DRAFT OF SUPPLEMENTAL INDENTURE
EXHIBIT 4.5
FIRST SUPPLEMENTAL INDENTURE
Dated as of _____, 1999
THIS FIRST SUPPLEMENTAL INDENTURE to the Indenture referred to below is
dated as of _____, 1999 (this "First Supplemental Indenture") among AK Steel
Corporation, a Delaware corporation ("AK Steel"), AK Steel Holding Corporation,
a Delaware corporation ("Holding") and Fifth Third Bank, as trustee (the
"Trustee").
AK Steel, Holding and the Trustee are parties to an Indenture, dated as
of February 10, 1999 (the "Indenture"), providing among other things, for the
authentication, delivery and administration of AK Steel's 7-7/8% Senior Notes
due 2009 (the "Notes").
AK Steel has solicited consents from Holders (as defined below) of the
Notes to certain amendments to the Indenture described in Article II hereof (the
"Proposed Amendments").
Pursuant to Section 9.02 of the Indenture, the Holders of at least a
majority in principal amount of the outstanding Notes have consented in writing
to the Proposed Amendments.
AK Steel has directed the Trustee to execute and deliver this First
Supplemental Indenture in accordance with the terms of the Indenture.
In consideration of the foregoing premises, the parties mutually agree
as follows for the benefit of each other and for the equal and ratable benefit
of the Holders of the Notes:
ARTICLE I
DEFINITIONS AND EFFECTIVENESS
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Section 1.1 Definitions. Except as otherwise defined herein,
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capitalized terms defined in the Indenture are used herein as therein defined.
Section 1.2 Condition to Effectiveness. The Proposed Amendments will
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become effective upon (the "Effective Time") the consummation of the merger
contemplated by the Agreement and Plan of Merger, dated as of May 20, 1999, as
it may be amended, among Holding, AK Steel and Armco Inc.
ARTICLE II
AMENDMENTS TO INDENTURE
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Section 2.1 Amendments to Indenture. On and after the Effective Time,
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the Indenture shall be amended as follows:
(a) Section 1.1 of the Indenture shall be amended to add the
following definitions in proper alphabetical order:
(i) "'domestic' means, with respect to any Person,
that such Person is organized and existing under the laws of
the United States, any State thereof or the District of
Columbia."; and
(ii) "'Restricted Subsidiary' means any Subsidiary of
AK Steel that AK Steel has not designated as a Non-Recourse
Subsidiary (or, if AK Steel has so designated such Subsidiary,
has thereafter removed such designation) pursuant to Section
4.22(a) hereof. For the avoidance of ambiguity, a Restricted
Subsidiary is any Subsidiary other than a Non-Recourse
Subsidiary."
(b) The definition of "Consolidated Net Income" contained in
Section 1.1 of the Indenture shall be amended as follows:
(i) the word "Restricted" shall be inserted
immediately before the first reference to the word
"Subsidiary" in clause (a) thereof;
(ii) the parenthetical clause "(other than a
Non-Recourse Subsidiary)" shall be deleted in clause (a)
thereof;
(iii) the word "and" at the end of clause (e) thereof
shall be deleted;
(iv) the text "; and" shall replace the "." at the
end of clause (f) thereof; and
(v) a new clause (g) shall be inserted after clause
(f) thereof as follows:
"(g) solely for purposes of Section 4.7 hereof,
special charges, costs and other expenses (including
restructuring charges and associated investment banking,
legal, accounting, printing and related fees and expenses)
recorded by Holding, AK Steel or any Restricted Subsidiary
(and related tax effects) in connection with the merger of
Armco Inc. with and into AK Steel pursuant to an Agreement and
Plan of Merger dated as of May 20, 1999, as it may be amended,
among Holding, AK Steel and Armco Inc. and any other merger or
other business combination transaction involving Holding, AK
Steel or any Restricted Subsidiary, to the extent that such
charges, costs and other expenses are not permitted under
generally accepted accounting principles to be capitalized and
amortized over future periods, in each case in respect of
which Holding has delivered to the Trustee an Officers'
Certificate, made in good faith by responsible financial or
accounting Officers of Holding, at the time such special
charges, costs and other expenses are recorded, setting forth
in reasonable detail such special charges, costs and other
expenses.".
(c) The definition of "Guarantor Subsidiary" contained in
Section 1.1 of the Indenture shall be amended in its entirety and
replaced with the following:
"'Guarantor Subsidiary' means (a) any domestic
Restricted Subsidiary or (b) any other Restricted Subsidiary
that is a Significant Subsidiary of which 80% or more 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 AK Steel, which in each case
executes a supplement to this Indenture pursuant to which such
Restricted Subsidiary jointly and
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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."
