UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT
TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): September 16, 2014
AK STEEL HOLDING CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
Commission
File No. 1-13696
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Delaware |
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31-1401455 |
(State or Other Jurisdiction
of Incorporation) |
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(IRS Employer
Identification No.) |
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9227 Centre Pointe Drive
West Chester, Ohio |
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45069 |
(Address of Principal Executive Offices) |
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(Zip Code) |
Registrants telephone number, including area code: (513) 425-5000
Not Applicable
(Former
Name or Former Address, if Changed Since Last Report)
Check the appropriate box below
if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2 below):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 1.01 |
Entry into a Material Definitive Agreement. |
Common Stock Offering
On September 16, 2014, AK Steel Holding Corporation (AK Holding) completed the public offering of 40,250,000 shares of common stock, par value
$0.01 (the Common Stock).
The Common Stock was issued pursuant to an underwriting agreement (the Common Stock Underwriting
Agreement), dated as of September 10, 2014, among AK Holding and J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Credit Suisse Securities (USA) LLC, as representatives of the underwriters named
therein (the Common Stock Underwriters).
Pursuant to the Common Stock Underwriting Agreement and subject to its terms and conditions, AK
Holding agreed to sell the Common Stock to the Common Stock Underwriters, and the Common Stock Underwriters agreed to purchase the Common Stock for resale to the public. The Common Stock was sold pursuant to a registration statement on Form S-3
(File No. 333-194078), filed on February 21, 2014 (as amended by Post-Effective Amendment No. 1 filed on September 8, 2014, the Registration Statement) by AK Holding and three of its subsidiaries: AK Steel Corporation
(AK Steel or the Company), AK Steel Properties, Inc. (AK Properties) and AK Tube LLC (AK Tube). A copy of the Common Stock Underwriting Agreement is filed as Exhibit 1.1 hereto and incorporated by
reference herein.
AK Holding expects to receive net proceeds from the Common Stock offering, after underwriting discounts and commissions and estimated
offering fees and expenses, of approximately $344.1 million. AK Holding intends to use the net proceeds from the concurrent offering of AK Steels Notes (as described below), together with a portion of the net proceeds from the Common Stock
offering, to finance AK Steels acquisition of Severstal Dearborn, LLC (Dearborn). The remainder of net proceeds from the Common Stock offering, if any, will be used to repay outstanding borrowings under its $1.1 billion, five-year
senior secured revolving credit facility (the Credit Facility) and for general corporate purposes.
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Senior Notes Offering
On September 16, 2014, AK Steel completed the public offering of $430.0 million aggregate principal amount of its 7.625% Senior Notes due 2021 (the
Notes) at a price to the public of 99.325% of par. The Notes are governed by an indenture, dated as of May 11, 2010 (the Base Indenture), among AK Steel, as issuer, AK Holding, as guarantor and U.S. Bank National
Association, as trustee, as supplemented by a fifth supplemental indenture, dated as of September 16, 2014 (the Fifth Supplemental Indenture, together with the Base Indenture, the Indenture), among AK Steel, as issuer,
AK Holding, AK Properties and AK Tube, as guarantors, and U.S. Bank National Association, as trustee. A copy of the Base Indenture was filed as Exhibit 4.1 to a Current Report on Form 8-K filed with the Securities and Exchange Commission on
May 11, 2010 and incorporated by reference herein. A copy of the Fifth Supplemental Indenture is filed as Exhibit 4.1 hereto and incorporated by reference herein.
The Notes were issued pursuant to an underwriting agreement (the Notes Underwriting Agreement), dated as of September 11, 2014, among AK
Steel, AK Holding, AK Properties, AK Tube and Credit Suisse Securities (USA) LLC, Citigroup Global Markets Inc. and J.P. Morgan Securities LLC, as representatives of the underwriters named therein (the Notes Underwriters, and together
with the Common Stock Underwriters, the Underwriters), and were fully and unconditionally guaranteed by AK Holding, AK Steel Properties and AK Tube (the Guarantees). Pursuant to the Notes Underwriting Agreement and subject to
its terms and conditions, AK Steel agreed to sell the Notes to the Notes Underwriters, and the Notes Underwriters agreed to purchase the Notes for resale to the public. The Notes were sold pursuant to the Registration Statement. A copy of the Notes
Underwriting Agreement is filed as Exhibit 1.2 hereto and incorporated by reference herein.
The Notes bear interest payable semiannually in cash in
arrears on April 1 and October 1 of each year, commencing on April 1, 2015. The Indenture provides that the Notes are redeemable prior to October 1, 2017, in whole or in part, at a redemption price equal to 100% of the
principal amount of the Notes plus a make-whole premium. AK Steel may redeem the Notes beginning on October 1, 2017 at the redemption price (expressed as a percentage of principal amount) set forth below, plus accrued and
unpaid interest to the redemption date, if redeemed during the twelve-month period commencing on October 1 of the years indicated below:
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Year |
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Redemption Price |
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2017 |
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103.813 |
% |
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2018 |
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101.906 |
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2019 and thereafter |
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100.000 |
% |
In addition, at any time prior to October 1, 2017, AK Steel may redeem up to 35% of the principal amount of the Notes
(including any additional Notes) with the net cash proceeds of one or more sales of AK Holdings common stock (to the extent the proceeds are contributed to AK Steel as equity) at a redemption price (expressed as a percentage of principal
amount) of 107.625%, plus accrued and unpaid interest to the redemption date; provided that at least 65% of the aggregate principal amount of Notes originally issued remains outstanding after such redemption.
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The Indenture also contains certain covenants which restrict AK Steel and its restricted subsidiaries
ability to create liens on its and their assets; incur subsidiary debt; engage in sale/leaseback transaction; and engage in a consolidation, merger or sale of assets.
AK Steel expects to receive net proceeds from the Notes offering, after underwriting discount and commissions and estimated offering fees and expenses, of
approximately $417.1 million.
The foregoing description does not constitute a complete summary of the Indenture and is qualified by reference in its
entirety to the full text of the Indenture, a copy which is filed as Exhibit 4.1 to this Current Report on Form 8-K and is incorporated herein by reference.
Other Relationships
An affiliate of Merrill
Lynch, Pierce, Fenner & Smith Incorporated serves as agent under the Credit Facility and certain of the Underwriters or their affiliates are lenders under the Credit Facility. In addition, each of Underwriters will receive customary fees
and reimbursement of reasonable out of pocket expenses. Some of the Underwriters and their affiliates have engaged in, and may in the future engage in, investment banking and other commercial dealings in the ordinary course of business with AK Steel
and AK Holding or their affiliates. They have received, or may in the future receive, customary fees and commissions for these transactions.
In addition,
in the ordinary course of their business activities, the Underwriters and their affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments
(including bank loans) for their own account and for the accounts of their customers. Such investments and securities activities may involve securities and/or instruments of AK Steel and AK Holding or their affiliates. The Underwriters and their
affiliates may also make investment recommendations and/or publish or express independent research views in respect of such securities or financial instruments and may hold, or recommend to clients that they acquire, long and/or short positions in
such securities and instruments. Credit Suisse Securities (USA) LLC acted as AK Steels financial advisor in connection with the Dearborn Acquisition.
Item 2.01 |
Completion of Acquisition or Disposition of Assets |
As previously disclosed in its Current Report
on Form 8-K filed on July 22, 2014, AK Steel entered into a Membership Interest Purchase Agreement, dated as of July 18, 2014 (the Purchase Agreement), by and among Severstal Columbus Holdings, LLC (Severstal),
Dearborn and AK Steel. The Purchase Agreement provides the terms and conditions of the Companys acquisition of all of Severstals membership interests in Dearborn (the Dearborn Acquisition). In accordance with the terms of the
Purchase Agreement, on September 16, 2014, the Dearborn Acquisition was successfully completed.
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Item 2.03 |
Creation of a Direct Financial Obligation. |
The disclosure under Item 1.01 above pertaining
to the Notes and the Indenture is incorporated by reference into this Item 2.03.
Item 7.01 |
Regulation FD Disclosure. |
On September 16, 2014, AK Steel issued a press release, a copy of
which is attached hereto as Exhibit No. 99.1 and incorporated by reference herein, announcing that it has completed the acquisition of Severstal North Americas integrated steelmaking assets located in Dearborn, Michigan and certain other
related assets.
Weil, Gotshal & Manges LLP, counsel to AK Holding, AK Steel, AK
Properties and AK Tube (the Companies), has issued opinions to the Companies, each dated September 16, 2014, regarding the legality of the Common Stock and the Notes. Copies of the opinions are filed hereto as Exhibits 5.1 and 5.2.
Such opinions are incorporated by reference into the Registration Statement.
Item 9.01 |
Financial Statements and Exhibits. |
(d) Exhibits
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Exhibit No. |
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Description |
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1.1 |
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Underwriting Agreement, dated as of September 10, 2014, among AK Steel Holding Corporation, Merrill Lynch, Pierce, Fenner & Smith Incorporated and J.P. Morgan Securities LLC and Credit Suisse Securities (USA) LLC, as
representatives of the underwriters named therein. |
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1.2 |
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Underwriting Agreement, dated as of September 11, 2014, among AK Steel Corporation, AK Steel Holding Corporation, AK Steel Properties, Inc., AK Tube LLC and Credit Suisse Securities (USA) LLC, Citigroup Global Markets Inc. and J.P.
Morgan Securities LLC, as representatives of the underwriters named therein. |
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4.1 |
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Fifth Supplemental Indenture, dated as of September 16, 2014, among AK Steel Corporation, as issuer, AK Steel Holding Corporation, as parent guarantor, AK Steel Properties, Inc. and AK Tube LLC, as subsidiary guarantors, and U.S.
Bank National Association, as trustee. |
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5.1 |
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Opinion of Weil, Gotshal & Manges LLP (Common Stock Offering). |
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5.2 |
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Opinion of Weil, Gotshal & Manges LLP (Notes Offering). |
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99.1 |
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Press Release, dated September 16, 2014. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
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AK STEEL HOLDING CORPORATION |
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By: |
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/s/ David C. Horn |
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David C. Horn |
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Secretary |
Date: September 16, 2014
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Exhibit 1.1
35,000,000 Shares
AK
Steel Holding Corporation
Common Stock
UNDERWRITING AGREEMENT
September 10, 2014
MERRILL
LYNCH, PIERCE, FENNER & SMITH INCORPORATED
CREDIT
SUISSE SECURITIES (USA) LLC,
J.P. MORGAN SECURITIES LLC,
As Representatives of the several Underwriters,
c/o Merrill
Lynch, Pierce, Fenner & Smith Incorporated
One Bryant Park
New York, N.Y. 10036,
Credit Suisse Securities
(USA) LLC
Eleven Madison Avenue
New York, N.Y. 10010-3629, and
J.P. Morgan
Securities LLC,
383 Madison Avenue
New York, N.Y. 10179
Dear Sirs:
1. Introductory. AK Steel Holding Corporation, a Delaware corporation (Company), agrees with the several
Underwriters named in Schedule A hereto (Underwriters) to issue and sell to the several Underwriters 35,000,000 shares (Firm Securities) of its common stock, par value $0.01 per share
(Securities), and also proposes to issue and sell to the Underwriters, at the option of the Underwriters, an aggregate of not more than 5,250,000 additional shares (Optional Securities) of its Securities as set
forth below. The Firm Securities and the Optional Securities are herein collectively called the Offered Securities.
The proceeds of the Offered Securities will be used, together with the proceeds of the concurrent offering by AK Steel Corporation of senior
notes (the Senior Notes Offering), to finance the Companys acquisition (the Dearborn Acquisition) by AK Steel Corporation of Severstal Dearborn, LLC, a Delaware limited liability company (together with its
subsidiaries, Dearborn), pursuant to the Membership Interest Purchase Agreement, dated July 18, 2014, by and among Severstal Columbus Holdings, LLC, Dearborn and AK Steel Corporation, a wholly-owned subsidiary of the Company
(the Membership Interest Purchase Agreement), and the remainder of the net proceeds, if any, to repay outstanding borrowings under AK Steel Corporations asset-based revolving credit
facility.
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2. Representations and Warranties of the Company. The Company represents and warrants to,
and agrees with, the several Underwriters that:
(a) Filing and Effectiveness of Registration Statement; Certain Defined
Terms. The Company has filed with the Commission a registration statement on Form S-3 (No. 333-194078), as amended by Post-Effective Amendment No. 1, each including a related prospectus or prospectuses, covering the registration of the
Offered Securities under the Act, which has become effective. Registration Statement at any particular time means such registration statement in the form then filed with the Commission, including any amendment thereto, any
document incorporated by reference therein and all 430B Information and all 430C Information with respect to such registration statement, that in any case has not been superseded or modified. Registration Statement without
reference to a time means the Registration Statement as of the Effective Time. For purposes of this definition, 430B Information shall be considered to be included in the Registration Statement as of the time specified in Rule 430B.
For purposes of this Agreement:
430B Information means information included in a prospectus then deemed to be a part of the Registration
Statement pursuant to Rule 430B(e) or retroactively deemed to be a part of the Registration Statement pursuant to Rule 430B(f).
430C Information means information included in a prospectus then deemed to be a part of the Registration
Statement pursuant to Rule 430C.
Act means the Securities Act of 1933, as amended.
Applicable Time means 9:35 P.M. (Eastern time) on the date of this Agreement.
Closing Date has the meaning defined in Section 3 hereof.
Commission means the Securities and Exchange Commission.
Effective Time of the Registration Statement relating to the Offered Securities means the time of the first
contract of sale for the Offered Securities.
Exchange Act means the Securities Exchange Act of 1934.
FCPA means the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations
thereunder.
Final Prospectus means the Statutory Prospectus that discloses the public offering price,
other 430B Information and other final terms of the Offered Securities and otherwise satisfies Section 10(a) of the Act.
General Use Issuer Free Writing Prospectus means any Issuer Free Writing Prospectus that is intended for
general distribution to prospective investors, as evidenced by its being so specified in Schedule B to this Agreement.
Issuer Free Writing Prospectus means any issuer free writing prospectus, as defined in
Rule 433, relating to the Offered Securities in the form filed or required to be filed with the Commission or, if not required to be filed, in the form retained in the Companys records pursuant to Rule 433(g).
Limited Use Issuer Free Writing Prospectus means any Issuer Free Writing Prospectus that is not a General
Use Issuer Free Writing Prospectus.
Rules and Regulations means the rules and regulations of the
Commission.
Securities Laws means, collectively, the Sarbanes-Oxley Act of 2002
(Sarbanes-Oxley), the Act, the Exchange Act, the Rules and Regulations, the auditing principles, rules, standards and practices applicable to auditors of issuers (as defined in Sarbanes-Oxley) promulgated or approved
by the Public Company Accounting Oversight Board and, as applicable, the rules of the New York Stock Exchange and the NASDAQ Stock Market (Exchange Rules).
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Statutory Prospectus with reference to any particular time
means the prospectus relating to the Offered Securities that is included in the Registration Statement immediately prior to that time, including all 430B Information and all 430C Information with respect to the Registration Statement. For
purposes of the foregoing definition, 430B Information shall be considered to be included in the Statutory Prospectus only as of the actual time that form of prospectus (including a prospectus supplement) is filed with the Commission pursuant
to Rule 424(b) and not retroactively.
Subsidiary means each direct and indirect subsidiary of the
Company.
Unless otherwise specified, a reference to a rule is to the indicated rule under the Act.
(b) Compliance with Securities Act Requirements. (i) (A) At the time the Registration Statement initially
became effective, (B) at the time of each amendment thereto for the purposes of complying with Section 10(a)(3) of the Act (whether by post-effective amendment, incorporated report or form of
prospectus), (C) at the Effective Time relating to the Offered Securities and (D) on the Closing Date, the Registration Statement conformed and will conform in all material respects to the requirements of the Act and the Rules and
Regulations and did not and will not include any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading and (ii) (A) on its date,
(B) at the time of filing the Final Prospectus pursuant to Rule 424(b) and (C) on the Closing Date, the Final Prospectus will conform in all material respects to the requirements of the Act and the Rules and Regulations, and will not
include any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading. The preceding sentence does not apply to statements in or omissions from any
such document based upon written information furnished to the Company by any Underwriter through the Representatives specifically for use therein, it being understood and agreed that the only such information is that described as such in
Section 8(b) hereof.
(c) Automatic Shelf Registration Statement. (i) Well-Known Seasoned Issuer
Status. (A) At the time of initial filing of the Registration Statement, (B) at the time of the most recent amendment thereto for the purposes of complying with Section 10(a)(3) of the Act (whether such amendment was by
post-effective amendment, incorporated report filed pursuant to Section 13 or 15(d) of the Exchange Act or form of prospectus), and (C) at the time the Company or any person acting on its behalf (within the meaning, for this clause only,
of Rule 163(c)) made any offer relating to the Offered Securities in reliance on the exemption of Rule 163, the Company was a well known seasoned issuer as defined in Rule 405, including not having been an ineligible issuer
as defined in Rule 405.
(ii) Effectiveness of Automatic Shelf Registration Statement. The Registration Statement is
an automatic shelf registration statement, as defined in Rule 405, that initially became effective within three years of the date of this Agreement.
(iii) Eligibility to Use Automatic Shelf Registration Form. The Company has not received from the Commission any notice
pursuant to Rule 401(g)(2) objecting to use of the automatic shelf registration statement form. If at any time when Offered Securities remain unsold by the Underwriters the Company receives from the Commission a notice pursuant to Rule 401(g)(2) or
otherwise ceases to be eligible to use the automatic shelf registration statement form and such Underwriters are required to deliver a prospectus for the Offered Securities, the Company will (i) promptly notify the Representatives,
(ii) promptly file a new registration statement or post-effective amendment on the proper form relating to the Offered Securities, in a form satisfactory to the Representatives, (iii) use its reasonable best efforts to cause such
registration statement or post-effective amendment to be declared effective as soon as practicable, and (iv) promptly notify the Representatives of such effectiveness. The Company will take all other action necessary or appropriate to permit
the public offering and sale of the Offered Securities to continue
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as contemplated in the registration statement that was the subject of the Rule 401(g)(2) notice or for which the Company has otherwise become ineligible. References herein to the Registration
Statement shall include such new registration statement or post-effective amendment, as the case may be.
(iv) Filing
Fees. The Company has paid or shall pay the required Commission filing fees relating to the Offered Securities within the time required by Rule 456(b)(1) without regard to the proviso therein and otherwise in accordance with Rules 456(b) and
457(r).
(d) General Disclosure Package. As of the Applicable Time, neither (i) the General Use Issuer Free
Writing Prospectus(es) issued at or prior to the Applicable Time and the preliminary prospectus supplement, dated September 8, 2014 including the base prospectus, dated September 8, 2014 (which is the most recent Statutory Prospectus
distributed to investors generally), and the other information, if any, stated in Schedule B to this Agreement to be included in the General Disclosure Package, all considered together (collectively, the General Disclosure
Package), nor (ii) any individual Limited Use Issuer Free Writing Prospectus, when considered together with the General Disclosure Package, included any untrue statement of a material fact or omitted to state any material fact
necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The preceding sentence does not apply to statements in or omissions from any Statutory Prospectus or any Issuer Free
Writing Prospectus in reliance upon and in conformity with written information furnished to the Company by any Underwriter through the Representatives specifically for use therein, it being understood and agreed that the only such information
furnished by any Underwriter consists of the information described as such in Section 8(b) hereof.
(e) Issuer Free
Writing Prospectuses. Each Issuer Free Writing Prospectus, as of its issue date and at all subsequent times through the completion of the public offer and sale of the Offered Securities or until any earlier date that the Company notified or
notifies the Representatives as described in the next sentence, did not, does not and will not include any information that conflicted, conflicts or will conflict with the information then contained in the Registration Statement. If at any time
following issuance of an Issuer Free Writing Prospectus there occurred or occurs an event or development as a result of which such Issuer Free Writing Prospectus conflicted or would conflict with the information then contained in the Registration
Statement or as a result of which such Issuer Free Writing Prospectus, if republished immediately following such event or development, would include an untrue statement of a material fact or omitted or would omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, (i) the Company has promptly notified or will promptly notify the Representatives and (ii) the Company has promptly
amended or will promptly amend or supplement such Issuer Free Writing Prospectus to eliminate or correct such conflict, untrue statement or omission.
(f) Good Standing of the Company. The Company has been duly incorporated and is validly existing as a corporation and in
good standing under the laws of the State of Delaware, with power and authority (corporate and other) to own its properties and conduct its business as described in the General Disclosure Package; and the Company is duly qualified to do business as
a foreign corporation in good standing in all other jurisdictions in which its ownership or lease of property or the conduct of its business requires such qualification, except where the failure to be so qualified would not, individually or in the
aggregate, reasonably be expected to result in a material adverse effect on the condition (financial or otherwise), results of operations, business, properties or prospects of the Company, the Subsidiaries and Dearborn and its subsidiaries, pro
forma for the Dearborn Acquisition, taken as a whole (Material Adverse Effect).
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(g) Subsidiaries. Each Subsidiary, and to the best knowledge of the
Company, Dearborn, has been duly incorporated and is existing and in good standing under the laws of the jurisdiction of its incorporation, with power and authority (corporate and other) to own its properties and conduct its business as described in
the General Disclosure Package; and each Subsidiary is duly qualified to do business as a foreign corporation in good standing in all other jurisdictions in which its ownership or lease of property or the conduct of its business requires such
qualification, except where the failure to be so qualified would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect; all of the issued and outstanding capital stock of each Subsidiary has been duly
authorized and validly issued and is fully paid and nonassessable; and except as disclosed in the General Disclosure Package and the Final Prospectus, all of the capital stock of each Subsidiary is owned by the Company, directly or indirectly, free
from liens, encumbrances and defects.
(h) Offered Securities. The Offered Securities and all other outstanding
shares of capital stock of the Company have been duly authorized; the authorized equity capitalization of the Company is as set forth in the General Disclosure Package and the Final Prospectus; all outstanding shares of capital stock of the Company
are, and, when the Offered Securities have been delivered and paid for pursuant to this Agreement on each Closing Date, such Offered Securities will have been, validly issued, fully paid and nonassessable, will conform in all material respects to
the information in the General Disclosure Package and to the description of such Offered Securities contained in the Final Prospectus; the stockholders of the Company have no preemptive rights with respect to the Securities; and none of the
outstanding shares of capital stock of the Company have been issued in violation of any preemptive or similar rights of any security holder.
(i) No Finders Fee. Except as disclosed in the General Disclosure Package and the Final Prospectus, there are no
contracts, agreements or understandings between the Company and any person that would give rise to a valid claim against the Company or any Underwriter for a brokerage commission, finders fee or other like payment in connection with this
offering.
(j) Registration Rights. Except as disclosed in the General Disclosure Package, there are no contracts,
agreements or understandings between the Company and any person granting such person the right to require the Company to file a registration statement under the Act with respect to any securities of the Company owned or to be owned by such person or
to require the Company to include such securities in the securities registered pursuant to a Registration Statement or in any securities being registered pursuant to any other registration statement filed by the Company under the Act (collectively,
registration rights), and any person to whom the Company has granted registration rights has agreed not to exercise such rights until after the expiration of the 90-day period referred to in Section 5 hereof.
(k) Listing. The Offered Securities have been approved for listing on the New York Stock Exchange, subject to notice of
issuance.
(l) Absence of Further Requirements. No consent, approval, authorization, or order of, or filing or
registration with, any person (including any governmental agency or body or any court) is required for the consummation of the transactions contemplated by this Agreement in connection with the offering, issuance and sale of the Offered Securities
by the Company, except (i) such as have been obtained, or made and such as may be required under state securities laws and (ii) for such consents, approvals, authorizations, orders, filings or registrations that would not, individually or
in the aggregate, reasonably be expected to result in a Material Adverse Effect or a material adverse effect on the ability of the Company to consummate the transactions contemplated hereby.
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(m) Title to Property. Except as disclosed in the General Disclosure
Package and the Final Prospectus, the Company, the Subsidiaries and, to the best knowledge of the Company, Dearborn, have good and marketable title to all real properties and all other properties and assets owned by them, in each case free from
liens, charges, encumbrances and defects except where the failure to have such title or the existence of such lien, charge, encumbrance or defect would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse
Effect, and except as disclosed in the General Disclosure Package and the Final Prospectus, the Company, the Subsidiaries and, to the best knowledge of the Company, Dearborn, hold any leased real or personal property under valid and enforceable
leases with no terms or provisions that would materially interfere with the use made or to be made thereof by them.
(n)
Absence of Defaults and Conflicts Resulting from Transaction. The execution, delivery and performance of this Agreement and the issuance and sale of the Offered Securities will not result in a breach or violation of any of the terms and
provisions of, or constitute a default or a Debt Repayment Triggering Event (as defined below) under, or result in the imposition of any lien, charge or encumbrance upon any property or assets of the Company or any of the Subsidiaries or, to the
best knowledge of the Company, Dearborn, pursuant to (i) the charter, by-laws or other organizational instrument or document of the Company or any of the Subsidiaries or, to the best knowledge of the Company, Dearborn, (ii) any statute,
rule, regulation or order of any governmental agency or body or any court, domestic or foreign, having jurisdiction over the Company or any of the Subsidiaries or, to the best knowledge of the Company, Dearborn, or any of their properties, or
(iii) any agreement or instrument to which the Company or any of the Subsidiaries or, to the best knowledge of the Company, Dearborn, is a party or by which the Company or any of the Subsidiaries is bound or to which any of the properties of
the Company or any of the Subsidiaries is subject, except, in the case of (iii) above, for such conflicts, breaches, violations, liens, charges or encumbrances that would not, individually or in the aggregate, have a Material Adverse Effect; a
Debt Repayment Triggering Event means any event or condition that gives, or with the giving of notice or lapse of time would give, the holder of any note, debenture, or other evidence of indebtedness (or any person acting on such
holders behalf) the right to require the repurchase, redemption or repayment of all or a portion of such indebtedness by the Company or any of the Subsidiaries or, to the best knowledge of the Company, Dearborn.
(o) Absence of Existing Defaults and Conflicts. Neither the Company nor any of the Subsidiaries or, to the best
knowledge of the Company, Dearborn, is in violation of its respective charter or by-laws or in default (or with the giving of notice or lapse of time would be in default) under any existing obligation, agreement, covenant or condition contained in
any indenture, loan agreement, mortgage, lease or other agreement or instrument to which any of them is a party or by which any of them is bound or to which any of the properties of any of them is subject, except such defaults that would not,
individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.
(p) Authorization of
Agreement. This Agreement has been duly authorized, executed and delivered by the Company.
(q) Possession of
Licenses and Permits. The Company, the Subsidiaries and, to the best knowledge of the Company, Dearborn possess, and are in compliance with the terms of, all adequate certificates, authorizations, franchises, licenses and permits
(Licenses) necessary or material to the conduct of the business now conducted or proposed in the General Disclosure Package to be conducted by them and have not received any notice of proceedings relating to the revocation or
modification of any Licenses that, if determined adversely to the Company, any of the Subsidiaries or Dearborn, would individually or in the aggregate reasonably be expected to have a Material Adverse Effect.
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(r) Absence of Labor Dispute. Except as disclosed in the General
Disclosure Package and the Final Prospectus, no labor dispute with the employees of the Company or any of the Subsidiaries, nor, to the best knowledge of the Company, Dearborn, exists or, to the knowledge of the Company, is threatened that would,
individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.
(s) Possession of
Intellectual Property. The Company, the Subsidiaries and, to the best knowledge of the Company, Dearborn, own, possess or can acquire on reasonable terms, adequate trademarks, trade names and other rights to inventions, know-how, patents,
copyrights, confidential information and other intellectual property (collectively, intellectual property rights) necessary to conduct the business now operated by them, or presently employed by them, and have not received any
notice of infringement of or conflict with asserted rights of others with respect to any intellectual property rights that, if determined adversely to the Company, any of the Subsidiaries, or Dearborn, would, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
(t) Environmental Laws. Except as disclosed in the
General Disclosure Package and the Final Prospectus, (a)(i) none of the Company, any of the Subsidiaries, nor, to the best knowledge of the Company, Dearborn, is in violation of, or has any liability under, any federal, state, local or non-U.S.
statute, law, rule, regulation, ordinance, code, other requirement or rule of law (including common law), or decision or order of any domestic or foreign governmental agency, governmental body or court, relating to pollution, to the use, handling,
transportation, treatment, storage, discharge, disposal or release of Hazardous Substances, to the protection or restoration of the environment or natural resources (including biota), to health and safety as such relates to exposure to Hazardous
Substances, and to natural resource damages (collectively, Environmental Laws), (ii) none of the Company, any of the Subsidiaries nor, to the best knowledge of the Company, Dearborn, owns, occupies, operates or uses any real
property contaminated with Hazardous Substances, (iii) none of the Company, any of the Subsidiaries nor, to the best knowledge of the Company, Dearborn, is conducting or funding any investigation, remediation, remedial action or monitoring of
actual or suspected Hazardous Substances in the environment, (iv) none of the Company, any of the Subsidiaries nor, to the best knowledge of the Company, Dearborn, is liable or, to its knowledge, allegedly liable for any release or threatened
release of Hazardous Substances, including at any off-site treatment, storage or disposal site, (v) none of the Company, any of the Subsidiaries nor, to the best knowledge of the Company, Dearborn, is subject to any claim by any governmental
agency or governmental body or person relating to Environmental Laws or Hazardous Substances, and (vi) the Company, the Subsidiaries and, to the best knowledge of the Company, Dearborn, have received and are in compliance with all, and have no
liability under any, permits, licenses, authorizations, identification numbers or other approvals required under applicable Environmental Laws to conduct their respective businesses, except in each case covered by clauses (i)
(vi) such as would not individually or in the aggregate reasonably be expected to have a Material Adverse Effect; (b) to the knowledge of the Company there are no facts or circumstances that would reasonably be expected to result in a
violation of, liability under, or claim pursuant to, any Environmental Law that would reasonably be expected to have a Material Adverse Effect; and (c) to the knowledge of the Company there are no Environmental Laws or requirements proposed for
adoption or implementation under any Environmental Law that would reasonably be expected to have a Material Adverse Effect. For purposes of this subsection, Hazardous Substances means (A) petroleum and petroleum products,
by-products or breakdown products, radioactive materials, asbestos-containing materials, polychlorinated biphenyls and mold, and (B) any other chemical, material or substance defined or regulated as toxic or hazardous or as a pollutant,
contaminant or waste under Environmental Laws.
