on
demand of AK Steel accompanied by an Officers' Certificate and an Opinion of
Counsel and at the cost and expense of AK Steel.
(b) Subject to subsection (c) of this Section 8.1 and Sections
8.2 and 8.6 hereof, AK Steel at any time may terminate (i) all its obligations
under the Securities and this Indenture ("legal defeasance option") or (ii) its
obligations under Sections 4.3, 4.5 through 4.14, 4.17 hereof and the operation
of subsections (e) (with respect to Sections 4.3 and 4.5 through 4.13 only) and
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(d) of Section 6.1 hereof ("covenant defeasance option"). AK Steel may exercise
its legal defeasance option notwithstanding its prior exercise of its covenant
defeasance option.
If AK Steel exercises its legal defeasance option, payment of the
Securities may not be accelerated because of an Event of Default. If AK Steel
exercises its covenant defeasance option, payment of the Securities may not be
accelerated because of an Event of Default by AK Steel specified in subsection
(e) (insofar as it relates to compliance with Sections 4.3 and 4.5 through 4.13
only) or (d) of Section 6.1 hereof.
Upon satisfaction of the conditions set forth herein and upon request
of AK Steel, the Trustee shall acknowledge in writing the discharge of those
obligations that AK Steel terminates.
(c) Notwithstanding subsections (a) and (b) of this Section
8.1, AK Steel's obligations in Sections 2.3, 2.4, 2.5, 2.6, 2.7, 7.7, 7.8, 8.4,
8.5 and 8.6 hereof shall survive until the Securities have been paid in full.
Thereafter, AK Steel's obligations only in Sections 7.7, 8.4 and 8.5 hereof
shall survive.
SECTION 8.2 Conditions to Defeasance. AK Steel may exercise its legal
defeasance option or its covenant defeasance option only if:
(a) AK Steel irrevocably deposits in trust (the "defeasance trust")
with the Trustee money or U.S. Government Obligations for the payment of
principal of, premium, if any, and interest on the Securities to maturity or
redemption, as the case may be;
(b) AK Steel delivers to the Trustee a certificate from a nationally
recognized firm of independent accountants expressing their opinion that the
payments of principal, premium, if any, and interest when due and without
reinvestment on the deposited U.S. Government Obligations plus any deposited
money without investment will provide cash at such times and in such amounts
(but, in the case of the legal defeasance option only, not more than such
amounts) as will be sufficient to pay principal, premium, if any, and interest
when due on all the Securities to maturity or redemption, as the case may be;
(c) 123 days pass after the deposit is made and during the 123-day
period no Default specified in subsection (h) or (i) of Section 6.1 hereof with
respect to AK Steel occurs which is continuing at the end of the period;
(d) no Default has occurred and is continuing on the date of such
deposit and after giving effect thereto;
(e) the deposit does not constitute a default under any other agreement
binding on AK Steel;
(f) AK Steel delivers to the Trustee an Opinion of Counsel to the
effect that the trust resulting from the deposit does not constitute, or is
qualified as, a regulated investment company under the Investment Company Act of
1940, as amended;
(g) in the case of the legal defeasance option, AK Steel delivers to
the Trustee an Opinion of Counsel stating that (i) AK Steel has received from,
or there has been published by, the Internal Revenue Service a ruling, or (ii)
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since the date on which the Securities were originally issued there has been a
change in the applicable Federal income tax law, in either case to the effect
that, and based thereon such Opinion of Counsel shall confirm that, the
Securityholders will not recognize income, gain or loss for Federal income tax
purposes as a result of such defeasance and will be subject to Federal income
tax on the same amounts, in the same manner and at the same times as would have
been the case if such defeasance had not occurred;
(h) in the case of the covenant defeasance option, AK Steel delivers to
the Trustee an Opinion of Counsel to the effect that the Securityholders will
not recognize income, gain or loss for Federal income tax purposes as a result
of such covenant defeasance and will be subject to Federal income tax on the
same amounts, in the same manner and at the same times as would have been the
case if such covenant defeasance had not occurred; and
(i) AK Steel delivers to the Trustee an Officers' Certificate and an
Opinion of Counsel, each stating that all conditions precedent to the defeasance
and discharge of the Securities as contemplated by this Article 8 have been
complied with.
Before or after a deposit, AK Steel may make arrangements satisfactory
to the Trustee for the redemption of Securities at a future date in accordance
with Article 3 hereof.
SECTION 8.3 Application of Trust Money. The Trustee shall hold in trust
money or U.S. Government Obligations deposited with it pursuant to this Article
8. It shall apply the deposited money and the money from U.S. Government
Obligations through the Paying Agent and in accordance with this Indenture to
the payment of principal of, premium, if any, and interest on the Securities.
SECTION 8.4 Repayment to Company. The Trustee and the Paying Agent
shall promptly turn over to AK Steel upon written request any excess money or
securities held by them at any time.
Subject to any applicable abandoned property law, the Trustee and the
Paying Agent shall pay to AK Steel upon request any money held by them for the
payment of principal, premium, if any, or interest that remains unclaimed for
two years, and, thereafter, Securityholders entitled to the money must look to
AK Steel for payment as general creditors.
SECTION 8.5 Indemnity for Government Obligations. AK Steel shall pay
and shall indemnify the Trustee against any tax, fee or other charge imposed on
or assessed against deposited U.S. Government Obligations or the principal,
premium, if any, and interest received on such U.S. Government Obligations.
SECTION 8.6 Reinstatement. If the Trustee or Paying Agent is unable to
apply any money or U.S. Government Obligations in accordance with this Article 8
by reason of any legal proceeding or by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, AK Steel's obligations under this Indenture and the Securities
shall be revived and reinstated as though no deposit had occurred pursuant to
this Article 8 until such time as the Trustee or Paying Agent is permitted to
apply all such money or U.S. Government Obligations in accordance with this
Article 8; provided, however, that, if AK Steel has made any payment of interest
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on, premium, if any, or principal of any Securities because of the reinstatement
of its obligations, AK Steel shall be subrogated to the rights of the Holders of
such Securities to receive such payment from the money or U.S. Government
Obligations held by the Trustee, or Paying Agent.
ARTICLE 9
Amendments
SECTION 9.1 Without Consent of Holders. AK Steel, the Guarantors and
the Trustee may amend this Indenture or the Securities without notice to or
consent of any Securityholder:
(a) to cure any ambiguity, omission, defect or inconsistency;
(b) to comply with Article 5 hereof;
(c) to provide for uncertificated Securities in addition to or
in place of certificated Securities; provided, however, that the
uncertificated Securities are issued in registered form for purposes of
Section 163(f) of the Internal Revenue Code of 1986, as amended, or in
a manner such that the uncertificated Securities are described in
Section 163(f) (2) (B) of the Internal Revenue Code of 1986, as
amended;
(d) to add guarantees with respect to the Securities;
(e) to add to the covenants of AK Steel or the Guarantors for
the benefit of the Holders or to surrender any right or power herein
conferred upon AK Steel or the Guarantors;
(f) to reflect the release of any Guarantor Subsidiary from
its Senior Note Guarantee, or the addition of any Subsidiary of AK
Steel as a Guarantor Subsidiary, in the manner provided by this
Indenture;
(g) to comply with any requirements of the SEC in connection
with qualifying this Indenture under the TIA; or
(h) to make any change that does not adversely affect the
rights of any Securityholder.
After an amendment under this Section 9.1 becomes effective, AK Steel
shall mail to Securityholders a notice briefly describing such amendment. The
failure to give such notice to all Securityholders, or any defect therein, shall
not impair or affect the validity of an amendment under this Section 9.1.
SECTION 9.2 With Consent of Holders. AK Steel, the Guarantors and the
Trustee may amend this Indenture or the Securities without notice to any
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Securityholder but with the written consent of the Holders of at least a
majority in principal amount of the then outstanding Securities. However,
without the consent of each Securityholder affected, an amendment may not:
(a) reduce the amount of Securities whose Holders must
consent to an amendment;
(b) reduce the rate of or extend the time for payment of
interest on any Security;
(c) reduce the principal amount of or extend the Stated
Maturity of any Security;
(d) reduce the premium payable upon the redemption of any
Security or change the time at which any Security may be redeemed in
accordance with Article 3;
(e) change the currency of payment of any Security;
(f) make any change in the provisions concerning waiver of
Defaults by Holders of the Securities or the rights of Holders to
receive payments of principal or interest in Section 6.4 or 6.7 hereof;
(g) make any change in Section 4.17 hereof or the definition
"Change in Control"; or
(h) make any change in this Section 9.2.
It shall not be necessary for the consent of the Holders under this
Section 9.2 to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent approves the substance thereof.
After an amendment under this Section 9.2 becomes effective, AK Steel
shall mail to Securityholders a notice briefly describing such amendment. The
failure to give such notice to all Securityholders, or any defect therein, shall
not impair or affect the validity of an amendment under this Section 9.2.
SECTION 9.3 Compliance with Trust Indenture Act. Every amendment to
this Indenture or the Securities shall comply with the TIA as then in effect.
SECTION 9.4 Revocation and Effect of Consents and Waivers. A consent to
an amendment or a waiver by a Holder of a Security shall bind the Holder and
every subsequent Holder of that Security or portion of the Security that
evidences the same debt as the consenting Holder's Security, even if notation of
the consent or waiver is not made on the Security. However, any such Holder or
subsequent Holder may revoke the consent or waiver as to such Holder's Security
or portion of the Security if the Trustee receives the notice of revocation
before the date the amendment or waiver becomes effective. After an amendment or
waiver becomes effective, it shall bind every Securityholder.
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AK Steel may, but shall not be obligated to, fix a record date for the
purpose of determining the Securityholders entitled to give their consent or
take any other action described above or required or permitted to be taken
pursuant to this Indenture. If a record date is fixed, then notwithstanding the
immediately preceding paragraph, those Persons who were Securityholders at such
record date (or their duly designated proxies), and only those Persons, shall be
entitled to give such consent or to revoke any consent previously given or to
take any such action, whether or not such Persons continue to be Holders after
such record date. No such consent shall be valid or effective for more than 120
days after such record date.
SECTION 9.5 Notation on or Exchange of Securities. If an amendment
changes the terms of a Security, the Trustee may require the Holder of the
Security to deliver it to the Trustee. The Trustee may place an appropriate
notation on the Security regarding the changed terms and return it to the
Holder. Alternatively, if AK Steel or the Trustee so determines, AK Steel in
exchange for the Security shall issue and the Trustee shall authenticate a new
Security that reflects the changed terms. Failure to make the appropriate
notation or to issue a new Security shall not affect the validity of such
amendment.