(d) The definition of "Non-Recourse Subsidiary" in Section 1.1
of the Indenture shall be amended in its entirety and replaced with the
following:
"'Non-Recourse Subsidiary' means a Subsidiary of AK Steel
that is not a Restricted Subsidiary."
(e) The definition of "Permitted Credit Facility" or
"Facilities" in Section 1.1 of the Indenture shall be amended by
replacing the two references to the word "Guarantor" with the word
"Restricted" therein.
(f) The definition of "Permitted Investments" contained in
Section 1.1 of the Indenture shall be amended as follows:
(i) a ";" shall be inserted at the end of clause (d)
thereof;
(ii) each of the five references to the word
"Guarantor" in clauses (e) and (f) thereof shall be replaced
with the word "Restricted";
(iii) the word "and" at the end of clause (e) thereof
shall be deleted; and
(iv) the text "; and" shall be inserted at the end of
clause (f) thereof.
(g) The definition of "Wholly Owned Guarantor Subsidiary" in
Section 1.1 of the Indenture shall be amended in its entirety and
replaced with the following:
"'Wholly Owned Guarantor Subsidiary' means any Wholly
Owned Subsidiary that is a Restricted Subsidiary (whether or
not a Guarantor Subsidiary). For the avoidance of doubt, not
all Wholly Owned Guarantor Subsidiaries are required to be
Guarantor Subsidiaries."
(h) Section 4.7 of the Indenture shall be amended by inserting
the word "Restricted" immediately before the first reference to the
word "Subsidiary".
(i) Section 4.11 of the Indenture shall be amended by
inserting the word "Restricted" immediately before the first reference
to the word "Subsidiary" therein.
(j) Section 4.12 of the Indenture shall be amended by
replacing the word "Guarantor" with the word "Restricted" in clause (e)
thereof.
(k) Section 4.14 of the Indenture shall be amended by
replacing the word "Guarantor" with the word "Restricted" therein.
(l) Section 4.15 of the Indenture shall be amended in its
entirety and replaced with the following:
"SECTION 4.15. Lines of Business. AK Steel shall be
permitted to engage in any business, either directly or
through any Subsidiary, provided that AK Steel and its
Subsidiaries, taken as a whole, remain principally engaged in
the same business, or any business reasonably related thereto,
in which they were engaged on the date on which the Initial
Securities were originally issued."
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(m) Section 4.18 of the Indenture shall be amended by
replacing the word "Guarantor" with the word "Restricted" and by
replacing each of the two references to the words "any Guarantor
Subsidiary" with the words "such Restricted Subsidiary" therein.
(n) Section 4.19 of the Indenture shall be amended by
replacing the word "Guarantor" with the word "Restricted" therein.
(o) Article 4 of the Indenture shall be amended by inserting
after Section 4.21 thereof a new Section 4.22 as follows:
"SECTION 4.22. Designation of Non-Recourse
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Subsidiaries and Restricted Subsidiaries. (a) AK Steel may
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designate any of its Subsidiaries (including an existing or
newly formed or acquired Subsidiary) as a Non-Recourse
Subsidiary if (i) such Subsidiary has total assets of $1,000
or less or (ii) such designation is effective immediately upon
such Person becoming a Subsidiary of either AK Steel or any of
its Restricted Subsidiaries. Unless so designated as a
Non-Recourse Subsidiary, any Person that becomes a Subsidiary
of AK Steel shall be classified as a Restricted Subsidiary.
Subject to Section 4.22(b) hereof, the designation as a
Non-Recourse Subsidiary may be removed. The designation of a
Non-Recourse Subsidiary or the removal of such designation in
compliance with Section 4.22(b) hereof shall be made by the
Board of Directors pursuant to a resolution delivered to the
Trustee and shall be effective as of the date specified in the
applicable resolution, which shall not be prior to the date
such resolution is delivered to the Trustee.
(b) AK Steel shall not, and shall not permit any of
its Restricted Subsidiaries to, take any action or enter into
any transaction or series of transactions that would result in
a Person becoming a Restricted Subsidiary (whether through an
acquisition, the removal of the designation as a Non-Recourse
Subsidiary or otherwise) unless, after giving effect to such
action, transaction or series of transactions:
(i) on a pro forma basis, AK Steel could
issue at least $1.00 of additional Debt pursuant to
the Consolidated EBITDA Coverage Ratio as set forth
in the first paragraph of Section 4.5 hereof;
(ii) such Restricted Subsidiary could then
issue, pursuant to Section 4.6 hereof, all Debt as to
which it is obligated at such time;
(iii) no Default or Event of Default would
occur or be continuing; and
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(iv) there exist no Liens with respect to
the property or assets of such Restricted Subsidiary
other than Liens permitted to be incurred under
Section 4.12 hereof.