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(u) Accurate Disclosure. The statements in the General Disclosure Package
and the Final Prospectus under the heading Description of Capital Stock and Description of Certain Indebtedness insofar as such statements summarize legal matters, agreements, documents or proceedings discussed therein, are
accurate and fair summaries of such legal matters, agreements, documents or proceedings and present the information required to be shown.
(v) Accurate Tax Disclosure. To the extent that the statements set forth in the General Disclosure Package and the Final
Prospectus under the caption Material U.S. Federal Income Tax Consequences for Non-U.S. Holders purport to describe certain provisions of the United States federal tax laws referred to therein, such summaries fairly describe, in all
material respects, such provisions.
(w) Absence of Manipulation. The Company has not taken, directly or indirectly,
any action that is designed to or that has constituted or that would reasonably be expected to cause or result in the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Offered
Securities.
(x) Statistical and Market-Related Data. Any third-party statistical and market-related data included
or incorporated by reference in the General Disclosure Package or in the Final Prospectus are based on or derived from sources that the Company believes to be reliable and accurate.
(y) Internal Controls and Compliance with the Sarbanes-Oxley Act. Except as set forth in the General Disclosure Package
and the Final Prospectus, the Company, the Subsidiaries and the Companys Board of Directors (the Board) are in compliance with Sarbanes-Oxley and all applicable Exchange Rules in all material respects. The Company maintains
a system of internal controls over financial reporting (as defined in Rule 13a-15-f of the Exchange Act) (collectively, Internal Controls) that comply with the Exchange Act and are sufficient to provide reasonable assurances that
(i) transactions are executed in accordance with managements general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with U.S. General Accepted
Accounting Principles and to maintain accountability for assets, (iii) access to assets is permitted only in accordance with managements general or specific authorization, (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with respect to any differences and (v) the interactive data in eXtensible Business Reporting Language incorporated by reference in the Registration Statement, the
General Disclosure Package and the Final Prospectus fairly presents the information called for in all material respects and is prepared in accordance with the Commissions rules and guidelines applicable thereto. The Internal Controls are
overseen by the Audit Committee (the Audit Committee) of the Board in accordance with Exchange Rules. The Company has not publicly disclosed or reported to the Audit Committee or the Board, and within the next 90 days the Company
does not reasonably expect to publicly disclose or report to the Audit Committee or the Board, a significant deficiency, material weakness, change in Internal Controls or fraud involving management or other employees who have a significant role in
Internal Controls (each, an Internal Control Event), any violation of, or failure to comply with, the Securities Laws, or any matter which, if determined adversely, would reasonably be expected to have a Material Adverse Effect.
(z) Disclosure Controls. Except as set forth in the General Disclosure Package and the Final Prospectus, AK Steel
Corporation, the Company and the Subsidiaries maintain an effective system of disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act) that is designed to ensure that information required to be disclosed by
the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Commissions rules and forms, including controls and procedures designed to ensure
that such information is accumulated and communicated to the Companys management as appropriate to allow timely decisions regarding required disclosure. The Company and the Subsidiaries have carried out evaluations of the effectiveness of
their disclosure controls and procedures as required by Rule 13a-15 of the Exchange Act.
8
(aa) Litigation. Except as disclosed in the General Disclosure Package and
the Final Prospectus, there are no pending actions, suits or proceedings (including any inquiries or investigations by any court or governmental agency or body, domestic or foreign) against or affecting the Company, any of the Subsidiaries, nor, to
the best knowledge of the Company, Dearborn, or any of their respective properties that, if determined adversely to the Company, any of the Subsidiaries, or Dearborn, would individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect, or would materially and adversely affect the ability of the Company to perform its obligations under this Agreement, or which are otherwise material in the context of the sale of the Offered Securities; and to the Companys
knowledge, no such actions, suits or proceedings (including any inquiries or investigations by any court or governmental agency or body, domestic or foreign) are threatened or contemplated.
(bb) Financial Statements. The financial statements included in the Registration Statement, the General Disclosure
Package and the Final Prospectus present fairly the financial position of the Company and its consolidated subsidiaries as of the dates shown and their results of operations and cash flows for the periods shown, and, except as otherwise disclosed in
the Registration Statement, the General Disclosure Package and the Final Prospectus, such financial statements have been prepared in conformity with the generally accepted accounting principles in the United States applied on a consistent basis. The
interactive data in eXtensible Business Reporting Language incorporated by reference in the Registration Statement, the General Disclosure Package and the Final Prospectus fairly presents the information called for in all material respects and has
been prepared in accordance with the Commissions rules and guidelines applicable thereto.
(cc) Dearborn Financial
Statements. To the best knowledge of the Company, the financial statements of Dearborn and its subsidiaries, together with the related notes, included in the Registration Statement, the General Disclosure Package and the Final Prospectus present
fairly the financial position of Dearborn and its consolidated subsidiaries as of the dates shown and their results of operations and cash flows for the periods shown and, except as otherwise disclosed in the Registration Statement, the General
Disclosure Package and the Final Prospectus, such financial statements have been prepared in conformity with the generally accepted accounting principles in the United States applied on a consistent basis. To the best knowledge of the Company, the
financial statements of Mountain State Carbon, LLC (MSC), together with the related notes, included in the Registration Statement, the General Disclosure Package and the Final Prospectus present fairly the financial position of MSC as of
the dates shown and its results of operations and cash flows for the periods shown and, except as otherwise disclosed in the Registration Statement, the General Disclosure Package and the Final Prospectus, such financial statements have been
prepared in conformity with the generally accepted accounting principles in the United States applied on a consistent basis.
(dd) Pro forma Financial Statements. The pro forma financial information and the related notes thereto included under
the captions SummaryUnaudited Pro Forma Condensed Consolidated Financial Information, Capitalization, Unaudited Pro Forma Condensed Consolidated Financial Statements, and elsewhere in the Registration
Statement, the General Disclosure Package and the Final Prospectus, and, to the best knowledge of the Company, with respect to the pro forma financial information and the related notes thereto derived from the Dearborn Financial Statements, present
fairly in all material respects the information contained therein, have been prepared in accordance with the Commissions rules and guidelines with respect to pro forma financial statements, and the assumptions used in the preparation thereof
are reasonable and the adjustments used therein are appropriate to give effect to the transactions and circumstances referred to therein.
9
(ee) No Material Adverse Change in Business. Except as disclosed in the
General Disclosure Package and the Final Prospectus, since the end of the period covered by the latest audited financial statements included in the General Disclosure Package and the Final Prospectus (i) there has been no change, in the
condition (financial or otherwise), results of operations, business, properties or prospects of the Company, the Subsidiaries, or, to the best knowledge of the Company, Dearborn, taken as a whole that is material and adverse, (ii) except as
disclosed in or contemplated by the General Disclosure Package and the Final Prospectus, there has been no dividend or distribution of any kind declared, paid or made by the Company on any class of its capital stock and (iii) except as
disclosed in or contemplated by the General Disclosure Package, there has been no material adverse change in the capital stock, short-term indebtedness, long-term indebtedness, net current assets or net assets of the Company.
(ff) Investment Company Act. The Company is not and, after giving effect to the offering and sale of the Offered
Securities and the application of the proceeds thereof as described in the General Disclosure Package and the Final Prospectus, will not be an investment company as defined in the Investment Company Act of 1940 (the Investment
Company Act).
(gg) Ratings. No nationally recognized statistical rating organization as such
term is defined in Section 3(a)(62) under the Exchange Act (i) has imposed (or has informed the Company that it is considering imposing) any condition (financial or otherwise) on the Companys retaining any rating assigned to the
Company or AK Steel Corporation or any securities of the Company or AK Steel Corporation or (ii) has indicated to the Company that it is considering any of the actions described in Section 7(c)(ii) hereof.
(hh) Foreign Corrupt Practices Act. None of the Company or, to the best of the Companys knowledge, any of the
Subsidiaries, Dearborn, or their respective directors, officers, agents, employees or affiliates is aware of or has taken any action, directly or indirectly, that would result in a violation by such persons of the FCPA, including, without
limitation, making use of the mails or any means or instrumentality of interstate commerce corruptly in furtherance of an offer, payment, promise to pay or authorization of the payment of any money, or other property, gift, promise to give, or
authorization of the giving of anything of value to any foreign official (as such term is defined in the FCPA) or any foreign political party or official thereof or any candidate for foreign political office, in contravention of the FCPA
and the Company and, to the best of the Companys knowledge, the Subsidiaries and affiliates and Dearborn have conducted their businesses in compliance with the FCPA and have devised or instituted and enforce policies and procedures designed to
ensure, and which are reasonably expected to continue to ensure, continued compliance therewith. In addition, none of the Company or, to the best of the Companys knowledge, any of the Subsidiaries, Dearborn, or their respective directors,
officers, agents, employees or affiliates is aware of or has taken any action, directly or indirectly, that would result in a violation by such persons of the U.K. Bribery Act 2010.
(ii) Compliance with Money Laundering Laws. The operations of the Company, the Subsidiaries and, to the best
knowledge of the Company, Dearborn, are and have been conducted at all times in compliance in all material respects with applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as
amended, the money laundering statutes of all applicable jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or guidelines issued, administered or enforced by any governmental agency, and no action, suit
or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any of the Subsidiaries with respect to such statutes, rules, regulations and guidelines is pending or, to the knowledge of the
Company, threatened.
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(jj) No Conflicts with Sanctions Laws. Neither the Company, its
Subsidiaries, nor, to the best knowledge of the Company, Dearborn, or any of their respective directors, officers or employees, nor, to the knowledge of the Company, any agent, affiliate or other person associated with or acting on behalf of the
Company any of its Subsidiaries or Dearborn is currently the subject or the target of any sanctions administered or enforced by the U.S. government (including, without limitation, the Office of Foreign Assets Control of the U.S. Department of the
Treasury (OFAC) or the U.S. Department of State and including, without limitation, the designation as a specially designated national or blocked person), the United Nations Security Council
(UNSC), the European Union, Her Majestys Treasury (HMT) or other relevant sanctions authority (collectively, Sanctions), nor is the Company, any of its subsidiaries or to the best
knowledge of the Company, Dearborn, located, organized or resident in a country or territory that is the subject or target of Sanctions, including, without limitation, Cuba, Iran, North Korea, Sudan and Syria (each, a Sanctioned
Country); and the Company will not directly or indirectly use the proceeds of the offering of the Offered Securities hereunder, or lend, contribute or otherwise make available such proceeds to any Subsidiary, joint venture partner or other
person or entity (i) to fund or facilitate any activities of or business with any person that, at the time of such funding or facilitation, is the subject or target of Sanctions, (ii) to fund or facilitate any activities of or business in
any Sanctioned Country or (iii) in any other manner that will result in a violation by any person (including any person participating in the transaction, whether as underwriter, advisor, investor or otherwise) of Sanctions. For the past five
years, the Company and the Subsidiaries, and to the best knowledge of the Company, Dearborn, have not knowingly engaged in and are not now knowingly engaged in any dealings or transactions with any person that at the time of the dealing or
transaction is or was the subject or the target of Sanctions or with any Sanctioned Country.
(kk) Taxes. The
Company, the Subsidiaries and, to the best knowledge of the Company, Dearborn, have filed all federal, state, local and non-U.S. tax returns that are required to be filed or have requested extensions thereof (except in any case in which the failure
so to file would not reasonably be expected to have a Material Adverse Effect); and, except as set forth in the General Disclosure Package and the Final Prospectus, the Company, the Subsidiaries and, to the best knowledge of the Company, Dearborn,
have paid all taxes (including any assessments, fines or penalties) required to be paid by them, except for any such taxes, assessments, fines or penalties currently being contested in good faith or as would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
(ll) Insurance. The Company, the Subsidiaries and,
to the best knowledge of the Company, Dearborn, are insured by insurers with appropriately rated claims paying abilities against such losses and risks and in such amounts as are prudent and customary for the businesses in which they are engaged; all
policies of insurance insuring the Company, any of the Subsidiaries or Dearborn or their respective businesses, assets, employees, officers and directors are in full force and effect; the Company, the Subsidiaries and, to the best knowledge of the
Company, Dearborn, are in compliance with the terms of such policies and instruments in all material respects; and there are no claims by the Company, any of the Subsidiaries or, to the best knowledge of the Company, by Dearborn, under any such
policy or instrument as to which any insurance company is denying liability or defending under a reservation of rights clause; none of the Company, any such Subsidiary, nor, to the best knowledge of the Company, Dearborn, has been refused any
insurance coverage sought or applied for; and none of the Company, any such Subsidiary, nor, to the best knowledge of the Company, Dearborn, has any reason to believe that it will not be able to renew its existing insurance coverage as and when such
coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not reasonably be expected to have a Material Adverse Effect, except as set forth in or contemplated in the
General Disclosure Package and the Final Prospectus.
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3. Purchase, Sale and Delivery of Offered Securities. On the basis of the representations,
warranties and agreements and subject to the terms and conditions set forth herein, the Company agrees to sell to the several Underwriters, and each of the Underwriters agrees, severally and not jointly, to purchase from the Company, at a purchase
price of $8.595 per share, the respective number of shares of Firm Securities set forth opposite the names of the Underwriters in Schedule A hereto.
The Company will deliver the Firm Securities to or as instructed by the Representatives for the accounts of the several Underwriters in a form
reasonably acceptable to the Representatives against payment of the purchase price by the Underwriters in Federal (same day) funds by wire transfer to an account at a bank acceptable to the Representatives drawn to the order of the Company at the
office of Davis Polk & Wardwell LLP, 450 Lexington Avenue, New York, NY 10017 at 9:00 A.M., New York time, on September 16, 2014, or at such other time not later than seven full business days thereafter as the Representatives and the
Company determine, such time being herein referred to as the First Closing Date. For purposes of Rule 15c6-1 under the Exchange Act, the First Closing Date (if later than the otherwise applicable settlement date) shall be the
settlement date for payment of funds and delivery of securities for all the Offered Securities sold pursuant to the offering.
In
addition, upon written notice from the Representatives given to the Company from time to time not more than 30 days subsequent to the date of the Final Prospectus, the Underwriters, on the basis of the representations, warranties and agreements set
forth herein and subject to the conditions set forth herein, may purchase all or less than all of the Optional Securities at the purchase price per Security to be paid for the Firm Securities less an amount per share equal to any dividends or
distributions declared by the Company and payable on the Firm Securities but not payable on the Option Securities. The Company agrees to sell to the Underwriters the number of shares of Optional Securities specified in such notice and the
Underwriters agree, severally and not jointly, to purchase such Optional Securities. Such Optional Securities shall be purchased for the account of each Underwriter in the same proportion as the number of shares of Firm Securities set forth opposite
such Underwriters name bears to the total number of shares of Firm Securities (or such number increased as set forth in Section 9 hereof) (subject to adjustment by the Representatives to eliminate fractions) and may be purchased by the
Underwriters only for the purpose of covering over-allotments made in connection with the sale of the Firm Securities. No Optional Securities shall be sold or delivered unless the Firm Securities previously have been, or simultaneously are, sold and
delivered. The right to purchase the Optional Securities or any portion thereof may be exercised from time to time and to the extent not previously exercised may be surrendered and terminated at any time upon notice by the Representatives to the
Company.
Each time for the delivery of and payment for the Optional Securities, being herein referred to as an Optional Closing
Date, which may be the First Closing Date (the First Closing Date and each Optional Closing Date, if any, being sometimes referred to as a Closing Date), shall be determined by the Representatives but shall be at least
one business day and not later than ten full business days after written notice of election to purchase Optional Securities is given. The Company will deliver the Optional Securities being purchased on each Optional Closing Date to or as instructed
by the Representatives for the accounts of the several Underwriters in a form reasonably acceptable to the Representatives against payment of the purchase price therefor in Federal (same day) funds by wire transfer to an account at a bank acceptable
to the Representatives drawn to the order of the Company, at the above office of Davis Polk & Wardwell LLP.
4. Offering by
Underwriters. It is understood that the several Underwriters propose to offer the Offered Securities for sale to the public as set forth in the Final Prospectus.
5. Certain Agreements of the Company. The Company agrees with the several Underwriters that:
(a) Filing of Prospectuses. The Company has filed or will file each Statutory Prospectus (including the Final
Prospectus) pursuant to and in accordance with Rule 424(b)(2) of the Act (or, if applicable and consented to by the Representatives, subparagraph (5)) not later than the second business day following the earlier of the date it is first
used or the execution and delivery of this Agreement. The Company has complied and will comply with Rule 433 of the Act.
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(b) Filing of Amendments; Response to Commission Requests. The Company
will promptly advise the Representatives of any proposal to amend or supplement the Registration Statement or any Statutory Prospectus at any time and will offer the Representatives a reasonable opportunity to comment on any such amendment or
supplement; and the Company will also advise the Representatives promptly of (i) the filing of any such amendment or supplement, (ii) any request by the Commission or its staff for any amendment to the Registration Statement, for any
supplement to any Statutory Prospectus or for any additional information, (iii) the institution by the Commission of any stop order proceedings in respect of the Registration Statement or the threatening of any proceeding for that purpose or
pursuant to Section 8A of the Act, and (iv) the receipt by the Company of any notification with respect to the suspension of the qualification of the Offered Securities in any jurisdiction or the institution or threatening of any
proceedings for such purpose. The Company will use its reasonable best efforts to prevent the issuance of any such stop order or the suspension of any such qualification and, if issued, to obtain as soon as possible the withdrawal thereof.
(c) Continued Compliance with Securities Laws. (i) If, at any time when a prospectus relating to the Offered
Securities is (or but for the exemption in Rule 172 would be) required to be delivered under the Act by any Underwriter or dealer, any event occurs as a result of which the Final Prospectus as then amended or supplemented would include an
untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, or if it is necessary at any time to amend the
Registration Statement or supplement the Final Prospectus to comply with the Act, the Company will promptly notify the Representatives of such event and will promptly prepare and file with the Commission and furnish, at its own expense, to the
Underwriters and the dealers and any other dealers upon request of the Representatives, an amendment or supplement which will correct such statement or omission or an amendment which will effect such compliance; and (ii) if at any time prior to
the filing of the Final Prospectus, any event occurs as a result of which the General Disclosure Package as then amended or supplemented would include an untrue statement of a material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were made, not misleading, or if it is necessary at any time to amend the General Disclosure Package to comply with law, the Company will promptly notify the Representatives of
such event and will promptly prepare and file with the Commission and furnish, at its own expense, to the Underwriters and the dealers and any other dealers upon request of the Representatives, a supplement that will correct such statement or
omission or an amendment that will effect such compliance. Neither the Representatives consent to, nor the Underwriters delivery of, any such amendment or supplement shall constitute a waiver of any of the conditions set forth in
Section 7 hereof.
(d) Rule 158. As soon as practicable, but not later than 16 months, after the date of
this Agreement, the Company will make generally available to its securityholders an earnings statement covering a period of at least 12 months beginning after the date of this Agreement and satisfying the provisions of Section 11(a) of the Act
and Rule 158.
(e) Furnishing of Prospectuses. The Company will furnish to the Representatives copies of the
Registration Statement, including all exhibits, any Statutory Prospectus, the Final Prospectus and all amendments and supplements to such documents, in each case as soon as available and in such quantities as the Representatives reasonably request.
The Company will pay the expenses of printing and distributing to the Underwriters all such documents.
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(f) Blue Sky Compliance. The Company will qualify the Offered Securities
for offer and sale under the laws of such jurisdictions as the Representatives shall reasonably request and will continue such qualifications in effect so long as required for distribution of the Securities; provided that the Company shall
not be required to (i) qualify as a foreign corporation or other entity or as a dealer in securities in any such jurisdiction where it would not otherwise be required to so qualify, (ii) file any general consent to service of process in
any such jurisdiction or (iii) subject itself to taxation in any such jurisdiction if it is not otherwise so subject.
(g) Reporting Requirements. The Company, during the period when the Final Prospectus is required to be delivered under
the Act, will file all documents required to be filed with the Commission pursuant to the Exchange Act within the time periods required by the Exchange Act.
(h) Payment of Expenses. The Company will pay all expenses incident to the performance of its obligations under this
Agreement, including but not limited to (i) any filing fees and other expenses (including fees and disbursements of counsel to the Underwriters) incurred in connection with qualification of the Offered Securities for sale under the laws of such
jurisdictions as the Representatives designate and the preparation and printing of memoranda relating thereto, (ii) the filing fees for FINRAs review of the offering of the Offered Securities, and the reasonable fees and disbursements of
counsel to the Underwriters in connection with compliance with FINRAs rules and regulations, (iii) any fees charged by investment rating agencies for the rating of the Offered Securities, (iv) costs and expenses relating to investor
presentations or any road show in connection with the offering and sale of the Offered Securities, any travel expenses of the Companys officers and employees and any other expenses of the Company including the chartering of
airplanes, (v) fees and expenses incident to listing the Offered Securities on the New York Stock Exchange, (vi) fees and expenses in connection with the registration of the Offered Securities under the Exchange Act, and
(vii) expenses incurred in distributing preliminary prospectuses and the Final Prospectus (including any amendments and supplements thereto) to the Underwriters and for expenses incurred for preparing, printing and distributing any Issuer Free
Writing Prospectuses to investors or prospective investors. It is understood, however, that, except as provided in subclauses (i) and (ii) of this clause (h), and Sections 8 and 10 hereof, the Underwriters will pay all of their own costs
and expenses, including the fees of their counsel, transfer taxes on resale of any of the Securities and any advertising expenses connected with any offers they may make.
(i) Use of Proceeds. The Company will use the net proceeds received in connection with this offering in the manner
described in the Use of Proceeds section of the General Disclosure Package and the Final Prospectus and, except as disclosed in the General Disclosure Package and the Final Prospectus, the Company does not intend to use any of the
proceeds from the sale of the Offered Securities hereunder to repay any outstanding debt owed to any affiliate of any Underwriter.
(j) Absence of Manipulation. The Company will not take, directly or indirectly, any action designed to or that would
constitute or that might reasonably be expected to cause or result in, stabilization or manipulation of the price of any securities of the Company to facilitate the sale or resale of the Offered Securities.
(k) Restriction on Sale of Securities. For a period of 90 days after the date hereof, the Company will not
(i) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, or file
with the Commission a registration statement under the Securities Act relating to, any shares of Securities or any securities convertible into or exercisable or exchangeable for Securities, or publicly disclose the intention to make any offer, sale,
pledge, disposition or filing, or (ii) enter into any swap or other agreement that transfers, in
14
whole or in part, any of the economic consequences of ownership of Securities or any such other securities, whether any such transaction described in clause (i) or (ii) above is to be
settled by delivery of Securities or such other securities, in cash or otherwise, without the prior written consent of the Representatives, other than (w) the Offered Securities to be sold hereunder, (x) any underlying shares of Securities
to be exchanged pursuant to AK Steel Corporations 5.00% Exchangeable Senior Notes due November 2019 upon the election of a holder of such notes pursuant to their terms, (y) any shares of Securities of the Company, options to purchase such
shares of Securities, restricted stock or restricted stock units granted pursuant to the Companys management incentive plans in effect on the date hereof and (z) shares of Securities of the Company issued upon the exercise of options or
vesting of restricted stock or restricted stock units pursuant to the terms of the Companys management incentive plans in effect on the date hereof.
6. Free Writing Prospectuses. (a) Issuer Free Writing Prospectuses. The Company represents and agrees that,
unless it obtains the prior consent of the Representatives, and each Underwriter represents and agrees that, unless it obtains the prior consent of the Company and the Representatives, it has not made and will not make any offer relating to the
Offered Securities that would constitute an Issuer Free Writing Prospectus, or that would otherwise constitute a free writing prospectus, as defined in Rule 405, required to be filed with the Commission. Any such free writing
prospectus consented to by the Company and the Representatives is hereinafter referred to as a Permitted Free Writing Prospectus. The Company represents that it has treated and agrees that it will treat each Permitted Free Writing
Prospectus as an issuer free writing prospectus, as defined in Rule 433, and has complied and will comply with the requirements of Rules 164 and 433 applicable to any Permitted Free Writing Prospectus, including timely
Commission filing where required, legending and record keeping.
(b) Term Sheets. The Company will prepare a final
term sheet relating to the Offered Securities, containing only information that describes the final terms of the Offered Securities and otherwise in a form consented to by the Representatives, and will file such final term sheet within the period
required by Rule 433(d)(5)(ii) following the date such final terms have been established for all classes of the offering of the Offered Securities. Any such final term sheet is an Issuer Free Writing Prospectus and a Permitted Free Writing
Prospectus for purposes of this Agreement. The Company and the Representatives also consent to the use by an Underwriter of a free writing prospectus that contains only (i)(x) information describing the preliminary terms of the Offered Securities or
their offering or (y) information that describes the final terms of the Offered Securities or their offering and that is included in the final term sheet of the Company contemplated in the first sentence of this subsection or (ii) other
information that is not issuer information as defined in Rule 433, it being understood that any such free writing prospectus referred to in clause (i) or (ii) above shall not be an Issuer Free Writing Prospectus for purposes of
this Agreement.
7. Conditions of the Obligations of the Underwriters. The obligations of the several Underwriters to purchase and
pay for the Firm Securities on the First Closing Date and the Optional Securities to be purchased on each Optional Closing Date will be subject to the accuracy of the representations and warranties of the Company herein (on the date hereof and as
though made on such Closing Date), to the accuracy of the statements of Company officers made pursuant to the provisions hereof, to the performance by the Company of its obligations hereunder and to the following additional conditions precedent:
(a) Accountants Comfort Letter. The Representatives shall have received letters, dated, respectively,
the date hereof and each Closing Date, of Ernst & Young LLP, Deloitte & Touche LLP and, with respect to Dearborn, KPMG LLP, confirming that they are registered public accounting firms and independent public accountants within the
meaning of the Securities Laws and substantially in the form agreed to with the Representatives (except that, in any letter dated a Closing Date, the specified date referred to in the letter shall be a date no more than three days prior to such
Closing Date).
15
(b) Filing of Prospectus. The Final Prospectus shall have been filed
with the Commission in accordance with the Rules and Regulations and Section 5(a) hereof. No stop order suspending the effectiveness of the Registration Statement or of any part thereof shall have been issued and no proceedings for that purpose
or pursuant to Section 8A of the Act shall have been instituted or, to the knowledge of the Company or any Underwriter, shall be contemplated by the Commission.
(c) No Material Adverse Change. Subsequent to the Applicable Time, there shall not have occurred (i) any
change in the condition (financial or otherwise), results of operations, business, properties or prospects of the Company, the Subsidiaries and Dearborn taken as a whole which, in the judgment of the Representatives, is material and adverse and
makes it impractical or inadvisable to proceed with the offering, sale or delivery of the Offered Securities; (ii) any downgrading in the rating of any debt securities of the Company or AK Steel Corporation by any nationally recognized
statistical rating organization (as defined in Section 3(a)(62) under the Exchange Act), or any public announcement that any such organization has under surveillance or review its rating of any debt securities of the Company or AK Steel
Corporation (other than an announcement with positive implications of a possible upgrading, and no implication of a possible downgrading, of such rating); (iii) any change in U.S. or international financial, political or economic conditions or
currency exchange rates or exchange controls the effect of which is such as to make it, in the judgment of the Representatives, impractical to proceed with the offering, sale or delivery or to enforce contracts for the sale of the Offered
Securities, whether in the primary market or in respect of dealings in the secondary market; (iv) any suspension or material limitation of trading in securities generally on the New York Stock Exchange, or any setting of minimum or maximum
prices for trading on such exchange; (v) or any suspension of trading of any securities of the Company on any exchange or in the over-the-counter market; (vi) any banking moratorium declared by any U.S. federal or New York authorities;
(vii) any major disruption of settlements of securities, payment, or clearance services in the United States or any other country where such securities are listed or (viii) any attack on, outbreak or escalation of hostilities or act of
terrorism involving the United States, any declaration of war by the U.S. Congress or any other national or international calamity or emergency if, in the judgment of the Representatives, the effect of any such attack, outbreak, escalation, act,
declaration, calamity or emergency is such as to make it impractical or inadvisable to proceed with the offering, sale or delivery of the Offered Securities or to enforce contracts for the sale of the Offered Securities.
(d) Opinion of Counsel for Company. The Representatives shall have received an opinion, dated such Closing Date, of
Weil, Gotshal & Manges LLP, counsel for the Company substantially in the form attached hereto as Exhibit A.