SECTION 9.6 Trustee to Sign Amendments. The Trustee shall sign any
amendment authorized pursuant to this Article 9 if the amendment does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
If it does, the Trustee may but need not sign it. In signing such amendment the
Trustee shall be entitled to receive indemnity reasonably satisfactory to it and
to receive, and, subject to Section 7.1 hereof, shall be, fully protected in
relying upon, an Officers' Certificate and an Opinion of Counsel stating that
such amendment is authorized or permitted by this Indenture.
SECTION 9.7 Payment for Consent. Neither Holding, AK Steel, any
Affiliate of Holding nor any Subsidiary shall, directly or indirectly, pay or
cause to be paid any consideration, whether by way of interest, fee or
otherwise, to any Holder for or as an inducement to any consent, waiver or
amendment of any of the terms or provisions of this Indenture or the Securities
unless such consideration is offered to be paid or agreed to be paid to all
Holders which so consent, waive or agree to amend in the time frame set forth in
solicitation documents relating to such consent, waiver or agreement.
ARTICLE 10
Senior Note Guarantees
SECTION 10.1 Unconditional Senior Note Guarantees. (a) Each Guarantor,
which includes Holding and each Guarantor Subsidiary, hereby jointly and
severally unconditionally guarantees to each Holder of a Security authenticated
and delivered by the Trustee, and to the Trustee on behalf of such Holder, the
due and punctual payment and performance of the Obligations (the "Senior Note
Guarantees") and further agree to pay any and all expenses (including, without
limitation, all fees and disbursements of counsel) which may be paid or incurred
by the Trustee or the Holders in enforcing their rights under the Senior Note
Guarantees. In case of the failure of AK Steel punctually to perform or make any
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such payment, each Guarantor hereby jointly and severally agrees to cause such
payment and performance to be made punctually.
(b) Each Guarantor hereby jointly and severally agrees that its
obligations hereunder shall be unconditional, irrespective of the validity,
regularity or enforceability of such Security or this Indenture, the absence of
any action to enforce the same, any exchange, or any release or amendment or
waiver of any term of any other Guarantee of, or any consent to departure from
any requirement of any other Guarantee of all or of any of the Securities, the
election by the Trustee or any of the Holders in any proceeding under Chapter 11
of the Bankruptcy Law of the application of Section 1111(b)(2) of the Bankruptcy
Law, any borrowing or grant of a security interest by AK Steel, as
debtor-in-possession, under Section 364 of the Bankruptcy Law, the disallowance,
under Section 502 of the Bankruptcy Law, of all or any portion of the claims of
the Trustee or any of the Holders for payment of any of the Securities, any
waiver or consent by the Holder of such Security or by the Trustee or either of
them with respect to any provisions thereof or of this Indenture, the obtaining
of any judgment against AK Steel or any action to enforce the same or any other
circumstances which might otherwise constitute a legal or equitable discharge or
defense of a guarantor. Each Guarantor hereby waives the benefits of diligence,
presentment, demand of payment, or exhausts any right or take any action against
AK Steel or any other Person, filing of claims with a court in the event of
insolvency or bankruptcy of AK Steel, any right to require a proceeding first
against AK Steel, protest or notice with respect to such Security or the Debt
evidenced thereby and all demands whatsoever, and covenants that this Senior
Note Guarantee will not be discharged except by complete performance of the
obligations contained in such Security and in this Senior Note Guarantee. Each
Guarantor hereby agrees that, in the event of a default in payment of principal
(or premium, if any) or interest on such Security, whether at their first
scheduled maturity, by acceleration, call for redemption, purchase or otherwise,
legal proceedings may be instituted by the Trustee on behalf of, or by, the
Holder of such Security, subject to the terms and conditions set forth in this
Indenture, directly against each Guarantor to enforce this Senior Note Guarantee
without first proceeding against AK Steel. Each Guarantor agrees that if, after
the occurrence and during the continuance of an Event of Default, the Trustee or
any of the Holders are prevented by applicable law from exercising their
respective rights to accelerate the maturity of the Securities, to collect
interest on the Securities, or to enforce or exercise any other right or remedy
with respect to the Securities, such Guarantor agrees to pay to the Trustee for
the account of the Holders, upon demand therefor, the amount that would
otherwise have been due and payable had such rights and remedies been permitted
to be exercised by the Trustee or any of the Holders.
(c) Each Guarantor shall be subrogated to all rights of the Holders of
the Securities upon which its Guarantee is endorsed against AK Steel in respect
of any amounts paid by such Guarantor on account of such Security pursuant to
the provisions of its Senior Note Guarantee or this Indenture; provided,
however, that no Guarantor shall be entitled to enforce or to receive any
payments arising out of, or based upon, such right of subrogation until the
principal of (and premium, if any) and interest on all Securities issued
hereunder shall have been paid in full.
(d) Each Senior Note Guarantee shall remain in full force and effect
and continue to be effective should any petition be filed by or against AK Steel
for liquidation or reorganization, should AK Steel become insolvent or make an
assignment for the benefit of creditors or should a receiver or trustee be
appointed for all or any significant part of AK Steel's assets, and shall, to
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the fullest extent permitted by law, continue to be effective or be reinstated,
as the case may be, if at any time payment and performance of the Securities,
is, pursuant to applicable law, rescinded or reduced in amount, or must
otherwise be restored or returned by any obligee on the Securities, whether as a
"voidable preference," "fraudulent transfer," or otherwise, all as though such
payment or performance had not been made. In the event that any payment, or any
part thereof, is rescinded, reduced, restored or returned, the Securities shall,
to the fullest extent permitted by law, be reinstated and deemed reduced only by
such amount paid and not so rescinded, reduced, restored or returned.
(e) Each Guarantor shall have the right to seek contribution from any
non-paying Guarantor so long as the exercise of such right does not impair the
rights of the Holders under its Senior Note Guarantee.
SECTION 10.2 Limitation of Guarantor's Liability. Each Guarantor and,
by its acceptance hereof, each Holder confirms that it is the intention of all
such parties that the guarantee by such Guarantor pursuant to its Guarantee not
constitute a fraudulent transfer or conveyance for purposes of any Federal,
state or foreign law. To effectuate the foregoing intention, the Holders and
each Guarantor hereby irrevocably agree that the obligations of each Guarantor
under its Guarantee shall be limited to the maximum amount as will, after giving
effect to all other contingent and fixed liabilities of such Guarantor and after
giving effect to any collections from payments made by or on behalf of any other
Guarantor in respect of the obligations of such other Guarantor under its
Guarantee pursuant to subsection (e) of Section 10.1 hereof, result in the
obligations of such Guarantor under its Guarantee not constituting a fraudulent
conveyance or fraudulent transfer under Federal, state or foreign law.
SECTION 10.3 Execution and Delivery of Senior Note Guarantees. To
further evidence the Senior Note Guarantees set forth in Section 10.1 hereof,
each Guarantor and AK Steel hereby agree that a notation relating to such Senior
Note Guarantees substantially in the form of Exhibit B shall be endorsed on each
Security authenticated and delivered by the Trustee and executed by either
manual or facsimile signature of an Officer of each Guarantor.
A Senior Note Guarantee bearing the manual or facsimile signature of
individuals who were at any time the Officers of a Guarantor shall bind such
Guarantor, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of the Security on
which such Senior Note Guarantee is endorsed or did not hold such offices at the
date of such Senior Note Guarantee.
The delivery of any Security by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the Senior Note Guarantee
endorsed thereon on behalf of the Guarantor. Each Guarantor hereby jointly and
severally agrees that its Senior Note Guarantee set forth in Section 10.1 hereof
shall remain in full force and effect notwithstanding any failure to endorse a
Senior Note Guarantee on any Security.
SECTION 10.4 Addition of Guarantor. (a) For as long as any Senior Note
Guarantees are required to remain in effect pursuant to the terms of this
Indenture, promptly but in no event later than 15 days following the date any
Person shall become a Subsidiary (other than a Non-Recourse Subsidiary) after
the date on which the Securities were originally issued, AK Steel shall cause
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such Subsidiary to become a Guarantor Subsidiary with respect to the Securities
by executing and delivering to the Trustee (i) a supplemental indenture, in form
and substance satisfactory to the Trustee, which subjects such Person to the
provisions (including the representations and warranties) of this Indenture as a
Guarantor Subsidiary and (ii) an Opinion of Counsel to the effect that such
supplemental indenture has been duly authorized and executed by such Person and
constitutes the legal, valid, binding and enforceable obligation of such Person
(subject to such customary exceptions concerning creditors' rights and equitable
principles as may be acceptable to the Trustee in its discretion).
(b) AK Steel will cause any Subsidiary of AK Steel that is or becomes a
borrower under or guarantor of any Permitted Credit Facility to become a
Guarantor Subsidiary with respect to the Securities in accordance with
subsection (a) of this Section 10.4.
SECTION 10.5 Release of the Senior Note Guarantee. (a) Notwithstanding
anything to the contrary contained in this Article 10, in the event that (i) any
Guarantor Subsidiary shall no longer be obligated to guarantee any Debt under
any Permitted Credit Facility, and (ii) no Default or Event of Default shall
have occurred and be continuing, then, following compliance with the next
following sentence, such Guarantor Subsidiary shall be released from its
obligations under this Indenture and the Senior Note Guarantee of such Guarantor
Subsidiary shall be of no further force or effect. Upon delivery by AK Steel to
the Trustee of an Officers' Certificate and an Opinion of Counsel to the effect
that the terms of this subsection (a) have been satisfied with respect to any
Guarantor Subsidiary, the Trustee shall execute any documents reasonably
required and reasonably acceptable in form and substance to the Trustee to
evidence the release of such Guarantor Subsidiary from the obligations of its
Senior Note Guarantee hereunder.
(b) Concurrently with any sale or other disposition (other
than to Holding or any Subsidiary of Holding) by way of merger, consolidation or
otherwise of all or substantially all the assets of a Guarantor Subsidiary or
all the capital stock of a Guarantor Subsidiary permitted by and in accordance
with the terms of this Indenture, and upon delivery by AK Steel to the Trustee
of an Officers' Certificate and an Opinion of Counsel to the effect that such
sale or other disposition was made by AK Steel in accordance with the provisions
of this Indenture, the Trustee shall execute any documents reasonably required
and reasonably acceptable in form and substance to the Trustee to evidence the
release of such Guarantor Subsidiary from the obligations under its Senior Note
Guarantee. Any Guarantor Subsidiary not released from its obligations under its
Senior Note Guarantee endorsed on the Securities and under this Article 10 shall
remain liable for the Obligations under its Senior Note Guarantee endorsed on
the Securities and under this Article 10.
