EXHIBIT 4.4
EXECUTION COPY
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AK STEEL CORPORATION
(AK STEEL HOLDING CORPORATION, as Guarantor)
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SECOND SUPPLEMENTAL AGREEMENT
Dated as of August 8, 2002
amending the
Note Purchase Agreements dated as of December 17, 1996, as amended
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Senior Secured Notes, Series A-E, due 2004
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AK STEEL CORPORATION
AK STEEL HOLDING CORPORATION
SECOND SUPPLEMENTAL AGREEMENT
as of August 8, 2002
Re: Senior Secured Notes, Series A-E, due 2004
TO THE SEVERAL NOTEHOLDERS WHOSE
NAMES APPEAR IN THE ACCEPTANCE
FORM AT THE END HEREOF
Ladies and Gentlemen:
AK STEEL CORPORATION, a Delaware corporation (the "Company"),
and AK STEEL HOLDING CORPORATION, a Delaware corporation ("Holding" and,
together with the Company, individually an "Obligor" and collectively the
"Obligors"), hereby agree with you as follows:
SECTION 1. Original Note Purchase Agreements and the Notes;
Proposed Amendments. Pursuant to the several Note Purchase Agreements dated as
of December 17, 1996 entered into by the Obligors with the institutional
investors named in Schedule A thereto, the Company issued and sold $250,000,000
aggregate principal amount of its Senior Secured Notes, Series A-E, due 2004
(the "Notes"), of which Notes in the aggregate principal amount of $187,500,000
remain outstanding on the date hereof. Such Note Purchase Agreements were
amended pursuant to the Supplemental Agreement dated as of July 28, 1999 (as so
amended, the "Original Note Purchase Agreements"). Unless the context otherwise
requires, capitalized terms used herein without definition have the respective
meanings ascribed thereto in the Original Note Purchase Agreements.
The Obligors propose to amend the Original Note Purchase
Agreements as hereinafter set forth (the Original Note Purchase Agreement as so
amended are sometimes called the "Amended Note Purchase Agreements"). In
connection therewith the Company has also solicited consents from the holders of
its 7.875% Senior Notes Due 2009, its 8.875% Senior Notes due 2008 and its 9.00%
Senior Notes due 2007 pursuant to separate Consent Solicitation Statements dated
July 19, 2002 (the "Other Consent Solicitations").
SECTION 2. Representations and Warranties of the Obligors.
The Obligors jointly and severally represent and warrant to you as follows:
Section 2.1. Organization, Authorization, Etc. Each Obligor is
a corporation duly organized, validly existing and in good standing under the
laws of Delaware, and has all
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requisite power and authority to execute, deliver and perform its obligations
under this Second Supplemental Agreement and the Amended Note Purchase
Agreements.
The execution and delivery of this Second Supplemental
Agreement and the performance of this Second Supplemental Agreement and the
Amended Note Purchase Agreements have been duly authorized by all necessary
action on the part of each Obligor. This Second Supplemental Agreement and the
Amended Note Purchase Agreements are legal, valid and binding obligations of the
Obligors, enforceable against the Obligors in accordance with their respective
terms, except as enforceability may be limited by (a) applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium or other similar
laws affecting the enforcement of creditors' rights and remedies generally and
(b) general principles of equity, including principles of commercial
reasonableness, good faith and fair dealing (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
Section 2.2. Compliance with Laws, Other Instruments, Etc. The
execution, delivery and performance by the Obligors of this Second Supplemental
Agreement and the Amended Note Purchase Agreements do not and will not (A)
contravene, result in any breach of, or constitute a default under, or result in
the creation of any Lien in respect of any property of the Obligors or any of
their respective Subsidiaries under, any indenture, mortgage, deed of trust,
loan, purchase or credit agreement, lease, corporate charter or by-laws, or any
other agreement or instrument to which the Obligors or any of their respective
Subsidiaries is bound or by which the Obligors or any of their respective
Subsidiaries or any of their respective properties may be bound or affected, (B)
conflict with or result in a breach of any of the terms, conditions or
provisions of any order, judgment, decree, or ruling of any court, arbitrator or
Governmental Authority applicable to the Obligors or any of their respective
Subsidiaries or (C) violate any provision of any statute or other rule or
regulation of any Governmental Authority applicable to the Obligors or any of
their respective Subsidiaries.
Section 2.3. Governmental Authorizations, Etc. No consent,
approval or authorization of, or registration, filing or declaration with, any
Governmental Authority is required for the validity of the execution, delivery
or performance by either of the Obligors of this Second Supplemental Agreement.