(e)
Opinion of Counsel for Underwriters. The Representatives shall have received from Davis Polk & Wardwell LLP, counsel for the Underwriters, such opinion or opinions, dated such Closing Date, with respect to such matters as the
Representatives may require, and the Company shall have furnished to such counsel such documents as they request for the purpose of enabling them to pass upon such matters.
(f) Officers Certificate. The Representatives shall have received a certificate, dated such Closing Date, of
an executive officer of the Company and a principal financial or accounting officer of the Company in which such officers shall state that: the representations and warranties of the Company in this Agreement are true and correct; the Company has
complied with all agreements and satisfied all conditions on its part to be performed or satisfied hereunder at or prior to such Closing Date; no stop order suspending the effectiveness of the Registration Statement has
16
been issued and no proceedings for that purpose have been instituted or, to the best of their knowledge and after reasonable investigation, are contemplated by the Commission; and, subsequent to
the date of the most recent financial statements in the General Disclosure Package, there has been no material adverse change in the condition (financial or otherwise), results of operations, business, properties or prospects of the Company, the
Subsidiaries, and to the best knowledge of the Company, Dearborn, taken as a whole except as set forth in the General Disclosure Package or as described in such certificate.
(g) Lock-Up Agreements. The lock-up agreements, each substantially in the form of Exhibit B hereto, between
you and the officers and directors of the Company listed on Schedule C hereto relating to sales and certain other dispositions of shares of the Securities or certain other securities, delivered to you on or before the date hereof, shall be full
force and effect on such Closing Date.
The Company will furnish the Representatives with such conformed copies of such opinions, certificates, letters
and documents as the Representatives reasonably request. The Representatives may waive on behalf of the Underwriters compliance with any conditions to the obligations of the Underwriters hereunder, whether in respect of an Optional Closing Date or
otherwise.
8. Indemnification and Contribution. (a) Indemnification of Underwriters. The Company will indemnify and
hold harmless each Underwriter, its partners, members, directors, officers, employees, agents, affiliates and each person, if any, who controls such Underwriter within the meaning of Section 15 of the Act or Section 20 of the Exchange Act
(each, an Indemnified Party), against any and all losses, claims, damages or liabilities, joint or several, to which such Indemnified Party may become subject, under the Act, the Exchange Act, other Federal or state statutory law
or regulation or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon (i) any untrue statement or alleged untrue statement of any material fact contained in any part of
the Registration Statement at any time, or arise out of or are based upon the omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, or (ii) any untrue statement
or alleged untrue statement of any material fact contained in any part of any Statutory Prospectus as of any time, the Final Prospectus or any Issuer Free Writing Prospectus, or arise out of or are based upon the omission or alleged omission of a
material fact necessary to make the statements therein, in each case in light of the circumstances under which they were made, not misleading, and will reimburse each Indemnified Party for any legal or other expenses reasonably incurred by such
Indemnified Party in connection with investigating or defending against any loss, claim, damage, liability, action, litigation, investigation or proceeding whatsoever (whether or not such Indemnified Party is a party thereto), whether threatened or
commenced, and in connection with the enforcement of this provision with respect to any of the above as such expenses are incurred; provided, however, that the Company will not be liable in any such case to the extent that any such loss, claim,
damage or liability arises out of or is based upon an untrue statement or alleged untrue statement in or omission or alleged omission from any of such documents in reliance upon and in conformity with written information furnished to the Company by
any Underwriter through the Representatives specifically for use therein, it being understood and agreed that the only such information furnished by any Underwriter consists of the information described as such in subsection (b) below.
(b) Indemnification of Company. Each Underwriter will severally and not jointly indemnify and hold harmless the Company, each of its
directors and each of its officers who signs a Registration Statement and each person, if any, who controls the Company within the meaning of Section 15 of the Act or Section 20 of the Exchange Act (each, an Underwriter
Indemnified Party), against any losses, claims, damages or liabilities to which such Underwriter Indemnified Party may become subject, under the Act, the Exchange Act, other Federal or state statutory law or regulation or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon (i) any untrue statement or alleged untrue statement of any material fact contained in any part of the Registration Statement
at any
17
time, or arise out of or are based upon the omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, or
(ii) any untrue statement or alleged untrue statement of any material fact contained in any part of any Statutory Prospectus as of any time, the Final Prospectus, or any Issuer Free Writing Prospectus, or arise out of or are based upon the
omission or alleged omission of a material fact necessary to make the statements therein, in each case in light of the circumstances under which they were made, not misleading, in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with written information furnished to the Company by such Underwriter through the Representatives specifically for use therein, and
will reimburse any legal or other expenses reasonably incurred by such Underwriter Indemnified Party in connection with investigating or defending against any such loss, claim, damage, liability, action, litigation, investigation or proceeding
whatsoever (whether or not such Underwriter Indemnified Party is a party thereto), whether threatened or commenced, based upon any such untrue statement or omission, or any such alleged untrue statement or omission as such expenses are incurred, it
being understood and agreed that the only such information furnished by any Underwriter consists of the following information in the Final Prospectus furnished on behalf of each Underwriter: the concession figure appearing in the fifth paragraph
under the caption Underwriting and the information contained in the twelfth, thirteenth and fourteenth paragraphs under the caption Underwriting relating to stabilizing activities.
(c) Actions against Parties; Notification. Promptly after receipt by an indemnified party under this Section of notice of the
commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under this Section 8, notify the indemnifying party of the commencement thereof; but the failure to notify the
indemnifying party shall not relieve it from any liability that it may have under subsection (a) or (b) above except to the extent that it has been materially prejudiced (through the forfeiture of substantive rights or defenses) by such
failure; and provided further that the failure to notify the indemnifying party shall not relieve it from any liability that it may have to an indemnified party otherwise than under subsection (a) or (b) above. In case any such action is
brought against any indemnified party and it notifies the indemnifying party of the commencement thereof, the indemnifying party will be entitled to participate therein and, to the extent that it may wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying party), and after notice from the
indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party will not be liable to such indemnified party under this Section for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable costs of investigation. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened action
in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party unless such settlement (i) includes an unconditional release of such indemnified party from all
liability on any claims that are the subject matter of such action and (ii) does not include a statement as to, or an admission of, fault, culpability or a failure to act by or on behalf of an indemnified party.
(d) Contribution. If the indemnification provided for in this Section is unavailable or insufficient to hold harmless an
indemnified party in respect of any losses, claims, damages or liabilities referred to herein, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to herein (i) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Underwriters on the other from the offering of the Offered Securities or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company on the
one hand and the Underwriters on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities as well as any other relevant equitable considerations. The relative benefits received by the
Company on the one hand and the Underwriters on the other shall be deemed to be in the
18
same proportion as the total net proceeds from the offering (before deducting expenses) received by the Company bear to the total underwriting discounts and commissions received by the
Underwriters. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied
by the Company or the Underwriters and the parties relative intent, knowledge, access to information and opportunity to correct or prevent such untrue statement or omission. The amount paid by an indemnified party as a result of the losses,
claims, damages or liabilities referred to in the first sentence of this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any
action or claim which is the subject of this subsection (d). Notwithstanding the provisions of this subsection (d), no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Securities
underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Underwriters
obligations in this subsection (d) to contribute are several in proportion to their respective underwriting obligations and not joint. The Company and the Underwriters agree that it would not be just and equitable if contribution pursuant to
this Section 8(d) were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to in this
Section 8(d).
9. Default of Underwriters. If any Underwriter or Underwriters default in their obligations to purchase Offered
Securities hereunder on either the First or any Optional Closing Date and the aggregate number of shares of Offered Securities that such defaulting Underwriter or Underwriters agreed but failed to purchase does not exceed 10% of the total number of
shares of Offered Securities that the Underwriters are obligated to purchase on such Closing Date, the Representatives may make arrangements satisfactory to the Company for the purchase of such Offered Securities by other persons, including any of
the Underwriters, but if no such arrangements are made by such Closing Date, the non-defaulting Underwriters shall be obligated severally, in proportion to their respective commitments hereunder, to purchase the Offered Securities that such
defaulting Underwriters agreed but failed to purchase on such Closing Date. If any Underwriter or Underwriters so default and the aggregate number of shares of Offered Securities with respect to which such default or defaults occur exceeds 10% of
the total number of shares of Offered Securities that the Underwriters are obligated to purchase on such Closing Date and arrangements satisfactory to the Representatives and the Company for the purchase of such Offered Securities by other persons
are not made within 36 hours after such default, this Agreement will terminate without liability on the part of any non-defaulting Underwriter or the Company, except as provided in Section 10 (provided that if such default occurs with respect
to Optional Securities after the First Closing Date, this Agreement will not terminate as to the Firm Securities or any Optional Securities purchased prior to such termination). As used in this Agreement, the term Underwriter includes
any person substituted for an Underwriter under this Section. Nothing herein will relieve a defaulting Underwriter from liability for its default.
10. Survival of Certain Representations and Obligations. The respective indemnities, agreements, representations, warranties and other
statements of the Company or its officers and of the several Underwriters set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of any investigation, or statement as to the results thereof, made by or on
behalf of any Underwriter, the Company or any of their respective representatives, officers or directors or any controlling person, and will survive delivery of and payment for the Offered Securities. If the purchase of the Offered Securities by the
Underwriters is not consummated for any reason other than solely because of the termination of this Agreement pursuant to Section 9 hereof, the Company will reimburse the Underwriters for all out-of-pocket expenses (including fees and
disbursements of counsel) reasonably incurred by them in connection with the offering of the Offered Securities, and the respective obligations of the Company and the Underwriters pursuant to Section 8 hereof shall remain in effect. For the
avoidance of doubt, if this
19
Agreement is terminated pursuant to Section 9 hereof, the respective obligations of the Company and the Underwriters pursuant to Section 8 hereof shall remain in effect. In addition, if
any Offered Securities have been purchased hereunder, the representations and warranties in Section 2 and all obligations under Section 5 shall also remain in effect.
11. Notices. All communications hereunder will be in writing and, if sent to the Underwriters, will be mailed, delivered or telegraphed
and confirmed to the Representatives, c/o Merrill Lynch, Pierce, Fenner & Smith, Incorporated, One Bryant Park, New York, N.Y., 10036, Facsimile: (646) 855-3073, Attention: Syndicate Department, with a copy to: Facsimile:
(212) 230-8730, Attention: ECM Legal, Credit Suisse Securities (USA) LLC, Eleven Madison Avenue, New York, N.Y. 10010-3629, Attention: LCD-IBD, and J.P. Morgan Securities LLC, 383 Madison Avenue, New York, N.Y. 10179, or, if sent to the
Company, will be mailed, delivered or telegraphed and confirmed to it at AK Steel Holding Corporation, 9227 Centre Point Drive, West Chester, OH 45069, Attention: General Counsel; provided, however, that any notice to an Underwriter pursuant to
Section 8 will be mailed, delivered or telegraphed and confirmed to such Underwriter.
12. In accordance with the requirements of the
USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)), the Underwriters are required to obtain, verify and record information that identifies their respective clients, including the Company, which information may
include the name and address of their respective clients, as well as other information that will allow the Underwriters to properly identify their respective clients.
13. Successors. This Agreement will inure to the benefit of and be binding upon the parties hereto and their respective successors and
the officers and directors and controlling persons referred to in Section 8, and no other person will have any right or obligation hereunder.
14. Representation of Underwriters. The Representatives will act for the several Underwriters in connection with this financing, and
any action under this Agreement taken by the Representatives jointly will be binding upon all the Underwriters.
15. Counterparts.
This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute one and the same Agreement.
16. Absence of Fiduciary Relationship. The Company acknowledges and agrees that:
(a) No Other Relationship. The Underwriters have been retained solely to act as underwriters in connection with the sale of Offered
Securities and that no fiduciary, advisory or agency relationship between the Company and the Underwriters has been created in respect of any of the transactions contemplated by this Agreement or the Final Prospectus, irrespective of whether the
Underwriters have advised or is advising the Company on other matters;
(b) Arms Length Negotiations. The price of the
Offered Securities set forth in this Agreement was established by the Company following discussions and arms-length negotiations with the Underwriters and the Company is capable of evaluating and understanding and understands and accepts the terms,
risks and conditions of the transactions contemplated by this Agreement;
(c) Absence of Obligation to Disclose. The Company has
been advised that the Underwriters and their affiliates are engaged in a broad range of transactions which may involve interests that differ from those of the Company and that the Underwriters have no obligation to disclose such interests and
transactions to the Company by virtue of any fiduciary, advisory or agency relationship; and
20
(d) Waiver. The Company waives, to the fullest extent permitted by law, any claims it may
have against the Underwriters for breach of fiduciary duty or alleged breach of fiduciary duty and agrees that the Underwriters shall have no liability (whether direct or indirect) to the Company in respect of such a fiduciary duty claim or to any
person asserting a fiduciary duty claim on behalf of or in right of the Company, including stockholders, employees or creditors of the Company.
17. Applicable Law. This Agreement and any claim, controversy or dispute arising under or related to this
Agreement shall be governed by, and construed in accordance with, the laws of the State of New York.
The Company hereby submits to
the non-exclusive jurisdiction of the Federal and state courts in the Borough of Manhattan in The City of New York in any suit or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby. The Company
irrevocably and unconditionally waives any objection to the laying of venue of any suit or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby in Federal and state courts in the Borough of Manhattan in The
City of New York and irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such suit or proceeding in any such court has been brought in an inconvenient forum.
21
If the foregoing is in accordance with the Representatives understanding of our agreement,
kindly sign and return to the Company one of the counterparts hereof, whereupon it will become a binding agreement between the Company and the several Underwriters in accordance with its terms.
|
|
|
Very truly yours,
AK STEEL HOLDING CORPORATION |
|
|
By: |
|
/s/ Joseph C. Alter |
Name: Joseph C. Alter |
Title:Vice President and General Counsel |
[Signature page to Underwriting Agreement]
The foregoing Underwriting Agreement is hereby confirmed and accepted as of the date first above written.
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
CREDIT SUISSE SECURITIES (USA) LLC
J.P. MORGAN SECURITIES LLC
Acting
on behalf of themselves and as the Representatives of the several Underwriters
By MERRILL LYNCH, PIERCE,
FENNER & SMITH INCORPORATED
|
|
|
By: |
|
/s/ Robert Mitchell Theiss |
Name: Robert Mitchell Theiss Title:
Managing Director |
By CREDIT SUISSE SECURITIES (USA) LLC
|
|
|
By: |
|
/s/ Peter Matt |
Name: Peter Matt Title: Managing
Director |
By J.P. MORGAN SECURITIES LLC
|
|
|
By: |
|
/s/ Jeff Zajkowski |
Name: Jeff Zajkowski Title:
Managing Director |
[Signature page to Underwriting Agreement]
SCHEDULE A
|
|
|
|
|
Underwriter |
|
Number of Firm Securities |
|
Merrill Lynch, Pierce, Fenner & Smith Incorporated |
|
|
3,829,000 |
|
Credit Suisse Securities (USA) LLC |
|
|
14,381,500 |
|
J.P. Morgan Securities LLC |
|
|
5,624,500 |
|
Citigroup Global Markets Inc. |
|
|
8,316,000 |
|
Goldman, Sachs & Co. |
|
|
1,424,500 |
|
Fifth Third Securities, Inc. |
|
|
1,424,500 |
|
|
|
|
|
|
Total |
|
|
35,000,000 |
|
|
|
|
|
|
A-1
SCHEDULE B
1. |
General Use Free Writing Prospectuses (included in the General Disclosure Package) |
General Use Issuer Free Writing Prospectus includes each of the following documents:
1. None.
2. |
Other Information Included in the General Disclosure Package |
The following information
is also included in the General Disclosure Package:
1. The initial price to the public of the Offered Securities: $9.00 per share.
2. Total number of Firm Securities: 35,000,000 shares.
3. Total number of Optional Securities: 5,250,000 shares.
B-1
SCHEDULE C
Directors and Officers Signing Lock-Up Agreements
Richard A. Abdoo
Joseph C. Alter
Stephanie Bisselberg
John S. Brinzo
Dennis C. Cuneo
Sheri H. Edison
Mark G. Essig
Renee S. Filiatraut
William K. Gerber
Gregory A. Hoffbauer
David C. Horn
Keith J. Howell
Robert J. Jenkins
Eric S. Peterson
Ralph S. Michael, III
Roger K. Newport
Kirk W. Reich
Maurice A. Reed
Shirley D. Peterson
James A. Thomson
James L. Wainscott
Vicente Wright
EXHIBIT A
Opinion of Weil Gotshal & Manges LLP
September 16, 2014
Merrill Lynch, Pierce,
Fenner & Smith Incorporated
One Bryant Park
New
York, N.Y. 10036
Credit Suisse Securities (USA) LLC,
Eleven Madison Avenue,
New York, N.Y. 10010-3629
J.P. Morgan Securities LLC
383 Madison Avenue
New York, NY 10179
Fifth Third Securities, Inc.
38 Fountain Square Plaza
MD10903B
Cincinnati, Ohio 45263
Goldman, Sachs & Co.
200 West Street
New York, New York 10282
Ladies and Gentlemen:
We have acted as counsel to AK Steel
Holding Corporation (the Company) in connection with the preparation, authorization, execution and delivery of, and the consummation of the transactions contemplated by, an underwriting agreement, dated September 10,
2014 (the Agreement), by and among the Company and J.P. Morgan Securities LLC, Credit Suisse Securities (USA) LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as representatives of the underwriters named
therein, relating to the issuance by the Company of 35,000,000 shares of common stock, par value $0.01 per share (the Securities). This opinion is being rendered to you pursuant to Section 7(d) of the Agreement.
Capitalized terms defined in the Agreement and used (but not otherwise defined) herein are used herein as so defined.
In so acting, we have examined
originals or copies (certified or otherwise identified to our satisfaction) of (i) the Agreement; (ii) the Registration Statement on Form S-3 (Registration No. 333-194078), filed on February 21, 2014 (as amended by Post-Effective
Amendment No. 1 filed on September 8, 2014, Registration Statement); (iii) the Prospectus, dated September 8, 2014, which forms a part of the Registration Statement (the Base
Prospectus); (iv) the Preliminary Prospectus Supplement, dated September 8, 2014 (the Preliminary Prospectus Supplement); (v) the Pricing Disclosure Package (as defined below); (v) the
Prospectus Supplement, dated September 10, 2014 (the Prospectus Supplement); (vi) the restated certificate of incorporation of the Company (the Certificate of Incorporation);
(vii) the amended and restated by-laws of the Company (the By-laws); and (viii) such corporate records, agreements, documents and other instruments, and such certificates or
comparable documents of public officials and of officers and representatives of the Company, and have made such inquiries of such officers and representatives, as we have deemed relevant and necessary as a basis for the opinions hereinafter set
forth. We refer to the Base Prospectus, as supplemented by the Preliminary Prospectus Supplement, and taken together with the information listed on Schedule A hereto, as the Pricing Disclosure Package. We refer to the Base
Prospectus as supplemented by the Prospectus Supplement as the Prospectus.
In such examination, we have assumed the genuineness of all signatures, the legal capacity of all natural
persons, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as certified, conformed or photostatic copies and the authenticity of the originals of such latter
documents. As to all questions of fact material to these opinions that have not been independently established, we have relied upon certificates or comparable documents of officers and representatives of the Company and upon the representations and
warranties of the Company contained in the Agreement. As used herein, to our knowledge, of which we are aware and we are not aware mean the conscious awareness of facts or other information by any lawyer in our
firm actively involved in the transactions contemplated by the Agreement, after consultation with such other lawyers in our firm as each such actively involved lawyer has deemed appropriate.
Based on the foregoing, and subject to the qualifications stated herein, we are of the opinion that:
1. The Company is a corporation validly existing and in good standing under the laws of the State of Delaware and has all requisite corporate power and
authority to own, lease and operate its properties and to carry on its business as now being conducted.
2. The Company has an authorized capitalization
as set forth in the Prospectus and the Pricing Disclosure Package.
3. The Securities to be issued pursuant to the Agreement have been duly authorized
and, when issued as contemplated by the Agreement, will be validly issued, fully paid and nonassessable.
4. The Company has all requisite corporate power
and authority to execute and deliver the Agreement and to perform its obligations thereunder. The execution, delivery and performance of the Agreement by the Company have been duly authorized by all necessary corporate action on the part of the
Company. The Agreement has been duly and validly executed and delivered by the Company.
5. The execution and delivery by the Company of the Agreement and
the performance by the Company of its obligations thereunder will not conflict with, constitute a breach of or default under or violate (i) any of the terms, conditions or provisions of the Certificate of Incorporation or By-laws of the
Company; (ii) any of the terms, conditions or provisions of any document, agreement or other instrument listed on Schedule B hereto; (iii) Delaware corporate, New York or federal law (other than federal and state securities or blue sky
laws, as to which we express no opinion in this paragraph); or (iv) any judgment, writ, injunction, decree, order or ruling of any court or governmental authority binding on the Company of which we are aware.
6. No consent, approval, waiver, license or authorization or other action by or filing with any Delaware corporate, New York or federal governmental authority
is required in connection with the execution and delivery by the Company of the Agreement, the consummation by the Company of the transactions contemplated thereby or the performance by the Company of its obligations thereunder, except for federal
and state securities or blue sky laws, as to which we express no opinion in this paragraph, and those already obtained.
7. To our knowledge, there are no
legal or governmental proceedings pending or overtly threatened to which the Company or any of its subsidiaries is a party or to which any of the properties of the Company or any of its subsidiaries is subject that are required to be described in
the Registration Statement, the Prospectus or the documents incorporated by reference therein and are not so described.
8. The statements (A) in the
Prospectus and the Pricing Disclosure Package under the caption Description of Capital Stock and (B) in the Registration Statement in response to the requirements of Item 9 of Form S-3, in each case insofar as such statements
constitute summaries of the legal matters, documents or proceedings referred to therein, fairly present the information called for with respect to such legal matters, documents and proceedings and fairly summarize the matters referred to therein in
all material respects.
9. The statements in the Prospectus and the Pricing Disclosure Package under the caption Material U.S. Federal Income Tax
Consequences for Non-U.S. Holders, insofar as they constitute statements of United States federal income tax law or legal conclusions with respect thereto, and subject to the limitations set forth therein, fairly summarize the matters referred
to therein in all material respects.
10. The Company is not, and immediately after giving effect to the sale of the Securities and the application of
the proceeds thereof as described in the Prospectus will not be, an investment company as defined in the Investment Company Act of 1940, as amended.
11. The Registration Statement has become effective under the Securities Act and, based solely on a telephone confirmation by the staff of the Securities and
Exchange Commission (the Commission), we are not aware of any stop order suspending the effectiveness of the Registration Statement or of any notice objecting to its use. To our knowledge, no proceedings therefor have been
initiated or overtly threatened by the Commission and any required filing of the Prospectus and any supplement thereto pursuant to Rule 424(b) under the Securities Act has been made in the manner and within the time period required by such Rule.
The opinions expressed herein are limited to the laws of the State of New York, the corporate laws of the State of Delaware and the federal laws of the
United States, and we express no opinion as to the effect on the matters covered by this letter of the laws of any other jurisdiction.
The opinions
expressed herein are rendered solely for your benefit in connection with the transactions described herein. Those opinions may not be used or relied upon by any other person, nor may this letter or any copies hereof be furnished to a third party,
filed with a governmental agency, quoted, cited or otherwise referred to without our prior written consent.
Very truly yours,
Schedule A
Pricing Information Provided Orally by Underwriters
1. The initial price to the public of the Offered Securities: $9.00 per share.
2. Total number of Firm Securities: 35,000,000 shares.
3.
Total number of Optional Securities: 5,250,000 shares.
Schedule B
1. |
Indenture dated as of May 11, 2010, among AK Steel Corporation, as issuer, AK Steel Holding Corporation, as guarantor, and U.S. Bank National Association, as trustee |
2. |
First Supplemental Indenture, dated as of May 11, 2010, among AK Steel Corporation, as issuer, AK Steel Holding Corporation, as guarantor, and U.S. Bank National Association, as trustee |
3. |
Second Supplemental Indenture, dated as of March 22, 2012, among AK Steel Corporation, as issuer, AK Steel Holding Corporation, as guarantor, and U.S. Bank National Association, as trustee |
4. |
Third Supplemental Indenture, dated as of November 20, 2012, among AK Steel Corporation, as issuer, AK Steel Holding Corporation, as guarantor, and U.S. Bank, National Association, as trustee. |
5. |
Fourth Supplemental Indenture dated as of April 29, 2014 among AK Steel Corporation, AK Steel Holding Corporation, as parent guarantor, AK Tube LLC and AK Steel Properties, Inc., as subsidiary guarantors, and U.S.
Bank National Association, as trustee. |
6. |
Indenture, dated as of November 20, 2012, among AK Steel Corporation, as issuer, AK Steel Holding Corporation, as guarantor, and U.S. Bank, National Association, as trustee and collateral agent. |
7. |
Amended and Restated Loan and Security Agreement, dated as of March 17, 2014, among AK Steel, as Borrower, certain financial institutions, as Lenders, Bank of America, N.A., as Agent, JP Morgan Chase Bank, N.A. and
Wells Fargo Capital Finance, LLC, as Co-Syndication Agents, Citibank, N.A., Deutsche Bank Trust Company Americas, Fifth Third Bank, Regions Bank, and U.S. Bank National Association, as Co-Documentation Agents, PNC Bank National Association, as
Managing Agent, and Bank of America, N.A., J.P. Morgan Securities LLC and Wells Fargo Capital Finance, LLC, as Joint Lead Arrangers and Co-Book Managers |
8. |
Increased Commitment Agreement, dated as of October 31, 2011 by and among AK Steel Corporation, as Borrower, Bank of America, N.A., as Agent, and Wells Fargo Capital Finance, LLC. |
9. |
Increased Commitment Agreement, dated as of October 31, 2011 by and among AK Steel Corporation, as Borrower, Bank of America, N.A., as Agent, and JPMorgan Chase Bank, N.A. |
10. |
Increased Commitment Agreement, dated as of October 31, 2011 by and among AK Steel Corporation, as Borrower, Bank of America, N.A., as Agent, and Deutsche Bank Trust Company. |
11. |
Increased Commitment Agreement, dated as of October 31, 2011 by and among AK Steel Corporation, as Borrower, Bank of America, N.A., as Agent, and Citibank, N.A. |
12. |
Increased Commitment Agreement, dated as of October 31, 2011 by and among AK Steel Corporation, as Borrower, Bank of America, N.A., as Agent, and PNC Bank, National Association. |
13. |
Increased Commitment Agreement, dated as of October 31, 2011 by and among AK Steel Corporation, as Borrower, Bank of America, N.A., as Agent, and Morgan Stanley Bank, N.A. |
14. |
Increased Commitment Agreement, dated as of October 31, 2011 by and among AK Steel Corporation, as Borrower, Bank of America, N.A., as Agent, and UBS Loan Finance LLC. |
15. |
Increased Commitment Agreement, dated as of October 31, 2011 by and among AK Steel Corporation, as Borrower, Bank of America, N.A., as Agent, and Bank of America, N.A. |
16. |
Increased Commitment Agreement, dated as of October 31, 2011 by and among AK Steel Corporation, as Borrower, Bank of America, N.A., as Agent, and Fifth Third Bank. |
17. |
Increased Commitment Agreement, dated as of October 31, 2011 by and among AK Steel Corporation, as Borrower, Bank of America, N.A., as Agent, and Credit Suisse AG, Cayman Islands Branch. |
18. |
Increased Commitment Agreement, dated as of October 31, 2011 by and among AK Steel Corporation, as Borrower, Bank of America, N.A., as Agent, and Goldman Sachs Bank USA. |
19. |
Air Quality Facilities Loan Agreement dated as of February 1, 2012 between AK Steel Corporation and the Ohio Air Quality Development Authority$36,000,000 Revenue Refunding Bonds, Series 2012-A.
|
20. |
Loan Agreement dated as of February 1, 2012 between AK Steel Corporation and the City of Rockport, Indiana$30,000,000 Revenue Refunding Bonds, Series 2012-A. |
21. |
Loan Agreement dated as of February 1, 2012 between AK Steel Corporation and the Butler County Industrial Development Authority$7,300,000 Revenue Refunding Bonds, Series 2012-A. |
22. |
First Amendment to Credit Agreement, dated as of November 12, 2012, among AK Steel Corporation, as borrower, Bank of America, N.A. as agent for the lenders, and the lenders party thereto. |
23. |
Security Agreement dated as of November 20, 2012, among the AK Steel Corporation and U.S. Bank National Association, as trustee and collateral agent. |
24. |
Collateral Trust Agreement dated as of November 20, 2012, among AK Steel and U.S. Bank National Association, as trustee and collateral agent. |
10b-5 Letter of Weil Gotshal & Manges LLP
September 16, 2014
Merrill Lynch, Pierce,
Fenner & Smith Incorporated
One Bryant Park
New
York, N.Y. 10036
Credit Suisse Securities (USA) LLC,
Eleven Madison Avenue,
New York, N.Y. 10010-3629
J.P. Morgan Securities LLC
383 Madison Avenue
New York, NY 10179
Fifth Third Securities, Inc.
38 Fountain Square Plaza
MD10903B
Cincinnati, Ohio 45263
Goldman, Sachs & Co.
