EXHIBIT 4.1
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AK STEEL CORPORATION
9 1/8% Senior Notes Due 2006
INDENTURE
Dated as of December 17, 1996
The Bank of New York,
Trustee
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CROSS-REFERENCE TABLE
TIA Indenture
Section Section
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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
N.A. means Not Applicable.
____________________
Note: This Cross Reference Table shall not, for any purpose, be deemed to be
part of the Indenture.
TABLE OF CONTENTS
Page
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ARTICLE 1
Definitions and Incorporation by Reference............. 1
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......................................... 17
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..................................... 19
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
ARTICLE 3
Redemption............................................. 21
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
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ARTICLE 4
Covenants.............................................. 22
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.................................................... 24
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........................ 27
SECTION 4.8. Limitation on Issuance and Sale of Equity Interests of
Subsidiaries.......................................................... 29
SECTION 4.9. Limitation on Restrictions on Distributions from
Subsidiaries.......................................................... 29
SECTION 4.10. Limitation on Sales of Assets and Equity Interests of
Subsidiaries.......................................................... 30
SECTION 4.11. Limitation on Transactions with Affiliates.............. 33
SECTION 4.12. Limitation on Liens..................................... 33
SECTION 4.13. Limitation on Sale/Leaseback Transactions............... 35
SECTION 4.14. Corporate Existence..................................... 36
SECTION 4.15. Limitation on Lines of Business......................... 36
SECTION 4.16. Restrictive Covenant of Holding......................... 36
SECTION 4.17. Change in Control....................................... 37
SECTION 4.18. Compliance Certificate.................................. 38
SECTION 4.19. Further Instruments and Acts............................ 38
SECTION 4.20. Maintenance of Properties............................... 38
SECTION 4.21. Insurance............................................... 39
ARTICLE 5
Successor Company 39
SECTION 5.1. When AK Steel or any of its Subsidiaries May Merge or
Transfer Assets....................................................... 39
SECTION 5.2. Successor Corporation Substituted........................ 40
ARTICLE 6
Defaults and Remedies 40
SECTION 6.1. Events of Default........................................ 40
SECTION 6.2. Acceleration............................................. 42
SECTION 6.3. Other Remedies........................................... 42
SECTION 6.4. Waiver of Past Defaults.................................. 43
SECTION 6.5. Control by Majority...................................... 43
SECTION 6.6. Limitation on Suits...................................... 43
SECTION 6.7. Rights of Holders to Receive Payment..................... 43
SECTION 6.8. Collection Suit by Trustee............................... 44
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SECTION 6.9. Trustee May File Proofs of Claim........................ 44
SECTION 6.10. Priorities.............................................. 44
SECTION 6.11. Undertaking for Costs................................... 44
SECTION 6.12. Waiver of Stay or Extension Laws........................ 44
ARTICLE 7
Trustee................................................ 45
SECTION 7.1. Duties of Trustee........................................ 45
SECTION 7.2. Rights of Trustee........................................ 46
SECTION 7.3. Individual Rights of Trustee............................. 47
SECTION 7.4. Trustee's Disclaimer..................................... 47
SECTION 7.5. Notice of Defaults....................................... 47
SECTION 7.6. Reports by Trustee to Holders............................ 47
SECTION 7.7. Compensation and Indemnity............................... 47
SECTION 7.8. Replacement of Trustee................................... 48
SECTION 7.9. Successor Trustee by Merger.............................. 49
SECTION 7.10. Eligibility; Disqualification........................... 49
SECTION 7.11. Preferential Collection of Claims Against Company....... 49
ARTICLE 8
Discharge of Indenture; Defeasance..................... 49
SECTION 8.1. Discharge of Liability on Securities; Defeasance......... 49
SECTION 8.2. Conditions to Defeasance................................. 50
SECTION 8.3. Application of Trust Money............................... 51
SECTION 8.4. Repayment to Company..................................... 51
SECTION 8.5. Indemnity for Government Obligations..................... 52
SECTION 8.6. Reinstatement............................................ 52
ARTICLE 9
Amendments............................................. 52
SECTION 9.1. Without Consent of Holders............................... 52
SECTION 9.2. With Consent of Holders.................................. 53
SECTION 9.3. Compliance with Trust Indenture Act...................... 54
SECTION 9.4. Revocation and Effect of Consents and Waivers............ 54
SECTION 9.5. Notation on or Exchange of Securities.................... 54
SECTION 9.6. Trustee to Sign Amendments............................... 54
SECTION 9.7. Payment for Consent...................................... 54
ARTICLE 10
Senior Note Guarantees................................ 55
SECTION 10.1. Unconditional Senior Note Guarantees.................... 55
SECTION 10.2. Limitation of Guarantor's Liability..................... 56
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SECTION 10.3. Execution and Delivery of Senior Note Guarantees........ 56
SECTION 10.4. Addition of Guarantor................................... 57
SECTION 10.5. Release of the Senior Note Guarantee.................... 57
ARTICLE 11
Miscellaneous......................................... 58
SECTION 11.1. Trust Indenture Act Controls............................ 58
SECTION 11.2. Notices................................................. 58
SECTION 11.3. Communication by Holders with Other Holders............. 59