Section 2.4. No Default, etc. No Event of Default or Default
has occurred and is continuing, and neither Obligor nor any of their respective
Subsidiaries is in default (whether or not waived) in the performance or
observance of any of the terms, covenants or conditions contained in any
instrument evidencing any Indebtedness and there is no pending request by the
Obligors (except pursuant to this Second Supplemental Agreement and the Other
Consent Solicitations) or any of their respective Subsidiaries for any amendment
or waiver in respect of any contemplated or possible default with respect to
such Indebtedness and no event has occurred and is continuing which, with notice
or lapse of time or both, would become such a default.
Section 2.5. No Undisclosed Fees. Neither Obligor has,
directly or indirectly, paid or caused to be paid any consideration (as
supplemental or additional interest, a fee or otherwise) to any holder of Notes
or other Indebtedness in order to induce such holder to enter into this Second
Supplemental Agreement or give its consent as requested by the Other Consent
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Solicitations or take any other action in connection with the transactions
contemplated hereby, nor has either Obligor agreed to make any such payment,
except as contemplated by the Other Consent Solicitations and Section 5.6 of
this Second Supplemental Agreement.
SECTION 3. Representation of the Noteholder. You represent to
the Obligors that you are the beneficial owner of Notes of the series and in the
aggregate unpaid principal amount or amounts set forth below your name in the
acceptance form of this Second Supplemental Agreement.
SECTION 4. Amendments of Original Note Purchase Agreements,
Etc. The Original Note Purchase Agreements are amended pursuant to Section 18
thereof, as follows:
A. Section 10.4(b) is amended to read as follows:
"(b) The Company will not at any time permit
Consolidated Debt to exceed 60% of Consolidated
Capitalization."
B. Section 10.6(b) is amended
(i) by changing "October 1, 1996", appearing twice
therein, to read "April 1, 2002", and
(ii) by changing clause (i) thereof to read as
follows:
"(i) the sum of (x) $25,000,000 plus (y) 50% of
Adjusted Consolidated Net Income accrued during the
period (treated as one accounting period) from April
1, 2002 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 Adjusted Consolidated Net Income shall be a
deficit, minus 100% of such deficit), plus"
C. Section 10.6 is also amended by changing the phrase
"on or before December 31, 1998" appearing in the final paragraph
thereto to read "during the period from April 1, 2002 to June 30,
2004".
D. Schedule B is amended by changing the definitions of
"Adjusted Consolidated Net Income" and "Consolidated Net Worth" to read
respectively as follows:
"'Adjusted Consolidated Net Income' for any period
means Consolidated Net Income before
(a) any amounts deducted from gross revenues in
determining such Consolidated Net Income on account of
special charges, costs and other expenses (including
restructuring charges and associated investment
banking, legal, accounting, printing and related fees
and expenses) recorded by the Company or any of its
Subsidiaries (other than Non-Recourse Subsidiaries),
and related tax effects, in connection with the
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merger of Armco Inc. with and into the Company
pursuant to an Agreement and Plan of Merger dated as
of May 20, 1999, as it may be amended, among Holding,
the Company and Armco Inc. and any other merger or
other business combination transaction involving the
Company or any Subsidiary (other than a Non-Recourse
Subsidiary), to the extent that any such charges,
costs and other expenses are not permitted under GAAP
to be capitalized and amortized over future periods,
in each case in respect of which the Company or
Holding has delivered to the holders of all Notes, at
the time such special charges, costs and other
expenses are recorded, an Officer's Certificate
setting forth in reasonable detail such special
charges, costs and other expenses,
(b) net gains or losses from a fourth quarter
(corridor) adjustment (and related tax effects)
recognized by the Company or any Subsidiary in
accordance with its method of recording unrecognized
net actuarial gains and losses in accounting for
pensions and other postretirement benefits (provided
that if any such fourth quarter adjustment shall
occur, the amount of such adjustment (and related tax
effects) shall be deferred and amortized equally over
a period of 120 months beginning January 1 of the year
subsequent to such adjustment), and
(c) any charges (and related tax effects)
recorded by the Company or any Subsidiary as a result
of the impairment of goodwill under GAAP."