200 West Street
New York, New York 10282
Ladies and Gentlemen:
Reference is made to (i) the
Registration Statement on Form S-3 (Registration No. 333-194078), filed by AK Steel Holding Corporation (AK Holding) and AK Steel Corporation (the Company and together with AK Holding, the
Companies) on February 21, 2014 (as amended by Post-Effective Amendment No. 1 filed on September 8, 2014, the Registration Statement), (ii) the Prospectus, dated as of
February 21, 2014 (the Base Prospectus), which forms a part of the Registration Statement, (iii) the Preliminary Prospectus Supplement, dated September 8, 2014 (the Preliminary Prospectus
Supplement) and (iv) the Prospectus Supplement, dated September 10, 2014 (the Prospectus Supplement), in each case relating to the common stock, par value $0.01 per share (the
Securities) of AK Holding, as to which we have acted as counsel to the Companies. We refer to the Base Prospectus, as supplemented by the Preliminary Prospectus Supplement, and taken together with the term sheet and other
documents listed on Schedule A hereto as the Pricing Disclosure Package. We refer to the Base Prospectus as supplemented by the Prospectus Supplement as the Prospectus. We refer to the Registration
Statement, the Base Prospectus, the Preliminary Prospectus Supplement, the term sheet and other documents listed on Schedule A hereto, and the Prospectus Supplement as the Offering Documents. This letter is furnished
to you pursuant to Section 7(d) of the Underwriting Agreement, dated as of September 10, 2014, among the Company and the underwriters named therein (the Agreement). Capitalized terms defined in the Agreement and
used (but not otherwise defined) herein are used herein as so defined.
The primary purpose of our professional engagement was not to establish or confirm
factual matters or financial or quantitative information, and many determinations involved in the preparation of the Offering Documents are of a non-legal character. In addition, we have not undertaken any obligation to verify independently any of
the factual matters set forth in the Offering Documents or in the documents incorporated by reference therein (the Incorporated Documents).
Consequently, we are not passing upon and do not assume any responsibility for the accuracy, completeness or fairness of the statements contained or incorporated by reference in the Offering
Documents (other than as stated in paragraphs 8 and 9 of our opinion of even date herewith). Also, we do not make any statement herein with respect to any of the financial statements and related notes thereto, the financial statement schedules or
the financial or accounting data contained or incorporated by reference in the Offering Documents or Exhibit 25 to the Registration Statement.
We
have reviewed the Offering Documents (including the Incorporated Documents) and we have participated in conferences with representatives of the Company, its independent public accountants, you and your counsel, at which conferences the contents of
the Offering Documents, the Incorporated Documents and related matters were discussed. However, we did not participate in the preparation of the Incorporated Documents.
Subject to the foregoing, we confirm to you that, on the basis of the information we gained in the course of performing the services referred to above,
(a) the Registration Statement (including the Incorporated Documents), as of its most recent effective date (which for purposes of this letter is understood to be the date of the Agreement), and the Prospectus (including the Incorporated
Documents), as of the date of the Prospectus Supplement, appeared on their face to be appropriately responsive, in all material respects relevant to the offering of the Securities, to the applicable requirements of the Securities Act and the rules
and regulations thereunder, and (b) no facts have come to our attention which cause us to believe that (i) the Registration Statement (including the Incorporated Documents), as of its most recent effective date (which for purposes of this
letter is understood to be the date of the Agreement), contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading, (ii) the
Pricing Disclosure Package (including the Incorporated Documents), as of 9:35 PM on September 10, 2014 contained any untrue statement of a material fact or omitted to state any material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading, or (iii) the Prospectus (including the Incorporated Documents), as of the date of the Prospectus Supplement or as of the date hereof, contained or contains any untrue
statement of a material fact or omitted or omits to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.
The statements made herein are set forth solely for your benefit and are addressed to you solely in your capacity as the underwriters of the Securities.
Neither this letter nor any of such statements may be used or relied upon by, or assigned to, any other person (including any subsequent purchaser or transferee of the Securities), and neither this letter nor any copies hereof may be furnished to
any other person, filed with a governmental agency, quoted, cited or otherwise referred to without our prior written consent.
Very truly yours,
Schedule A
Pricing Information Provided Orally by Underwriters
1. The initial price to the public of the Offered Securities: $9.00 per share.
2. Total number of Firm Securities: 35,000,000 shares.
3.
Total number of Optional Securities: 5,250,000 shares.
EXHIBIT B
Form of Lock-Up Agreement
September [], 2014
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
CREDIT SUISSE SECURITIES (USA) LLC,
J.P. MORGAN SECURITIES LLC,
As
Representatives of the several Underwriters listed in Schedule A to the Underwriting Agreement referred to below
c/o
Merrill Lynch, Pierce, Fenner & Smith Incorporated
One
Bryant Park
New York, N.Y. 10036,
Credit Suisse Securities
(USA) LLC,
Eleven Madison Avenue
New York, N.Y. 10010-3629,
and
J.P. Morgan Securities LLC
383 Madison Avenue
New York, N.Y. 10179
Re: AK Steel Holding
Corporation Public Offering
Ladies and Gentlemen:
The undersigned understands that you, as Representatives of the several Underwriters, propose to enter into an Underwriting Agreement (the Underwriting
Agreement) with AK Steel Holding Corporation, a Delaware corporation (the Company), providing for the public offering (the Public Offering) by the several Underwriters named in Schedule A to the Underwriting Agreement
(the Underwriters), of common stock, $0.01 per share par value of the Company (the Common Stock). Capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Underwriting Agreement.
In consideration of the Underwriters agreement to purchase and make the Public Offering of the Common Stock, and for other good and valuable
consideration receipt of which is hereby acknowledged, the undersigned hereby agrees that, without the prior written consent of Merrill Lynch, Pierce, Fenner & Smith Incorporated, Credit Suisse Securities (USA) LLC and J.P. Morgan
Securities LLC on behalf of the Underwriters, the undersigned will not, during the period ending 90 days after the date of the prospectus relating to the Public Offering (the Prospectus), (1) offer, pledge, sell, contract to sell,
sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any shares of Common Stock or any securities convertible
into or exercisable or exchangeable for Common Stock (including without limitation, Common Stock or such other securities which may be deemed to be beneficially owned by the undersigned in accordance with the rules and regulations of the Securities
and Exchange Commission and securities which may be issued upon exercise of a stock option or warrant), or publicly disclose the intention to make any offer, sale, pledge or disposition, (2) enter into any swap or other agreement that
transfers, in whole or in
part, any of the economic consequences of ownership of the Common Stock or such other securities, whether any such transaction described in clause (1) or (2) above is to be settled by
delivery of Common Stock or such other securities, in cash or otherwise or (3) make any demand for or exercise any right with respect to the registration of any shares of Common Stock or any security convertible into or exercisable or
exchangeable for Common Stock, in each case other than (A) the Common Stock to be sold pursuant to the Underwriting Agreement, (B) transfers of shares of Common Stock as a bona fide gift or gifts, (C) transfers to any immediate
family, trust for the direct or indirect benefit of the undersigned or the immediate family of the undersigned or any of their successors upon death, or any partnerships or limited liability company, the partners or members of which consist of the
undersigned and/or immediate family members of the undersigned, and in each case such transfer does not involve a disposition for value (for purposes of this lock-up agreement, immediate family shall mean any relationship by blood,
marriage or adoption, not more remote than first cousin), (D) distributions of shares of Common Stock to members, limited or general partners, stockholders or affiliates of the undersigned, (E) transfers of Common Stock to any beneficiary
of the undersigned pursuant to a will, other testamentary document or applicable laws of descent, (F) transfers to the undersigneds affiliates or to any investment fund or other entity controlled or managed by the undersigned,
(G) transactions relating to shares of Common Stock or other securities acquired in open market transactions after the completion of the Public Offering, and (H) the transfer of any shares of Common Stock upon the exercise of options to
purchase Common Stock or the vesting, delivery or settlement of restricted shares, restricted stock units or other awards to provide for any withholding taxes on the exercise, vesting, delivery or settlement thereof or to pay the exercise price
thereof; provided that in the case of any transfer or distribution pursuant to clauses (B) through (F), each donee or distributee shall execute and deliver to the Representatives a lock-up letter in the form of this paragraph; and
provided, further, that in the case of any transfer or distribution pursuant to clauses (B) through (H), no filing by any party (donor, donee, transferor or transferee) under the Securities Exchange Act of 1934, as amended, or
other public announcement shall be required or shall be made voluntarily in connection with such transfer or distribution (other than a filing on a Form 5 made after the expiration of the 90-day period referred to above). In addition, the foregoing
paragraph shall not apply to the establishment of a trading plan by the undersigned pursuant to Rule 10b5-1 under the Exchange Act for the transfer of shares of Common Stock, provided that such plan does not provide for the transfer of Common Stock
during the 90-day period referred to above and no filing under the Exchange Act, or other public announcement (other than a filing on a Form 5 made after the expiration of the 90-day period referred to above), shall be required or shall be made
voluntarily in connection with the establishment of such plan until after the expiration of the 90-day period referred to above.
In furtherance of the
foregoing, the Company, and any duly appointed transfer agent for the registration or transfer of the securities described herein, are hereby authorized to decline to make any transfer of securities if such transfer would constitute a violation or
breach of this Letter Agreement.
The undersigned hereby represents and warrants that the undersigned has full power and authority to enter into this
Letter Agreement. All authority herein conferred or agreed to be conferred and any obligations of the undersigned shall be binding upon the successors, assigns, heirs or personal representatives of the undersigned.
The undersigned understands that, if the Underwriting Agreement has not been entered into within 60 days of the date hereof, or if the Underwriting Agreement
(other than the provisions thereof which survive termination) shall terminate or be terminated prior to payment for and delivery of the Common Stock to be sold thereunder, the undersigned shall be released from, all obligations under this Letter
Agreement. The undersigned understands that the Underwriters are entering into the Underwriting Agreement and proceeding with the Public Offering in reliance upon this Letter Agreement.
This Letter Agreement and any claim, controversy or dispute arising under or related to this Letter Agreement shall be governed by and construed in accordance
with the laws of the State of New York, without regard to the conflict of laws principles thereof.
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Very truly yours, |
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By: |
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Name: |
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Title: |
Exhibit 1.2
$430,000,000
AK Steel
Corporation
7.625% Senior Notes due 2021
UNDERWRITING AGREEMENT
September 11, 2014
CREDIT
SUISSE SECURITIES (USA) LLC,
CITIGROUP GLOBAL MARKETS INC.,
J.P. MORGAN SECURITIES LLC,
As
Representatives of the several Underwriters,
c/o Credit Suisse Securities (USA) LLC
Eleven Madison Avenue
New York, N.Y. 10010-3629,
Citigroup Global Markets Inc.
388 Greenwich
Street
New York, N.Y. 10013
J.P. Morgan
Securities LLC
383 Madison Avenue
New York, N.Y. 10179, and
Dear Sirs:
1. Introductory. AK Steel Corporation, a Delaware corporation (Company), AK Steel Holding Corporation (the
Parent), AK Tube LLC (AK Tube) and AK Steel Properties, Inc. (AK Properties, and together with the Parent and AK Tube the Guarantors and each a
Guarantor), agree with the several Underwriters named in Schedule A hereto (Underwriters) to issue and sell to the several Underwriters $430,000,000 principal amount of the Companys 7.625% Senior Notes due
2021 (the Offered Securities), to be issued under that certain indenture, dated as of May 11, 2010 between the Company, the Parent and U.S. Bank National Association, as Trustee (the Base Indenture), and
that certain fifth supplemental indenture, to be dated as of the Closing Date between the Company, the Guarantors and U.S. Bank National Association, as Trustee (the Fifth Supplemental Indenture, and together with the Base
Indenture, the Indenture).
The Offered Securities will be guaranteed on an unsecured senior basis by each Guarantor
(such guarantee, the Guarantee and collectively, the Guarantees).
The proceeds of the Offered
Securities will be used, together with the proceeds of the concurrent offering of Parents shares of common stock (the Common Stock Offering), to finance the Companys acquisition (the Dearborn
Acquisition) of Severstal Dearborn, LLC, a Delaware limited liability company (together with its subsidiaries, Dearborn), pursuant to the Membership Interest Purchase Agreement, dated July 18, 2014, by and among
Severstal Columbus Holdings, LLC, Dearborn and the Company (the Membership Interest Purchase Agreement).
1
2. Representations and Warranties of the Company and the Guarantors. The Company and the
Guarantors jointly and severally represent and warrant to, and agree with, the several Underwriters that:
(a) Filing
and Effectiveness of Registration Statement; Certain Defined Terms. The Parent has filed with the Commission a registration statement on Form S-3 (No. 333-194078), as amended by Post-Effective Amendment No. 1, each including a related
prospectus or prospectuses, covering the registration of the Offered Securities under the Act, which has become effective. Registration Statement at any particular time means such registration statement in the form then filed
with the Commission, including any amendment thereto, any document incorporated by reference therein and all 430B Information and all 430C Information with respect to such registration statement, that in any case has not been superseded or modified.
Registration Statement without reference to a time means the Registration Statement as of the Effective Time. For purposes of this definition, 430B Information shall be considered to be included in the Registration Statement as of
the time specified in Rule 430B.
For purposes of this Agreement:
430B Information means information included in a prospectus then deemed to be a part of the Registration
Statement pursuant to Rule 430B(e) or retroactively deemed to be a part of the Registration Statement pursuant to Rule 430B(f).
430C Information means information included in a prospectus then deemed to be a part of the Registration
Statement pursuant to Rule 430C.
Act means the Securities Act of 1933, as amended.
Applicable Time means 7:30 A.M. (Eastern time) on the date of this Agreement.
Closing Date has the meaning defined in Section 3 hereof.
Commission means the Securities and Exchange Commission.
Effective Time of the Registration Statement relating to the Offered Securities means the time of the first
contract of sale for the Offered Securities.
Exchange Act means the Securities Exchange Act of 1934.
FCPA means the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations
thereunder.
Final Prospectus means the Statutory Prospectus that discloses the public offering price,
other 430B Information and other final terms of the Offered Securities and otherwise satisfies Section 10(a) of the Act.
General Use Issuer Free Writing Prospectus means any Issuer Free Writing Prospectus that is intended for
general distribution to prospective investors, as evidenced by its being so specified in Schedule B to this Agreement.
Issuer Free Writing Prospectus means any issuer free writing prospectus, as defined in
Rule 433, relating to the Offered Securities in the form filed or required to be filed with the Commission or, if not required to be filed, in the form retained in the Companys records pursuant to Rule 433(g).
Limited Use Issuer Free Writing Prospectus means any Issuer Free Writing Prospectus that is not a General
Use Issuer Free Writing Prospectus.
Rules and Regulations means the rules and regulations of the
Commission.
Securities Laws means, collectively, the Sarbanes-Oxley Act of 2002
(Sarbanes-Oxley), the Act, the Exchange Act, the Trust Indenture Act, the Rules and Regulations, the auditing principles, rules, standards and practices applicable to auditors of issuers (as defined in Sarbanes-Oxley)
promulgated or approved by the Public Company Accounting Oversight Board and, as applicable, the rules of the New York Stock Exchange and the NASDAQ Stock Market (Exchange Rules).
2
Statutory Prospectus with reference to any particular time
means the prospectus relating to the Offered Securities that is included in the Registration Statement immediately prior to that time, including all 430B Information and all 430C Information with respect to the Registration Statement. For
purposes of the foregoing definition, 430B Information shall be considered to be included in the Statutory Prospectus only as of the actual time that form of prospectus (including a prospectus supplement) is filed with the Commission pursuant
to Rule 424(b) and not retroactively.
Subsidiary means each direct and indirect subsidiary of
Parent.
Trust Indenture Act means the Trust Indenture Act of 1939.
Unless otherwise specified, a reference to a rule is to the indicated rule under the Act.
(b) Compliance with Securities Act Requirements. (i) (A) At the time the Registration Statement initially
became effective, (B) at the time of each amendment thereto for the purposes of complying with Section 10(a)(3) of the Act (whether by post-effective amendment, incorporated report or form of
prospectus), (C) at the Effective Time relating to the Offered Securities and (D) on the Closing Date, the Registration Statement conformed and will conform in all material respects to the requirements of the Act, the Trust Indenture Act
and the Rules and Regulations and did not and will not include any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading and (ii) (A) on
its date, (B) at the time of filing the Final Prospectus pursuant to Rule 424(b) and (C) on the Closing Date, the Final Prospectus will conform in all material respects to the requirements of the Act and the Rules and Regulations, and
will not include any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading. The preceding sentence does not apply to statements in or omissions
from any such document based upon written information furnished to the Company by any Underwriter through the Representatives specifically for use therein, it being understood and agreed that the only such information is that described as such in
Section 8(b) hereof.
(c) Automatic Shelf Registration Statement. (i) Well-Known Seasoned Issuer
Status. (A) At the time of initial filing of the Registration Statement, (B) at the time of the most recent amendment thereto for the purposes of complying with Section 10(a)(3) of the Act (whether such amendment was by
post-effective amendment, incorporated report filed pursuant to Section 13 or 15(d) of the Exchange Act or form of prospectus), and (C) at the time the Company or any person acting on its behalf (within the meaning, for this clause only,
of Rule 163(c)) made any offer relating to the Offered Securities in reliance on the exemption of Rule 163, Parent was a well known seasoned issuer as defined in Rule 405, including not having been an ineligible issuer as
defined in Rule 405.
(ii) Effectiveness of Automatic Shelf Registration Statement. The Registration Statement is an
automatic shelf registration statement, as defined in Rule 405, that initially became effective within three years of the date of this Agreement.
(iii) Eligibility to Use Automatic Shelf Registration Form. Parent has not received from the Commission any notice
pursuant to Rule 401(g)(2) objecting to use of the automatic shelf registration statement form. If at any time when Offered Securities remain unsold by the Underwriters Parent receives from the Commission a notice pursuant to Rule 401(g)(2) or
otherwise ceases to be eligible to use the automatic shelf registration statement form and such Underwriters are required to deliver a prospectus for the Offered Securities, Parent will (i) promptly notify the Representatives,
(ii) promptly file a new registration statement or post-effective amendment on the proper form relating to the Offered Securities, in a form satisfactory to the Representatives, (iii) use its reasonable best efforts to cause such
registration statement or post-effective amendment to be declared effective as soon as practicable, and (iv) promptly notify the Representatives of such effectiveness. Parent will take all other action necessary or appropriate to permit the
public offering and sale of the Offered Securities to continue as contemplated in the registration statement that was the subject of the Rule 401(g)(2) notice or for which Parent has otherwise become ineligible. References herein to the Registration
Statement shall include such new registration statement or post-effective amendment, as the case may be.
3
(iv) Filing Fees. Parent has paid or shall pay the required Commission
filing fees relating to the Offered Securities within the time required by Rule 456(b)(1) without regard to the proviso therein and otherwise in accordance with Rules 456(b) and 457(r).
(d) General Disclosure Package. As of the Applicable Time, neither (i) the General Use Issuer Free Writing
Prospectus(es) issued at or prior to the Applicable Time and the preliminary prospectus supplement, dated September 8, 2014, including the base prospectus, dated September 8, 2014 (which is the most recent Statutory Prospectus distributed
to investors generally), and the other information, if any, stated in Schedule B to this Agreement to be included in the General Disclosure Package, all considered together (collectively, the General Disclosure Package), nor
(ii) any individual Limited Use Issuer Free Writing Prospectus, when considered together with the General Disclosure Package, included any untrue statement of a material fact or omitted to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were made, not misleading. The preceding sentence does not apply to statements in or omissions from any Statutory Prospectus or any Issuer Free Writing Prospectus in reliance
upon and in conformity with written information furnished to the Company by any Underwriter through the Representatives specifically for use therein, it being understood and agreed that the only such information furnished by any Underwriter consists
of the information described as such in Section 8(b) hereof.
(e) Issuer Free Writing Prospectuses. Each Issuer
Free Writing Prospectus, as of its issue date and at all subsequent times through the completion of the public offer and sale of the Offered Securities or until any earlier date that the Company notified or notifies the Representatives as described
in the next sentence, did not, does not and will not include any information that conflicted, conflicts or will conflict with the information then contained in the Registration Statement. If at any time following issuance of an Issuer Free Writing
Prospectus there occurred or occurs an event or development as a result of which such Issuer Free Writing Prospectus conflicted or would conflict with the information then contained in the Registration Statement or as a result of which such Issuer
Free Writing Prospectus, if republished immediately following such event or development, would include an untrue statement of a material fact or omitted or would omit to state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, (i) the Company has promptly notified or will promptly notify the Representatives and (ii) the Company has promptly amended or will promptly amend or supplement such
Issuer Free Writing Prospectus to eliminate or correct such conflict, untrue statement or omission.
(f) Good Standing
of the Company and Parent. Each of the Company and Parent has been duly incorporated and is validly existing as a corporation and in good standing under the laws of the State of Delaware, with power and authority (corporate and other) to own its
properties and conduct its business as described in the General Disclosure Package; and each of the Company and Parent is duly qualified to do business as a foreign corporation in good standing in all other jurisdictions in which its ownership or
lease of property or the conduct of its business requires such qualification, except where the failure to be so qualified would not, individually or in the aggregate, reasonably be expected to result in a material adverse effect on the condition
(financial or otherwise), results of operations, business, properties or prospects of the Company, Parent, the Subsidiaries and Dearborn and its subsidiaries, pro forma for the Dearborn Acquisition, taken as a whole (Material Adverse
Effect).
(g) Subsidiaries. Each Subsidiary, and to the best knowledge of the Company, Dearborn, has been
duly incorporated and is existing and in good standing under the laws of the jurisdiction of its incorporation, with power and authority (corporate and other) to own its properties and conduct its business as described in the General Disclosure
Package; and each Subsidiary is duly qualified to do business as a foreign corporation in good standing in all other jurisdictions in which its
4
ownership or lease of property or the conduct of its business requires such qualification, except where the failure to be so qualified would not, individually or in the aggregate, reasonably be
expected to result in a Material Adverse Effect; all of the issued and outstanding capital stock of each Subsidiary has been duly authorized and validly issued and is fully paid and nonassessable; and except as disclosed in the General Disclosure
Package and the Final Prospectus, all of the capital stock of each Subsidiary is owned by Parent, directly or indirectly, free from liens, encumbrances and defects.
(h) Execution and Delivery of Indenture; Offered Securities; Guarantee. The Indenture has been duly authorized by the
Company and the Guarantors and has been duly qualified under the Trust Indenture Act; the Base Indenture constitutes, and, as of the Closing Date, the Indenture will constitute a valid and legally binding obligation of the Company and the
Guarantors, enforceable against each of them in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors rights
and to general equity principles (collectively, the Enforceability Exceptions); the Offered Securities have been duly authorized by the Company and, when the Offered Securities are delivered and paid for pursuant to this Agreement
on the Closing Date, the Indenture having been duly executed and delivered, such Offered Securities will have been duly executed, authenticated, issued and delivered, will conform in all material respects to the information in the General Disclosure
Package and to the description of such Offered Securities contained in the Final Prospectus, and such Offered Securities will constitute valid and legally binding obligations of the Company, enforceable against the Company in accordance with their
terms, subject to the Enforceability Exceptions; and the Guarantees to be endorsed on the Offered Securities by the Guarantors have been duly authorized by each such Guarantor and, when the Offered Securities are executed, authenticated, issued and
delivered as provided in the Indenture and paid for as provided herein the Guarantee of each Guarantor endorsed thereon will have been duly executed and delivered by such Guarantor, will conform in all material respects to the information in the
General Disclosure Package and to the description of such Guarantee contained in the Final Prospectus and will constitute a valid and legally binding obligation of each Guarantor, enforceable against such Guarantor in accordance with its terms,
subject to the Enforceability Exceptions.
(i) No Finders Fee. Except as disclosed in the General
Disclosure Package and the Final Prospectus, there are no contracts, agreements or understandings between the Company or any Guarantor and any person that would give rise to a valid claim against the Company, any Guarantor or any Underwriter for a
brokerage commission, finders fee or other like payment in connection with this offering.
(j) Absence of
Further Requirements. No consent, approval, authorization, or order of, or filing or registration with, any person (including any governmental agency or body or any court) is required for the consummation of the transactions contemplated by this
Agreement or the Indenture in connection with the offering, issuance and sale of the Offered Securities by the Company or the sale of the Guarantees by the Guarantors, except (i) such as have been obtained, or made and such as may be required
under state securities laws and (ii) except for such consents approvals, authorizations, orders, filings or registrations that would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect or a
material adverse effect on the ability of the Company and the Guarantors to consummate the transactions contemplated hereby.
(k) Title to Property. Except as disclosed in the General Disclosure Package and the Final Prospectus, the Company, the
Parent, the Subsidiaries and, to the best knowledge of the Company, Dearborn, have good and marketable title to all real properties and all other properties and assets owned by them, in each case free from liens, charges, encumbrances and defects
except where the failure to have such title or the existence of such lien, charge, encumbrance or defect would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect, and except as disclosed in the
General Disclosure Package and the Final Prospectus, the Company, the
5
Parent, the Subsidiaries and, to the best knowledge of the Company, Dearborn, hold any leased real or personal property under valid and enforceable leases with no terms or provisions that would
materially interfere with the use made or to be made thereof by them.
(l) Absence of Defaults and Conflicts Resulting
from Transaction. The execution, delivery and performance of the Indenture and this Agreement, the issuance and sale of the Offered Securities and the Guarantees and compliance with the terms and provisions thereof will not result in a breach or
violation of any of the terms and provisions of, or constitute a default or a Debt Repayment Triggering Event (as defined below) under, or result in the imposition of any lien, charge or encumbrance upon any property or assets of the Company, Parent
or any of the Subsidiaries or, to the best knowledge of the Company, Dearborn, pursuant to (i) the charter, by-laws or other organizational instrument or document of the Company, Parent or any of the Subsidiaries or, to the best knowledge of
the Company, Dearborn, (ii) any statute, rule, regulation or order of any governmental agency or body or any court, domestic or foreign, having jurisdiction over the Company, Parent or any of the Subsidiaries or, to the best knowledge of the
Company, Dearborn, or any of their properties, or (iii) any agreement or instrument to which the Company, Parent or any of the Subsidiaries or, to the best knowledge of the Company, Dearborn, is a party or by which the Company, Parent or any of
the Subsidiaries is bound or to which any of the properties of the Company, Parent or any of the Subsidiaries is subject, except, in the case of (iii) above, for such conflicts, breaches, violations, liens, charges or encumbrances that would
not, individually or in the aggregate, have a Material Adverse Effect; a Debt Repayment Triggering Event means any event or condition that gives, or with the giving of notice or lapse of time would give, the holder of any note,
debenture, or other evidence of indebtedness (or any person acting on such holders behalf) the right to require the repurchase, redemption or repayment of all or a portion of such indebtedness by the Company, Parent or any of the Subsidiaries
or, to the best knowledge of the Company, Dearborn.
(m) Absence of Existing Defaults and Conflicts. Neither the
Company, Parent nor any of the Subsidiaries or, to the best knowledge of the Company, Dearborn, is in violation of its respective charter or by-laws or in default (or with the giving of notice or lapse of time would be in default) under any existing
obligation, agreement, covenant or condition contained in any indenture, loan agreement, mortgage, lease or other agreement or instrument to which any of them is a party or by which any of them is bound or to which any of the properties of any of
them is subject, except such defaults that would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.
(n) Authorization of Agreement. This Agreement has been duly authorized, executed and delivered by the Company and each
Guarantor.
(o) Possession of Licenses and Permits. The Company, the Parent, the Subsidiaries and, to the best
knowledge of the Company, Dearborn, possess, and are in compliance with the terms of, all adequate certificates, authorizations, franchises, licenses and permits (Licenses) necessary or material to the conduct of the business now
conducted or proposed in the General Disclosure Package to be conducted by them and have not received any notice of proceedings relating to the revocation or modification of any Licenses that, if determined adversely to the Company, Parent, any of
the Subsidiaries or Dearborn, would individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
(p) Absence of Labor Dispute. Except as disclosed in the General Disclosure Package and Final Prospectus, no labor
dispute with the employees of the Company, Parent, or any of the Subsidiaries, nor, to the best knowledge of the Company, Dearborn, exists or, to the knowledge of the Company or any Guarantor, as applicable, is threatened that would, individually or
in the aggregate, reasonably be expected to result in a Material Adverse Effect.