(c) Concurrently with the legal defeasance of the Securities or the
covenant defeasance of the Securities under Article 8 hereof, the Guarantor
Subsidiaries shall be released from all of their obligations under their Senior
Note Guarantees endorsed on the Securities and under this Article 10, without
any action on the part of the Trustee or any Holder of Securities.
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ARTICLE 11
Miscellaneous
SECTION 11.1 Trust Indenture Act Controls. If any provision of this
Indenture limits, qualifies or conflicts with another provision which is
required to be included in this Indenture by any provision of the TIA, such
required provision shall control.
SECTION 11.2 Notices. Any notice or communication shall be in writing
and delivered in person or mailed by first class mail addressed as follows:
if to AK Steel or any Guarantor:
AK Steel Corporation
703 Curtis Street
Middletown, Ohio 45043
Attention: John G. Hritz, Esq.
Executive Vice President,
General Counsel and Secretary
if to the Trustee:
Fifth Third Bank
Corporate Trust Administration
38 Fountain Square Plaza
Cincinnati, Ohio 45363
AK Steel, the Guarantors or the Trustee by notice to the others may
designate additional or different addresses for subsequent notices or
communications.
Any notice or communication mailed to a Securityholder shall be mailed
to the Securityholder at the Securityholder's address as it appears on the
registration books of the Registrar and shall be sufficiently given if so mailed
within the time prescribed.
Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.
SECTION 11.3 Communication by Holders with Other Holders.
Securityholders may communicate pursuant to TIA ss. 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. AK Steel, the Guarantors, the Trustee, the Registrar and anyone else
shall have the protection of TIA ss. 312(c).
SECTION 11.4 Certificate and Opinion as to Conditions Precedent. Upon
any request or application by AK Steel or any Guarantor to the Trustee to take
or refrain from taking any action under this Indenture, AK Steel or any
Guarantor shall furnish to the Trustee:
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(a) an Officers' Certificate in form and substance
reasonably satisfactory to the Trustee stating that, in the opinion of
the signers, all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with; and
(b) an Opinion of Counsel in form and substance
reasonably satisfactory to the Trustee stating that, in the opinion of
such counsel, all such conditions precedent have been complied with.
SECTION 11.5 Statements Required in Certificate or Opinion. Each
certificate or opinion with respect to compliance with a covenant or condition
provided for in this Indenture shall include:
(a) a statement that each person signing such
certificate or opinion has read such covenant or condition;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(c) a statement that, in the opinion of each such
person, he has made such examination or investigation as is necessary
to enable him to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(d) a statement as to whether or not, in the opinion of
each such person, such covenant or condition has been complied with.
SECTION 11.6 When Securities Disregarded. In determining whether the
Holders of the required principal amount of Securities have concurred in any
direction, waiver or consent, Securities owned by Holding, AK Steel or by any
Affiliate of Holding shall be disregarded and deemed not to be outstanding,
except that, for the purpose of determining whether the Trustee shall be
protected in relying on any such direction, waiver or consent, only Securities
which the Trustee actually knows are so owned shall be so disregarded. Also,
subject to the foregoing, only Securities outstanding at the time shall be
considered in any such determination.
SECTION 11.7 Rules by Trustee, Paying Agent and Registrar. The Trustee
may make reasonable rules for action by or a meeting of Securityholders. The
Registrar and the Paying Agent may make reasonable rules for their functions.
SECTION 11.8 Legal Holidays. A "Legal Holiday" is a Saturday, a Sunday
or a day on which banking institutions are not required to be open in the State
of New York or the State in which the principal Corporate Trust Office of the
Trustee is located. If a payment date is a Legal Holiday, payment shall be made
on the next succeeding day that is not a Legal Holiday, and no interest shall
accrue for the intervening period. If a regular record date is a Legal Holiday,
the record date shall not be affected.
SECTION 11.9 Governing Law. The rights and duties of AK Steel, Holding
and the Trustee under this Indenture, the Securities and the Senior Note
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Guarantees shall, pursuant to New York General Obligations Law Section 5-1401,
be governed by the law of the State of New York.
SECTION 11.10 No Recourse Against Others. A director, officer, employee
or stockholder, as such, of AK Steel or any Guarantor shall not have any
liability for any obligations of AK Steel or such Guarantor under the Securities
or this Indenture or the Senior Note Guarantees or for any claim based on, in
respect of or by reason of such obligations or their creation. By accepting a
Security, each Securityholder shall waive and release all such liability. The
waiver and release shall be part of the consideration for the issue of the
Securities.
SECTION 11.11 Successors. All agreements of AK Steel and the Guarantor
in this Indenture and the Securities shall bind their respective successors. All
agreements of the Trustee in this Indenture shall bind its successors.
SECTION 11.12 Multiple Originals. The parties may sign any number of
copies of this Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement. One signed copy is enough to prove this
Indenture.
SECTION 11.13 Table of Contents; Headings. The table of contents,
cross-reference sheet and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not intended
to be considered a part hereof and shall not modify or restrict any of the terms
or provisions hereof.
SECTION 11.14 Separability Clause. In case any provision in this
Indenture or in the Securities shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
SECTION 11.15 Benefits of Indenture. Nothing in this Indenture or in
the Securities, express or implied, shall give to any Person, other than the
parties hereto and their successors hereunder and the Holders, any benefit or
any legal or equitable right, remedy or claim under this Indenture.
59
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Indenture to
be duly executed as of the date first written above.
AK STEEL CORPORATION
By: /s/ James L. Wainscott
----------------------------------------
Name: James L. Wainscott
Title: Vice President, Treasurer and
Chief Financial Officer
AK STEEL HOLDING CORPORATION,
as Guarantor
By: /s/ James L. Wainscott
----------------------------------------
Name: James L. Wainscott
Title: Vice President, Treasurer and
Chief Financial Officer
FIFTH THIRD BANK,
as Trustee
By: /s/ Gregory R. Hahn
----------------------------------------
Name: Gregory R. Hahn
Title: Assistant Vice President
<PAGE>
STATE OF OHIO )
) ss.:
COUNTY OF BUTLER )
On the 10th day of February, 1999, before me personally came James L.
Wainscott, to me known, who, being by me duly sworn, did depose and say that he
is Vice President, Treasurer and Chief Financial Officer of AK Steel
Corporation, one of the corporations described in and which executed the
foregoing instrument; and that he signed his name thereto by authority of the
Board of Directors of said corporation.
/s/ Joseph W. Plye
----------------------------------------
Notary Public
<PAGE>
STATE OF OHIO )
) ss.:
COUNTY OF BUTLER )
On the 10th day of February, 1999, before me personally came James L.
Wainscott, to me known, who, being by me duly sworn, did depose and say that he
is Vice President, Treasurer and Chief Financial Officer of AK Steel Holding
Corporation, one of the corporations described in and which executed the
foregoing instrument; and that he signed his name thereto by authority of the
Board of Directors of said corporation.
/s/ Joseph W. Plye
----------------------------------------
Notary Public
<PAGE>
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 10th day of February, 1999, before me personally came Gregory R.
Hahn, to me known, who, being by me duly sworn, did depose and say that he is an
Assistant Vice President of Fifth Third Bank, an Ohio banking corporation that
is the Trustee described in and which executed the foregoing instrument; and
that he signed his name thereto by authority of the Board of Directors of said
corporation.
/s/ Debra Goldberg
----------------------------------------
Notary Public
<PAGE>
APPENDIX A
FOR OFFERINGS TO QUALIFIED INSTITUTIONAL BUYERS PURSUANT TO RULE 144A AND
TO CERTAIN PERSONS IN OFFSHORE TRANSACTIONS IN RELIANCE ON REGULATION S.
PROVISIONS RELATING TO INITIAL SECURITIES,
PRIVATE EXCHANGE SECURITIES
AND EXCHANGE SECURITIES
1. Definitions.
1.1 Definitions.
For the purposes of this Appendix A the following terms shall have the
meanings indicated below:
"Depository" means The Depository Trust Company, New York, New York,
its nominees and their respective successors.
"Exchange Securities" means the 7-7/8% Senior Notes Due 2009 to be
issued pursuant to this Indenture in connection with a Registered Exchange Offer
pursuant to the Registration Rights Agreement.
"Initial Purchasers" means Credit Suisse First Boston Corporation and
PNC Capital Markets, Inc.
"Initial Securities" means the 7-7/8% Senior Notes Due 2009 issued
under this Indenture on or about the date hereof.
"Private Exchange" means the offer by the Company, pursuant to the
Registration Rights Agreement, to the Initial Purchasers to issue and deliver to
each Initial Purchaser, in exchange for the Initial Securities held by such
Initial Purchaser as part of its initial distribution, a like aggregate
principal amount of Private Exchange Securities.
"Private Exchange Securities" means the 7-7/8% Senior Notes Due 2009 to
be issued pursuant to this Indenture in connection with a Private Exchange
pursuant to the Registration Rights Agreement.
"Purchase Agreement" means the Purchase Agreement dated February 5,
1999, among AK Steel, Holding and the Initial Purchasers.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Registered Exchange Offer" means the offer by the Company, pursuant to
the Registration Rights Agreement, to certain Holders of Initial Securities, to
issue and deliver to such Holders, in exchange for the Initial Securities, a
<PAGE>
like aggregate principal amount of Exchange Securities registered under the
Securities Act.
"Registration Rights Agreement" means the Registration Rights Agreement
dated February 5, 1999, among AK Steel, Holding and the Initial Purchasers.
"Securities" means the Initial Securities, the Exchange Securities and
the Private Exchange Securities, treated as a single class.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Custodian" means the custodian with respect to a Global
Security (as appointed by the Depository), or any successor person thereto and
shall initially be the Trustee.
"Shelf Registration Statement" means the registration statement issued
by the Company in connection with the offer and sale of Initial Securities or
Private Exchange Securities pursuant to the Registration Rights Agreement.
"Transfer Restricted Securities" means Securities that bear or are
required to bear the legend set forth in Section 2.3(b).
1.2 Other Definitions.
Defined in
Term Section:
---- --------
"Agent Members"................................. 2.1(b)
"Global Security"................................2.1(a)
"Regulation S"...................................2.1(a)
"Rule 144A"......................................2.1(a)
2. The Securities.
2.1 Form and Dating.
The Initial Securities are being offered and sold by AK Steel pursuant
to the Purchase Agreement.