* * * *
"'Consolidated Net Worth' means, at any date, the
total of the amounts shown on the balance sheet of the Company
and its Subsidiaries (other than Non-Recourse Subsidiaries),
determined on a consolidated basis in accordance with GAAP, as
of the end of the fiscal quarter then most recently ended, as
(a) the par or stated value of all outstanding Equity
Interests plus (b) paid-in capital or capital surplus relating
to such Equity Interests plus (c) any retained earnings or
earned surplus plus (d) any non-cash direct charges to
shareholder's equity less (i) any accumulated deficit (ii) any
amounts attributable to Redeemable Equity Interests, (iii) any
amounts attributable to Exchangeable Equity Interests. Solely
for the purpose of the calculation of Consolidated
Capitalization in Section 10.4(b), Consolidated Net Worth
shall exclude (x) net gains or losses from a fourth quarter
(corridor) adjustment (and related tax effects) recognized by
the Company or any Subsidiary in accordance with its method of
recording unrecognized net actuarial gains and losses in
accounting for pensions and other postretirement benefits
(provided that if any such fourth quarter adjustment shall
occur, the amount of such adjustment (and related tax effects)
shall be deferred and amortized equally over a period of 120
months beginning January 1 of the year subsequent to such
adjustment), and (y) any charges (and related tax effects)
recorded by the
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Company or any Subsidiary as a result of the impairment of goodwill
under GAAP."
E. The definition of "Permitted Investments" in Schedule B is also
amended:
(i) by deleting "and" at the end of clause (e) thereof,
(ii) by replacing the period at the end of clause (f) thereof
with "; and", and
(ii) by adding a new clause (g) at the end of such definition
to read as follows:
"(g) Guaranties issued by the Company of up to
$50,000,000 aggregate principal amount of Debt at any one time
outstanding issued by another Person structured as an
unincorporated joint venture, partnership, association or
limited liability company (i) in which the Company or any
Wholly Owned Guarantor Subsidiary owns at least 50% of the
outstanding total voting power of Equity Interests and (ii)
that engages only in a business of the type permitted by
Section 10.9."
SECTION 5. Effectiveness of this Second Supplemental Agreement. This
Second Supplemental Agreement will become effective on the date (the "Effective
Date") on which all of the following conditions precedent shall have been
satisfied:
Section 5.1. Proceedings. All proceedings taken by the Obligors in
connection with the transactions contemplated hereby and all documents and
papers incident thereto shall be satisfactory to you, and you and your special
counsel shall have received all such counterpart originals or certified or other
copies of such documents and papers, all in form and substance satisfactory to
you, as you or they may reasonably request in connection therewith.
Section 5.2. Execution of this Second Supplemental Agreement.
Counterparts of this Second Supplemental Agreement shall have been executed and
delivered by the Obligors and the Required Holders.
Section 5.3. Representations and Warranties. The representations and
warranties of the Obligors contained in Section 2 of this Second Supplemental
Agreement shall be true on and as of the Effective Date as though such
representations and warranties had been made on and as of the Effective Date,
and you shall have received a certificate of a senior financial officer of each
Obligor, dated the Effective Date, to such effect.
Section 5.4. Other Consent Solicitations. The Other Consent
Solicitations shall have become effective.
Section 5.5. Opinion of Counsel. You shall have received an opinion,
dated the Effective Date, addressed to you and otherwise satisfactory in scope
and substance to you, from Weil, Gotshal & Xxxxxx LLP, substantially in the form
set forth in Annex A attached hereto,
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and covering such other matters incident to the transactions contemplated hereby
as you may reasonably request.
Section 5.6. Payment of Fees. The Company shall have paid (a) to you
and each other holder of a Note, by wire transfer as provided in Schedule A to
the Original Note Purchase Agreements (or to you in such other manner or to such
other address as you shall have specified in writing to the Company at least one
Business Day before the Effective Date) an amendment fee equal to 0.25% of the
unpaid principal amount of the Notes respectively held by you and such other
holder as set forth below your and their names in the acceptance form of this
Second Supplemental Agreement, and (b) the fees and disbursements of your
special counsel as contemplated by Section 6 of this Second Supplemental
Agreement.
At least one Business Day prior to the date on which the Company
proposes to pay the amendment fee pursuant to this Section 5.6, the Company will
advise Credit Suisse First Boston ("CSFB") of the date of such anticipated
payment and request that CSFB communicate that information (either orally or in
any manner contemplated by Section 19 of the Original Note Purchase Agreements)
to you and each other holder of a Note, provided that (a) the communication of
that information shall not be deemed a condition precedent to the effectiveness
of this Second Supplemental Agreement and (b) the failure on the part of the
Company to so advise CSFB or CSFB to communicate that information to the holders
of the Notes shall not, in either case, be deemed to constitute a breach of this
Second Supplemental Agreement or the Amended Note Purchase Agreements for any
purpose whatsoever or otherwise give rise to any liability on the part of the
Company or CSFB in favor of you or any other holder of the Notes.