SECTION 11.4. Certificate and Opinion as to Conditions Precedent...... 59
SECTION 11.5. Statements Required in Certificate or Opinion........... 59
SECTION 11.6. When Securities Disregarded............................. 59
SECTION 11.7. Rules by Trustee, Paying Agent and Registrar............ 60
SECTION 11.8. Legal Holidays.......................................... 60
SECTION 11.9. Governing Law........................................... 60
SECTION 11.10. No Recourse Against Others............................. 60
SECTION 11.11. Successors............................................. 60
SECTION 11.12. Multiple Originals..................................... 60
SECTION 11.13. Table of Contents; Headings............................ 60
SECTION 11.14. Separability Clause.................................... 60
SECTION 11.15. Benefits of Indenture.................................. 61
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................................................. 2
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THIS INDENTURE is dated as of December 17, 1996, among AK STEEL
CORPORATION, a Delaware corporation ("AK Steel"), AK STEEL HOLDING CORPORATION,
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a Delaware corporation ("Holding"), as Guarantor, and The Bank of New York, a
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New York banking corporation (the "Trustee").
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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 9 1/8% Senior
Notes Due 2006 (the "Initial Securities") and, if and when issued pursuant to a
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registered exchange for Initial Securities, AK Steel's 9 1/8% Senior Notes due
2006 (the "Exchange Securities"), and if and when issued pursuant to a private
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exchange for Initial Securities, AK Steel's 9 1/8% Senior Notes due 2006 (the
"Private Exchange Securities" and, together with the Initial Securities and the
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Exchange Securities, the "Securities"):
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ARTICLE 1
Definitions and Incorporation by Reference
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SECTION 1.1. Definitions.
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"Accounts Receivable" of any Person means any and all accounts,
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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,
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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
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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
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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
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,
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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
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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
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state law for the relief of debtors.
"Board of Directors" of a Person means the Board of Directors of that
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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
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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
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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:
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(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 Xxxxx'x Investors Service,
Inc.;
(c) Investments in repurchase agreements, involving Investments
in U.S. Government Obligations or other Cash Equivalents, entered into with
any bank, trust
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company or investment bank rated at least A- and A-1 by Standard & Poor's
and at least A3 and P-1 by Xxxxx'x Investors Service, Inc.;
(d) Investments in commercial paper maturing not more than 90
days from the date of acquisition thereof and rated at least A-1 by
Standard & Poor's and at least P-1 by Xxxxx'x 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
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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 a 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
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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
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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 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
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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
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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.
"Consolidated Net Income" means, for any period, the net income (or
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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
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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.
"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
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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,
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(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);
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(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 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
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or both would be, an Event of Default.
"EBITDA" for any period means the Consolidated Net Income of Holding
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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, (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
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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.
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"Exchangeable Equity Interests" of any Person means any Equity
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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,
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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.
"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.
-8-
"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.
"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.