(a) Global Securities. Initial Securities offered and sold to
a QIB in reliance on Rule 144A under the Securities Act ("Rule 144A") or in
reliance on Regulation S under the Securities Act ("Regulation S"), in each case
as provided in the Purchase Agreement, shall be issued initially in the form of
one or more permanent global Securities in definitive, fully registered form
without interest coupons with the global securities legend and restricted
securities legend set forth in Exhibit 1 hereto (each, a "Global Security"),
which shall be deposited on behalf of the purchasers of the Initial Securities
represented thereby with the Securities Custodian, and registered in the name of
the Depository or a nominee of the Depository, duly executed by AK Steel and
authenticated by the Trustee as hereinafter provided. The aggregate principal
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<PAGE>
amount of the Global Securities may from time to time be increased or decreased
by adjustments made on the records of the Securities Custodian and the
Depository or its nominee as hereinafter provided.
(b) Book-Entry Provisions. This Section 2.1(b) shall apply
only to a Global Security deposited with or on behalf of the Depository.
AK Steel shall execute and the Trustee shall, in accordance with this
Section 2.1(b), authenticate and deliver initially one or more Global Securities
that (a) shall be registered in the name of the Depository or the nominee of
such Depository and (b) shall be delivered by the Trustee to such Depository or
pursuant to such Depository's instructions or held by the Securities Custodian.
Members of, or participants in, the Depository ("Agent Members") shall
have no rights under this Indenture with respect to any Global Security held on
their behalf by the Depository or by the Securities Custodian or under such
Global Security, and the Depository may be treated by AK Steel, the Trustee and
any agent of AK Steel or the Trustee as the absolute owner of such Global
Security for all purposes whatsoever. Notwithstanding the foregoing, nothing
herein shall prevent AK Steel, the Trustee or any agent of AK Steel or the
Trustee from giving effect to any written certification, proxy or other
authorization furnished by the Depository or impair, as between the Depository
and its Agent Members, the operation of customary practices of such Depository
governing the exercise of the rights of a holder of a beneficial interest in any
Global Security.
(c) Certificated Securities. Except as provided in Section 2.3
or 2.4, owners of beneficial interests in Global Securities will not be entitled
to receive physical delivery of certificated Securities.
2.2 Authentication. The Trustee shall authenticate and deliver: (1)
Initial Securities for original issue in an aggregate principal amount of
$450,000,000 and (2) Exchange Securities or Private Exchange Securities for
issue only in a Registered Exchange Offer or a Private Exchange, respectively,
pursuant to the Registration Rights Agreement, for a like principal amount of
Initial Securities, in each case upon a written order of AK Steel signed by two
Officers of AK Steel. Such order shall specify the amount of the Securities to
be authenticated and the date on which the original issue of Securities is to be
authenticated and whether the Securities are to be Initial Securities, Exchange
Securities or Private Exchange Securities. The aggregate principal amount of
Securities outstanding at any time may not exceed $450,000,000 except as
provided in Section 2.7 of this Indenture.
2.3 Transfer and Exchange.
(a) Transfer and Exchange of Global Securities and Beneficial
Interests Therein. (i) The transfer and exchange of Global Securities or
beneficial interests therein shall be effected through the Depository in
accordance with this Indenture (including applicable restrictions on transfer
set forth herein, if any) and the procedures of the Depository therefor. A
transferor of a beneficial interest in a Global Security shall deliver to the
Registrar a written order given in accordance with the Depository's procedures
containing information regarding the participant account of the Depository to be
credited with a beneficial interest in the Global Security. The Registrar shall,
in accordance with such instructions instruct the Depository to credit to the
3
<PAGE>
account of the Person specified in such instructions a beneficial interest in
the Global Security and to debit the account of the Person making the transfer
the beneficial interest in the Global Security being transferred.
(ii) Notwithstanding any other provisions of this Appendix A
(other than the provisions set forth in Section 2.4 hereof), a Global
Security may not be transferred as a whole except by the Depository to
a nominee of the Depository or by a nominee of the Depository to the
Depository or another nominee of the Depository or by the Depository or
any such nominee to a successor Depository or a nominee of such
successor Depository.
(iii) In the event that a Global Security is exchanged for
Securities in definitive registered form pursuant to Section 2.4 hereof
or Section 2.9 of this Indenture, prior to the consummation of a
Registered Exchange Offer or the effectiveness of a Shelf Registration
Statement with respect to such Securities, such Securities may be
exchanged only in accordance with such procedures as are substantially
consistent with the provisions of this Section 2.3 (including the
certification requirements set forth on the reverse of the Initial
Securities intended to ensure that such transfers comply with Rule 144A
or Regulation S, as the case may be) and such other procedures as may
from time to time be adopted by AK Steel.
(b) Legend.
(i) Except as permitted by the following paragraphs (ii),
(iii) and (iv), each Security certificate evidencing the Global
Securities (and all Securities issued in exchange therefor or in
substitution thereof) shall bear a legend in substantially the
following form:
"THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND THIS SECURITY MAY NOT BE OFFERED,
SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS SECURITY IS HEREBY
NOTIFIED THAT THE SELLER OF THIS SECURITY MAY BE RELYING ON THE EXEMPTION FROM
THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A
THEREUNDER.
THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF AK STEEL THAT (A)
THIS SECURITY MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (I)
IN THE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT)
IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (II) OUTSIDE THE UNITED
STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE
SECURITIES ACT, (III) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (IV) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF
CASES (I) THROUGH (IV) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY
4
<PAGE>
STATE OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER
IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS SECURITY FROM IT OF THE RESALE
RESTRICTIONS REFERRED TO IN (A) ABOVE."
(ii) Upon any sale or transfer of a Transfer Restricted
Security (including any Transfer Restricted Security represented by a
Global Security) pursuant to Rule 144 under the Securities Act the
Registrar shall permit the Holder thereof to exchange such Transfer
Restricted Security for a certificated Security that does not bear the
legend set forth above and rescind any restriction on the transfer of
such Transfer Restricted Security, if the Holder certifies in writing
to the Registrar that its request for such exchange was made in
reliance on Rule 144 (such certification to be in the form set forth on
the reverse of the Security).
(iii) After a transfer of any Initial Securities or Private
Exchange Securities during the period of the effectiveness of a Shelf
Registration Statement with respect to such Initial Securities or
Private Exchange Securities, as the case may be, all requirements
pertaining to legends on such Initial Security or such Private Exchange
Security will cease to apply, the requirements requiring any such
Initial Security or such Private Exchange Security issued to certain
Holders be issued in global form will cease to apply, and a
certificated Initial Security or Private Exchange Security without
legends will be available to the transferee of the Holder of such
Initial Securities or Private Exchange Securities upon exchange of such
transferring Holder's certificated Initial Security or Private Exchange
Security or directions to transfer such Holder's interest in the Global
Security, as applicable.
(iv) Upon the consummation of a Registered Exchange Offer with
respect to the Initial Securities pursuant to which Holders of such
Initial Securities are offered Exchange Securities in exchange for
their Initial Securities, all requirements pertaining to such Initial
Securities that Initial Securities issued to certain Holders be issued
in global form will cease to apply and certificated Initial Securities
with the restricted securities legend set forth in Exhibit 1 hereto
will be available to Holders of such Initial Securities that do not
exchange their Initial Securities, and Exchange Securities in
certificated or global form will be available to Holders that exchange
such Initial Securities in such Registered Exchange Offer.
(v) Upon the consummation of a Private Exchange with respect
to the Initial Securities pursuant to which Holders of such Initial
Securities are offered Private Exchange Securities in exchange for
their Initial Securities, all requirements pertaining to such Initial
Securities that Initial Securities issued to certain Holders be issued
in global form will still apply, and Private Exchange Securities in
global form with the restricted securities legend set forth in Exhibit
1 hereto will be available to Holders that exchange such Initial
Securities in such Private Exchange.
(c) Cancellation or Adjustment of Global Security. At such
time as all beneficial interests in a Global Security have either been exchanged
for certificated Securities, redeemed, repurchased or canceled, such Global
Security shall be returned to the Depository for cancellation or retained and
canceled by the Securities Custodian. At any time prior to such cancellation, if
any beneficial interest in a Global Security is exchanged for certificated
Securities, redeemed, repurchased or canceled, the principal amount of
Securities represented by such Global Security shall be reduced and an
adjustment shall be made on the books and records of the Securities Custodian
with respect to such Global Security to reflect such reduction.
5
<PAGE>
(d) Obligations with Respect to Transfers and Exchanges of
Securities.
(i) To permit registrations of transfers and exchanges, AK
Steel shall execute and the Trustee shall authenticate certificated
Securities and Global Securities at the Registrar's or co-registrar's
request.
(ii) No service charge shall be made for any registration of
transfer or exchange, but AK Steel may require payment of a sum
sufficient to cover any transfer tax, assessments, or similar
governmental charge payable in connection therewith (other than any
such transfer taxes, assessments or similar governmental charge payable
upon exchange or transfer pursuant to Sections 3.7, 4.17 and 9.5 of
this Indenture).
(iii) The Registrar or co-registrar shall not be required to
register the transfer of or exchange of (a) any certificated Security
selected for redemption in whole or in part pursuant to Article 3 of
this Indenture, except the unredeemed portion of any certificated
Security being redeemed in part, or (b) any Security for a period
beginning 15 Business Days before the mailing of a notice of an offer
to repurchase or redeem Securities or 15 Business Days before an
interest payment date.
(iv) Prior to the due presentation for registration of
transfer of any Security, AK Steel, the Trustee, the Paying Agent, the
Registrar or any co-registrar may deem and treat the person in whose
name a Security is registered as the absolute owner of such Security
for the purpose of receiving payment of principal of and interest on
such Security and for all other purposes whatsoever, whether or not
such Security is overdue, and none of AK Steel, the Trustee, the Paying
Agent, the Registrar or any co-registrar shall be affected by notice to
the contrary.
(v) All Securities issued upon any transfer or exchange
pursuant to the terms of this Indenture shall evidence the same debt
and shall be entitled to the same benefits under this Indenture as the
Securities surrendered upon such transfer or exchange.
(e) No Obligation of the Trustee.
(i) The Trustee shall have no responsibility or obligation to
any beneficial owner of a Global Security, a member of, or a
participant in the Depository or other Person with respect to the
accuracy of the records of the Depository or its nominee or of any
participant or member thereof, with respect to any ownership interest
in the Securities or with respect to the delivery to any participant,
member, beneficial owner or other Person (other than the Depository) of
any notice (including any notice of redemption) or the payment of any
amount, under or with respect to such Securities. All notices and
communications to be given to the Holders and all payments to be made
to Holders under the Securities shall be given or made only to or upon
the order of the registered Holders (which shall be the Depository or
its nominee in the case of a Global Security). The rights of beneficial
owners in any Global Security shall be exercised only through the
Depository subject to the applicable rules and procedures of the
Depository. The Trustee may rely and shall be fully protected in
relying upon information furnished by the Depository with respect to
its members, participants and any beneficial owners.