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(q) Possession of Intellectual Property. The Company, the Parent, the
Subsidiaries and, to the best knowledge of the Company, Dearborn, own, possess or can acquire on reasonable terms, adequate trademarks, trade names and other rights to inventions, know-how, patents, copyrights, confidential information and other
intellectual property (collectively, intellectual property rights) necessary to conduct the business now operated by them, or presently employed by them, and have not received any notice of infringement of or conflict with
asserted rights of others with respect to any intellectual property rights that, if determined adversely to the Company, Parent, any of the Subsidiaries or Dearborn, would individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
(r) Environmental Laws. Except as disclosed in the General Disclosure Package and the Final
Prospectus, (a)(i) none of the Company, Parent or any of the Subsidiaries, nor, to the best knowledge of the Company, Dearborn, is in violation of, or has any liability under, any federal, state, local or non-U.S. statute, law, rule,
regulation, ordinance, code, other requirement or rule of law (including common law), or decision or order of any domestic or foreign governmental agency, governmental body or court, relating to pollution, to the use, handling, transportation,
treatment, storage, discharge, disposal or release of Hazardous Substances, to the protection or restoration of the environment or natural resources (including biota), to health and safety as such relates to exposure to Hazardous Substances, and to
natural resource damages (collectively, Environmental Laws), (ii) none of the Company, Parent or any of the Subsidiaries, nor, to the best knowledge of the Company, Dearborn, owns, occupies, operates or uses any real property
contaminated with Hazardous Substances, (iii) none of the Company, Parent or any of the Subsidiaries, nor, to the best knowledge of the Company, Dearborn, is conducting or funding any investigation, remediation, remedial action or monitoring of
actual or suspected Hazardous Substances in the environment, (iv) none of the Company, Parent or any of the Subsidiaries, nor, to the best knowledge of the Company, Dearborn, is liable or, to its knowledge, allegedly liable for any release or
threatened release of Hazardous Substances, including at any off-site treatment, storage or disposal site, (v) none of the Company, Parent or any of the Subsidiaries, nor, to the best knowledge of the Company, Dearborn, is subject to any claim
by any governmental agency or governmental body or person relating to Environmental Laws or Hazardous Substances, and (vi) the Company, the Parent, the Subsidiaries and, to the best knowledge of the Company, Dearborn, have received and are in
compliance with all, and have no liability under any, permits, licenses, authorizations, identification numbers or other approvals required under applicable Environmental Laws to conduct their respective businesses, except in each case covered by
clauses (i) (vi) such as would not individually or in the aggregate reasonably be expected to have a Material Adverse Effect; (b) to the knowledge of the Company or the Guarantors, as applicable, there are no facts or
circumstances that would reasonably be expected to result in a violation of, liability under, or claim pursuant to, any Environmental Law that would reasonably be expected to have a Material Adverse Effect; and (c) to the knowledge of the
Company or the Guarantors, as applicable, there are no Environmental Laws or requirements proposed for adoption or implementation under any Environmental Law that would reasonably be expected to have a Material Adverse Effect. For purposes of this
subsection, Hazardous Substances means (A) petroleum and petroleum products, by-products or breakdown products, radioactive materials, asbestos-containing materials, polychlorinated biphenyls and mold, and (B) any other
chemical, material or substance defined or regulated as toxic or hazardous or as a pollutant, contaminant or waste under Environmental Laws.
(s) Accurate Disclosure. The statements in the General Disclosure Package and the Final Prospectus under the heading
Description of Notes and Description of Certain Indebtedness, insofar as such statements summarize legal matters, agreements, documents or proceedings discussed therein, are accurate and fair summaries of such legal matters,
agreements, documents or proceedings and present the information required to be shown.
(t) Accurate Tax Disclosure.
To the extent that the statements set forth in the General Disclosure Package and the Final Prospectus under the caption Material U.S. Federal Income Tax Consequences purport to describe certain provisions of the United States federal
tax laws referred to therein, such summaries fairly describe, in all material respects, such provisions.
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(u) Absence of Manipulation. Neither the Company nor any Guarantor has
taken, directly or indirectly, any action that is designed to or that has constituted or that would reasonably be expected to cause or result in the stabilization or manipulation of the price of any security of the Company to facilitate the sale or
resale of the Offered Securities.
(v) Statistical and Market-Related Data. Any third-party statistical and
market-related data included or incorporated by reference in the General Disclosure Package or in the Final Prospectus are based on or derived from sources that the Company and the Guarantors believe to be reliable and accurate.
(w) Internal Controls and Compliance with the Sarbanes-Oxley Act. Except as set forth in the General Disclosure Package
and the Final Prospectus, Parent, the Company and the Subsidiaries and Parents Board of Directors (the Board) are in compliance with Sarbanes-Oxley and all applicable Exchange Rules in all material respects. Parent maintains
a system of internal controls over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) (collectively, Internal Controls) that comply with the Exchange Act and are sufficient to provide reasonable
assurances that (i) transactions are executed in accordance with managements general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with U.S.
General Accepted Accounting Principles and to maintain accountability for assets, (iii) access to assets is permitted only in accordance with managements general or specific authorization, (iv) the recorded accountability for assets
is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences, and (v) the interactive data in eXtensible Business Reporting Language incorporated by reference in the Registration
Statement, the General Disclosure Package and the Final Prospectus fairly presents the information called for in all material respects and is prepared in accordance with the Commissions rules and guidelines applicable thereto. The Internal
Controls are overseen by the Audit Committee (the Audit Committee) of the Board in accordance with Exchange Rules. Parent has not publicly disclosed or reported to the Audit Committee or the Board, and within the next 90 days
Parent does not reasonably expect to publicly disclose or report to the Audit Committee or the Board, a significant deficiency, material weakness, change in Internal Controls or fraud involving management or other employees who have a significant
role in Internal Controls (each, an Internal Control Event), any violation of, or failure to comply with, the Securities Laws, or any matter which, if determined adversely, would reasonably be expected to have a Material Adverse
Effect.
(x) Disclosure Controls. Except as set forth in the General Disclosure Package and the Final Prospectus,
Parent, the Company and the Subsidiaries maintain an effective system of disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act) that is designed to ensure that information required to be disclosed by Parent
in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Commissions rules and forms, including controls and procedures designed to ensure that such
information is accumulated and communicated to Parents management as appropriate to allow timely decisions regarding required disclosure. Parent, the Company and the Subsidiaries have carried out evaluations of the effectiveness of their
disclosure controls and procedures as required by Rule 13a-15 of the Exchange Act.
(y) Litigation. Except as
disclosed in the General Disclosure Package and the Final Prospectus, there are no pending actions, suits or proceedings (including any inquiries or investigations by any court or governmental agency or body, domestic or foreign) against or
affecting the Company, Parent, any of the Subsidiaries, nor, to the best knowledge of the Company, Dearborn, or any of their respective properties that, if determined adversely to the Company, Parent, any of the Subsidiaries, or Dearborn, would
individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, or would materially and adversely affect the ability of the Company or Parent to perform their respective obligations under the Indenture or this Agreement,
or which are otherwise material in the context of the sale of the Offered Securities and the sale of the Guarantees; and to the Companys or Parents knowledge, no such actions, suits or proceedings (including any inquiries or
investigations by any court or governmental agency or body, domestic or foreign) are threatened or contemplated.
8
(z) Financial Statements. The financial statements included in the
Registration Statement, the General Disclosure Package and the Final Prospectus present fairly the financial position of Parent and its consolidated subsidiaries as of the dates shown and their results of operations and cash flows for the periods
shown, and, except as otherwise disclosed in the Registration Statement, the General Disclosure Package and the Final Prospectus, such financial statements have been prepared in conformity with the generally accepted accounting principles in the
United States applied on a consistent basis. The interactive data in eXtensible Business Reporting Language incorporated by reference in the Registration Statement, the General Disclosure Package and the Final Prospectus fairly presents the
information called for in all material respects and has been prepared in accordance with the Commissions rules and guidelines applicable thereto.
(aa) Dearborn Financial Statements. To the best knowledge of the Company, the financial statements of Dearborn and its
subsidiaries, together with the related notes, included in the Registration Statement, the General Disclosure Package and the Final Prospectus present fairly the financial position of Dearborn and its consolidated subsidiaries as of the dates shown
and their results of operations and cash flows for the periods shown and, except as otherwise disclosed in the Registration Statement, the General Disclosure Package and the Final Prospectus, such financial statements have been prepared in
conformity with the generally accepted accounting principles in the United States applied on a consistent basis. To the best knowledge of the Company, the financial statements of Mountain State Carbon, LLC (MSC), together with the
related notes, included in the Registration Statement, the General Disclosure Package and the Final Prospectus present fairly the financial position of MSC as of the dates shown and its results of operations and cash flows for the periods shown and,
except as otherwise disclosed in the Registration Statement, the General Disclosure Package and the Final Prospectus, such financial statements have been prepared in conformity with the generally accepted accounting principles in the United States
applied on a consistent basis.
(bb) Pro Forma Financial Statements. The pro forma financial information and the
related notes thereto included under the captions SummaryUnaudited Pro Forma Condensed Consolidated Financial Information, Capitalization, Unaudited Pro Forma Condensed Consolidated Financial Statements, and
elsewhere in the Registration Statement, the General Disclosure Package and the Final Prospectus, and to the best knowledge of the Company, with respect to the pro forma financial information and the related notes thereto derived from the Dearborn
Financial Statements, present fairly in all material respects the information contained therein, have been prepared in accordance with the Commissions rules and guidelines with respect to pro forma financial statements, and the assumptions
used in the preparation thereof are reasonable and the adjustments used therein are appropriate to give effect to the transactions and circumstances referred to therein.
(cc) No Material Adverse Change in Business. Except as disclosed in the General Disclosure Package and the Final
Prospectus, since the end of the period covered by the latest audited financial statements included in the General Disclosure Package and the Final Prospectus (i) there has been no change, in the condition (financial or otherwise), results of
operations, business, properties or prospects of the Company, Parent, the Subsidiaries, or, to the best knowledge of the Company, Dearborn, taken as a whole that is material and adverse, (ii) except as disclosed in or contemplated by the
General Disclosure Package and the Final Prospectus, there has been no dividend or distribution of any kind declared, paid or made by Parent on any class of its capital stock and (iii) except as disclosed in or contemplated by the General
Disclosure Package, there has been no material adverse change in the capital stock, short-term indebtedness, long-term indebtedness, net current assets or net assets of Parent.
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(dd) Investment Company Act. None of the Companies is, and immediately
after giving effect to the offering and sale of the Offered Securities and the application of the proceeds thereof as described in the General Disclosure Package and the Final Prospectus, none will be an investment company as defined in
the Investment Company Act of 1940 (the Investment Company Act).
(ee) Ratings. No
nationally recognized statistical rating organization as such term is defined in Section 3(a)(62) under the Exchange Act (i) has imposed (or has informed the Company that it is considering imposing) any condition (financial or
otherwise) on the Companys retaining any rating assigned to the Company or any securities of the Company or Parent or (ii) has indicated to the Company or Parent that it is considering any of the actions described in Section 7(c)(ii)
hereof.
(ff) Foreign Corrupt Practices Act. None of the Company, Parent or, to the best of the Companys
and Parents knowledge, any of the Subsidiaries, Dearborn, or their respective directors, officers, agents, employees or affiliates is aware of or has taken any action, directly or indirectly, that would result in a violation by such persons of
the FCPA, including, without limitation, making use of the mails or any means or instrumentality of interstate commerce corruptly in furtherance of an offer, payment, promise to pay or authorization of the payment of any money, or other property,
gift, promise to give, or authorization of the giving of anything of value to any foreign official (as such term is defined in the FCPA) or any foreign political party or official thereof or any candidate for foreign political office, in
contravention of the FCPA and the Company, Parent and, to the best of the Companys and Parents knowledge, the Subsidiaries and affiliates and Dearborn have conducted their businesses in compliance with the FCPA and have devised or
instituted and enforce policies and procedures designed to ensure, and which are reasonably expected to continue to ensure, continued compliance therewith. In addition, none of the Company, Parent or, to the best of the Companys and
Parents knowledge, any of the Subsidiaries, Dearborn or their respective directors, officers, agents, employees or affiliates is aware of or has taken any action, directly or indirectly, that would result in a violation by such persons of the
U.K. Bribery Act 2010.
(gg) Compliance with Money Laundering Laws. The operations of the Company, Parent, the
Subsidiaries and, to the best knowledge of the Company and Parent, Dearborn, are and have been conducted at all times in compliance in all material respects with applicable financial recordkeeping and reporting requirements of the Currency and
Foreign Transactions Reporting Act of 1970, as amended, the money laundering statutes of all applicable jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or guidelines issued, administered or enforced
by any governmental agency, and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company, the Parent or any of its subsidiaries with respect to such statutes, rules,
regulations and guidelines is pending or, to the knowledge of the Company and the Parent, threatened.
(hh) No
Conflicts with Sanctions Laws. Neither the Company, the Parent, their subsidiaries, nor, to the best knowledge of the Company, Dearborn, or any of their respective directors, officers or employees, nor, to the knowledge of the Company and the
Parent, any agent, affiliate or other person associated with or acting on behalf of the Company, the Parent, any of their subsidiaries or Dearborn is currently the subject or the target of any sanctions administered or enforced by the U.S.
government (including, without limitation, the Office of Foreign Assets Control of the U.S. Department of the Treasury (OFAC) or the U.S. Department of State and including, without limitation, the designation as a specially
designated national or blocked person), the United Nations Security Council (UNSC), the European Union, Her Majestys Treasury (HMT) or other relevant sanctions authority (collectively,
Sanctions), nor is the Company, the Parent, any of their subsidiaries or to the best knowledge of the Company, Dearborn, located, organized or resident in a country or territory that is the subject or target of Sanctions,
including, without limitation, Cuba, Iran, North Korea, Sudan and Syria (each, a Sanctioned Country); and the Company will not directly or indirectly use the proceeds of the offering of the Offered Securities hereunder, or lend,
contribute or otherwise make available such proceeds to the Parent, any subsidiary, joint venture partner or other person or entity (i) to fund or facilitate any activities of or
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business with any person that, at the time of such funding or facilitation, is the subject or target of Sanctions, (ii) to fund or facilitate any activities of or business in any Sanctioned
Country or (iii) in any other manner that will result in a violation by any person (including any person participating in the transaction, whether as underwriter, advisor, investor or otherwise) of Sanctions. For the past five years, the
Company and its subsidiaries, and to the best knowledge of the Company, Dearborn, have not knowingly engaged in and are not now knowingly engaged in any dealings or transactions with any person that at the time of the dealing or transaction is or
was the subject or the target of Sanctions or with any Sanctioned Country.
(ii) Taxes. The Company, the
Parent, the Subsidiaries and, to the best knowledge of the Company, Dearborn, have filed all federal, state, local and non-U.S. tax returns that are required to be filed or have requested extensions thereof (except in any case in which the failure
so to file would not reasonably be expected to have a Material Adverse Effect); and, except as set forth in the General Disclosure Package and the Final Prospectus, the Company, the Parent, the Subsidiaries and, to the best knowledge of the Company,
Dearborn, have paid all taxes (including any assessments, fines or penalties) required to be paid by them, except for any such taxes, assessments, fines or penalties currently being contested in good faith or as would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
(jj) Insurance. The Company, the Parent,
the Subsidiaries and, to the best knowledge of the Company, Dearborn, are insured by insurers with appropriately rated claims paying abilities against such losses and risks and in such amounts as are prudent and customary for the businesses in which
they are engaged; all policies of insurance insuring the Company, Parent, any of the Subsidiaries or Dearborn or their respective businesses, assets, employees, officers and directors are in full force and effect; the Company, the Parent, the
Subsidiaries and, to the best knowledge of the Company, Dearborn, are in compliance with the terms of such policies and instruments in all material respects; and there are no claims by the Company, Parent or any of the Subsidiaries or, to the best
knowledge of the Company, by Dearborn, under any such policy or instrument as to which any insurance company is denying liability or defending under a reservation of rights clause; none of the Company, Parent, any such Subsidiary, nor, to the best
knowledge of the Company, Dearborn, has been refused any insurance coverage sought or applied for; and none of the Company, Parent, any such Subsidiary, nor, to the best knowledge of the Company, Dearborn, has any reason to believe that it will not
be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not reasonably be expected to have a Material
Adverse Effect, except as set forth in or contemplated in the General Disclosure Package and the Final Prospectus.
3. Purchase, Sale
and Delivery of Offered Securities. On the basis of the representations, warranties and agreements and subject to the terms and conditions set forth herein, the Company agrees to sell to the several Underwriters, and each of the Underwriters
agrees, severally and not jointly, to purchase from the Company, at a purchase price of 97.575% of the principal amount, the respective principal amounts of Offered Securities set forth opposite the names of the Underwriters in Schedule A
hereto.
The Company will deliver the Offered Securities to or as instructed by the Representatives for the accounts of the several
Underwriters in a form reasonably acceptable to the Representatives against payment of the purchase price by the Underwriters in Federal (same day) funds by wire transfer to an account at a bank acceptable to the Representatives drawn to the order
of the Company at the office of Davis Polk & Wardwell LLP, 450 Lexington Avenue, New York, New York 10017, at 9:00 A.M., New York time, on September 16, 2014, or at such other time not later than seven full business days thereafter as
the Representatives and the Company determine, such time being herein referred to as the Closing Date. For purposes of Rule 15c6-1 under the Exchange Act, the Closing Date (if later than the otherwise applicable settlement
date) shall be the settlement date for payment of funds and delivery of securities for all the Offered Securities sold pursuant to the offering. The Offered Securities so to be delivered or evidence of their issuance will be made available for
checking at the above office of Davis Polk & Wardwell LLP at least 24 hours prior to the Closing Date.
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4. Offering by Underwriters. It is understood that the several Underwriters propose to
offer the Offered Securities for sale to the public as set forth in the Final Prospectus.
5. Certain Agreements of the Company and the
Guarantors. The Company and the Guarantors jointly and severally agree with the several Underwriters that:
(a)
Filing of Prospectuses. The Company has filed or will file each Statutory Prospectus (including the Final Prospectus) pursuant to and in accordance with Rule 424(b)(2) of the Act (or, if applicable and consented to by the
Representatives, subparagraph (5)) not later than the second business day following the earlier of the date it is first used or the execution and delivery of this Agreement. The Company has complied and will comply with Rule 433 of the
Act.
(b) Filing of Amendments; Response to Commission Requests. The Company will promptly advise the
Representatives of any proposal to amend or supplement the Registration Statement or any Statutory Prospectus at any time and will offer the Representatives a reasonable opportunity to comment on any such amendment or supplement; and the Company
will also advise the Representatives promptly of (i) the filing of any such amendment or supplement, (ii) any request by the Commission or its staff for any amendment to the Registration Statement, for any supplement to any Statutory
Prospectus or for any additional information, (iii) the institution by the Commission of any stop order proceedings in respect of the Registration Statement or the threatening of any proceeding for that purpose or pursuant to Section 8A of
the Act, and (iv) the receipt by the Company of any notification with respect to the suspension of the qualification of the Offered Securities or the Guarantees in any jurisdiction or the institution or threatening of any proceedings for such
purpose. The Company will use its reasonable best efforts to prevent the issuance of any such stop order or the suspension of any such qualification and, if issued, to obtain as soon as possible the withdrawal thereof.
(c) Continued Compliance with Securities Laws. (i) If, at any time when a prospectus relating to the Offered
Securities or the Guarantee is (or but for the exemption in Rule 172 would be) required to be delivered under the Act by any Underwriter or dealer, any event occurs as a result of which the Final Prospectus as then amended or supplemented would
include an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, or if it is necessary at any time to amend the
Registration Statement or supplement the Final Prospectus to comply with the Act, the Company will promptly notify the Representatives of such event and will promptly prepare and file with the Commission and furnish, at its own expense, to the
Underwriters and the dealers and any other dealers upon request of the Representatives, an amendment or supplement which will correct such statement or omission or an amendment which will effect such compliance; and (ii) if at any time prior to
the filing of the Final Prospectus, any event occurs as a result of which the General Disclosure Package as then amended or supplemented would include an untrue statement of a material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were made, not misleading, or if it is necessary at any time to amend the General Disclosure Package to comply with law, the Company will promptly notify the Representatives of
such event and will promptly prepare and file with the Commission and furnish, at its own expense, to the Underwriters and the dealers and any other dealers upon request of the Representatives, a supplement which will correct such statement or
omission or an amendment which will effect such compliance. Neither the Representatives consent to, nor the Underwriters delivery of, any such amendment or supplement shall constitute a waiver of any of the conditions set forth in
Section 7 hereof.
(d) Rule 158. As soon as practicable, but not later than 16 months, after the date of
this Agreement, Parent will make generally available to its securityholders an earnings statement covering a period of at least 12 months beginning after the date of this Agreement and satisfying the provisions of Section 11(a) of the Act and
Rule 158.
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(e) Furnishing of Prospectuses. The Company will furnish to the
Representatives copies of the Registration Statement, including all exhibits, any Statutory Prospectus, the Final Prospectus and all amendments and supplements to such documents, in each case as soon as available and in such quantities as the
Representatives reasonably request. The Company will pay the expenses of printing and distributing to the Underwriters all such documents.
(f) Blue Sky Compliance. The Company will qualify the Offered Securities for offer and sale under the laws of such U.S.
jurisdictions as the Representatives shall reasonably request and will continue such qualifications in effect so long as required for distribution of the Securities; provided that the Company shall not be required to (i) qualify as a foreign
corporation or other entity or as a dealer in securities in any such jurisdiction where it would not otherwise be required to so qualify, (ii) file any general consent to service of process in any such jurisdiction or (iii) subject itself
to taxation in any such jurisdiction if it is not otherwise so subject.
(g) Reporting Requirements. Parent,
during the period when the Final Prospectus is required to be delivered under the Act, will file all documents required to be filed with the Commission pursuant to the Exchange Act within the time periods required by the Exchange Act.
(h) Payment of Expenses. The Company will pay all expenses incident to the performance of its obligations under this
Agreement, including but not limited to (i) any filing fees and other expenses (including fees and disbursements of counsel to the Underwriters) incurred in connection with qualification of the Offered Securities and the Guarantee for sale
under the laws of such jurisdictions as the Representatives designate and the preparation and printing of memoranda relating thereto, (ii) the filing fees for FINRAs review of the offering of the Offered Securities, and the reasonable
fees and disbursements of counsel to the Underwriters in connection with compliance with FINRAs rules and regulations, (iii) any fees charged by investment rating agencies for the rating of the Offered Securities, costs and expenses
relating to investor presentations or any road show in connection with the offering and sale of the Offered Securities, (iv) any travel expenses of the Companys or Parents officers and employees and any other expenses of
the Company or any Guarantor including the chartering of airplanes, (v) fees and expenses in connection with the registration of the Offered Securities under the Exchange Act, (vi) expenses incurred in distributing preliminary prospectuses
and the Final Prospectus (including any amendments and supplements thereto) to the Underwriters and for expenses incurred for preparing, printing and distributing any Issuer Free Writing Prospectuses to investors or prospective investors. It is
understood, however, that, except as provided in subclauses (i) and (ii) of this clause (h), and Sections 8 and 10 hereof, the Underwriters will pay all of their own costs and expenses, including the fees of their counsel, transfer taxes
on resale of any of the Securities and the Guarantee by them, and any advertising expenses connected with any offers they may make.
(i) Use of Proceeds. The Company will use the net proceeds received in connection with this offering in the manner
described in the Use of Proceeds section of the General Disclosure Package and the Final Prospectus and, except as disclosed in the General Disclosure Package and the Final Prospectus, the Company does not intend to use any of the
proceeds from the sale of the Offered Securities hereunder to repay any outstanding debt owed to any affiliate of any Underwriter.
(j) Absence of Manipulation. Neither the Company nor any Guarantor will take, directly or indirectly, any action
designed to or that would constitute or that might reasonably be expected to cause or result in, stabilization or manipulation of the price of any securities of the Company to facilitate the sale or resale of the Offered Securities.
(k) Restriction on Sale of Securities. Neither the Company nor any Guarantor will offer, sell, contract to sell, pledge
or otherwise dispose of, directly or indirectly, or file with the Commission a registration statement under the Act relating to United States dollar-denominated debt securities issued or guaranteed by the Company or any Guarantor and having a
maturity of more than one
13
year from the date of issue, or publicly disclose the intention to make any such offer, sale, pledge, disposition or filing, without the prior written consent of the Representatives, for a period
beginning on the date hereof and ending 30 days after the Closing Date.
6. Free Writing Prospectuses.
(a) Issuer Free Writing Prospectuses. The Company and the Guarantors jointly and severally represent and agree that, unless the Company obtains the prior consent of the Representatives, and each Underwriter represents and agrees that,
unless it obtains the prior consent of the Company and the Representatives, it has not made and will not make any offer relating to the Offered Securities that would constitute an Issuer Free Writing Prospectus, or that would otherwise constitute a
free writing prospectus, as defined in Rule 405, required to be filed with the Commission. Any such free writing prospectus consented to by the Company and the Representatives is hereinafter referred to as a Permitted Free
Writing Prospectus. The Company and the Guarantors jointly and severally represent that they have treated and agree that they will treat each Permitted Free Writing Prospectus as an issuer free writing prospectus, as defined in
Rule 433, and have complied and will comply with the requirements of Rules 164 and 433 applicable to any Permitted Free Writing Prospectus, including timely Commission filing where required, legending and record keeping.
(b) Term Sheets. The Company will prepare a final term sheet relating to the Offered Securities, containing only
information that describes the final terms of the Offered Securities and otherwise in a form consented to by the Representatives, and will file such final term sheet within the period required by Rule 433(d)(5)(ii) following the date such
final terms have been established for the offering of the Offered Securities. Any such final term sheet is an Issuer Free Writing Prospectus and a Permitted Free Writing Prospectus for purposes of this Agreement. The Company and the Representatives
also consent to the use by any Underwriter of a free writing prospectus that contains only (i)(x) information describing the preliminary terms of the Offered Securities or their offering or (y) information that describes the final terms of the
Offered Securities or their offering and that is included in the final term sheet of the Company contemplated in the first sentence of this subsection or (ii) other information that is not issuer information, as defined in
Rule 433, it being understood that any such free writing prospectus referred to in clause (i) or (ii) above shall not be an Issuer Free Writing Prospectus for purposes of this Agreement.
7. Conditions of the Obligations of the Underwriters. The obligations of the several Underwriters to purchase and pay for the Offered
Securities on the Closing Date will be subject to the accuracy of the representations and warranties of the Company and the Guarantors herein (on the date hereof and as though made on the Closing Date), to the accuracy of the statements of the
Companys and the Guarantors officers made pursuant to the provisions hereof, to the performance by the Company and the Guarantors of their respective obligations hereunder and to the following additional conditions precedent:
(a) Accountants Comfort Letter. The Representatives shall have received letters, dated, respectively, the
date hereof and the Closing Date, of Ernst & Young LLP, Deloitte & Touche LLP and, with respect to Dearborn, KPMG LLP, confirming that they are registered public accounting firms and independent public accountants within the
meaning of the Securities Laws and substantially in the form agreed to with the Representatives (except that, in the letter dated the Closing Date, the specified date referred to in the letter shall be a date no more than three days prior to such
Closing Date).
(b) Filing of Prospectus. The Final Prospectus shall have been filed with the Commission in
accordance with the Rules and Regulations and Section 5(a) hereof. No stop order suspending the effectiveness of the Registration Statement or of any part thereof shall have been issued and no proceedings for that purpose or pursuant to
Section 8A of the Act shall have been instituted or, to the knowledge of the Company, Guarantors or any Underwriter, shall be contemplated by the Commission.
14
(c) No Material Adverse Change. Subsequent to the Applicable Time,
there shall not have occurred (i) any change in the condition (financial or otherwise), results of operations, business, properties or prospects of the Company, Parent, the Subsidiaries and Dearborn taken as a whole which, in the judgment of
the Representatives, is material and adverse and makes it impractical or inadvisable to proceed with the offering, sale or delivery of the Offered Securities; (ii) any downgrading in the rating of any debt securities of the Company or any
Guarantor by any nationally recognized statistical rating organization (as defined in Section 3(a)(62) under the Exchange Act), or any public announcement that any such organization has under surveillance or review its rating of any
debt securities of the Company or any Guarantor (other than an announcement with positive implications of a possible upgrading, and no implication of a possible downgrading, of such rating); (iii) any change in U.S. or international financial,
political or economic conditions or currency exchange rates or exchange controls the effect of which is such as to make it, in the judgment of the Representatives, impractical to proceed with the offering, sale or delivery of or to enforce contracts
for the sale of the Offered Securities, whether in the primary market or in respect of dealings in the secondary market; (iv) any suspension or material limitation of trading in securities generally on the New York Stock Exchange, or any
setting of minimum or maximum prices for trading on such exchange; (v) or any suspension of trading of any securities of the Company or any Guarantor on any exchange or in the over-the-counter market; (vi) any banking moratorium declared
by any U.S. federal or New York authorities; (vii) any major disruption of settlements of securities, payment, or clearance services in the United States or any other country where such securities are listed or (viii) any attack on,
outbreak or escalation of hostilities or act of terrorism involving the United States, any declaration of war by the U.S. Congress or any other national or international calamity or emergency if, in the judgment of the Representatives, the effect of
any such attack, outbreak, escalation, act, declaration, calamity or emergency is such as to make it impractical or inadvisable to proceed with the offering, sale or delivery of the Offered Securities or to enforce contracts for the sale of the
Offered Securities.
(d) Opinions of Counsel for Company and the Guarantors. The Representatives shall have
received an opinion, dated the Closing Date, of Weil, Gotshal & Manges LLP, counsel for the Company and the Guarantors, substantially in the form attached hereto as Exhibit A.
(e) Opinion of Counsel for Underwriters. The Representatives shall have received from Davis Polk & Wardwell
LLP, counsel for the Underwriters, such opinion or opinions, dated the Closing Date, with respect to such matters as the Representatives may require, and the Company shall have furnished to such counsel such documents as they request for the purpose
of enabling them to pass upon such matters.