-9-
"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
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 or the 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
-10-
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 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 (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 income tax purposes and which obligations have a
remaining life to maturity of less than one year from the acquisition
thereof and were 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 thereof,
which issuer or guarantor has a short-term Debt rating which is (on the
date of the acquisition thereof) at least A-1 by Standard & Poor's and at
least P-1 by Xxxxx'x 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
-11-
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 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 Xxxxx'x 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
-12-
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 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.
"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
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
-13-
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. (S)(S) 77aaa-
---
77bbbb) as in effect on the date of this Indenture, except as provided in
Section 9.3 hereof.
"Trustee" means the party named as such in the caption of this
-------
Indenture until a successor replaces it and, thereafter, means the successor.
-14-
"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
"Intangible Property" 1.1; definition
-15-
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;
-16-
(5) words in the singular include the plural and words in the plural
include the singular;
(6) unsecured debt shall not be deemed to be subordinate or junior to
secured debt merely by virtue of its nature as unsecured debt;
(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.
-17-
The Trustee shall authenticate and make available for delivery
Securities for original issue in an aggregate principal amount of $550,000,000,
upon a written order of AK Steel signed by two Officers or by an Officer and
either an Assistant Treasurer or an Assistant Secretary 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 interest on any Security, AK Steel shall deposit with the Paying Agent a sum
sufficient to pay such principal 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.
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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
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(1)
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
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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.
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
-20-
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.
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;
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(e) if fewer than all the outstanding Securities are to be redeemed,
the identification and principal amounts of the particular Securities to be
redeemed;
(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 interest on the Securities on the dates and in the manner
provided in the Securities and in this Indenture. Principal 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
-22-
all principal and interest 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
-------------------------------
in the Borough of Manhattan, The City of New York, 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;
provided, however, that no such designation or rescission shall in any manner
relieve AK Steel of its obligation to maintain an office or agency in the
Borough of Manhattan, The City of New York for such purposes. 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 Trustee
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 (S) 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).
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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.
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) The Securities, AK Steel's Senior Secured Notes Due 2004, 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 (a) taxes payable by AK Steel on real or depreciable
personal property relating to AK Steel's Rockport Works facility or (b)
charges payable by AK Steel for sewer and water services relating to such
facility 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 issued by AK Steel and Debt issued in exchange
for, or the proceeds of which are used to refund or refinance, any Debt
permitted by this subsection (d); provided, however, that (i) the principal
amount of the Debt so issued shall not exceed the principal amount of the
Debt so exchanged, refunded or refinanced, and (ii) the Debt so issued (1)
shall not mature prior to the Stated Maturity of the Debt so exchanged,
refunded or refinanced and (2) shall have an Average Life equal to or
greater than the remaining Average Life of the Debt so exchanged, refunded
or refinanced;
(d) 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 in the ordinary course of business after the date
on which the Securities were originally issued; provided, however, that
Debt issued under this subsection (d) in any calendar year shall not exceed
in aggregate principal amount the sum of (i) $50.0 million for each of
1997, 1998 and 1999, and $35.0 million for each calendar year from and
including 2000 to and including 2005 plus (ii) the excess of the aggregate
principal amount otherwise permitted to be issued under this subsection (d)
in all previous calendar years to and including the
-24-
calendar year in which the Securities were originally issued over the
aggregate principal amount actually issued by AK Steel during such period
under this subsection (d), and Debt issued by AK Steel in exchange for, or
the proceeds of which are used to refund or refinance, any then outstanding
Debt permitted by this subsection (d); provided, however, that (1) the
principal amount of the Debt so issued shall not exceed the principal
amount of the Debt so exchanged, refunded or refinanced, and (2) the Debt
so issued (A) shall not mature prior to the Stated Maturity of the Debt so
exchanged, refunded or refinanced and (B) shall have an Average Life equal
to or greater than the remaining Average Life of the Debt so exchanged,
refunded or refinanced;
(e) Debt (other than Debt described in subsection (a), (b), (c), or
(d) of this Section 4.5) outstanding on the date on which the Securities
were originally issued, and Debt issued by AK Steel in exchange for, or the
proceeds of which are used to refund or refinance, any Debt permitted by
this subsection (e) or permitted as described in the first paragraph of
this Section 4.5; provided, however, that (i) the principal amount of the
Debt so issued shall not exceed the principal amount of the Debt so
exchanged, refunded or refinanced and (ii) the Debt so issued (1) shall not
mature prior to the Stated Maturity of the Debt so exchanged, refunded or
refinanced and (2) shall have an Average Life equal to or greater than the
remaining Average Life of the Debt so exchanged, refunded or refinanced;
(f) 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 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
(g) Debt (not otherwise permitted to be issued pursuant to
subsections (a) through (f) 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 (g) 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.