6
<PAGE>
(ii) The Trustee shall have no obligation or duty to monitor,
determine or inquire as to compliance with any restrictions on transfer
imposed under this Indenture or under applicable law with respect to
any transfer of any interest in any Security (including any transfers
between or among Depository participants, members or beneficial owners
in any Global Security) other than to require delivery of such
certificates and other documentation or evidence as are expressly
required by, and to do so if and when expressly required by, the terms
of this Indenture, and to examine the same to determine substantial
compliance as to form with the express requirements hereof.
2.4 Certificated Securities.
(a) A Global Security deposited with the Depository or with the Trustee
as custodian for the Depository pursuant to Section 2.1 shall be transferred to
the beneficial owners thereof in the form of certificated Securities in an
aggregate principal amount equal to the principal amount of such Global
Security, in exchange for such Global Security, only if such transfer complies
with Section 2.3 and (i) the Depository notifies the Company that it is
unwilling or unable to continue as Depository for such Global Security or if at
any time such Depository ceases to be a "clearing agency" registered under the
Exchange Act and a successor depositary is not appointed by the Company within
90 days of such notice, (ii) an Event of Default has occurred and is continuing
or (iii) AK Steel, in its sole discretion, notifies the Trustee in writing that
it elects to cause the issuance of certificated Securities under this Indenture.
(b) Any Global Security that is transferable to the beneficial owners
thereof pursuant to this Section 2.4 shall be surrendered by the Depository to
the Trustee at its Corporate Trust office to be so transferred, in whole or from
time to time in part, without charge, and the Trustee shall authenticate and
deliver, upon such transfer of each portion of such Global Security, an equal
aggregate principal amount of certificated Securities of authorized
denominations. Any portion of a Global Security transferred pursuant to this
Section 2.4 shall be executed, authenticated and delivered only in denominations
of $1,000 and any integral multiple thereof and registered in such names as the
Depository shall direct. Any certificated Initial Security delivered in exchange
for an interest in the Global Security shall, except as otherwise provided by
Section 2.3(b), bear the restricted securities legend set forth in Exhibit 1
hereto.
(c) Subject to the provisions of Section 2.4(b), the registered Holder
of a Global Security may grant proxies and otherwise authorize any Person,
including Agent Members and Persons that may hold interests through Agent
Members, to take any action that a Holder is entitled to take under this
Indenture or the Securities.
(d) In the event of the occurrence of any of the events specified in
Section 2.4(a), AK Steel will promptly make available to the Trustee a
reasonable supply of certificated Securities in definitive, fully registered
form without interest coupons.
7
<PAGE>
EXHIBIT 1
to
APPENDIX A
[FORM OF FACE OF INITIAL SECURITY]
[Global Securities Legend]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW
YORK, TO AK STEEL OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
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 SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC 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 THE
INDENTURE REFERRED TO ON THE REVERSE HEREOF.
[Restricted Securities Legend]
THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THIS SECURITY MAY
NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS
SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY MAY BE RELYING ON
THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY
RULE 144A THEREUNDER.
THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF AK STEEL THAT (A)
THIS SECURITY MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (I)
IN THE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT)
IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (II) OUTSIDE THE UNITED
<PAGE>
STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE
SECURITIES ACT, (III) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (IV) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF
CASES (I) THROUGH (IV) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY
STATE IN THE UNITED STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER
IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS SECURITY FROM IT OF THE RESALE
RESTRICTIONS REFERRED TO IN (A) ABOVE.
AK STEEL CORPORATION
7-7/8% Senior Note Due 2009
GUARANTEED AS TO PAYMENT OF PRINCIPAL,
PREMIUM, IF ANY, AND INTEREST BY
AK STEEL HOLDING CORPORATION
CUSIP No. ______
AK Steel Corporation, a Delaware corporation, promises to pay to
____________ or registered assigns, the principal sum of ___________ Dollars
($_______) on February 15, 2009.
Interest Payment Dates: February 15 and August 15
Record Dates: February 1 and August 1
2
<PAGE>
Additional provisions of this Security are set forth on the
other side of this Security.
AK STEEL CORPORATION,
by
[Seal]
------------------------------
Name:
Title:
------------------------------
Name:
Title:
Dated:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
FIFTH THIRD BANK,
as Trustee, certifies
that this is one of the
Securities referred to
in the Indenture.
by
----------------------------
Authorized Signatory
3
<PAGE>
[FORM OF REVERSE SIDE OF INITIAL SECURITY]
AK STEEL CORPORATION
7-7/8% Senior Note Due 2009
1. Interest
AK Steel Corporation, a Delaware corporation (such corporation, and its
successors and assigns under the Indenture hereinafter referred to, being herein
called "AK Steel"), promises to pay interest on the principal amount of this
Security at the rate per annum shown above; provided, however, that if a
Registration Default (as defined in the Registration Rights Agreement) occurs,
interest will accrue on this Security at a rate of 8-3/8% per annum from and
including the date on which any such Registration Default shall occur to but
excluding the date on which all Registration Defaults have been cured. AK Steel
will pay interest semiannually on February 15 and August 15 of each year,
commencing on August 15, 1999. Interest on the Securities will accrue from the
most recent date to which interest has been paid or, if no interest has been
paid, from February 10, 1999. Interest will be computed on the basis of a
360-day year of twelve 30-day months. AK Steel shall pay interest on overdue
principal at the rate borne by the Securities plus 1% per annum, and it shall
pay interest on overdue installments of interest at the same rate to the extent
lawful.
2. Method of Payment
AK Steel will pay interest on the Securities (except defaulted interest
which AK Steel may pay on a special payment date) to the Persons who are
registered Holders of Securities at the close of business on the February 1 or
August 1 next preceding the interest payment date even if the Securities are
canceled after the record date and on or before the interest payment date.
Holders must surrender the Securities to a Paying Agent to collect principal
payments. AK Steel will pay principal, premium, and interest in money of the
United States that at the time of payment is legal tender for payment of public
and private debts. Payments in respect of the Securities represented by a Global
Security (including principal, premium and interest) will be made by wire
transfer of immediately available funds to the accounts specified by The
Depository Trust Company. AK Steel will make all payments in respect of a
certificated Security (including principal, premium and interest) by mailing a
check to the registered address of each Holder thereof; provided, however, that
payments on the Securities may also be made, in the case of a Holder of a
certificated Security of at least $1,000,000 aggregate principal amount of
Securities, by wire transfer to a U.S. dollar account maintained by the payee
with a bank in the United States if such Holder elects payment by wire transfer
by giving written notice to the Trustee (as defined herein) or the Paying Agent
to such effect designating such account no later than 30 days immediately
preceding the relevant due date for payment (or such other date as the Trustee
may accept in its discretion).
4
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3. Paying Agent and Registrar
Initially, Fifth Third Bank (the "Trustee"), will act as Paying Agent
and Registrar. AK Steel may appoint and change any Paying Agent, Registrar or
co-registrar without notice. AK Steel or any of its domestically incorporated
Wholly Owned Subsidiaries may act as Paying Agent, Registrar or co-registrar.
4. Indenture
AK Steel issued the Securities under an Indenture dated as of February
10, 1999 (the "Indenture"), among AK Steel, AK Steel Holding Corporation
("Holding"), as Guarantor, and the Trustee. The terms of the Securities include
those stated in the Indenture and those made part of the Indenture by reference
to the Trust Indenture Act of 1939 (15 U.S.C. ss.ss. 77aaa-77bbbb) as in effect
on the date of the Indenture (the "Act"). Capitalized terms used herein and not
defined herein have the meanings ascribed thereto in the Indenture. The
Securities are subject to all such terms, and Securityholders are referred to
the Indenture and the Act for a statement of those terms.
The Securities are senior unsecured obligations of AK Steel limited to
$450,000,000 aggregate principal amount (subject to Section 2.7 of the
Indenture). The Indenture imposes certain limitations on, among other things,
the issuance of Debt by AK Steel, the issuance of Debt and Preferred Equity
Interests by the Subsidiaries of AK Steel, the payment of dividends and other
distributions and acquisitions or retirements of AK Steel's capital stock and
subordinated obligations, issuance and sale of Equity Interests by the
Subsidiaries of AK Steel, restrictions on distributions by the Subsidiaries of
AK Steel, sales of assets, transactions with Affiliates, sale/leaseback
transactions, lines of business and the activities of Holding. In addition, the
Indenture requires AK Steel, under certain circumstances, to offer to purchase
Securities in the event of a Change in Control as described below and to offer
to repurchase Securities at a purchase price equal to 100% of the principal
amount thereof, plus accrued and unpaid interest, if any, to the date of
repurchase, with the net cash proceeds of certain sales or other dispositions of
assets..
5. Optional Redemption
Except as set forth in the next paragraph, the Securities may not be
redeemed prior to February 15, 2004. On and after that date, AK Steel may redeem
the Securities, as a whole or from time to time in part, at the following
redemption prices (expressed as percentages of principal amount) if redeemed
during the 12-month period beginning February 15 of the years indicated below:
Redemption
Year Price
---- -----
2004.................................................103.938%
2005.................................................102.625%
2006.................................................101.313%
2007 and thereafter .................................100.000%
5
<PAGE>
together in the case of any such optional redemption with accrued interest (if
any) to the redemption date.
Notwithstanding the foregoing, at any time and on more than one
occasion prior to February 15, 2002, AK Steel may redeem up to $157.5 million
aggregate principal amount of Securities with the proceeds of one or more Public
Equity Offerings at a redemption price (expressed as a percentage of principal
amount) of 107.875% plus accrued interest to the redemption date; provided,
however, that at least $292.5 million aggregate principal amount of the
Securities remain outstanding immediately after each such redemption (other than
Securities held, directly or indirectly, by AK Steel or its Affiliates) and each
such redemption occurs within 60 days after the completion of the related Public
Equity Offering.
6. Notice of Redemption
Notice of redemption will be mailed at least 30 days but not more than
60 days before the redemption date to each Holder of Securities to be redeemed
at his registered address. Securities in denominations larger than $1,000 may be
redeemed in part but only in whole multiples of $1,000. If money sufficient to
pay the redemption price of and accrued interest on all Securities (or portions
thereof) to be redeemed on the redemption date is deposited with the Paying
Agent on or before the redemption date and certain other conditions are
satisfied, on and after such date interest ceases to accrue on such Securities
(or such portions thereof) called for redemption.
7. Put Provisions
Upon a Change in Control, any Holder of Securities will have the right,
subject to certain conditions, to cause AK Steel to repurchase all or any part
of the Securities of such Holder at a repurchase price equal to 101% of the
principal amount of the Securities to be repurchased plus accrued interest to
the date of repurchase as provided in, and subject to the terms of, the
Indenture.