(f) Officers Certificate. The Representatives shall have
received a certificate, dated the Closing Date, of an executive officer of the Company and the Guarantors and a principal financial or accounting officer of the Company and the Guarantors in which such officers shall state that: the representations
and warranties of the Company and the Guarantors in this Agreement are true and correct; the Company and the Guarantors have complied with all agreements and satisfied all conditions on their parts to be performed or satisfied hereunder at or prior
to the Closing Date; no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been instituted or, to the best of their knowledge and after reasonable investigation, are
contemplated by the Commission; and, subsequent to the dates of the most recent financial statements in the General Disclosure Package and the Final Prospectus, there has been no material adverse change in the condition (financial or otherwise),
results of operations, business, properties or prospects of the Company, Parent, the Subsidiaries, and to the best knowledge of the Company, Dearborn, taken as a whole except as set forth in the General Disclosure Package and the Final Prospectus or
as described in such certificate.
(g) Consummation of the Common Stock Offering. The Common Stock Offering shall be
consummated concurrently with the issue and sale of the Offered Securities pursuant to this Agreement.
15
(h) Consummation of the Dearborn Acquisition. The Dearborn Acquisition
shall be consummated concurrently with the issue and sale of the Offered Securities pursuant to this Agreement.
The Company and the Guarantors will
furnish the Representatives with such conformed copies of such opinions, certificates, letters and documents as the Representatives reasonably request. The Representatives may waive on behalf of the Underwriters compliance with any conditions to the
obligations of the Underwriters hereunder.
8. Indemnification and Contribution. (a) Indemnification of Underwriters.
The Company and the Guarantors will jointly and severally indemnify and hold harmless each Underwriter, its partners, members, directors, officers, employees, agents, affiliates and each person, if any, who controls such Underwriter within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act (each, an Indemnified Party), against any and all losses, claims, damages or liabilities, joint or several, to which such Indemnified Party may become
subject, under the Act, the Exchange Act, other Federal or state statutory law or regulation or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon (i) any untrue
statement or alleged untrue statement of any material fact contained in any part of the Registration Statement at any time, or arise out of or are based upon the omission or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein not misleading, or (ii) any untrue statement or alleged untrue statement of any material fact contained in any part of any Statutory Prospectus as of any time, the Final Prospectus or any Issuer Free
Writing Prospectus, or arise out of or are based upon the omission or alleged omission of a material fact necessary to make the statements therein, in each case in light of the circumstances under which they were made, not misleading, and will
reimburse each Indemnified Party for any legal or other expenses reasonably incurred by such Indemnified Party in connection with investigating or defending against any loss, claim, damage, liability, action, litigation, investigation or proceeding
whatsoever (whether or not such Indemnified Party is a party thereto), whether threatened or commenced, and in connection with the enforcement of this provision with respect to any of the above as such expenses are incurred; provided, however, that
the Company and the Guarantors will not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement in or omission or alleged omission from
any of such documents in reliance upon and in conformity with written information furnished to the Company by any Underwriter through the Representatives specifically for use therein, it being understood and agreed that the only such information
furnished by any Underwriter consists of the information described as such in subsection (b) below.
(b) Indemnification of
Company and the Guarantors. Each Underwriter will severally and not jointly indemnify and hold harmless the Company, the Guarantors, each of their respective directors, each of their respective officers who signs a Registration Statement and
each person, if any, who controls the Company or any Guarantor within the meaning of Section 15 of the Act or Section 20 of the Exchange Act (each, an Underwriter Indemnified Party), against any losses, claims, damages
or liabilities to which such Underwriter Indemnified Party may become subject, under the Act, the Exchange Act, other Federal or state statutory law or regulation or otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon (i) any untrue statement or alleged untrue statement of any material fact contained in any part of the Registration Statement at any time, or arise out of or are based upon the omission or alleged
omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, or (ii) any untrue statement or alleged untrue statement of any material fact contained in any part of any Statutory
Prospectus as of any time, the Final Prospectus or any Issuer Free Writing Prospectus, or arise out of or are based upon the omission or alleged omission of a material fact necessary to make the statements therein, in each case in light of the
circumstances under which they were made, not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with
written information furnished to the Company by such Underwriter through the Representatives specifically for use therein, and will reimburse any legal or other expenses reasonably incurred by such Underwriter Indemnified Party in connection with
investigating or defending against any such loss, claim, damage, liability, action, litigation, investigation or proceeding whatsoever (whether or not such Underwriter Indemnified Party is a party thereto), whether threatened or commenced,
16
based upon any such untrue statement or omission, or any such alleged untrue statement or omission as such expenses are incurred, it being understood and agreed that the only such information
furnished by any Underwriter consists of the following information in the Final Prospectus furnished on behalf of each Underwriter: the information contained in the fifth paragraph under the caption Underwriting relating to market making
activities and the information contained in the tenth and eleventh paragraphs under the caption Underwriting relating to stabilizing transactions.
(c) Actions against Parties; Notification. Promptly after receipt by an indemnified party under this Section of notice of the
commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under this Section 8, notify the indemnifying party of the commencement thereof; but the failure to notify the
indemnifying party shall not relieve it from any liability that it may have under subsection (a) or (b) above except to the extent that it has been materially prejudiced (through the forfeiture of substantive rights or defenses) by such
failure; and provided further that the failure to notify the indemnifying party shall not relieve it from any liability that it may have to an indemnified party otherwise than under subsection (a) or (b) above. In case any such action is
brought against any indemnified party and it notifies the indemnifying party of the commencement thereof, the indemnifying party will be entitled to participate therein and, to the extent that it may wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying party), and after notice from the
indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party will not be liable to such indemnified party under this Section for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable costs of investigation. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened action
in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party unless such settlement (i) includes an unconditional release of such indemnified party from all
liability on any claims that are the subject matter of such action and (ii) does not include a statement as to, or an admission of, fault, culpability or a failure to act by or on behalf of an indemnified party.
(d) Contribution. If the indemnification provided for in this Section is unavailable or insufficient to hold harmless an
indemnified party in respect of any losses, claims, damages or liabilities referred to herein, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to herein (i) in such proportion as is appropriate to reflect the relative benefits received by the Company and the Guarantors on the one hand and the Underwriters on the other from the offering of the Offered Securities or
(ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the
Company and the Guarantors on the one hand and the Underwriters on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities as well as any other relevant equitable considerations. The
relative benefits received by the Company and the Guarantors on the one hand and the Underwriters on the other shall be deemed to be in the same proportion as the total net proceeds from the offering (before deducting expenses) received by the
Company and the Guarantors bear to the total underwriting discounts and commissions received by the Underwriters. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company and the Guarantors or the Underwriters and the parties relative intent, knowledge, access to information and opportunity
to correct or prevent such untrue statement or omission. The amount paid by an indemnified party as a result of the losses, claims, damages or liabilities referred to in the first sentence of this subsection (d) shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any action or claim which is the subject of this subsection (d). Notwithstanding the provisions of this subsection (d), no
Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Securities underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within
17
the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Underwriters obligations in this
subsection (d) to contribute are several in proportion to their respective underwriting obligations and not joint. The Company, each Guarantor and the Underwriters agree that it would not be just and equitable if contribution pursuant to this
Section 8(d) were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to in this
Section 8(d).
9. Default of Underwriters. If any Underwriter or Underwriters default in their obligations to purchase Offered
Securities hereunder on the Closing Date and the aggregate principal amount of Offered Securities that such defaulting Underwriter or Underwriters agreed but failed to purchase does not exceed 10% of the total principal amount of Offered Securities
that the Underwriters are obligated to purchase on the Closing Date, the Representatives may make arrangements satisfactory to the Company for the purchase of such Offered Securities by other persons, including any of the Underwriters, but if no
such arrangements are made by the Closing Date, the non-defaulting Underwriters shall be obligated severally, in proportion to their respective commitments hereunder, to purchase the Offered Securities that such defaulting Underwriters agreed but
failed to purchase on the Closing Date. If any Underwriter or Underwriters so default and the aggregate principal amount of Offered Securities with respect to which such default or defaults occur exceeds 10% of the total principal amount of Offered
Securities that the Underwriters are obligated to purchase on the Closing Date and arrangements satisfactory to the Representatives and the Company for the purchase of such Offered Securities by other persons are not made within 36 hours after such
default, this Agreement will terminate without liability on the part of any non-defaulting Underwriter or the Company, except as provided in Section 10. As used in this Agreement, the term Underwriter includes any person substituted
for an Underwriter under this Section. Nothing herein will relieve a defaulting Underwriter from liability for its default.
10.
Survival of Certain Representations and Obligations. The respective indemnities, agreements, representations, warranties and other statements of the Company, the Guarantors or any of their respective officers and of the several Underwriters
set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of any investigation, or statement as to the results thereof, made by or on behalf of any Underwriter, the Company, the Guarantors or any of their
respective representatives, officers or directors or any controlling person, and will survive delivery of and payment for the Offered Securities. If the purchase of the Offered Securities by the Underwriters is not consummated for any reason other
than solely because of the termination of this Agreement pursuant to Section 9 hereof, the Company will reimburse the Underwriters for all out-of-pocket expenses (including fees and disbursements of counsel) reasonably incurred by them in
connection with the offering of the Offered Securities, and the respective obligations of the Company, the Guarantors and the Underwriters pursuant to Section 8 hereof shall remain in effect. For the avoidance of doubt, if the Agreement is
terminated pursuant to Section 9 hereof, the respective obligations of the Company, the Guarantors and the Underwriters pursuant to Section 8 hereof shall remain in effect. In addition, if any Offered Securities have been purchased
hereunder, the representations and warranties in Section 2 and all obligations under Section 5 shall also remain in effect.
11.
Notices. All communications hereunder will be in writing and, if sent to the Underwriters, will be mailed, delivered or telegraphed and confirmed to the Representatives, c/o Credit Suisse Securities (USA) LLC, Eleven Madison Avenue, New York,
N.Y. 10010-3629, Attention: LCD-IBD, J.P. Morgan Securities LLC, 383 Madison Avenue, New York, N.Y., 10179 and Citigroup Global Markets Inc., 388 Greenwich Street, New York, N.Y. 10013, Attention: General Counsel or, if sent to the Company or any
Guarantor, will be mailed, delivered or telegraphed and confirmed to it at AK Steel Corporation, 9227 Centre Pointe Drive, West Chester, OH 45069, Attention: General Counsel; provided, however, that any notice to an Underwriter pursuant to
Section 8 will be mailed, delivered or telegraphed and confirmed to such Underwriter.
In accordance with the requirements of the USA
Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)), the Underwriters are required to obtain, verify and record information that identifies their respective clients, including the Company, which information may include
the name and address of their respective clients, as well as other information that will allow the Underwriters to properly identify their respective clients.
18
12. Successors. This Agreement will inure to the benefit of and be binding upon the
parties hereto and their respective successors and the officers and directors and controlling persons referred to in Section 8, and no other person will have any right or obligation hereunder.
13. Representation of Underwriters. The Representatives will act for the several Underwriters in connection with this financing, and
any action under this Agreement taken by the Representatives jointly or individually will be binding upon all the Underwriters.
14.
Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute one and the same Agreement.
15. Absence of Fiduciary Relationship. The Company and Parent acknowledge and agree that:
(a) No Other Relationship. The Underwriters have been retained solely to act as underwriters in connection with the sale of Offered
Securities and that no fiduciary, advisory or agency relationship between the Company and the Guarantors, on the one hand, and the Underwriters, on the other hand, has been created in respect of any of the transactions contemplated by this Agreement
or the Final Prospectus, irrespective of whether the Underwriters have advised or is advising the Company or the Guarantors on other matters;
(b) Arms Length Negotiations. The price of the Offered Securities set forth in this Agreement was established by the Company
following discussions and arms-length negotiations with the Underwriters, and the Company and the Guarantors are capable of evaluating and understanding and understand and accept the terms, risks and conditions of the transactions contemplated by
this Agreement;
(c) Absence of Obligation to Disclose. The Company and the Guarantors have been advised that the Underwriters and
their affiliates are engaged in a broad range of transactions which may involve interests that differ from those of the Company and the Guarantors and that the Underwriters have no obligation to disclose such interests and transactions to the
Company or the Guarantors by virtue of any fiduciary, advisory or agency relationship; and
(d) Waiver. The Company and the
Guarantors waive, to the fullest extent permitted by law, any claims they may have against the Underwriters for breach of fiduciary duty or alleged breach of fiduciary duty and agree that the Underwriters shall have no liability (whether direct or
indirect) to the Company or the Guarantors in respect of such a fiduciary duty claim or to any person asserting a fiduciary duty claim on behalf of or in right of the Company or the Guarantors, including stockholders, employees or creditors of the
Company or the Guarantors.
16. Applicable Law. This Agreement and any claim, controversy or dispute arising
under or related to this Agreement shall be governed by, and construed in accordance with, the laws of the State of New York.
The
Company and the Guarantors hereby submit to the non-exclusive jurisdiction of the Federal and state courts in the Borough of Manhattan in The City of New York in any suit or proceeding arising out of or relating to this Agreement or the transactions
contemplated hereby. The Company and the Guarantors irrevocably and unconditionally waive any objection to the laying of venue of any suit or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby in Federal
and state courts in the Borough of Manhattan in The City of New York and irrevocably and unconditionally waive and agree not to plead or claim in any such court that any such suit or proceeding in any such court has been brought in an inconvenient
forum.
19
If the foregoing is in accordance with the Representatives understanding of our agreement,
kindly sign and return to the Company one of the counterparts hereof, whereupon it will become a binding agreement between the Company, each Guarantor and the several Underwriters in accordance with its terms.
|
|
|
Very truly yours, |
|
AK STEEL CORPORATION |
|
|
By: |
|
/s/ Joseph C. Alter |
Name: |
|
Joseph C. Alter |
Title: |
|
Vice President and General Counsel |
|
|
|
AK STEEL HOLDING CORPORATION
as Guarantor |
|
|
By: |
|
/s/ Joseph C. Alter |
Name: |
|
Joseph C. Alter |
Title: |
|
Vice President and General Counsel |
|
|
|
AK TUBE LLC as
Guarantor |
|
|
By: |
|
/s/ Joseph C. Alter |
Name: |
|
Joseph C. Alter |
Title: |
|
Assistant Secretary |
|
|
|
AK STEEL PROPERTIES, INC.
as Guarantor |
|
|
By: |
|
/s/ David C. Horn |
Name: |
|
David C. Horn |
Title: |
|
President |
[Signature page to Underwriting Agreement]
The foregoing Underwriting Agreement is hereby confirmed and accepted as of the date first above written.
CREDIT SUISSE SECURITIES (USA) LLC,
CITIGROUP GLOBAL MARKETS INC.
J.P. Morgan Securities LLC,
Acting on behalf of themselves and
as the Representatives of the several Underwriters
By CREDIT SUISSE SECURITIES (USA) LLC
|
|
|
By: |
|
/s/ Peter Matt |
Name: Peter Matt |
Title: Managing Director |
By CITIGROUP GLOBAL MARKETS INC.
|
|
|
By: |
|
/s/ Stuart G. Dickinson |
Name: Stuart G. Dickinson |
Title: Managing Director |
By J.P. MORGAN SECURITIES LLC
|
|
|
By: |
|
/s/ David A. Dwyer |
Name: David A. Dwyer |
Title: Managing Director |
[Signature page to Underwriting Agreement]
SCHEDULE A
|
|
|
|
|
Underwriter |
|
Principal Amount of 7.625% Senior Notes due 2021 |
|
Credit Suisse Securities (USA) LLC |
|
$ |
176,687,234 |
|
Citigroup Global Markets Inc. |
|
$ |
102,173,109 |
|
J.P. Morgan Securities LLC |
|
$ |
69,117,356 |
|
Merrill Lynch, Pierce, Fenner & Smith Incorporated |
|
$ |
47,061,553 |
|
Fifth Third Securities, Inc. |
|
$ |
17,480,374 |
|
Goldman, Sachs & Co. |
|
$ |
17,480,374 |
|
|
|
|
|
|
Total |
|
$ |
430,000,000 |
|
A-1
SCHEDULE B
1. |
General Use Free Writing Prospectuses (included in the General Disclosure Package) |
General Use Issuer Free Writing Prospectus includes each of the following documents:
1. Final Term Sheet, dated September 11, 2014, a copy of which is attached hereto.
2. |
Other Information Included in the General Disclosure Package |
The
following information is also included in the General Disclosure Package:
None
B-1
AK Steel Corporation (AK Steel)
Pricing Term Sheet
$430,000,000 7.625% Notes due 2021
|
|
|
Issuer: |
|
AK Steel Corporation |
Guarantees: |
|
The Notes will be fully and unconditionally guaranteed on a senior unsecured basis by AK Steel Holding Corporation (AK Holding), the direct parent of AK Steel and AK Tube LLC and AK Steel Properties, Inc., two
wholly-owned subsidiaries of AK Steel (collectively, the Guarantors). |
|
|
Security Type: |
|
Senior Notes |
|
|
Ratings:* |
|
Caa1 / B- |
|
|
Pricing Date: |
|
September 11, 2014 |
|
|
Settlement Date: |
|
September 16, 2014 (T + 3) |
|
|
Principal Amount: |
|
US $430,000,000 |
|
|
Maturity: |
|
October 1, 2021 |
|
|
Benchmark: |
|
2.000% UST Due November 15, 2021 |
|
|
Spread to Benchmark: |
|
+551 bps |
|
|
Coupon: |
|
7.625% |
|
|
Price to Public: |
|
99.325% |
|
|
Yield to Maturity: |
|
7.750% |
|
|
Interest Payment Dates: |
|
April 1 and October 1, commencing April 1, 2015 |
|
|
Optional Redemption: |
|
The Notes will be redeemable at AK Steels option at any time before October 1, 2017 at a redemption price equal to the principal
amount of Notes being redeemed plus a make-whole premium of the Treasury Rate as of such redemption date plus 50 basis points plus accrued and unpaid interest to the redemption date.
The Notes will be redeemable at AK Steels option, in whole or in part, at any time
on and after October 1, 2017 at the redemption price for the Notes (expressed as a percentage of principal amount) set forth below, plus accrued and unpaid interest to the redemption date, if redeemed during the twelve-month period commencing
on October 1 of the years indicated below: |
|
|
|
|
|
Year |
|
Redemption Price |
|
2017 |
|
|
103.813 |
% |
2018 |
|
|
101.906 |
% |
2019 (and thereafter) |
|
|
100.000 |
% |
|
|
|
|
|
|
|
At any time prior to October 1, 2017, AK Steel may redeem up to 35% of the principal amount of the Notes with the proceeds of offerings of AK Holdings shares of common stock occurring after the Closing Date at a
redemption price of 107.625% of the principal amount of the notes, plus accrued and unpaid interest to the redemption date, if any; provided that at least 65% of the aggregate principal amount of Notes originally issued on the Closing Date remains
outstanding after each such redemption. |
|
|
CUSIP/ISIN: |
|
001546 AS9 / US001546AS98 |
|
|
Use of Proceeds: |
|
We intend to use the net proceeds from this offering, together with a portion of the net proceeds from AK Holdings concurrent common stock offering, to finance AK Steels acquisition of Severstal Dearborn, LLC (the
Dearborn Acquisition). |
|
|
Joint Book-Running Managers |
|
Credit Suisse Securities (USA) LLC Citigroup
Global Markets Inc. J.P. Morgan Securities LLC |
|
|
Co-Managers: |
|
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Fifth Third Securities, Inc. Goldman, Sachs &
Co. |
|
|
Concurrent Offering: |
|
Concurrently with this offering, AK Holding is offering shares of its common stock (Shares), a portion of the net proceeds of which will be used, along with the net proceeds of this offering, to finance the Dearborn
Acquisition. Closing of the common stock offering is not conditioned on the closing of this offering. However, closing of this offering is conditioned on the closing of the common stock offering and the concurrent closing of the Dearborn
Acquisition. |
|
|
Number of Shares in Concurrent Offering: |
|
35,000,000 (or 40,250,000 Shares if the underwriters exercise in full their option to purchase additional Shares) |
|
|
Public Offering Price of Shares: |
|
$9.00 per Share |
* |
Note: A credit rating of a security is not a recommendation to buy, sell or hold securities and may be subject to review, revision, suspension, reduction or withdrawal at any time by the assigning rating agency.
|
AK Steel Corporation and AK Steel Holding Corporation have filed a registration statement (including a base prospectus) and AK Steel
Corporation and the Guarantors have filed a prospectus supplement with the U.S. Securities and Exchange Commission (SEC) for the offering to which this communication relates. Before you invest, you should read the prospectus supplement for this
offering, the prospectus in that registration statement and any other documents filed with the SEC for more complete information about the issuer and this offering. You may get these documents for free by searching the SEC online database (EDGAR) on
the SEC web site at http://www.sec.gov. Alternatively, AK Steel Corporation, AK Steel Holding Corporation, any underwriter or any dealer participating in the offering will arrange to send you the prospectus supplement and prospectus if you request
it by calling Credit Suisse Securities (USA) LLC toll-free at 1-800-221-1037, J.P. Morgan Securities LLC toll-free at 1-800-245- 8812 or Citigroup Global Markets Inc. toll-free at 1-877-858-5407.
This pricing term sheet supplements the preliminary form of prospectus supplement issued by AK Steel Corporation and the Guarantors on September 8,
2014 relating to the prospectus dated September 8, 2014.
Any disclaimer or other notice that may appear below is not applicable to this communication and should be
disregarded. Such disclaimer or notice was automatically generated as a result of this communication being sent by Bloomberg or another email system.
EXHIBIT A
Form of Opinion from Weil Gotshal & Manges
Credit Suisse Securities (USA) LLC,
Eleven Madison Avenue,
New York, N.Y. 10010-3629
Citigroup Global Markets Inc.
388 Greenwich Street
New York, N.Y. 10013, and
J.P. Morgan Securities LLC
383 Madison Avenue
New York, NY 10179
Merrill Lynch, Pierce, Fenner & Smith Incorporated
One
Bryant Park
New York, N.Y. 10036
Fifth Third Securities,
Inc.
38 Fountain Square Plaza
MD10903B
Cincinnati, Ohio 45263
Goldman, Sachs & Co.
200 West Street
New York, New York 10282
Ladies and Gentlemen:
We have acted as counsel to
AK Steel Corporation (the Company), AK Steel Holding Corporation (Parent), AK Tube LLC (AK Tube) and AK Steel Properties, Inc. (AK Steel
Properties and together with the Company, Parent and AK Tube, the Companies) in connection with the preparation, authorization, execution and delivery of, and the consummation of the transactions contemplated
by, the Underwriting Agreement, dated September 11, 2014 (the Agreement), by and among the Company, the guarantors party thereto and Credit Suisse Securities (USA) LLC, J.P. Morgan Securities LLC and Citigroup Global
Markets Inc., as representatives of the underwriters named therein, relating to the issuance by the Company of $430,000,000 aggregate principal amount of its 7.625% Senior Notes due 2021 (the Notes). The Notes are being
issued pursuant to a base indenture, dated as of May 11, 2010 (the Base Indenture), among the Companies and U.S. Bank National Association, as trustee (the Trustee), as supplemented by the
Fifth Supplemental Indenture, dated as of September 16, 2014 (the Supplemental Indenture and together with the Base Indenture, the Indenture) among the Companies and the Trustee. The
Companys
obligations under the Indenture and the Notes are guaranteed by each of Parent, AK Tube and AK Steel Properties (the Guarantors), and such guarantees (the
Guarantees) are set forth in the Indenture. This opinion is being rendered to you pursuant to Section 7(d) of the Agreement. Capitalized terms defined in the Agreement and used (but not otherwise defined) herein are
used herein as so defined.
In so acting, we have examined originals or copies (certified or otherwise identified to our
satisfaction) of (i) the Agreement; (ii) the Indenture; (iii) executed copies of global certificates representing the Notes; (iv) the Guarantees; (v) the Registration Statement on Form S-3 (Registration No. 333-194078),
filed on February 21, 2014 (as amended by Post-Effective Amendment No. 1 filed on September 8, 2014, the Registration Statement); (vi) the Prospectus, dated September 8, 2014, which forms a part of
the Registration Statement (the Base Prospectus); (vii) the Preliminary Prospectus Supplement, dated September 8, 2014 (the Preliminary Prospectus Supplement); (viii) the Prospectus
Supplement, dated September 11, 2014 (the Prospectus Supplement); (ix) the Pricing Disclosure Package (as defined below); (x) the certificate of incorporation or certificate of formation, as applicable, of
each of the Companies; (xi) the by-laws or limited liability company agreement, as applicable, of each of the Companies; and (xii) such corporate records, agreements, documents and other instruments, and such certificates or comparable
documents of public officials and of officers and representatives of the Companies, and have made such inquiries of such officers and representatives, as we have deemed relevant and necessary as a basis for the opinions hereinafter set forth. We
refer to the Base Prospectus, as supplemented by the Preliminary Prospectus Supplement, and taken together with the term sheet and other documents listed on Schedule A hereto, as the Pricing Disclosure Package. We refer to
the Base Prospectus as supplemented by the Prospectus Supplement as the Prospectus.
In such examination, we have
assumed the genuineness of all signatures, the legal capacity of all natural persons, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as certified, conformed or
photostatic copies and the authenticity of the originals of such latter documents. As to all questions of fact material to these opinions that have not been independently established, we have relied upon certificates or comparable documents of
officers and representatives of the Companies and upon the representations and warranties of the Companies contained in the Agreement. As used herein, to our knowledge, of which we are aware and we are not aware
mean the conscious awareness of facts or other information by any lawyer in our firm actively involved in the transactions contemplated by the Agreement, after consultation with such other lawyers in our firm as each such actively involved lawyer
has deemed appropriate.
Based on the foregoing, and subject to the qualifications stated herein, we are of the opinion that:
Each of the Company, Parent and AK Steel Properties is a corporation validly existing and in good standing under the laws of the State of Delaware and each of
the Company, Parent and AK Steel Properties has all requisite corporate power and authority to own, lease and operate its properties and to carry on its business as now being conducted. AK Tube is a limited liability company validly existing and in
good standing under the laws of the State of Delaware and has all requisite limited liability company power and authority to own, lease and operate its properties and to carry on its business as now being conducted.
Each of the Company, Parent and AK Steel Properties has all requisite corporate power and authority to execute and deliver the Agreement and to perform its
obligations thereunder. The execution, delivery and performance of the Agreement by each of the Company, Parent and AK Steel Properties has been duly authorized by all necessary corporate action on the part of each of the Company, Parent and AK
Steel Properties. AK Tube has all requisite limited liability company power and authority to execute and deliver the Agreement and to perform its obligations thereunder. The execution, delivery and performance of the Agreement by AK Tube has
been duly authorized by all necessary limited liability company action on the part of AK Tube. The Agreement has been duly and validly executed and delivered by each of the Companies.
Each of the Company, Parent and AK Steel Properties has all requisite corporate power and authority to execute and deliver the Indenture and to perform its
obligations thereunder. The execution, delivery and performance of the Indenture by each of the Company, Parent and AK Steel Properties has been duly authorized by all necessary
corporate action on its part. AK Tube has all requisite limited liability company power and authority to execute and deliver the Indenture and to perform its obligations thereunder. The
execution, delivery and performance of the Indenture by AK Tube has been duly authorized by all necessary limited liability company action on its part. The Indenture has been duly and validly executed and delivered by the Companies and
(assuming the due authorization, execution and delivery thereof by the Trustee) constitutes the legal, valid and binding obligation of each of the Companies, enforceable against each of them in accordance with its terms, subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws affecting creditors rights and remedies generally, and subject, as to enforceability, to general principles of equity, including principles of
commercial reasonableness, good faith and fair dealing (regardless of whether enforcement is sought in a proceeding at law or in equity). The Indenture has been duly qualified under the Trust Indenture Act of 1939, as amended.
The Company has all requisite corporate power and authority to execute and deliver the Notes and to perform its obligations thereunder. The execution,
delivery and performance of the Notes by the Company have been duly authorized by all necessary corporate action on the part of the Company. The Notes have been duly and validly executed and when delivered to and paid for by the Underwriters in
accordance with the terms of the Agreement (assuming the due authentication thereof by the Trustee) will constitute the legal, valid and binding obligations of the Company, enforceable against it in accordance with their terms and will be entitled
to the benefits of the Indenture, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws affecting creditors rights and remedies generally, and subject, as to enforceability, to general
principles of equity, including principles of commercial reasonableness, good faith and fair dealing (regardless of whether enforcement is sought in a proceeding at law or in equity).
Each of Parent and AK Steel Properties has all requisite corporate power and authority to execute and deliver its respective Guarantee and to perform its
obligations thereunder. The execution, delivery and performance of the Guarantees by Parent and AK Steel Properties have been duly authorized by all necessary corporate action on the part of Parent and AK Steel Properties. AK Tube has all requisite
limited liability company power and authority to execute and deliver the Guarantee and to perform its obligations thereunder. The execution, delivery and performance of the Guarantee by AK Tube has been duly authorized by all necessary limited
liability company action on the part of AK Tube. The Guarantees have been duly and validly executed and delivered by each of the Guarantors, and, when the Notes have been duly authenticated by the Trustee in accordance with the Indenture and
delivered to and paid for by the Underwriters in accordance with the terms of the Agreement, will constitute the legal, valid and binding obligation of each of the Guarantors, enforceable against the Guarantors in accordance with its terms, subject
to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws affecting creditors rights and remedies generally, and subject, as to enforceability, to general principles of equity, including
principles of commercial reasonableness, good faith and fair dealing (regardless of whether enforcement is sought in a proceeding at law or in equity).