Notwithstanding the foregoing, AK Steel shall not issue any Debt if
the proceeds thereof are used, directly or indirectly, to repay, prepay, redeem,
defease, retire, refund or refinance any Subordinated Obligations unless such
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:
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(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
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
proceeds of which are used to refund or refinance, 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 or the liquidation value of the Debt or Preferred Equity Interests
so refunded or refinanced 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 or refinanced 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 or
refinanced;
(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 any other Debt as permitted in
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
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(h) and (ii) Debt issued by AK Steel pursuant to subsection (g) of Section
4.5 hereof does not exceed $60.0 million.
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:
------------------
(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 the date on which the Securities were originally issued would
exceed the sum of (A) 50% of the Consolidated Net Income of Holding
accrued during the period (treated as one accounting period) from the
first day of the first month of the fiscal quarter in which the
Securities were originally issued 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 the date on which the
Securities were originally issued (other than to a Subsidiary of AK
Steel or an employee stock ownership plan or similar trust), plus (C)
the
-27-
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 the date on which the Securities were originally issued,
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 the date on which the Securities were
originally issued, 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;
(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
-28-
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) or (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 December 31, 1998 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
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:
-29-
(i) pursuant to an agreement in effect at or entered into on the
date on which the 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 (i) or (ii) of
this Section 4.9(b) or contained in any amendment to an agreement referred
to in subsection (i) or (ii) of this Section 4.9(b); 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 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
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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 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 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 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
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 (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.
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(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
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
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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 arm's-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
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
-33-
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 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 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 in the ordinary course of business after the date
on which the 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 (1) the Debt secured by such Liens shall have been permitted to be
issued under subsection (d) of Section 4.5 hereof or (2) 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 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
-34-
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 refinance Debt which has been
secured by a Lien permitted under this Indenture and is permitted to be
refinanced 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 refinanced, 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 $100.0 million; 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 subsection (a) shall no longer be
applicable to such lease and such lease shall be
-35-
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. Limitation on 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 Securities were
originally issued or businesses reasonably related thereto.
SECTION 4.16. Restrictive Covenant 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 Guarantees of the Securities,
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
-36-
Holding; and provided further, however, that if Holding merges into AK Steel,
this Section 4.16 shall no longer be applicable.
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)
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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' 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.
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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
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;
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(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
(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):
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(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 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;
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(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,
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.
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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 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 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.
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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
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 and interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on the
Securities for principal 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
-44-
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.
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.
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(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.
(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.
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(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 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 (S)
-----------------------------
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
(S) 313(a). The Trustee also shall comply with TIA (S) 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,
-47-
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.
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.
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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 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 (S) 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
(S) 310(b); provided, however, that there shall be excluded from the operation
of TIA (S) 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 (S)
310(b)(1) are met.
SECTION 7.11. Preferential Collection of Claims Against Company. The
-------------------------------------------------
Trustee shall comply with TIA (S)311(a), excluding any creditor relationship
listed in TIA (S)311(b). A Trustee who has resigned or been removed shall be
subject to TIA (S) 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 and AK Steel irrevocably
deposits with the Trustee funds sufficient to pay at
-49-
maturity 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 Section 8.1 hereof 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
(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;
-50-
(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) 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.
-51-
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 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;
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(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
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.
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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.
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
-54-
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 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
-55-
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
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
-56-
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
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 Revolving 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 the Permitted Revolving 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
-57-
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.
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
000 Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
Attention: Xxxx X. Xxxxx, Esq.