8. Senior Note Guarantees
As provided in the Indenture and subject to certain limitations therein
set forth, the Obligations of AK Steel under the Indenture and this Security are
Guaranteed on a senior basis pursuant to Senior Note Guarantees endorsed hereon
by the Guarantors, which includes Holding and each Guarantor Subsidiary. The
Indenture provides that a Guarantor Subsidiary shall be released from its Senior
Note Guarantee and that the Holder shall have no further claim against such
Guarantor Subsidiary upon compliance with certain conditions.
9. Denominations; Transfer; Exchange
The Securities are in registered form without coupons in denominations
of $1,000 and whole multiples of $1,000. A Holder may transfer or exchange
securities in accordance with the Indenture. The Registrar may require a Holder,
among other things, to furnish appropriate endorsements or transfer documents
and to pay any taxes and fees required by law or permitted by the Indenture. The
Registrar need not register the transfer or exchange of any Securities (or
portions thereof except the portion of the Security not be redeemed) selected
6
<PAGE>
for redemption or any Securities for a period of 15 days before a selection of
Securities to be redeemed or 15 days before an interest payment date.
10. Persons Deemed Owners
The registered Holder of this Security may be treated as the owner of
it for all purposes.
11. Unclaimed Money
If money for the payment of principal or interest remains unclaimed for
two years, the Trustee or Paying Agent shall pay the money back to AK Steel at
its request unless an abandoned property law designates another Person. After
any such payment, Holders entitled to the money must look only to AK Steel and
not to the Trustee for payment.
12. Defeasance
Subject to certain conditions, AK Steel at any time may terminate some
or all of its obligations under the Securities and the Indenture if AK Steel
deposits with the Trustee money or U.S. Government Obligations for the payment
of principal of, premium, if any, and interest on the Securities to redemption
or maturity, as the case may be.
13. Amendment, Waiver
Subject to certain exceptions set forth in the Indenture, (a) the
Indenture or the Securities may be amended with the written consent of the
Holders of at least a majority in principal amount outstanding of the Securities
and (b) any default or noncompliance with any provision may be waived with the
written consent of the Holders of a majority in principal amount outstanding of
the Securities. Subject to certain exceptions set forth in the Indenture,
without the consent of any Securityholder, AK Steel and the Trustee may amend
the Indenture or the Securities to cure any ambiguity, omission, defect or
inconsistency, or to add guarantees with respect to the Securities, or to comply
with Article 5 of the Indenture, or to provide for uncertificated securities in
addition to or in place of certificated Securities, or to comply with the Act,
or to add to the covenants for the benefit of the Holders or surrender any right
or power conferred upon AK Steel or the Guarantors, or to reflect the release of
any Guarantor Subsidiary from its Senior Note Guarantee to the extent permitted
by the Indenture, or to make any change that does not adversely affect the
rights of any Securityholder.
14. Defaults and Remedies
Under the Indenture, Events of Default include (a) default in any
payment of interest on any Security when the same becomes due and payable, and
such default continues for a period of 30 days, (b) default in the payment of
the principal of any Security when the same becomes due and payable at its
Stated Maturity, upon redemption, upon declaration or otherwise, (c) failure to
redeem or purchase Securities when required pursuant to the Indenture and the
Securities, (d) failure to (i) comply with the covenant described under Section
5.1 of the Indenture (ii) make or consummate an Offer in accordance with the
provisions of Section 4.10 of the Indenture or (iii) make or consummate a Change
in Control Offer in accordance with the provisions of Section 4.17 of the
Indenture, (e) failure to observe or comply with any of the agreements in the
7
<PAGE>
Securities or the Indenture (other than those referred to in subsection (a),
(b), (c) or (d) above), which continues for 60 days after there has been given
to AK Steel by the Trustee or to AK Steel and the Trustee by the Holders of at
least 25% in principal amount of Securities then outstanding a written notice
specifying such failure, (f) Debt of AK Steel or any Significant Subsidiary is
not paid within any applicable grace period after final maturity or is
accelerated by the holders thereof because of a default, the total amount of
such Debt unpaid or accelerated exceeds $10.0 million or its foreign currency
equivalent, (g) any Senior Note Guarantee issued by Holding or any Significant
Subsidiary ceases to be in full force and effect other than in accordance with
its terms, or Holding or any Significant Subsidiary or any Person acting on
behalf of Holding or such Significant Subsidiary shall deny or disaffirm its
obligations under its Senior Note Guarantee, (h) certain events in bankruptcy,
insolvency or reorganization with respect to Holding, AK Steel or any
Significant Subsidiary, and (i) any judgment or decree for the payment of money
in excess of $10.0 million is rendered against Holding, AK Steel or any
Significant Subsidiary and is not discharged and either (i) an enforcement
proceeding has been commenced by any creditor upon such judgment or decree or
(ii) there is a period of 60 days following such judgment during which such
judgment or decree is not discharged, waived or the execution thereof stayed.
If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the Securities may declare all
the Securities to be due and payable immediately. Certain events of bankruptcy
or insolvency with respect to AK Steel, Holding or any Significant Subsidiary
are Events of Default which will result in the Securities being due and payable
immediately upon the occurrence of such Events of Default.
Securityholders may not enforce the Indenture or the Securities except
as provided in the Indenture. The Trustee may refuse to enforce the Indenture or
the Securities unless it receives reasonable indemnity or security. Subject to
certain limitations, Holders of a majority in principal amount of the Securities
may direct the Trustee in its exercise of any trust or power. The Trustee may
withhold from Securityholders notice of any continuing Default (except a Default
in payment of principal or interest on any Security) if it determines that
withholding notice is in their interest.
15. Trustee Dealings with AK Steel, Holding and their Affiliates
Subject to certain limitations imposed by the Act, the Trustee under
the Indenture, in its individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with and collect obligations owed
to it by AK Steel, Holding or their Affiliates and may otherwise deal with AK
Steel, Holding or their Affiliates with the same rights it would have if it were
not Trustee.
16. No Recourse Against Others
A director, officer, employee or stockholder, as such, of AK Steel,
Holding or any Guarantor Subsidiary shall not have any liability for any
obligations of AK Steel, Holding or the Guarantor Subsidiary under the
Securities or the Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. By accepting a Security, each
Securityholder waives and releases all such liability. The waiver and release
are part of the consideration for the issue of the Securities.
8
<PAGE>
17. Authentication
This Security shall not be valid until an authorized signatory of the
Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.
18. Abbreviations
Customary abbreviations may be used in the name of a Securityholder or
an assignee, such as TEN COM (=tenants in common), TENANT (=tenants by the
entireties), JT TEN (=joint tenants with rights of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).
19. Governing Law
The rights and duties of AK Steel, Holding and the Trustee hereto under
the Indenture, this Security and the Senior Note Guarantees shall, pursuant to
New York General Obligations Law Section 5-1401, be governed by the law of the
State of New York.
20. CUSIP Numbers
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, AK Steel has caused CUSIP numbers to be
printed on the Securities and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Securityholders. No representation is
made as to the accuracy of such numbers either as printed on the Securities or
as contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
AK Steel will furnish to any Securityholder upon written request and
without charge to the Securityholder a copy of the Indenture:
AK STEEL CORPORATION
703 Curtis Street
Middletown, Ohio 45043
Attention: General Counsel
9
<PAGE>
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
- ---------------------------------------------------------
(Print or type assignee's name, address and zip code)
- ---------------------------------------------------------
(Insert assignee's Soc. Sec. or tax I.D. No.)
And irrevocably appoint ___________________
agent to transfer this Security on the books of AK Steel. The agent may
substitute another to act for him.
- ---------------------------------------------------------
Date: Your Signature:
Sign exactly as your name appears on the other side of this Security.
In connection with any transfer of any of the Securities evidenced by this
certificate occurring prior to the expiration of the period referred to in Rule
144(k) under the Securities Act of 1933 after the later of the date of original
issuance of such Securities and the last date, if any, on which such Securities
were owned by the Company or any Affiliate of the Company, the undersigned
confirms that such Securities are being transferred in accordance with its
terms:
CHECK ONE BOX BELOW
(1) [ ] to the Company; or
(2) [ ] pursuant to an effective registration statement under the Securities
Act of 1933; or
(3) [ ] inside the United States to a "qualified institutional buyer" (as
defined in Rule 144A under the Securities Act of 1933) that purchases
for its own account or for the account of a qualified institutional
<PAGE>
buyer to whom notice is given that such transfer is being made in
reliance on Rule 144A, in each case pursuant to and in compliance with
Rule 144A under the Securities Act of 1933; or
(4) [ ] outside the United States in an offshore transaction within the meaning
of Regulation S under the Securities Act in compliance with Rule 904
under the Securities Act of 1933; or
(5) [ ] pursuant to another available exemption from registration provided by
Rule 144 under the Securities Act of 1933.
Unless one of the boxes is checked, the Trustee will refuse to register any of
the Securities evidenced by this certificate in the name of any person other
than the registered holder thereof; provided, however, that if box (4) or (5) is
checked, the Trustee may require, prior to registering any such transfer of the
Securities, such legal opinions, certifications and other information as the
Company has reasonably requested to confirm that such transfer is being made
pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act of 1933, such as the exemption
provided by Rule 144 under such Act.
----------------------------------
Signature
- --------------------------------
Signature Guarantee:
------------------------------
(Signature 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.)
2
<PAGE>
TO BE COMPLETED BY PURCHASER IF (3) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this
Security for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, and is aware that the sale to it is being made in reliance on Rule 144A
and acknowledges that it has received such information regarding the Company as
the undersigned has requested pursuant to Rule 144A or has determined not to
request such information and that it is aware that the transferor is relying
upon the undersigned's foregoing representations in order to claim the exemption
from registration provided by Rule 144A.
Dated: _________________________ __________________________________________
NOTICE: To be executed by an executive
officer
3
<PAGE>
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The following increases or decreases in this Global Security have been
made:
<TABLE>
<S> <C> <C> <C> <C>
Principal amount of Signature of authorized
Amount of decrease in Amount of increase in this Global officer of Trustee or
Date of Principal Amount of Principal Amount of Security following Securities Custodian
Exchange this Global Security this Global Security such decrease or
increase
</TABLE>
4
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by AK Steel
pursuant to Section 4.10 or 4.17 of the Indenture, check the box:
[ ]
If you want to elect to have only part of this Security purchased by AK
Steel pursuant to Section 4.10 or 4.17 of the Indenture, state the amount:
Date: Your Signature:
------------------- -------------------------------------
(Sign exactly as your name appears
on the other side of the Security)
Signature Guarantee:
-----------------------------------------------------------
(Signature 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.