The execution and delivery by each of the Companies of the Agreement, the Indenture, the Notes and the Guarantees, as applicable, and the performance by each
of the Companies of its respective obligations thereunder will not conflict with, constitute a breach of or default under or violate (i) any of the terms, conditions or provisions of its certificate of incorporation or certificate of formation,
as applicable, or by-laws or limited liability company agreement, as applicable; (ii) any of the terms, conditions or provisions of any document, agreement or other instrument listed on Schedule B hereto; (iii) Delaware corporate, New York
or federal law (other than federal and state securities or blue sky laws, as to which we express no opinion in this paragraph); or (iv) any judgment, writ, injunction, decree, order or ruling of any court or governmental authority binding on it
of which we are aware.
No consent, approval, waiver, license or authorization or other action by or filing with any Delaware corporate, New York or
federal governmental authority is required in connection with the execution and delivery by the Companies of the Agreement, the Indenture and the Guarantees, the consummation by the Companies of the transactions contemplated thereby or the
performance by the Companies of their respective obligations thereunder, except for federal and state securities or blue sky laws, as to which we express no opinion in this paragraph, those already obtained.
To our knowledge, there are no legal or governmental proceedings pending or overtly threatened to which Parent or
any of its subsidiaries is a party or to which any of the properties of Parent or any of its subsidiaries is subject that are required to be described in the Registration Statement, the Prospectus or the documents incorporated by reference therein
and are not so described.
The statements (A) in the Prospectus and the Pricing Disclosure Package under the captions Description of
Notes and Description of Certain Indebtedness and (B) in the Registration Statement in response to the requirements of Item 9 of Form S-3, in each case insofar as such statements constitute summaries of the legal matters,
documents or proceedings referred to therein, fairly present the information called for with respect to such legal matters, documents and proceedings and fairly summarize the matters referred to therein in all material respects.
The statements in the Prospectus and the Pricing Disclosure Package under the caption Material U.S. Federal Income Tax Consequences for Non-U.S.
Holders, insofar as they constitute statements of United States federal income tax law or legal conclusions with respect thereto, and subject to the limitations set forth therein, fairly summarize the matters referred to therein in all
material respects.
None of Companies is, and immediately after giving effect to the sale of the Notes and the application of the proceeds thereof as
described in the Prospectus and the Pricing Disclosure Package none will be, an investment company as defined in the Investment Company Act of 1940, as amended.
The Registration Statement has become effective under the Securities Act and, based solely on a telephone confirmation by the staff of the Securities and
Exchange Commission (the Commission), we are not aware of any stop order suspending the effectiveness of the Registration Statement or of any notice objecting to its use. To our knowledge, no proceedings therefor have been initiated or
overtly threatened by the Commission and any required filing of the Prospectus and any supplement thereto pursuant to Rule 424(b) under the Securities Act has been made in the manner and within the time period required by such Rule.
The opinions expressed herein are limited to the laws of the State of New York, the corporate laws of the State of Delaware and the federal laws of the United
States, and we express no opinion as to the effect on the matters covered by this letter of the laws of any other jurisdiction.
The opinions expressed
herein are rendered solely for your benefit in connection with the transactions described herein. Those opinions may not be used or relied upon by any other person, nor may this letter or any copies hereof be furnished to a third party, filed with a
governmental agency, quoted, cited or otherwise referred to without our prior written consent.
Very truly yours,
Schedule A
1. Final Term Sheet, dated September 11, 2014
Schedule B
1. |
Indenture dated as of May 11, 2010, among AK Steel Corporation, as issuer, AK Steel Holding Corporation, as guarantor, and U.S. Bank National Association, as trustee |
2. |
First Supplemental Indenture, dated as of May 11, 2010, among AK Steel Corporation, as issuer, AK Steel Holding Corporation, as guarantor, and U.S. Bank National Association, as trustee |
3. |
Second Supplemental Indenture, dated as of March 22, 2012, among AK Steel Corporation, as issuer, AK Steel Holding Corporation, as guarantor, and U.S. Bank National Association, as trustee |
4. |
Third Supplemental Indenture, dated as of November 20, 2012, among AK Steel Corporation, as issuer, AK Steel Holding Corporation, as guarantor, and U.S. Bank National Association, as trustee |
5. |
Fourth Supplemental Indenture, dated as of April 29, 2014, among AK Tube LLC, as guarantor, AK Steel Properties, Inc., as guarantor, AK Steel Corporation, as issuer, AK Steel Holding Corporation, as guarantor, and
U.S. Bank National Association, as trustee |
6. |
Loan and Security Agreement dated as of April, 28, 2011, among AK Steel Corporation, as Borrower, Certain Financial Institutions, as Lenders, Bank of America, N.A., as Agent, JP Morgan Chase Bank, N.A. and Wells Fargo
Capital Finance, LLC, as Co-Syndication Agents, Citibank, N.A. and Deutsche Bank Securities Inc., as Co-Documentation Agents, Fifth Third Bank and PNC Bank, National Association, as Managing Agents, and Merrill Lynch, Pierce, Fenner & Smith
Incorporated, J.P. Morgan Securities LLC and Wells Fargo Capital Finance, LLC, as Joint Lead Arrangers and Co-Book Managers. |
7. |
Increased Commitment Agreement, dated as of October 31, 2011 by and among AK Steel Corporation, as Borrower, Bank of America, N.A., as Agent, and Wells Fargo Capital Finance, LLC. |
8. |
Increased Commitment Agreement, dated as of October 31, 2011 by and among AK Steel Corporation, as Borrower, Bank of America, N.A., as Agent, and JPMorgan Chase Bank, N.A. |
9. |
Increased Commitment Agreement, dated as of October 31, 2011 by and among AK Steel Corporation, as Borrower, Bank of America, N.A., as Agent, and Deutsche Bank Trust Company. |
10. |
Increased Commitment Agreement, dated as of October 31, 2011 by and among AK Steel Corporation, as Borrower, Bank of America, N.A., as Agent, and Citibank, N.A. |
11. |
Increased Commitment Agreement, dated as of October 31, 2011 by and among AK Steel Corporation, as Borrower, Bank of America, N.A., as Agent, and PNC Bank, National Association. |
12. |
Increased Commitment Agreement, dated as of October 31, 2011 by and among AK Steel Corporation, as Borrower, Bank of America, N.A., as Agent, and Morgan Stanley Bank, N.A. |
13. |
Increased Commitment Agreement, dated as of October 31, 2011 by and among AK Steel Corporation, as Borrower, Bank of America, N.A., as Agent, and UBS Loan Finance LLC. |
14. |
Increased Commitment Agreement, dated as of October 31, 2011 by and among AK Steel Corporation, as Borrower, Bank of America, N.A., as Agent, and Bank of America, N.A. |
15. |
Increased Commitment Agreement, dated as of October 31, 2011 by and among AK Steel Corporation, as Borrower, Bank of America, N.A., as Agent, and Fifth Third Bank. |
16. |
Increased Commitment Agreement, dated as of October 31, 2011 by and among AK Steel Corporation, as Borrower, Bank of America, N.A., as Agent, and Credit Suisse AG, Cayman Islands Branch. |
17. |
Increased Commitment Agreement, dated as of October 31, 2011 by and among AK Steel Corporation, as Borrower, Bank of America, N.A., as Agent, and Goldman Sachs Bank USA. |
18. |
Air Quality Facilities Loan Agreement dated as of February 1, 2012 between AK Steel Corporation and the Ohio Air Quality Development Authority$36,000,000 Revenue Refunding Bonds, Series 2012-A.
|
19. |
Loan Agreement dated as of February 1, 2012 between AK Steel Corporation and the City of Rockport, Indiana$30,000,000 Revenue Refunding Bonds, Series 2012-A. |
20. |
Loan Agreement dated as of February 1, 2012 between AK Steel Corporation and the Butler County Industrial Development Authority$7,300,000 Revenue Refunding Bonds, Series 2012-A. |
21. |
First Amendment to Credit Agreement, dated as of November 12, 2012, among AK Steel Corporation, as borrower, Bank of America, N.A. as agent for the lenders, and the lenders party thereto. |
Form of 10b-5 Letter from Weil, Gotshal & Manges
Credit Suisse Securities (USA) LLC,
Eleven Madison Avenue,
New York, N.Y. 10010-3629
Citigroup Global Markets Inc.
388 Greenwich Street
New York, N.Y. 10013, and
J.P. Morgan Securities LLC
383 Madison Avenue
New York, NY 10179
Merrill Lynch, Pierce, Fenner & Smith Incorporated
One
Bryant Park
New York, N.Y. 10036
Fifth Third Securities,
Inc.
38 Fountain Square Plaza
MD10903B
Cincinnati, Ohio 45263
Goldman, Sachs & Co.
200 West Street
New York, New York 10282
Ladies and Gentlemen:
Reference is made to (i) the
Registration Statement on Form S-3 (Registration No. 333-194078), filed by AK Steel Holding Corporation (AK Holding) and AK Steel Corporation (the Company and together with AK Holding, the
Companies) on February 21, 2014 (as amended by Post-Effective Amendment No. 1 filed on September 8, 2014, the Registration Statement), (ii) the Prospectus, dated as of
February 21, 2014 (the Base Prospectus), which forms a part of the Registration Statement, (iii) the Preliminary Prospectus Supplement, dated September 8, 2014 (the Preliminary Prospectus
Supplement) and (iv) the Prospectus Supplement, dated September 11, 2014 (the Prospectus Supplement), in each case relating to the 7.625% Senior Notes due 2021 (the
Securities) of the Company, as to which we have acted as counsel to the Companies, AK Tube LLC and AK Steel Properties, Inc. We refer to the Base Prospectus, as supplemented by the Preliminary Prospectus Supplement, and
taken together with the term sheet and other documents listed on Schedule A hereto as the Pricing Disclosure Package. We refer to the Base Prospectus as supplemented by the Prospectus Supplement as the
Prospectus. We refer to the Registration Statement, the Base Prospectus, the Preliminary Prospectus Supplement, the term sheet and other documents listed on Schedule A hereto, and the Prospectus Supplement as the
Offering Documents. This letter is furnished to you pursuant to Section 7(d) of the Underwriting Agreement, dated as of September 11, 2014, among the Company, the guarantors party thereto and the underwriters
named therein (the Agreement). Capitalized terms defined in the Agreement and used (but not otherwise defined) herein are used herein as so defined.
The primary purpose of our professional engagement was not to establish or confirm factual matters or financial
or quantitative information, and many determinations involved in the preparation of the Offering Documents are of a non-legal character. In addition, we have not undertaken any obligation to verify independently any of the factual matters set forth
in the Offering Documents or in the documents incorporated by reference therein (the Incorporated Documents). Consequently, we are not passing upon and do not assume any responsibility for the accuracy, completeness or
fairness of the statements contained or incorporated by reference in the Offering Documents (other than as stated in paragraphs 9 and 10 of our opinion of even date herewith). Also, we do not make any statement herein with respect to any of the
financial statements and related notes thereto, the financial statement schedules or the financial or accounting data contained or incorporated by reference in the Offering Documents or Exhibit 25 to the Registration Statement.
We have reviewed the Offering Documents (including the Incorporated Documents) and we have participated in conferences with representatives of the Company,
its independent public accountants, you and your counsel, at which conferences the contents of the Offering Documents, the Incorporated Documents and related matters were discussed. However, we did not participate in the preparation of the
Incorporated Documents.
Subject to the foregoing, we confirm to you that, on the basis of the information we gained in the course of performing the
services referred to above, (a) the Registration Statement (including the Incorporated Documents), as of its most recent effective date (which for purposes of this letter is understood to be the date of the Agreement), and the Prospectus
(including the Incorporated Documents), as of the date of the Prospectus Supplement, appeared on their face to be appropriately responsive, in all material respects relevant to the offering of the Securities, to the applicable requirements of the
Securities Act and the rules and regulations thereunder, and (b) no facts have come to our attention which cause us to believe that (i) the Registration Statement (including the Incorporated Documents), as of its most recent effective date
(which for purposes of this letter is understood to be the date of the Agreement), contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not
misleading, (ii) the Pricing Disclosure Package (including the Incorporated Documents), as of 7:30 AM on September 11, 2014 contained any untrue statement of a material fact or omitted to state any material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were made, not misleading, or (iii) the Prospectus (including the Incorporated Documents), as of the date of the Prospectus Supplement or as of the date hereof,
contained or contains any untrue statement of a material fact or omitted or omits to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.
The statements made herein are set forth solely for your benefit and are addressed to you solely in your capacity as the underwriters of the Securities.
Neither this letter nor any of such statements may be used or relied upon by, or assigned to, any other person (including any subsequent purchaser or transferee of the Securities), and neither this letter nor any copies hereof may be furnished to
any other person, filed with a governmental agency, quoted, cited or otherwise referred to without our prior written consent.
Very truly yours,
Schedule A
1. Final Term Sheet, dated September 11, 2014
Exhibit 4.1
AK Steel Corporation
as
the Company
AK Steel Holding Corporation
as the Parent Guarantor
AK Tube LLC and AK Steel Properties, Inc.
As Subsidiary Guarantors
and
U.S. Bank,
National Association,
as Trustee
Fifth Supplemental Indenture
Dated as of September 16, 2014
TABLE OF CONTENTS
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PAGE |
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ARTICLE 1 |
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SCOPE OF FIRST SUPPLEMENTAL INDENTURE |
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Section 1.01. Scope |
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2 |
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ARTICLE 2 |
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DEFINITIONS |
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Section 2.01. Definitions and Other Provisions of General Application |
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2 |
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Section 2.02. Other Definitions |
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8 |
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ARTICLE 3 |
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FORM AND TERMS OF THE NOTES |
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Section 3.01. Form and Dating |
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8 |
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Section 3.02. Terms of the Notes |
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8 |
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ARTICLE 4. |
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CHANGE OF CONTROL. |
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Section 4.01. Redemption Upon Change Of Control |
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10 |
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ARTICLE 5 |
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COVENANTS |
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Section 5.01. Limitation On Liens |
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12 |
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Section 5.02. Limitation On Subsidiary Debt |
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14 |
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Section 5.03. Limitation on Sale and Leaseback |
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15 |
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ARTICLE 6 |
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SATISFACTION AND DISCHARAGES |
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Section 6.01. In General |
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16 |
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Section 6.02. Defeasance and Discharge |
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16 |
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ARTICLE 7 |
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AMENDMENTS, SUPPLEMENTS AND WAIVERS |
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Section 7.01. In General |
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18 |
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Section 7.02. Additional Provisions |
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18 |
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i
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ARTICLE 8 |
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GUARANTEES |
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Section 8.01. In General |
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18 |
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Section 8.02. Additional Provisions |
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19 |
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ARTICLE 9 |
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MISCELLANEOUS |
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Section 9.01. Trust Indenture Act of 1939 |
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21 |
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Section 9.02. Governing Law |
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22 |
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Section 9.03. Duplicate Originals |
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22 |
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Section 9.04. Separability |
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22 |
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Section 9.05. Ratification |
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22 |
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Section 9.06. Effectiveness |
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22 |
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Section 9.07. Successors |
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22 |
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Section 9.08. Trustees Disclaimer |
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22 |
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EXHIBIT A Form of 7.625% Senior Note due 2021 |
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A-1 |
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EXHIBIT B Form of Supplemental Indenture |
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B-1 |
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ii
FIFTH SUPPLEMENTAL INDENTURE
FIFTH SUPPLEMENTAL INDENTURE (this Fifth Supplemental Indenture), dated as of September 16, 2014, between AK
Steel Corporation, a Delaware corporation (the Company), AK Steel Holding Corporation, a Delaware corporation, as Parent Guarantor, AK Tube LLC, a Delaware limited liability company (AK Tube), and AK Steel
Properties, Inc., a Delaware Corporation (AK Steel Properties and AK Tube each a Subsidiary Guarantor or Guaranteeing Subsidiary and together the Guaranteeing Subsidiaries
or Subsidiary Guarantors), as guarantors, and U.S. Bank, National Association, a national banking association, as trustee (the Trustee).
RECITALS OF THE COMPANY
WHEREAS, the Company, the Parent Guarantor and the Trustee executed and delivered an Indenture, dated as of May 11, 2010 (the
Base Indenture and as supplemented by this Fifth Supplemental Indenture, the Indenture), to provide for the issuance by the Company from time to time of its senior debentures, notes or other evidences of
indebtedness (the Securities);
WHEREAS, Sections 2.01, 2.03 and 11.01 of the Base Indenture provide that
the Company and the Parent Guarantor, when authorized by a Board Resolution, and the Trustee, at any time and from time to time, may enter into one or more indentures supplemental to the Indenture, without the consent of any Holders, to, among other
things, establish the form or terms of Securities of any series as permitted by the Indenture;
WHEREAS, the issuance and
sale of $430,000,000 aggregate principal amount of a new series of the Securities of the Company designated as its 7.625% Senior Notes due 2021 (the Notes) have been authorized by resolutions adopted by the board of directors of
each of the Company, the Parent Guarantor and the Subsidiary Guarantors;
WHEREAS, the Company desires to issue and sell
$430,000,000 aggregate principal amount of the Notes as of the date hereof;
WHEREAS, the Company desires to establish the
form and terms of the Notes;
WHEREAS, all things necessary to make this Fifth Supplemental Indenture a legal and binding
supplement to the Base Indenture in accordance with its terms and the terms of the Base Indenture have been done;
WHEREAS, the Company and the Parent Guarantor have complied with all conditions precedent
provided for in the Base Indenture relating to this Fifth Supplemental Indenture; and
WHEREAS, the Company has requested
that the Trustee execute and deliver this Fifth Supplemental Indenture.
NOW, THEREFORE:
For and in consideration of the premises stated herein and the purchase of the Notes by the Holders thereof, the Company, the Parent
Guarantor, the Subsidiary Guarantors and the Trustee covenant and agree, for the equal and proportionate benefit of the Holders of the Notes, as follows:
ARTICLE 1
SCOPE
OF FIFTH SUPPLEMENTAL INDENTURE
Section 1.01. Scope. This
Fifth Supplemental Indenture constitutes a supplement to the Base Indenture and an integral part of the Indenture and shall be read together with the Base Indenture as though all the provisions thereof are contained in one instrument. Except as
expressly amended by the Fifth Supplemental Indenture, the terms and provisions of the Base Indenture shall remain in full force and effect. Notwithstanding the foregoing, this Fifth Supplemental Indenture shall only apply to the Notes.
ARTICLE 2
DEFINITIONS
Section 2.01. Definitions and Other Provisions of General Application. For all purposes of this Fifth Supplemental
Indenture unless otherwise specified herein:
(a) all terms used in this Fifth Supplemental Indenture which are not otherwise
defined herein shall have the meanings they are given in the Base Indenture;
(b) the provisions of general application stated in
Section 1.04 of the Base Indenture shall apply to this Fifth Supplemental Indenture, except that the words herein, hereof, hereto and hereunder and other words of
similar import refer to this Fifth Supplemental Indenture as a whole and not to the Base Indenture or any particular Article, Section or other subdivision of the Base Indenture or this Fifth Supplemental Indenture;
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(c) Section 1.01 of the Base Indenture is amended and supplemented, solely with respect to
the Notes, by inserting the following additional defined terms in their appropriate alphabetical positions:
Attributable
Debt, in respect of any Sale and Leaseback Transaction, means, as of the time of determination, the total obligation (discounted to present value at the rate per annum equal to the discount rate which would be applicable to a capital lease
obligation with like term in accordance with GAAP) of the lessee for rental payments (other than amounts required to be paid on account of property taxes, maintenance, repairs, insurance, water rates and other items which do not constitute payments
for property rights) during the remaining portion of the initial term of the lease included in such Sale and Leaseback Transaction.
Board of Directors means the board of directors of the Parent Guarantor.
Change of Control means such time as:
(1) the direct or indirect sale, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series
of related transactions, of all or substantially all of the properties or assets of the Company and its Subsidiaries, taken as a whole, to any person (as that term is used in Section 13(d)(3) of the Exchange Act);
(2) a person or group (within the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act) becomes the ultimate
beneficial owner (as defined in Rule 13d-3 under the Exchange Act) of more than 50% of the total voting power of the Voting Stock of the Parent Guarantor on a fully diluted basis;
(3) the adoption of a plan relating to the liquidation or dissolution of the Company or the Parent Guarantor;
(4) individuals who on the Closing Date constitute the Board of Directors (together with any new directors whose election by the Board of
Directors or whose nomination by the Board of Directors for election by the Parent Guarantors stockholders was approved by a vote of a majority of the members of the Board of Directors then in office who either were members of the Board of
Directors on the Closing Date or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the members of the Board of Directors then in office;
(5) the Company or the Parent Guarantor consolidates with, or merges with or into, any Person, or any Person consolidates with, or merges with
or into the Company or the Parent Guarantor, in any such event pursuant to a transaction in which any of the outstanding Voting Stock of the Company or the Parent Guarantor, as the case may be, or such other Person is converted into or exchanged for
cash, securities or other property, other than any such transaction where (A) the Voting Stock of the Company or the Parent Guarantor outstanding immediately prior to such transaction is converted into or exchanged for Voting Stock of the
surviving or transferee Person constituting a majority of the outstanding shares of such Voting Stock of such surviving or transferee Person
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(immediately after giving effect to such issuance) and (B) immediately after such transaction, no person or group (as such terms are used in Sections 13(d) and 14(d)
of the Exchange Act) becomes, directly or indirectly, the Beneficial Owner of 50% or more of the voting power of the Voting Stock of the surviving or transferee Person; or
(6) the Parent Guarantor fails to own 100% of the Capital Stock of the Company; provided, however, that it shall not be deemed a Change
of Control if the Parent Guarantor merges into the Company, except that in such case, the Company shall be substituted for the Parent Guarantor for purposes of this definition of Change of Control, and this clause (6) shall no
longer be applicable.
Change of Control Repurchase Event means the occurrence of both a Change of Control and a
Ratings Event.
Closing Date means September 16, 2014.
Consolidated Net Tangible Assets means the total assets of the Parent Guarantor and its Subsidiaries after deducting
therefrom all intangible assets, current liabilities (excluding any thereof which are by their terms extendible or renewable at the option of the obligor thereon to a time more than 12 months after the time as of which the amount thereof is being
computed) and minority interests, if any, in any assets of the Subsidiaries, all as would be set forth on the most recently available quarterly or annual consolidated balance sheet of the Parent Guarantor and its Subsidiaries, prepared in conformity
with GAAP.
Foreign Subsidiary means any Subsidiary that is not organized or existing under the laws of the United
States, any state thereof, the District of Columbia, or any territory thereof.
Funded Debt means all Indebtedness
having a maturity of more than 12 months from the date as of which the determination is made or having a maturity of 12 months or less but by its terms being renewable or extendable beyond 12 months from such date at the option of the borrower, but
excluding any such Indebtedness owed to the Parent Guarantor or a Subsidiary of the Parent Guarantor.
Guarantor means
the Parent Guarantor and each Subsidiary Guarantor.
Investment Grade means a rating of Baa3 or better by Moodys
(or its equivalent under any successor Rating Categories of Moodys), a rating of BBB- or better by S&P (or its equivalent under any successor Rating Categories of S&P) and the equivalent Investment Grade credit rating from any
additional Rating Agency or Rating Agencies selected by the Company.
Moodys means Moodys Investors Service
Inc.
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Mortgage means, with respect to any property or assets, any mortgage or deed
of trust, pledge, hypothecation, assignment, security interest, lien, encumbrance, or any other security arrangement of any kind or nature whatsoever on or with respect to such property or assets (including any conditional sale or other title
retention agreement having substantially the same economic effect as any of the foregoing).
Note Guarantee means a
Guarantee of the obligations of the Company under the Notes and the Indenture in respect of the Notes.
Offer to
Purchase means an offer to purchase Notes by the Company from the Holders of the Notes commenced by mailing a notice, which will govern the offer, by first class mail to the Trustee and each Holder of a Note stating:
(1) that all Notes validly tendered will be accepted for payment on a pro rata basis;
(2) the Change of Control Payment and the date of purchase of the Notes, which shall be at least 30 days but not more than 60 days from the
date such notice is mailed, other than as may be required by law (the Change of Control Payment Date);
(3) that any
Note not tendered will continue to accrue interest pursuant to its terms;
(4) that, unless the Company defaults in the payment of the
Change of Control Payment, any Note accepted for payment pursuant to the Offer to Purchase shall cease to accrue interest on and after the Change of Control Payment Date;
(5) that Holders of the Notes electing to have a Note purchased pursuant to the Offer to Purchase will be required to surrender the Note,
together with the form entitled Option of the Holder to Elect Purchase on the reverse side of the Note completed, to the Paying Agent at the address specified in the notice prior to the close of business on the Business Day immediately
preceding the Change of Control Payment Date;
(6) that Holders of the Notes will be entitled to withdraw their election if the Paying
Agent receives, not later than the close of business on the third Business Day immediately preceding the Payment Date, a telegram, facsimile transmission or letter setting forth the name of such Holder, the principal amount of Notes delivered for
purchase and a statement that such Holder is withdrawing his election to have such Notes purchased; and
(7) that Holders of the Notes
whose Notes are being purchased only in part will be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered; provided that each Note purchased and each new Note issued shall be in a principal amount of
$2,000 or integral multiples of $1,000 in excess thereof.
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Principal Property means any domestic blast furnace or steel producing
facility, or casters that are part of a plant that includes such a facility, in each case located in the United States, having a net book value in excess of 1% of Consolidated Net Tangible Assets at the time of determination.
Rating Agency means (1) each of Moodys and S&P and (2) if either of Moodys or S&P ceases to
rate the Notes or fails to make a rating of the Notes publicly available for reasons outside of the control of the Company, a nationally recognized statistical rating organization within the meaning of Section 3(a)(62) under the
Exchange Act, selected by the Company (as certified by a resolution of the board of directors of the Company) as a replacement agency for Moodys or S&P, or both, as the case may be.
Rating Category means (i) with respect to S&P, any of the following categories: BBB, BB, B, CCC, CC, C and D (or
equivalent successor categories); (ii) with respect to Moodys, any of the following categories: Baa, Ba, B, Caa, Ca, C and D (or equivalent successor categories); and (iii) the equivalent of any such category of S&P or
Moodys used by another Rating Agency. In determining whether the rating of the Notes has decreased by one or more gradations, gradations within Rating Categories (+ and - for S&P; 1, 2 and 3 for Moodys; or the equivalent gradations
for another Rating Agency) shall be taken into account (e.g., with respect to S&P, a decline in a rating from BB+ to BB, as well as from BB- to B+, will constitute a decrease of one gradation).
Rating Date means the date that is 60 days prior to the earlier of (i) a Change of Control or (ii) public notice
of the occurrence of a Change of Control or of the intention by the Company or the Parent Guarantor, as applicable, to effect a Change of Control.
Ratings Event means the occurrence of the events described in (a) or (b) of this definition on, or within 60 days
after the earlier of, (i) the occurrence of a Change of Control or (ii) public notice of the occurrence of a Change of Control or the intention by the Company or the Parent Guarantor, as applicable, to effect a Change of Control (which
period shall be extended so long as the rating of the Notes is under publicly announced consideration for a possible downgrade by any of the Rating Agencies): (a) if the Notes are rated by both Rating Agencies on the Rating Date as Investment
Grade, the rating of the Notes shall be reduced so that the Notes are rated below Investment Grade by both Rating Agencies, or (b) if the Notes are rated below Investment Grade by at least one Rating Agency, the ratings of the Notes by both
Rating Agencies shall be decreased by one or more gradations (including gradations within Rating Categories, as well as between Rating Categories) and the Notes are then rated below Investment Grade by both Rating Agencies.
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Notwithstanding the foregoing, a Ratings Event otherwise arising by virtue of a particular
reduction in rating shall not be deemed to have occurred in respect of a particular Change of Control (and thus shall not be deemed a Ratings Event for purposes of the definition of Change of Control Repurchase Event hereunder) if the Rating
Agencies making the reduction in rating to which this definition would otherwise apply do not announce or publicly confirm or inform the Trustee in writing at its request that the reduction was the result, in whole or in part, of any event or
circumstance comprised of or arising as a result of, or in respect of, the applicable Change of Control (whether or not the applicable Change of Control shall have occurred at the time of the Ratings Event).
Receivables Facility means one or more receivables financing facilities, as amended, supplemented, modified, extended,
renewed, restated or refunded from time to time, the obligations of which are non-recourse (except for customary representations, warranties, covenants and indemnities made in connection with such facilities) to the Company or any of its Restricted
Subsidiaries (other than a Receivables Subsidiary) pursuant to which the Company or any of its Restricted Subsidiaries sells their accounts receivable to either (a) a Person that is not a Restricted Subsidiary or (b) a Receivables
Subsidiary that in turn sells its accounts receivable to a Person that is not a Restricted Subsidiary.
Receivables
Subsidiary means any Subsidiary formed for the purpose of, and that solely engages only in one or more Receivables Facilities or other activities reasonably related thereto.
Restricted Subsidiary means any Subsidiary other than an Unrestricted Subsidiary.
S&P means Standard & Poors Ratings Services, a division of McGraw Hill Financial, Inc. or its successor.
Sale and Leaseback Transaction means any arrangement with any Person providing for the leasing to the Company or any
Subsidiary of the Company of any Principal Property, which Principal Property has been or is to be sold or transferred by the Company or any Subsidiary of the Company to such Person.