Vice President,
General Counsel and Secretary
if to the Trustee:
The Bank of New York
000 Xxxxxxx Xxxxxx, 00 Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Trustee Administration
AK Steel, the Guarantors or the Trustee by notice to the others may
designate additional or different addresses for subsequent notices or
communications.
-58-
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 (S) 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 (S) 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:
(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
-59-
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
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.
-60-
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.
-61-
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/ Xxxxxxx X. Xxxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Senior Vice President,
Chief Financial Officer
Attest:
/s/ Xxxx X. Xxxxx
---------------------
Xxxx X. Xxxxx
Secretary
AK Steel Holding Corporation,
as Guarantor
By /s/ Xxxxxxx X. Xxxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Senior Vice President,
Chief Financial Officer
Attest:
/s/ Xxxx X. Xxxxx
---------------------
Xxxx X. Xxxxx
Secretary
The Bank of New York,
as Trustee
By /s/ Xxxx Xxxx Xxxxxxxxx
------------------------------
Name: Xxxx Xxxx Xxxxxxxxx
Title: Vice President
Attest:
/s/ Xxxx X. Xxxxxxxxx
---------------------
Xxxx X. Xxxxxxxxx
Assistant Treasurer
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 16th day of December, 1996, before me personally came Xxxxxxx
X. Xxxxxxx, to me known, who, being by me duly sworn, did depose and say that he
is Senior Vice President, CFO of AK Steel Corporation, one of the corporations
described in and which executed the foregoing instrument; that he knows the seal
of the said corporation; that the seal affixed to said instrument is such
corporate seal; that it was so affixed by authority of the Board of Directors of
said corporation; and that he signed his name thereto by like authority.
/s/ Xxxxxxxxx Xxxxxxxx
----------------------
Xxxxxxxxx Xxxxxxxx
Notary Public, State of New York
No. 01SH5056934
Qualified in New York County
Commission Expires March 11, 0000
XXXXX XX XXX XXXX )
) ss.:
COUNTY OF NEW YORK )
On the 16th day of December, 1996, before me personally came Xxxxxxx
X. Xxxxxxx, to me known, who, being by me duly sworn, did depose and say that he
is Senior Vice President, CFO of AK Steel Holding Corporation, one of the
corporations described in and which executed the foregoing instrument; that he
knows the seal of the said corporation; that the seal affixed to said instrument
is such corporate seal; that it was so affixed by authority of the Board of
Directors of said corporation; and that he signed his name thereto by like
authority.
/s/ Xxxxxxxxx Xxxxxxxx
----------------------
Xxxxxxxxx Xxxxxxxx
Notary Public, State of New York
No. 01SH5056934
Qualified in New York County
Commission Expires March 11, 0000
XXXXX XX XXX XXXX )
) ss.:
COUNTY OF NEW YORK )
On the 16th day of December, 1996, before me personally came Xxxx Xxxx
Xxxxxxxxx, to me known, who, being by me duly sworn, did depose and say that
[he --she] is a Vice President of The Bank of New York, one of the corporations
described in and which executed the foregoing instrument; that [he -- she] knows
the seal of the said corporation; that the seal affixed to said instrument is
such corporate seal; that it was so affixed by authority of the Board of
Directors of said corporation; and that [he -- she] signed [his -- her] name
thereto by like authority.
/s/ Xxxxxxx X. Xxxx
----------------------
Xxxxxxx X. Xxxx
Notary Public, State of New York
No. 01SH5027547
Qualified in New York County
Commission Expires March 8, 1998
APPENDIX A
FOR OFFERINGS TO QUALIFIED INSTITUTIONAL BUYERS PURSUANT TO RULE 144A,
INSTITUTIONAL "ACCREDITED INVESTORS" (AS DEFINED IN RULE
501(a)(1), (2), (3) OR (7) 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:
"Definitive Security" means a certificated Initial Security bearing
the restricted securities legend set forth in Section 2.3(d) and which is held
by an IAI in accordance with Section 2.1(c) .
"Depository" means The Depository Trust Company, New York, New York,
its nominees and their respective successors.
"Exchange Securities" means the 9 1/8% Senior Notes Due 2006 to be
issued pursuant to this Indenture in connection with a Registered Exchange Offer
pursuant to the Registration Rights Agreement.