(c) AK Steel shall not, and shall not permit any of
its Restricted Subsidiaries to, take any action or enter into
any transaction or series of transactions that would result in
any such Restricted Subsidiary ceasing to be a Subsidiary
(other than a merger or consolidation with AK Steel or another
Restricted Subsidiary) unless, after giving effect to such
action, transaction or series of transactions, either:
(i) (A) neither AK Steel nor any of its
Affiliates (other than a Person that is an Affiliate
by virtue of its ownership of Equity Interests or
control of AK Steel) shall own any Equity Interests
of such former Restricted Subsidiary or any successor
in interest to the business thereof, and (B) there
shall not exist any Debt of such former Restricted
Subsidiary or any successor in interest to the
business thereof in favor of AK Steel or any of its
Restricted Subsidiaries; or
(ii) AK Steel and its Restricted
Subsidiaries would be permitted to make a Restricted
Payment in the amount of the aggregate Investment
(excluding (A) any Investment to the extent of cash
or the Fair Market Value of property or assets other
than cash received by AK Steel or its Restricted
Subsidiary, as the case may be, in respect of or as a
repayment of such Investment, and (B) the amount of
Debt of such former Restricted Subsidiary received by
AK Steel or its Restricted Subsidiaries as part of
the consideration for the acquisition of the Equity
Interests or assets of such former Restricted
Subsidiary), if any, made in such former Restricted
Subsidiary after October 1, 1996."
(p) Section 5.1 of the Indenture shall be amended by (i)
inserting the word "Guarantor" immediately before the word "Subsidiary"
and (ii) deleting the parenthetical clause "(other than a Non-Recourse
Subsidiary)", in each case, in the last paragraph thereof.
(q) Clause (a) of Section 10.4 of the Indenture shall be
amended as follows:
(i) the word "Guarantor" shall be inserted
immediately before the first reference to the word
"Subsidiary" therein;
(ii) the parenthetical clause "(other than a
Non-Recourse Subsidiary)" shall be deleted; and
(iii) the words "become a Guarantor Subsidiary with
respect to the Securities by executing and delivering" shall
be deleted and replaced with the words "execute and deliver"
therein.
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Section 2.2 Notification to Holders. AK Steel shall notify the Holders
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in accordance with Section 9.02 of the Indenture of the execution of this First
Supplemental Indenture. Any failure of AK Steel to give such notice to all
Holders, or any defect therein, shall not impair or affect the validity of this
First Supplemental Indenture.
Section 2.3 Receipt by Trustee. In accordance with Sections 9.6 and
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11.4 of the Indenture, the parties acknowledge that the Trustee has received an
Officers' Certificate and an Opinion of Counsel as conclusive evidence that this
First Supplemental Indenture complies with the applicable requirements of the
Indenture, including that the Proposed Amendments are authorized or permitted by
the Indenture.
ARTICLE III
MISCELLANEOUS
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Section 3.1 Parties. Nothing expressed or mentioned herein is intended
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or shall be construed to give any Person, other than the Holders and the
Trustee, any legal or equitable right, remedy or claim under or in respect of
this First Supplemental Indenture or the Indenture or any provision herein or
therein contained.
Section 3.2 Governing Law. The rights and duties of AK Steel, Holding
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and the Trustee under this First Supplemental Indenture shall, pursuant to New
York General Obligations Law Section 5-1401, be governed by the laws of the
State of New York.
Section 3.3 Separability Clause. In case any provision in this First
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Supplemental Indenture 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 3.4 Ratification of Indenture; First Supplemental Indenture
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Part of Indenture. Except as expressly supplemented hereby, the Indenture is in
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all respects ratified and confirmed and all the terms, conditions, and
provisions thereof shall remain in full force and effect. This First
Supplemental Indenture shall form a part of the Indenture for all purposes, and
every Holder of Notes heretofore or hereafter authenticated and delivered shall
be bound hereby. The Trustee makes no representation or warranty as to the
validity or sufficiency of this First Supplemental Indenture.
Section 3.5 Multiple Originals. The parties may sign any number of
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copies of this First Supplemental Indenture. Each signed copy shall be an
original, but all of them shall represent the same agreement. One signed copy is
enough to prove this First Supplemental Indenture.
Section 3.6 Headings. The headings of the Articles and Sections of this
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First Supplemental 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.
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IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed as of the date first written above.
AK STEEL CORPORATION
By:
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Name:
Title:
AK STEEL HOLDING CORPORATION,
as Guarantor
By:
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Name:
Title:
FIFTH THIRD BANK,
as Trustee
By:
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Name:
Title:
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