<PAGE>
EXHIBIT A
[FORM OF FACE OF EXCHANGE SECURITY OR PRIVATE EXCHANGE SECURITY]
[1]
[2]
AK STEEL CORPORATION
7-7/8% Senior Note Due 2009
GUARANTEED AS TO PAYMENT OF PRINCIPAL,
PREMIUM, IF ANY, AND INTEREST BY
AK STEEL HOLDING CORPORATION
CUSIP No.
AK Steel Corporation, a Delaware corporation, promises to pay to
____________or registered assigns, the principal sum of ___________ Dollars
($________) on February 15, 2009.
Interest Payment Dates: February 15 and August 15
Record Dates: February 1 and August 1
Additional provisions of this Security are set forth on the other side
of this Security.
- -------------------------------
1 If the Security is to be issued in global form add the Global Securities
Legend from Exhibit 1 to Appendix A and the attachment from such Exhibit 1
captioned "TO BE ATTACHED TO GLOBAL SECURITIES - SCHEDULE OF INCREASES OR
DECREASES IN GLOBAL SECURITY."
2 If the Security is a Private Exchange Security issued in a Private Exchange
to an Initial Purchaser holding an unsold portion of its initial allotment,
add the Restricted Securities Legend from Exhibit 1 to Appendix A and
replace the Assignment Form included in this Exhibit A with the Assignment
Form included in such Exhibit 1.
<PAGE>
AK STEEL CORPORATION,
by
[Seal]
------------------------------
Name:
Title:
------------------------------
Name:
Title:
Dated:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
FIFTH THIRD BANK,
as Trustee, certifies
that this is one of the
Securities referred to
in the Indenture.
by
----------------------------
Authorized Signatory
2
<PAGE>
[FORM OF REVERSE SIDE OF EXCHANGE SECURITY
OR PRIVATE EXCHANGE SECURITY]
AK STEEL CORPORATION
7-7/8% Senior Note Due 2009
1. Interest
AK Steel Corporation, a Delaware corporation (such corporation, and its
successors and assigns under the Indenture hereinafter referred to, being herein
called "AK Steel"), promises to pay interest on the principal amount of this
Security at the rate per annum shown above; provided, however, that if a
Registration Default (as defined in the Registration Rights Agreement) occurs,
interest will accrue on this Security at a rate of 8-3/8% per annum from and
including the date on which any such Registration Default shall occur to but
excluding the date on which all Registration Defaults have been cured. AK Steel
will pay interest semiannually on February 15 and August 15 of each year,
commencing on August 15, 1999. Interest on the Securities will accrue from the
most recent date to which interest has been paid or, if no interest has been
paid, from February 10, 1999. Interest will be computed on the basis of a
360-day year of twelve 30-day months. AK Steel shall pay interest on overdue
principal at the rate borne by the Securities plus 1% per annum, and it shall
pay interest on overdue installments of interest at the same rate to the extent
lawful.
2. Method of Payment
AK Steel will pay interest on the Securities (except defaulted interest
which AK Steel may pay on a special payment date) to the Persons who are
registered Holders of Securities at the close of business on the February 1 or
August 1 next preceding the interest payment date even if the Securities are
canceled after the record date and on or before the interest payment date.
Holders must surrender the Securities to a Paying Agent to collect principal
payments. AK Steel will pay principal, premium, and interest in money of the
United States that at the time of payment is legal tender for payment of public
and private debts. Payments in respect of the Securities represented by a Global
Security (including principal, premium and interest) will be made by wire
transfer of immediately available funds to the accounts specified by The
Depository Trust Company. The Company will make all payments in respect of a
certificated Security (including principal, premium and interest) by mailing a
check to the registered address of each Holder thereof; provided, however, that
payments on the Securities may also be made, in the case of a Holder of a
certificated Security of at least $1,000,000 aggregate principal amount of
Securities, by wire transfer to a U.S. dollar account maintained by the payee
with a bank in the United States if such Holder elects payment by wire transfer
by giving written notice to the Trustee (as defined herein) or the Paying Agent
to such effect designating such account no later than 30 days immediately
preceding the relevant due date for payment (or such other date as the Trustee
may accept in its discretion).
3
<PAGE>
3. Paying Agent and Registrar
Initially, Fifth Third Bank (the "Trustee"), will act as Paying Agent
and Registrar. AK Steel may appoint and change any Paying Agent, Registrar or
co-registrar without notice. AK Steel or any of its domestically incorporated
Wholly Owned Subsidiaries may act as Paying Agent, Registrar or co-registrar.
4. Indenture
AK Steel issued the Securities under an Indenture dated as of February
10, 1999 (the "Indenture"), among AK Steel, AK Steel Holding Corporation
("Holding"), as Guarantor, and the Trustee. The terms of the Securities include
those stated in the Indenture and those made part of the Indenture by reference
to the Trust Indenture Act of 1939 (15 U.S.C. ss.ss. 77aaa-77bbbb) as in effect
on the date of the Indenture (the "Act"). Capitalized terms used herein and not
defined herein have the meanings ascribed thereto in the Indenture. The
Securities are subject to all such terms, and Securityholders are referred to
the Indenture and the Act for a statement of those terms.
The Securities are senior unsecured obligations of AK Steel limited to
$450,000,000 aggregate principal amount (subject to Section 2.7 of the
Indenture). The Indenture imposes certain limitations on, among other things,
the issuance of Debt by AK Steel, the issuance of Debt and Preferred Equity
Interests by the Subsidiaries of AK Steel, the payment of dividends and other
distributions and acquisitions or retirements of AK Steel's capital stock and
subordinated obligations, issuance and sale of Equity Interests by the
Subsidiaries of AK Steel, restrictions on distributions by the Subsidiaries of
AK Steel, sales of assets, transactions with Affiliates, sale/leaseback
transactions, lines of business and the activities of Holding. In addition, the
Indenture requires AK Steel, under certain circumstances, to offer to purchase
Securities in the event of a Change in Control as described below and to offer
to repurchase Securities at a purchase price equal to 100% of the principal
amount thereof, plus accrued and unpaid interest, if any, to the date of
repurchase, with the net cash proceeds of certain sales or other dispositions of
assets..
5. Optional Redemption
Except as set forth in the next paragraph, the Securities may not be
redeemed prior to February 15, 2004. On and after that date, AK Steel may redeem
the Securities as a whole or from time to time in part at the following
redemption prices (expressed as percentages of principal amount) if redeemed
during the 12-month period beginning February 15 of the years indicated below:
Redemption
Year Price
---- -----
2004...............................................103.938%
2005...............................................102.625%
2006...............................................101.313%
2007 and thereafter ...............................100.000%
4
<PAGE>
together in the case of any such optional redemption with accrued interest (if
any) to the redemption date.
Notwithstanding the foregoing, at any time and on more than one occasion prior
to February 15, 2002, AK Steel may redeem up to $157.5 million aggregate
principal amount of Securities with the proceeds of one or more Public Equity
Offerings, at a redemption price (expressed as a percentage of principal amount)
of 107.875% plus accrued interest to the redemption date; provided, however,
that at least $292.5 million aggregate principal amount of the Securities remain
outstanding immediately after each such redemption (other than Securities held,
directly or indirectly, by AK Steel or its Affiliates) and each such redemption
occurs within 60 days after the completion of the related Public Equity
Offering.
6. Notice of Redemption
Notice of redemption will be mailed at least 30 days but not more than
60 days before the redemption date to each Holder of Securities to be redeemed
at his registered address. Securities in denominations larger than $1,000 may be
redeemed in part but only in whole multiples of $1,000. If money sufficient to
pay the redemption price of and accrued interest on all Securities (or portions
thereof) to be redeemed on the redemption date is deposited with the Paying
Agent on or before the redemption date and certain other conditions are
satisfied, on and after such date interest ceases to accrue on such Securities
(or such portions thereof) called for redemption.
7. Put Provisions
Upon a Change in Control, any Holder of Securities will have the right,
subject to certain conditions, to cause AK Steel to repurchase all or any part
of the Securities of such Holder at a repurchase price equal to 101% of the
principal amount of the Securities to be repurchased plus accrued interest to
the date of repurchase as provided in, and subject to the terms of, the
Indenture.
8. Senior Note Guarantees
As provided in the Indenture and subject to certain limitations therein
set forth, the Obligations of AK Steel under the Indenture and this Security are
Guaranteed on a senior basis pursuant to Senior Note Guarantees endorsed hereon
by the Guarantors, which includes Holding and each Guarantor Subsidiary. The
Indenture provides that a Guarantor Subsidiary shall be released from its Senior
Note Guarantee and that the Holder shall have no further claim against such
Guarantor Subsidiary upon compliance with certain conditions.
9. Denominations; Transfer; Exchange
The Securities are in registered form without coupons in denominations
of $1,000 and whole multiples of $1,000. A Holder may transfer or exchange
securities in accordance with the Indenture. The Registrar may require a Holder,
among other things, to furnish appropriate endorsements or transfer documents
and to pay any taxes and fees required by law or permitted by the Indenture. The
Registrar need not register the transfer or exchange of any Securities (or
portions thereof except the portion of the Security not be redeemed) selected
5
<PAGE>
for redemption or any Securities for a period of 15 days before a selection of
Securities to be redeemed or 15 days before an interest payment date.
10. Persons Deemed Owners
The registered Holder of this Security may be treated as the owner of
it for all purposes.
11. Unclaimed Money
If money for the payment of principal or interest remains unclaimed for
two years, the Trustee or Paying Agent shall pay the money back to AK Steel at
its request unless an abandoned property law designates another Person. After
any such payment, Holders entitled to the money must look only to AK Steel and
not to the Trustee for payment.
12. Defeasance
Subject to certain conditions, AK Steel at any time may terminate some
or all of its obligations under the Securities and the Indenture if AK Steel
deposits with the Trustee money or U.S. Government Obligations for the payment
of principal of, premium, if any, and interest on the Securities to redemption
or maturity, as the case may be.
13. Amendment, Waiver
Subject to certain exceptions set forth in the Indenture, (a) the
Indenture or the Securities may be amended with the written consent of the
Holders of at least a majority in principal amount outstanding of the Securities
and (b) any default or noncompliance with any provision may be waived with the
written consent of the Holders of a majority in principal amount outstanding of
the Securities. Subject to certain exceptions set forth in the Indenture,
without the consent of any Securityholder, AK Steel and the Trustee may amend
the Indenture or the Securities to cure any ambiguity, omission, defect or
inconsistency, or to add guarantees with respect to the Securities, or to comply
with Article 5 of the Indenture, or to provide for uncertificated securities in
addition to or in place of certificated Securities, or to comply with the Act,
or to add to the covenants for the benefit of the Holders or surrender any right
or power conferred upon AK Steel or the Guarantors, or to reflect the release of
any Guarantor Subsidiary from its Senior Note Guarantee to the extent permitted
by the Indenture, or to make any change that does not adversely affect the
rights of any Securityholder.