"IAI" means an institutional "accredited investor" as described in
Rule 501(a) (1), (2), (3) or (7) under the Securities Act.
"Initial Purchasers" means CS First Boston Corporation and Xxxxxxx,
Sachs & Co.
"Initial Securities" means the 9 1/8% Senior Notes Due 2006 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 9 1/8% Senior Notes Due 2006
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 December 12,
1996, 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 like aggregate
principal amount of Exchange Securities registered under the Securities Act.
"Registration Rights Agreement" means the Registration Rights
Agreement dated December 12, 1996, 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 Definitive Securities and
Securities that bear or are required to bear the legend set forth in Section
2.3(d).
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
-2-
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
Trustee, at its New York office, as custodian for the Depository (or with such
other custodian as the Depository may direct), 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
amount of the Global Securities may from time to time be increased or decreased
by adjustments made on the records of the Trustee 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 Trustee as custodian
for the Depository.
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 Trustee as the custodian of the
Depository 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 this Section 2.1
-----------------------
or Section 2.3 or 2.4, owners of beneficial interests in Global Securities will
not be entitled to receive physical delivery of certificated Securities.
Purchasers of Initial Securities who are IAIs and are not QIBs and did not
purchase Initial Securities sold in reliance on Regulation S will receive
Definitive Securities; provided, however, that upon transfer of such Definitive
-------- -------
Securities to a QIB, such Definitive Securities will, unless the Global Security
has previously been exchanged, be exchanged for an interest in a Global Security
pursuant to the provisions of Section 2.3.
2.2 Authentication. The Trustee shall authenticate and deliver: (1)
--------------
Initial Securities for original issue in an aggregate principal amount of
$550,000,000 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 or by an Officer and either an Assistant Treasurer or an Assistant
Secretary of AK Steel. Such order shall specify the amount of the Securities to
be authenticated and the date on
-3-
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 $550,000,000 except as provided in Section 2.07 of this
Indenture.
2.3 Transfer and Exchange. (a) Transfer and Exchange of Definitive
--------------------- -----------------------------------
Securities. When Definitive Securities are presented to the Registrar or a co-
----------
registrar with a request:
(x) to register the transfer of such Definitive Securities; or
(y) to exchange such Definitive Securities for an equal principal
amount of Definitive Securities of other authorized denominations,
the Registrar or co-registrar shall register the transfer or make the exchange
as requested if its reasonable requirements for such transaction are met;
provided, however, that the Definitive Securities surrendered for transfer or
-------- -------
exchange:
(i) shall be duly endorsed or accompanied by a written instrument of
transfer in form reasonably satisfactory to the Company and the Registrar
or co-registrar, duly executed by the Holder thereof or his attorney duly
authorized in writing; and
(ii) are being transferred or exchanged pursuant to an effective
registration statement under the Securities Act, pursuant to Section 2.3(b)
or pursuant to clause (A), (B) or (C) below, and are accompanied by the
following additional information and documents, as applicable:
(A) if such Definitive Securities are being delivered to the
Registrar by a Holder for registration in the name of such Holder,
without transfer, a certification from such Holder to that effect (in
the form set forth on the reverse of the Security); or
(B) if such Definitive Securities are being transferred to AK
Steel, a certification to that effect (in the form set forth on the
reverse of the Security); or
(C) if such Definitive Securities are being transferred pursuant
to an exemption from registration in accordance with Rule 144; or (x)
in reliance on another exemption from the registration requirements of
the Securities Act: (i) a certification to that effect (in the form
set forth on the reverse of the Security) and (ii) if AK Steel or the
Registrar so requests, an opinion of counsel or other evidence
reasonably satisfactory to them as to the compliance with the
restrictions set forth in the legend set forth in Section 2.3(d)(i).