SECTION 6. Expenses. Without limiting the generality of Section 16.1
of the Amended Note Purchase Agreements, the Company agrees, whether or not the
transactions contemplated hereby are consummated, to pay the reasonable fees and
disbursements of Xxxxxxx Xxxx & Xxxxxxxxx, your special counsel, for their
services rendered in connection with such transactions and with respect to this
Second Supplemental Agreement and any other document delivered pursuant to this
Second Supplemental Agreement and reimburse you for your reasonable
out-of-pocket expenses in connection with the foregoing.
In furtherance of the foregoing, on the Effective Date the Company will
pay or cause to be paid the reasonable fees and disbursements of Xxxxxxx Xxxx &
Xxxxxxxxx which are reflected in the statement of Xxxxxxx Xxxx & Xxxxxxxxx
delivered to the Company prior to the Effective Date. The Company will also pay
promptly upon receipt of supplemental statements therefor, reasonable additional
fees, if any, and disbursements of Xxxxxxx Xxxx & Xxxxxxxxx in connection with
the transactions contemplated hereby (including disbursements unposted as of the
Effective Date).
SECTION 7. Ratification. Except as amended hereby, the Original Note
Purchase Agreements are in all respects ratified and confirmed and the
provisions thereof shall remain in full force and effect.
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SECTION 8. Counterparts. This Second Supplemental Agreement may be
executed in two or more counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same instrument.
SECTION 9. Governing Law. This Second Supplemental Agreement shall be
governed by and construed in accordance with the laws of the State of New York.
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If you are in agreement with the foregoing, please sign the form of
acceptance in the space below provided, whereupon this Second Supplemental
Agreement shall become a binding agreement between you and the Company and
Holding, subject to becoming effective as hereinabove provided.
AK STEEL CORPORATION
By /s/ Xxxxx X. Xxxxxxxxx
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Title: Chief Financial Officer
AK STEEL HOLDING CORPORATION
By /s/ Xxxxx X. Xxxxxxxxx
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Title: Chief Financial Officer
ACCEPTED AND AGREED:
NOTEHOLDERS:
TEACHERS INSURANCE AND ANNUITY ASSOCIATION OF AMERICA
By /s/ Xxxxx Xxxxxx
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Title: Group Managing Director
Principal Amount of Notes Held: $37,500,000 (Series A)
Principal Amount of Notes Held: $37,500,000 (Series E)
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
By: Xxxxx X. Xxxxxx & Company Inc. as Investment Adviser
By /s/ Xxxxx X. Onukwughe
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Title: Managing Director
Principal Amount of Notes Held: $7,406,250 (Series B)
Principal Amount of Notes Held: $7,406,250 (Series E)
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CM LIFE INSURANCE COMPANY
By: Xxxxx X. Xxxxxx & Company Inc. as Investment Sub-Adviser
By /s/ Xxxxx X. Omukwughe
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Title: Managing Director
Principal Amount of Notes Held: $843,750 (Series B)
Principal Amount of Notes Held: $843,750 (Series E)
LIFE INSURANCE COMPANY OF GEORGIA
By ING INVESTMENT MANAGEMENT LLC, ITS AGENT
By /s/ Xxxxx X. Xxxxxxx
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Title: Senior Vice President
Principal Amount of Notes Held: $1,875,000 (Series A)
Principal Amount of Notes Held: $1,875,000 (Series D)
SOUTHLAND LIFE INSURANCE COMPANY
By ING INVESTMENT MANAGEMENT LLC, ITS AGENT
By /s/ Xxxxx X. Xxxxxxx
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Title: Senior Vice President
Principal Amount of Notes Held: $1,875,000 (Series A)
Principal Amount of Notes Held: $1,875,000 (Series D)
SECURITY LIFE OF DENVER INSURANCE COMPANY
By ING INVESTMENT MANAGEMENT LLC, ITS AGENT
By /s/ Xxxxx X. Xxxxxxx
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Title: Senior Vice President
Principal Amount of Notes Held: $1,875,000 (Series A)
Principal Amount of Notes Held $2,250,000 (Series C)
Principal Amount of Notes Held: $1,875,000 (Series D)
Principal Amount of Notes Held: $4,500,000 (Series E)
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THE VARIABLE ANNUITY LIFE INSURANCE COMPANY
By: AIG Global Investment Corp., investment adviser
By /s/ Xxx X. Xxxxxxxxxxx
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Title: Managing Director
Principal Amount of Notes Held: $1,875,000 (Series C)
Principal Amount of Notes Held: $9,375,000 (Series E)
THE FRANKLIN LIFE INSURANCE COMPANY
By: AIG Global Investment Corp., investment adviser
By /s/ Xxx X. Xxxxxxxxxxx