14. Defaults and Remedies
Under the Indenture, Events of Default include (a) default in any
payment of interest on any Security when the same becomes due and payable, and
such default continues for a period of 30 days, (b) default in the payment of
the principal of any Security when the same becomes due and payable at its
Stated Maturity, upon redemption, upon declaration or otherwise, (c) failure to
redeem or purchase Securities when required pursuant to the Indenture and the
Securities, (d) failure to (i) comply with the covenant described under Section
5.1 of the Indenture (ii) make or consummate an Offer in accordance with the
provisions of Section 4.10 of the Indenture or (iii) make or consummate a Change
in Control Offer in accordance with the provisions of Section 4.17 of the
Indenture, (e) failure to observe or comply with any of the agreements in the
6
<PAGE>
Securities or the Indenture (other than those referred to in subsection (a),
(b), (c) or (d) above), which continues for 60 days after there has been given
to AK Steel by the Trustee or to AK Steel and the Trustee by the Holders of at
least 25% in principal amount of Securities then outstanding a written notice
specifying such failure, (f) Debt of AK Steel or any Significant Subsidiary is
not paid within any applicable grace period after final maturity or is
accelerated by the holders thereof because of a default, the total amount of
such Debt unpaid or accelerated exceeds $10.0 million or its foreign currency
equivalent, (g) any Senior Note Guarantee issued by Holding or any Significant
Subsidiary ceases to be in full force and effect other than in accordance with
its terms, or Holding or any Significant Subsidiary or any Person acting on
behalf of Holding or such Significant Subsidiary shall deny or disaffirm its
obligations under its Senior Note Guarantee, (h) certain events in bankruptcy,
insolvency or reorganization with respect to Holding, AK Steel or any
Significant Subsidiary, and (i) any judgment or decree for the payment of money
in excess of $10.0 million is rendered against Holding, AK Steel or any
Significant Subsidiary and is not discharged and either (i) an enforcement
proceeding has been commenced by any creditor upon such judgment or decree or
(ii) there is a period of 60 days following such judgment during which such
judgment or decree is not discharged, waived or the execution thereof stayed.
If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the Securities may declare all
the Securities to be due and payable immediately. Certain events of bankruptcy
or insolvency with respect to AK Steel, Holding or any Significant Subsidiary
are Events of Default which will result in the Securities being due and payable
immediately upon the occurrence of such Events of Default.
Securityholders may not enforce the Indenture or the Securities except
as provided in the Indenture. The Trustee may refuse to enforce the Indenture or
the Securities unless it receives reasonable indemnity or security. Subject to
certain limitations, Holders of a majority in principal amount of the Securities
may direct the Trustee in its exercise of any trust or power. The Trustee may
withhold from Securityholders notice of any continuing Default (except a Default
in payment of principal or interest on any Security) if it determines that
withholding notice is in their interest.
15. Trustee Dealings with AK Steel, Holding and their Affiliates
Subject to certain limitations imposed by the Act, the Trustee under
the Indenture, in its individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with and collect obligations owed
to it by AK Steel, Holding or their Affiliates and may otherwise deal with AK
Steel, Holding or their Affiliates with the same rights it would have if it were
not Trustee.
16. No Recourse Against Others
A director, officer, employee or stockholder, as such, of AK Steel,
Holding or any Guarantor Subsidiary shall not have any liability for any
obligations of AK Steel, Holding or the Guarantor Subsidiary under the
Securities or the Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. By accepting a Security, each
Securityholder waives and releases all such liability. The waiver and release
are part of the consideration for the issue of the Securities.
7
<PAGE>
17. Authentication
This Security shall not be valid until an authorized signatory of the
Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.
18. Abbreviations
Customary abbreviations may be used in the name of a Securityholder or
an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with rights of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).
19. Governing Law
The rights and duties of AK Steel, Holding and the Trustee under the
Indenture, this Security and the Senior Note Guarantees shall, pursuant to New
York General Obligations Law Section 5-1401, be governed by the law of the State
of New York.
20. CUSIP Numbers
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, AK Steel has caused CUSIP numbers to be
printed on the Securities and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Securityholders. No representation is
made as to the accuracy of such numbers either as printed on the Securities or
as contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
AK Steel will furnish to any Securityholder upon written request and
without charge to the Securityholder a copy of the Indenture:
AK STEEL CORPORATION
703 Curtis Street
Middletown, Ohio 45043
Attention: General Counsel
8
<PAGE>
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
- -----------------------------------------------------------
(Print or type assignee's name, address and zip code)
- -----------------------------------------------------------
(Insert assignee's Soc. Sec. or tax I.D. No.)
And irrevocably appoint ___________________________________
agent to transfer this Security on the books of AK Steel.
The agent may substitute another to act for him.
- -----------------------------------------------------------
Date: Your Signature:
------------- ----------------------------------
- -----------------------------------------------------------
Sign exactly as your name appears on the other side of
this Security.
- -------------------------
Signature Guarantee:
--------------------------------------------
(Signature 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.)
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by AK Steel
pursuant to Section 4.10 or 4.17 of the Indenture, check the box:
[ ]
If you want to elect to have only part of this Security purchased by AK
Steel pursuant to Section 4.10 or 4.17 of the Indenture, state the amount:
Date: Your Signature:
----------------- -------------------------------------
(Sign exactly as your name appears
on the other side of the Security)
Signature Guarantee:
-----------------------------------------------------------
(Signature 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.
<PAGE>
EXHIBIT B
FORM OF NOTATION ON SECURITY RELATING
TO SENIOR NOTE GUARANTEES
Holding and each Guarantor Subsidiary (which term includes any
successor Person under the Indenture), has jointly and severally,
unconditionally and absolutely Guaranteed, to the extent set forth in the
Indenture and subject to the provisions in the Indenture, the due and punctual
payment and performance of the Obligations in connection with the Indenture and
the Securities, and further agree to pay any and all expenses (including,
without limitation, all fees and disbursements of counsel) which may be paid or
incurred by the Trustee or the Holders in enforcing their rights under the
Senior Note Guarantees. In case of the failure of AK Steel punctually to perform
or make any such payment, each Guarantor hereby jointly and severally agrees to
cause such payment and performance to be made punctually.
The obligations of the Guarantors to the Holders and to the Trustee
pursuant to the Senior Note Guarantees and the Indenture are expressly set forth
in Article 10 of the Indenture and reference is hereby made to the Indenture for
the precise terms of the Senior Note Guarantees. Capitalized terms used herein
and not defined herein have the meanings ascribed thereto in the Indenture.
AK STEEL CORPORATION
By_______________________
Name:
Title:
AK STEEL HOLDING CORPORATION
By_______________________
Name:
Title:
- -------------------------
Attorney-in-Fact
As Attorney in Fact for
each Guarantor Subsidiary
EXHIBIT 2
NOTICE OF REDEMPTION
BY
AK STEEL CORPORATION
OF
ALL OF ITS
10 3/4% SENIOR NOTES DUE APRIL 1, 2004
CUSIP NUMBER: 001546 AA 8*
Notice is hereby given, pursuant to Section 3.4 of the Indenture (the
"Indenture"), dated as of April 1, 1994, as amended, among AK Steel Corporation
(the "Company"), AK Steel Holding Corporation and Fifth Third Bank, as successor
trustee (the "Trustee"), that the Company has called for redemption all of its
10 3/4% Senior Notes Due April 1, 2004 (the "Notes") outstanding on April 1,
1999 (the "Redemption Date"), at a price (the "Redemption Price") equal to
104.031% of the principal amount thereof, plus accrued and unpaid interest
thereon to the Redemption Date, in accordance with paragraph 5 of the Notes.
TO RECEIVE THE REDEMPTION PRICE, A HOLDER OF NOTES MUST SURRENDER THE
CERTIFICATE OR CERTIFICATES EVIDENCING THOSE NOTES TO THE TRUSTEE (WHO IS ALSO
ACTING AS PAYING AGENT), AT THE ADDRESS LISTED BELOW:
Fifth Third Bank
Corporate Trust Operations
Mail Drop 10AT66
38 Fountain Square Plaza
Cincinnati, Ohio 45263
To expedite processing, Notes may be surrendered prior to the Redemption
Date, but payment will not be made until the Redemption Date. THE METHOD OF
DELIVERY OF THE NOTES IS AT THE OPTION AND RISK OF THE HOLDER. IF YOU USE THE
MAIL, WE RECOMMEND FOR YOUR PROTECTION THAT DELIVERY BE MADE BY REGISTERED MAIL,
PROPERLY INSURED, WITH RETURN RECEIPT REQUESTED.
On the Redemption Date, the Redemption Price will become due and payable
on the Notes, interest thereon will cease to accrue and all rights of
Noteholders therein will cease except the right to receive the Redemption Price.
Under federal income tax law, the Trustee (as paying agent) will be
required to withhold 31% of the amount of any payments made to certain holders
of Notes. IN ORDER TO AVOID SUCH "BACKUP WITHHOLDING," EACH NOTEHOLDER SHOULD
COMPLETE AND SIGN THE SUBSTITUTE FORM W-9 ENCLOSED WITH THIS NOTICE OF
REDEMPTION (AND RETURN IT TO THE TRUSTEE WITH THE NOTES), PROVIDING SUCH
HOLDER'S CORRECT TAXPAYER IDENTIFICATION NUMBER ("TIN") ON THE SUBSTITUTE FORM
W-9 AND INDICATING THAT THE HOLDER IS NOT SUBJECT TO BACKUP WITHHOLDING BY
CHECKING THE BOX IN PART 2 OF THE SUBSTITUTE FORM W-9. For further information
concerning backup withholding and instructions for completing the Substitute
Form W-9 (including how to obtain a TIN if you do not have one and how to
complete the Substitute Form W-9 if your Notes are held in more than one name)
consult the enclosed Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9.
A copy of this Notice of Redemption is being sent to all holders of record
of the Notes. Questions and requests for additional copies of this Notice of
Redemption should be directed to Fifth Third Bank, Corporate Trust Services
(telephone: (800) 837-2755).
AK STEEL CORPORATION
February 17, 1999
- --------
* This CUSIP number has been assigned to this issue by an organization not
affiliated with Trustee and is included solely for the convenience of the
Noteholders. Neither AK Steel Corporation nor the Trustee shall be
responsible for the selection or use of this CUSIP number, nor is any
representation made as to its correctness on the Notes or as indicated in any
redemption notice.
NYFS07...:\55\38055\0019\1948\NTS2049W.24B