(b) Restrictions on Transfer of a Definitive Security for a Beneficial
------------------------------------------------------------------
Interest in a Global Security. A Definitive Security may not be exchanged for a
-----------------------------
beneficial interest in a Global Security except upon satisfaction of the
requirements set forth below. Upon receipt by
-4-
the Trustee of a Definitive Security, duly endorsed or accompanied by
appropriate instruments of transfer, in form satisfactory to the Trustee,
together with:
(i) certification, in the form set forth on the reverse of the
Security, that such Definitive Security is being transferred (A) to a QIB
in accordance with Rule 144A, or (B) outside the United States in an
offshore transaction within the meaning of Regulation S and in compliance
with Rule 904 under the Securities Act; and
(ii) written instructions directing the Trustee to make, or to direct
the Securities Custodian to make, an adjustment on its books and records
with respect to such Global Security to reflect an increase in the
aggregate principal amount of the Securities represented by the Global
Security, such instructions to contain information regarding the Depository
account to be credited with such increase,
then the Trustee shall cancel such Definitive Security and cause, or direct the
Securities Custodian to cause, in accordance with the standing instructions and
procedures existing between the Depository and the Securities Custodian, the
aggregate principal amount of Securities represented by the Global Security to
be increased by the aggregate principal amount of the Definitive Security to be
exchanged and shall credit or cause to be credited to the account of the Person
specified in such instructions a beneficial interest in the Global Security
equal to the principal amount of the Definitive Security so canceled. If no
Global Securities are then outstanding, the Company shall issue and the Trustee
shall authenticate, upon written order of AK Steel in the form of an Officers'
Certificate, a new Global Security in the appropriate principal amount.
(c) 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 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
-5-
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.
(d) Legend.
------
(i) Except as permitted by the following paragraphs (ii), (iii) and
(iv), each Security certificate evidencing the Global Securities and the
Definitive 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) 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) 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 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."
Each Definitive Security will also bear the following additional
legend:
"IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE
REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES
-6-
AND OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO
CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS."
(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:
(A) in the case of any Transfer Restricted Security that is a
Definitive Security, 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; and
(B) in the case of any Transfer Restricted Security that is
represented by a Global Security, 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
-7-
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.
(e) Cancellation or Adjustment of Global Security. At such time as
---------------------------------------------
all beneficial interests in a Global Security have either been exchanged for
certificated or Definitive Securities, redeemed, repurchased or canceled, such
Global Security shall be returned to the Depository for cancellation or retained
and canceled by the Trustee. At any time prior to such cancellation, if any
beneficial interest in a Global Security is exchanged for certificated or
Definitive 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 Trustee (if it is then
the Securities Custodian for such Global Security) with respect to such Global
Security, by the Trustee or the Securities Custodian, to reflect such reduction.
(f) 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,
Definitive 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 or Definitive Security
selected for redemption in whole or in part pursuant to Article III of this
Indenture, except the unredeemed portion of any certificated or Definitive
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.
-8-
(g) 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.
(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 located in the Borough of Manhattan, The City of New York, 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
Initial 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
-9-
$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(d), 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.
-10-
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 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)
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) 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.
[IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR
AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH REGISTRAR AND
TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH
THE FOREGOING RESTRICTIONS.]/1/
AK STEEL CORPORATION
9 1/8% Senior Note Due 2006
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 December 15, 2006.
Interest Payment Dates: June 15 and December 15
Record Dates: June 1 and December 1
--------------
/1/ Include if a Definitive Security to be held by an institutional "accredited
investor" (as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act).
-2-
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
The Bank of New York,
as Trustee, certifies
that this is one of the
Securities referred to
in the Indenture.
by
____________________________
Authorized Signatory
-3-
[FORM OF REVERSE SIDE OF INITIAL SECURITY]
AK STEEL CORPORATION
9 1/8% Senior Note Due 2006
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 9 1/8% 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 June 15 and December 15 of each year.
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 December 17, 1996.
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 June 1 or
December 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 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-
3. Paying Agent and Registrar
--------------------------
Initially, The Bank of New York (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 December
17, 1996 (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. (S)(S) 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
$550,000,000 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 December 15, 2001. 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 December 15 of the years indicated:
-5-
Redemption
Year Price
---- ----------
2001 .................................................. 104.56%
2002 .................................................. 103.04%
2003 .................................................. 101.52%
2004 and thereafter ................................... 100.00%
together in the case of any such optional redemption with accrued interest (if
any) to the redemption date.