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Title: Managing Director
Principal Amount of Notes Held: $7,500,000 (Series C)
ALLSTATE LIFE INSURANCE COMPANY
By /s/ Xxxxxx X. Xxxxxx
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Title: Authorized Signatory
By /s/ Xxxxxx X. Xxxxxx
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Title: Authorized Signatory
Principal Amount of Notes Held: $__________ (Series E) ($11,250,000)
XXXX XXXXXXX LIFE INSURANCE COMPANY
By /s/ Xxxxxx Xxxxxxxxx
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Title: Director
Principal Amount of Notes Held $9,375,000 (Series A)
Principal Amount of Notes Held: $12,375,000 (Series E)
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PRINCIPAL LIFE INSURANCE COMPANY
By: Principal Capital Management, LLC,
a Delaware limited liability company, its authorized signatory
By /s/ Xxx Xxxxx
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Title:
By /s/ Xxx Xxxxx
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Title:
Principal Amount of Notes Held: $7,500,000 (Series A)
Principal Amount of Notes Held: $6,000,000 (Series E)
USG ANNUITY & LIFE COMPANY
By ING INVESTMENT MANAGEMENT LLC, ITS AGENT
By /s/ Xxxxx X. Xxxxxxx
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Title: Senior Vice President
Principal Amount of Notes Held: $1,500,000 (Series E)
EQUITABLE LIFE INSURANCE COMPANY OF IOWA
By ING INVESTMENT MANAGEMENT LLC, ITS AGENT
By /s/ Xxxxx X. Xxxxxxx
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Title: Senior Vice President
Principal Amount of Notes Held: $750,000 (Series E)
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METROPOLITAN LIFE INSURANCE COMPANY
By /s/ C. Xxxxx Xxxxxx
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Title:
Principal Amount of Notes Held: $1,125,000 (Series B)
Principal Amount of Notes Held: $3,375,000 (Series C)
Principal Amount of Notes Held: $6,000,000 (Series B)
ANNEX A
(to Second Supplemental Agreement)
OPINION OF COUNSEL FOR THE COMPANY
The following opinions are to be provided by counsel for the Company,
subject to customary assumptions, limitations and qualifications. All
capitalized terms used herein without definition shall have the meanings
ascribed thereto in the Second Supplemental Agreement.
1. Each Obligor is a corporation validly existing under the laws of
the State of Delaware and has all requisite power and authority to execute and
deliver the Second Supplemental Agreement and to perform the provisions thereof.
2. The Second Supplemental Agreement has been duly authorized,
executed and delivered by the Obligors and constitutes a legal, valid and
binding agreement of the Obligors, enforceable against the Obligors in
accordance with its terms.
3. No consent, approval or authorization of, or registration, filing
or declaration with, any Governmental Body is required on the part of either
Obligor for the validity of the execution and delivery or for the performance by
the Company of the Second Supplemental Agreement, except for federal and state
securities or blue sky laws, as to which we express no opinion, and those
already obtained.
4. The consummation of the transactions contemplated by the Second
Supplemental Agreement and the performance of the terms and provisions of the
Second Supplemental Agreement do not and will not (i) conflict with the
Certificate of Incorporation or by-laws of either Obligor or their respective
Subsidiaries, (ii) result in any breach of, or constitute a default under, or
result in the creation of any Lien in respect of any property of either Obligor
or their respective Subsidiaries under, any material indenture, mortgage, deed
of trust, bank loan or credit agreement, or other material agreement or
instrument known to us, after due inquiry, to which either Obligor or their
respective Subsidiaries is a party or by which either Obligor or their
respective Subsidiaries or any of their respective properties may be bound or
affected, or (iii) conflict with or result in a breach of any of the terms,
conditions or provisions of any order, judgment, decree or ruling of any court,
arbitrator or Governmental Authority applicable to either Obligor or their
respective Subsidiaries and known to us or violate any provision of any law,
statute, rule or regulation of any Governmental Authority applicable to either
Obligor or their respective Subsidiaries.
* * * *
This opinion is given solely for your benefit, and for the benefit of
the institutional investor holders from time to time of the Notes held by you,
in connection with the transactions contemplated by the Second Supplemental
Agreement, and may not be relied upon by any other person for any purpose
without our prior written consent.