In addition, at any time prior to December 15, 1999, AK Steel may
redeem up to $175,000,000 of the aggregate principal amount of Securities with
the proceeds of a Public Equity Offering, at any time or from time to time, at a
redemption price (expressed as a percentage of principal amount) of 109.125%
plus accrued interest to the redemption date; provided, however, that at least
$375,000,000 aggregate principal amount of the Securities remain outstanding
after each such redemption.
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.
-6-
9. Denominations; Transfer; Exchange
---------------------------------
The Securities are in registered form without coupons in denominations
of $1,000 (or in the case of Definitive Securities sold to institutional
accredited investors as described in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act, minimum denominations of $200,000) 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 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.
-7-
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 comply with any of the agreements in the 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
-8-
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.
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.
-9-
AK Steel will furnish to any Securityholder upon written request and
without charge to the Securityholder a copy of the Indenture which has in it the
text of this Security in larger type. Requests may be made to:
AK STEEL CORPORATION
000 Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
Attention: General Counsel
-10-
--------------------------------------------------------------------------------
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
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-
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-
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The following increases or decreases in this Global Security have been
made:
Principal amount of Signature of
Amount of decrease in Amount of increase in this Global Security authorized officer of
Date of Principal Amount of Principal Amount of following such Trustee or Securities
Exchange this Global Security this Global Security decrease or increase Custodian
-4-
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.
EXHIBIT A
[FORM OF FACE OF EXCHANGE SECURITY OR PRIVATE EXCHANGE SECURITY]
[/2/]
[/3/]
AK STEEL CORPORATION
9 1/8% Senior Note Due 2006
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 December 15, 2006.
Interest Payment Dates: June 15 and December 15
Record Dates: June 1 and December 1
Additional provisions of this Security are set forth on the other side
of this Security.
-------------------
/2/ 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."
/3/ 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.
AK Steel Corporation,
by
[Seal]
______________________________
Name:
Title:
______________________________
Name:
Title:
Dated: __________________
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
The Bank of New York,
as Trustee, certifies
that this is one of the
Securities referred to
in the Indenture.
by
____________________________
Authorized Signatory
-2-
[FORM OF REVERSE SIDE OF EXCHANGE SECURITY
OR PRIVATE EXCHANGE SECURITY]
AK STEEL CORPORATION
9 1/8% Senior Note Due 2006
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 9 1/8% 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 June 15 and December 15 of each year.
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 December 17, 1996.
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 June 1 or
December 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 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-
3. Paying Agent and Registrar
--------------------------
Initially, The Bank of New York (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 December
17, 1996 (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. (S)(S) 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
$550,000,000 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 December 15, 2001. 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 December 15 of the years indicated:
-4-
Redemption
Year Price
---- ----------
2001 104.56%
2002 103.04%
2003 101.52%
2004 and thereafter 100.00%
together in the case of any such optional redemption with accrued interest (if
any) to the redemption date.
In addition, at any time prior to December 15, 1999, AK Steel may redeem up to
$175,000,000 aggregate principal amount of Securities with the proceeds of a
Public Equity Offering, at any time or from time to time, at a redemption price
(expressed as a percentage of principal amount) of 109.125% plus accrued
interest to the redemption date; provided, however, that at least $375,000,000
aggregate principal amount of the Securities remain outstanding after each such
redemption.
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.
-5-
9. Denominations; Transfer; Exchange
---------------------------------
The Securities are in registered form without coupons in denominations
of $1,000 (or in the case of Definitive Securities sold to institutional
accredited investors as described in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act, minimum denominations of $200,000) 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 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.
-6-
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 comply with any of the agreements in the 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
-7-
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.
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.
-8-
AK Steel will furnish to any Securityholder upon written request and
without charge to the Securityholder a copy of the Indenture which has in it the
text of this Security in larger type. Requests may be made to:
AK STEEL CORPORATION
000 Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxx
00000
Attention: General
Counsel
-9-
--------------------------------------------------------------------------------
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.)
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.
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