Subsidiary Guarantor means a Subsidiary that Guarantees the Companys obligations under the Notes and the Indenture in
respect of the Notes, and as of the Closing Date includes AK Tube and AK Steel Properties.
Unrestricted Subsidiary
means (i) any Foreign Subsidiary, (ii) any Receivables Subsidiary and (iii) any Subsidiary of the Parent Guarantor created after the Closing Date, at least 10% of the Voting Stock of which is owned by Persons other than the Parent
Guarantor or a Subsidiary thereof; provided that (a) such Subsidiary does not engage in the business of the Company as conducted on the Closing Date (but shall engage in any extension thereof or activities incidental
7
or related thereto) and (b) in the event (1) any such Subsidiary Guarantees Indebtedness of the Company in an aggregate amount in excess of $50 million or (2) the Company or any of
its Subsidiaries (other than an Unrestricted Subsidiary) contributes or otherwise transfers (other than a sale for fair market value) any Principal Property (including shares of stock of a Subsidiary that owns the Principal Property) or the proceeds
of any sale of Principal Property to such Subsidiary, in either case such Subsidiary shall cease to be an Unrestricted Subsidiary.
Voting Stock means with respect to any Person, Capital Stock of any class or kind ordinarily having the power to vote for
the election of directors, managers or other voting members of the governing body of such Person.
Section 2.02. Other
Definitions. Each of the following terms is defined in the section set forth opposite such term:
|
|
|
Term |
|
Section |
Change of Control Payment |
|
Section 4.01 |
DTC |
|
Section 3.02(r) |
Non-Guarantor Subsidiary Debt |
|
Section 5.02(a) |
ARTICLE 3
FORM AND TERMS OF THE NOTES
Section 3.01. Form and Dating.
(a) The Notes shall be substantially in the form of Exhibit A attached hereto. The Notes shall be executed on behalf of the Company by
one Officer of the Company. The Notes may have a legend or legends or endorsements as may be required to comply with any law or with any rules of any securities exchange or usage. The Notes shall be dated the date of their authentication. The Notes
and any beneficial interest in the Notes shall be in minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof.
(b) The terms contained in the Notes shall constitute, and are hereby expressly made, a part of the Indenture as supplemented by this Fifth
Supplemental Indenture and the Company, the Parent Guarantor, the Subsidiary Guarantors and the Trustee, by their execution and delivery of this Fifth Supplemental Indenture, expressly agree to such terms and provisions and to be bound thereby.
Section 3.02. Terms of the Notes. The following terms relating to the Notes are hereby established:
(a) Title. The Notes shall constitute a series of Securities having the title 7.625% Senior Notes due 2021.
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(b) Principal Amount. The aggregate principal amount of the Notes that may be
authenticated and delivered under the Indenture, as amended hereby, shall be $430,000,000 on the Closing Date. Provided that no Event of Default has occurred and is continuing with respect to the Notes, the Company may, without notice to or the
consent of the Holders, create and issue additional Securities having the same terms as, and ranking equally and ratably with, the Notes in all respects and so that such additional Notes will be consolidated and form a single series with, and have
the same terms as to status, redemption or otherwise as, the Notes initially issued; provided that if the additional Securities are not fungible with the Notes for U.S. federal income tax purposes, the additional Securities will have a separate
CUSIP number.
(c) Maturity Date. The entire outstanding Principal of the Notes shall be payable on October 1, 2021.
(d) Interest Rate. The rate at which the Notes shall bear interest shall be 7.625% per annum; the date from which interest shall
accrue on the Notes shall be September 16, 2014 or the most recent interest payment date to which interest has been paid or duly provided for; the interest payment dates for the Notes shall be April 1 and October 1 of each year,
beginning April 1, 2015; the interest so payable and punctually paid or duly provided for, on any interest payment date, will be paid to the Person in whose names the Notes are registered at the close of business on the record date for such
interest, which shall be the March 15 or September 15 as the case may be, immediately preceding such interest payment date, except that interest payable at maturity will be paid to the same Persons to whom Principal of the Notes is
payable; the interest will be computed on the basis of a 360-day year consisting of twelve 30-day months.
(e) Place of Payment of
Principal and Interest. Section 4.02 of the Base Indenture shall apply to the Notes.
(f) Optional Redemption. The Notes
shall be redeemable as specified in the form of Note attached as Exhibit A hereto, and Article 3 of the Base Indenture shall reply to any such redemption.
(g) Mandatory Redemption, Repurchase or Repayment. Except as provided pursuant Article 4, the Company shall have no other obligation to
redeem, purchase or repay the Notes pursuant to any mandatory redemption, sinking fund or analogous provisions or at the option of a Holder thereof.
(h) Denomination. The Notes shall be denominated as set forth in the Base Indenture.
(i) Acceleration. 100% of the principal amount of the Notes shall be payable upon declaration of acceleration of the maturity thereof.
9
(j) Currency of the Notes. The Notes shall be denominated, and payment of Principal and
interest of the Notes shall be payable in, the currency of the United States of America.
(k) Currency of Payment. The Principal of
and interest on the Notes shall be payable in the currency of the United States of America.
(l) Registered Form. The Notes shall
be issuable as Registered Global Securities. Section 2.07 of the Base Indenture shall apply to the Notes.
(m) Exchange or
Conversion. The Notes shall not be exchangeable for or convertible into the common stock of the Company or any other security.
(n)
Additional Amounts. The Company will not pay any additional amounts on the Notes.
(o) Definitive Form. The Notes may be
issued in definitive form pursuant to the terms of the Base Indenture.
(p) Trustee. The trustee shall be U.S. Bank, National
Association; and the Paying Agent and Authenticating Agent shall initially be the Trustee.
(q) Satisfaction and Discharge. Article
10 of the Base Indenture shall apply to the Notes.
(r) Depositary. The Depositary for any Notes issued as Global Registered
Securities shall be The Depository Trust Company in The City of New York (DTC) or any successor Depositary appointed by the Company within 90 days of the termination of services of DTC (or any successor to DTC).
(s) Events of Default. Article 7 of the Base Indenture shall apply to the Notes.
(t) Covenants. The covenants set forth in Article 4 of the Base Indenture and Article 5 of this Fifth Supplemental Indenture shall
apply to the Notes.
(u) Additional Terms. Other terms applicable to the Notes are as otherwise provided for below.
ARTICLE 4.
CHANGE
OF CONTROL.
Section 4.01. Redemption Upon Change Of Control. (a) Within 30 days following
the date upon which any Change of Control Repurchase Event occurs, or at the Companys option, prior to any Change of Control Repurchase Event if a definitive agreement is in place for the Change of Control at the time of making
10
the Offer to Purchase pursuant to the Change of Control Repurchase Event, the Company shall commence an Offer to Purchase at a purchase price equal to 101% of the aggregate principal amount of
the Notes repurchased, plus accrued and unpaid interest, if any, to the date of repurchase (the Change of Control Payment), subject to the rights of Holders of Notes on the relevant record date to receive interest due on the
relevant interest payment date.
(b) On the Change of Control Payment Date, the Company will, to the extent lawful:
(i) accept for payment on a pro rata basis all Notes or portions of Notes properly tendered pursuant to an Offer to Purchase
not validly withdrawn;
(ii) deposit with the Paying Agent the required payment for all properly tendered Notes or portions
of Notes so accepted; and
(iii) deliver or cause to be delivered to the Trustee the repurchased Notes or portions thereof
so accepted, accompanied by an Officers Certificate stating, among other things, the aggregate principal amount of repurchased Notes.
(c) Following the Change of Control Payment Date:
(i) the Paying Agent shall promptly mail to the Holders of Notes so accepted payment in an amount equal to the purchase price,
and the Trustee shall promptly authenticate and mail to such Holders a new Note equal in principal amount to any unpurchased portion of the Note surrendered; provided that each Note purchased and each new Note issued shall be in a principal
amount of $2,000 or integral multiples of $1,000 in excess thereof; and
(ii) the Company will publicly announce the
results of an Offer to Purchase as soon as practicable after the Change of Control Payment Date.
(d) The Trustee shall act as the Paying
Agent for an Offer to Purchase.
(e) The Company will not be required to make an Offer to Purchase upon the occurrence of a Change of
Control Repurchase Event if a third party makes an offer to purchase the Notes in the manner, at the times and price, and otherwise in compliance with the requirements of the Indenture applicable to an Offer to Purchase made by the Company and the
third party purchases all Notes validly tendered and not withdrawn in such offer to purchase.
(f) Notwithstanding anything to the
contrary herein, the Company may make an Offer to Purchase upon the occurrence of a Change of Control
11
Repurchase Event in advance of a Change of Control Repurchase Event if a definitive agreement is in place for the Change of Control at the time of making the Offer to Purchase, in which case the
notice will state that the Offer to Purchase is conditioned on the Change of Control Repurchase Event being consummated on or prior to the Change of Control Payment Date.
(g) The Company will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations
thereunder, to the extent those laws and regulations are applicable, in connection with the repurchase of Notes as a result of a Change of Control Repurchase Event. To the extent that the provisions of any such securities laws or regulations
conflict with this Section 4.01, the Company will comply with those securities laws and regulations and will not be deemed to have breached the Companys obligations under this Section 4.01 by virtue of any such conflict.
ARTICLE 5
COVENANTS
In
addition to the covenants set forth in the Base Indenture, the Company agrees for the benefit of the Holders of the Notes that:
Section 5.01. Limitation On Liens. (a) So long as any Notes are outstanding, the Parent Guarantor will not, and will not
permit any of its Subsidiaries to, create, incur, issue, assume or Guarantee any Indebtedness secured by a Mortgage upon (a) any Principal Property of the Company or any Principal Property of a Subsidiary of the Company or (b) any shares
of stock or other equity interests or Indebtedness of any Subsidiary of the Company that owns a Principal Property (whether such Principal Property, shares of stock or other equity interests or Indebtedness is now existing or owned or hereafter
created or acquired) or any shares of stock or other equity interests or Indebtedness of the Company, in each case, without effectively providing concurrently that the Notes are secured equally and ratably with or, at the Companys option,
prior to such Indebtedness, so long as such Indebtedness shall be so secured. This restriction does not apply to, and there shall be excluded from Indebtedness in any computation under such restriction, Indebtedness secured by:
(i) Mortgages on any property or assets existing at the time of the acquisition thereof by the Company or any of its
Subsidiaries and not incurred in contemplation of such acquisition;
(ii) Mortgages on property or assets of a Person
existing at the time such Person is merged into or consolidated with the Company or any of its Subsidiaries or at the time of a sale, lease or other disposition of the properties and assets of such Person (or a division thereof) as an entirety or
substantially as an entirety to the Company or any of its Subsidiaries; provided that any such Mortgage does not extend to any Principal
12
Property owned by the Company or any of its Subsidiaries immediately prior to such merger, consolidation, sale, lease or disposition and not incurred in contemplation of such acquisition;
(iii) Mortgages on property or assets of a Person existing at the time such Person becomes a Subsidiary of the Company and not
incurred in contemplation of such acquisition;
(iv) Mortgages in favor of the Company or any Guarantor;
(v) Mortgages on property or assets (including shares of Capital Stock or Indebtedness of any Subsidiary formed to acquire,
construct, develop or improve such property) to secure all or part of the cost of acquisition, construction, development or improvement of such property, or to secure Indebtedness incurred to provide funds for any such purpose; provided that
the commitment of the creditor to extend the credit secured by any such Mortgage shall have been obtained no later than 360 days after the later of (a) the completion of the acquisition, construction, development or improvement of such property
or assets or (b) the placing in operation of such property or assets;
(vi) Mortgages in favor of the United States of
America or any State thereof, or any department, agency or instrumentality or political subdivision thereof, to secure partial, progress, advance or other payments; and
(vii) Mortgages existing on the date of the Indenture or any extension, renewal, replacement or refunding of any Indebtedness
secured by a Mortgage existing on the date of the Indenture or referred to in clauses (i), (ii), (iii) or (v); provided that any such extension, renewal, replacement or refunding of such Indebtedness shall be created within 360 days of
repaying the Indebtedness secured by the Mortgage referred to in clauses (i), (ii), (iii) or (v) and the principal amount of the Indebtedness secured thereby and not otherwise authorized by clauses (i), (ii), (iii) or (v) shall
not exceed the principal amount of Indebtedness plus any premium or fee or accrued and unpaid interest payable in connection with any such extension, renewal, replacement or refunding, so secured at the time of such extension, renewal, replacement
or refunding.
(b) Notwithstanding the restrictions described above, the Parent Guarantor and any of its Subsidiaries may create, incur,
issue, assume or Guarantee Indebtedness secured by Mortgages, without equally and ratably securing the Notes, if at the time of such creation, incurrence, issuance, assumption or Guarantee, after giving effect thereto and to the retirement of any
Indebtedness which is concurrently being retired, the aggregate amount of all such Indebtedness secured by Mortgages which would otherwise be subject to such
13
restrictions (other than any Indebtedness secured by Mortgages permitted as described in clauses (i) through (vii) of Section 5.01(a)) plus the aggregate amount (without
duplication) of (x) all Non-Guarantor Subsidiary Debt (other than Non-Guarantor Subsidiary Debt described in clauses (i) through (v) of Section 5.02(a)) and (y) all Attributable Debt of the Company and any of its
Subsidiaries in respect of Sale and Leaseback Transactions (with the exception of such transactions which are permitted under clauses (i) through (iv) of Section 5.03) does not exceed 15% of Consolidated Net Tangible Assets.
Section 5.02. Limitation On Subsidiary Debt. (a) So long as any Notes are outstanding, the Company will not permit any of its
Restricted Subsidiaries that is not a Subsidiary Guarantor to create, assume, incur, Guarantee or otherwise become liable for or suffer to exist any Indebtedness (any Indebtedness of a non-Guarantor Subsidiary of the Company, Non-Guarantor
Subsidiary Debt), without concurrently Guaranteeing the payment of the Principal of, premium, if any, and interest on the Notes on an unsecured unsubordinated basis. This restriction does not apply to, and there shall be excluded from
Indebtedness in any computation under such restriction, Non-Guarantor Subsidiary Debt constituting:
(i) Indebtedness of a
Person existing at the time such Person is merged into or consolidated with any Restricted Subsidiary of the Company or at the time of a sale, lease or other disposition of the properties and assets of such Person (or a division thereof) as an
entirety or substantially as an entirety to any Restricted Subsidiary of the Company and is assumed by such Restricted Subsidiary; provided that any Indebtedness was not incurred in contemplation thereof and is not Guaranteed by any other
Subsidiary of the Company;
(ii) Indebtedness of a Person existing at the time such Person becomes a Restricted Subsidiary
of the Company; provided that any Indebtedness was not incurred in contemplation thereof;
(iii) Indebtedness owed
to the Company or any Guarantor;
(iv) Indebtedness outstanding on the date of the Indenture or any extension, renewal,
replacement or refunding of any Indebtedness existing on the date of the Indenture or referred to in clauses (i), (ii) or (iii); provided that any such extension, renewal, replacement or refunding of such Indebtedness shall be created
within 360 days of repaying the Indebtedness referred to in this clause or clauses (i), (ii) or (iii) above and the principal amount of the Indebtedness shall not exceed the principal amount of Indebtedness plus any premium or fee payable
in connection with any such extension, renewal, replacement or refunding, so secured at the time of such extension, renewal, replacement or refunding; and
(v) Indebtedness in respect of a Receivables Facility.
14
(b) Notwithstanding the limitations on Non-Guarantor Subsidiary Debt described in
Section 5.02(a), the Company and any of its Restricted Subsidiaries may create, incur, issue, assume or Guarantee Non-Guarantor Subsidiary Debt, without Guaranteeing the Notes, if at the time of such creation, incurrence, issuance, assumption
or Guarantee, after giving effect thereto and to the retirement of any Indebtedness which is concurrently being retired, the aggregate amount of all such Non-Guarantor Subsidiary Debt which would otherwise be subject to such restrictions (other than
Non-Guarantor Subsidiary Debt which is described in clauses (i) through (v) of Section 5.02(a)) plus the aggregate amount (without duplication) of (x) all Indebtedness secured by Mortgages (not including any such Indebtedness
secured by Mortgages described in clauses (i) through (vii) of Section 5.01(a)) and (y) all Attributable Debt of the Company and any of its Subsidiaries in respect of Sale and Leaseback Transactions (with the exception of such
transactions which are permitted under clauses (i) through (iv) of Section 5.03) does not exceed 15% of Consolidated Net Tangible Assets.
(c) Any Subsidiary of the Company required to Guarantee the Notes pursuant to Section 5.02(a) or that chooses to Guarantee the Notes
shall (i) execute and deliver to the Trustee a supplemental indenture substantially in the Form of Exhibit B or otherwise satisfactory to the Trustee pursuant to which such Subsidiary shall unconditionally Guarantee all of the
Companys obligations under the Notes and the Indenture in respect of the Notes on the terms set forth in the Indenture and (ii) deliver to the Trustee an Opinion of Counsel. The execution by each Subsidiary Guarantor of a supplemental
indenture in the form of Exhibit B evidences the Note Guarantee of such Subsidiary Guarantor, whether or not the person signing as an officer of the Subsidiary Guarantor still holds that office at the time of authentication of any Note.
The delivery of any Note by the Trustee after authentication constitutes due delivery of the Note Guarantee set forth in the Indenture on behalf of each Subsidiary Guarantor.
Section 5.03. Limitation on Sale and Leaseback. (a) So long as any Notes are outstanding, the Company will not, and will not
permit any of its Subsidiaries to, enter into any Sale and Leaseback Transaction unless:
(i) the Sale and Leaseback
Transaction is solely with the Company or any of its Subsidiaries;
(ii) the lease is for a period not in excess of 24
months, including renewals;
(iii) the Company or such Subsidiary would (at the time of entering into such arrangement) be
entitled as described in clauses (i) through (vii) of Section 5.01(a), without equally and ratably securing the Notes then outstanding under the Indenture, to create, incur, issue, assume or guarantee Indebtedness secured by a
Mortgage on such property or assets in the amount of the Attributable Debt arising from such Sale and Leaseback Transaction;
15
(iv) the Company or such Subsidiary, within 360 days after the sale of property
or assets in connection with such Sale and Leaseback Transaction is completed, applies an amount equal to the greater of (A) the net proceeds of the sale of such Principal Property or (B) the fair market value of such Principal Property to
(1) the retirement of Notes, other Funded Debt of the Company ranking on a parity with the Notes or Funded Debt of a Subsidiary of the Company or (2) the purchase of property or assets used or useful in its business or to the retirement of
long-term indebtedness; or
(v) the Attributable Debt of the Company and its Subsidiary in respect of such Sale and
Leaseback Transaction and all other Sale and Leaseback Transactions entered into after the Closing Date (other than any such Sale and Leaseback Transaction as would be permitted as described in clauses (i) through (iv) of this
Section 5.03), plus the aggregate principal amount (without duplication) of (x) Indebtedness secured by Mortgages then outstanding (not including any such Indebtedness secured by Mortgages described in clauses (i) through
(vii) of Section 5.01(a)) which do not equally and ratably secure the Notes (or secure Notes on a basis that is prior to other Indebtedness secured thereby) and (y) Non-Guarantor Subsidiary Debt (with the exception of Non-Guarantor
Subsidiary Debt which is described in clauses (i) through (v) of Section 5.02(a)), would not exceed 15% of Consolidated Net Tangible Assets.
ARTICLE 6
SATISFACTION AND DISCHARGE
Section 6.01. In General. Article 10 of the Base Indenture will apply to the Notes.
Section 6.02. Defeasance and Discharge. Section 10.05 of the Base Indenture is amended, supplemented and restated as follows:
(a) The Company shall be deemed to have paid and shall be discharged from any and all obligations in respect of the Securities, after the
deposit referred to in clause (i) hereof has been made, and the provisions of the Indenture shall no longer be in effect with respect to the Securities (and the Trustee, at the reasonable written request and expense of the Company, shall
execute proper instruments acknowledging the same), except as to: (a) rights of Holders of the Securities to receive payments of Principal thereof, premium thereto, and interest thereon, upon the original stated due dates therefor, (b) the
Companys obligations with respect to the issuance of temporary Securities and the registration of transfer with respect to the Securities, the Companys right of
16
optional redemption, substitution of mutilated, defaced, destroyed, lost or stolen Securities and the maintenance an office or agency for payment for security payments held in trust pursuant to
clause (i) hereof, (c) the rights, obligations and immunities of the Trustee hereunder, and (d) the defeasance provisions contained in Article 10 of the Base Indenture; provided that the following conditions shall have
been satisfied:
(i) with reference to Section 10.05 of the Base Indenture, the Company irrevocably has deposited or
caused to be deposited with the Trustee (or another qualifying trustee satisfying the requirements set out in the Indenture) as trust funds in trust, for the purposes of making the following payments, specifically pledged as security for, and
dedicated solely to, the benefits of the Holders of the Securities, (A) money in an amount, (B) U.S. Government Obligations that through the payment of interest and principal in respect thereof in accordance with their terms will provide
not later than one day before the due date of any payment referred to in subclause (x) or (y) of this clause (i), or (C) a combination thereof, in each case sufficient as certified by the chief financial officer of the Company in a
written certification delivered to the Trustee, to pay and discharge, without consideration of reinvestment and after payment of all federal, state and local taxes or other charges and assessments in respect thereof, and which shall be applied by
the Trustee to pay and discharge (x) all of the Principal of, premium, if any, and each installment of interest on the outstanding Securities on the maturity or due dates thereof or if the Company has made irrevocable arrangements satisfactory
to the Trustee for the giving of notice of redemption by the Trustee, the redemption date, as the case may be, and (y) any mandatory sinking fund payments or analogous payments applicable to the Securities on the day on which such payments are
due and payable in accordance with the terms of Securities and the Indenture with respect to the Securities;
(ii) the
Company has delivered to the Trustee (A) either (x) an Opinion of Counsel to the effect that, under then applicable U.S. federal income tax law, Holders of Securities will not recognize gain or loss for U.S. federal income tax purposes as
a result of the Companys exercise of its option under this Section 10.05 and will be subject to U.S. federal income tax on the same amount and in the same manner and at the same times as would have been the case if such deposit,
defeasance and discharge had not occurred or (y) a ruling directed to the Trustee received from the Internal Revenue Service to the same effect as the aforementioned Opinion of Counsel and (B) an Opinion of Counsel to the effect that the
creation of the defeasance trust does not violate the Investment Company Act of 1940, as amended;
(iii) immediately after
giving effect to such deposit on a pro forma basis, no Event of Default, or event that after the giving of notice or
17
lapse of time or both would become an Event of Default, shall have occurred and be continuing and such deposit shall not result in a breach or violation of, or constitute a default under, any
other material agreement or instrument to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries is bound;
(iv) the Company shall have delivered to the Trustee an Officers Certificate and an Opinion of Counsel, each stating that
all conditions precedent to the defeasance and discharge under this Section 10.05 have been complied with; and
(v) if
the Securities are to be redeemed prior to the final maturity thereof (other than from mandatory sinking fund payments or analogous payments), notice of such redemption shall have been duly given pursuant to the Indenture or provision therefor
satisfactory to the Trustee shall have been made.
ARTICLE 7
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 7.01. In General. Article 11 of the Base Indenture will apply to the Notes.
Section 7.02. Additional Provisions. In addition to the provisions listed in Section 11.02 of the Base Indenture, without the
consent of each Holder of the Notes affected thereby, an amendment or waiver may not:
(a) change the optional redemption dates or
optional redemption prices of the Notes from those stated under Optional Redemption on the reverse of each Note; or
(b)
amend, change or modify the obligation of the Company to make and consummate an Offer to Purchase under Article 4 after a Change of Control Repurchase Event has occurred, including, in each case, amending, changing or modifying any definition
relating thereto.
ARTICLE 8
GUARANTEES
Section 8.01. In General. Article 12 of the Base Indenture will apply to the Notes.
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Section 8.02. Additional Provisions. Each Guaranteeing Subsidiary hereby agrees to
become a party to the Indenture as a Subsidiary Guarantor and shall have all of the rights and be subject to all of the obligations and agreements of a Subsidiary Guarantor under the Indenture. Each Guaranteeing Subsidiary agrees to be bound by all
of the provisions of the Indenture applicable to a Subsidiary Guarantor and to perform all of the obligations and agreements as follows:
(a) Subject to the provisions of this Fifth Supplemental Indenture, each Guaranteeing Subsidiary hereby irrevocably and
unconditionally Guarantees on an unsecured unsubordinated basis, the full and punctual payment (whether at stated maturity, upon redemption, purchase pursuant to an offer to purchase or acceleration, or otherwise) of the Principal of, interest on
and all other amounts payable under, the Notes, and the full and punctual payment of all other amounts payable by the Company under the Fifth Supplemental Indenture in respect of the Notes. Upon failure by the Company to pay punctually any such
amount, each Guarantor shall forthwith on demand pay the amount not so paid at the place and in the manner specified in the Indenture.
(b) The obligations of each Guaranteeing Subsidiary hereunder are unconditional and absolute and, without limiting the
generality of the foregoing, will not be released, discharged or otherwise affected by:
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i. |
any extension, renewal, settlement, compromise, waiver or release in respect of any obligation of the Company under the Indenture or the Notes, by operation of law or otherwise; |
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ii. |
any modification or amendment of or supplement to the Indenture or the Notes; |
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iii. |
any change in the corporate existence, structure or ownership of the Company, or any insolvency, bankruptcy, reorganization or other similar proceeding affecting the Company or its assets or any resulting release or
discharge of any obligation of the Company contained in the Indenture or the Notes; |
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iv. |
the existence of any claim, set-off or other rights which such Guaranteeing Subsidiary may have at any time against the Company, the Trustee or any other Person, whether in
connection with the Indenture or any unrelated transactions, provided that nothing herein prevents the assertion of any such claim by separate suit or compulsory counterclaim; |
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v. |
any invalidity or unenforceability relating to or against the Company for any reason of the Indenture or the Notes, or any provision of applicable law or regulation purporting to prohibit the payment by the Company of
the Principal of or interest on the Notes or any other amount payable by the Company under the Indenture; or |
19
|
vi. |
any other act or omission to act or delay of any kind by the Company, the Trustee or any other Person or any other circumstance whatsoever which might, but for the provisions of this paragraph, constitute a legal or
equitable discharge of or defense to such Guaranteeing Subsidiarys obligations hereunder. |
(c) Except
as otherwise provided in the Indenture, each Guaranteeing Subsidiarys obligations hereunder will remain in full force and effect until the Principal of and interest on the Notes and all other amounts payable by the Company under the Indenture
have been paid in full. If at any time any payment of the Principal of or interest on the Notes or any other amount payable by the Company under the Indenture is rescinded or must be otherwise restored or returned upon the insolvency, bankruptcy or
reorganization of the Company or otherwise, each Guaranteeing Subsidiarys obligations hereunder with respect to such payment will be reinstated as though such payment had been due but not made at such time.
(d) Each Guaranteeing Subsidiary irrevocably waives acceptance hereof, presentment, demand, protest and any notice not provided
for herein, as well as any requirement that at any time any action be taken by any Person against the Company or any other Person.
(e) Upon making any payment with respect to any obligation of the Company under this Article, each Guaranteeing Subsidiary
making such payment will be subrogated to the rights of the payee against the Company with respect to such obligation, provided that such Guaranteeing Subsidiary may not enforce either any right of subrogation, or any right to receive payment
in the nature of contribution, or otherwise, from any other Guarantor, with respect to such payment so long as any amount payable by the Company hereunder or under the Notes remains unpaid.
(f) If acceleration of the time for payment of any amount payable by the Company under the Indenture in respect of the Notes or
the Notes is stayed upon the insolvency, bankruptcy or reorganization of the Company, all such amounts otherwise subject to acceleration under the terms of the Indenture in respect of the Notes are nonetheless payable by the Guaranteeing
Subsidiaries hereunder forthwith on demand by the Trustee or the Holders of the Notes.
(g) Notwithstanding anything to the
contrary in this Fifth Supplemental Indenture, each Guaranteeing Subsidiary, and by its acceptance of Notes, each Holder, confirms that it is the intention of all such parties that the Note Guarantee of such Guaranteeing Subsidiary not constitute a
fraudulent conveyance under applicable fraudulent
20
conveyance provisions of the United States Bankruptcy Code or any comparable provision of state law. To effectuate that intention, the Trustee, the Holders of the Notes and each Guaranteeing
Subsidiary irrevocably agree that the obligations of each Guaranteeing Subsidiary under its Note Guarantee are limited to the maximum amount that would not render such Guaranteeing Subsidiarys obligations subject to avoidance under applicable
fraudulent conveyance provisions of the United States Bankruptcy Code or any comparable provision of state law.
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(h) |
The Note Guarantee of a Subsidiary Guarantor will terminate upon: |
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(i) |
the release or discharge (other than a discharge through payment thereon) of the Indebtedness of such Subsidiary that resulted in the obligation to Guarantee the Notes pursuant to Section 5.02 Section 5.02(a) (or,
in respect of the Subsidiary Guarantors on the Closing Date, release of their guarantees of all of our other Indebtedness); |
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(ii) |
a sale or other disposition (including by way of consolidation or merger) of the Capital Stock of the Subsidiary such that the Subsidiary is no longer a Subsidiary of the Parent Guarantor; |
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(iii) |
defeasance or discharge of the Notes, as provided under Article 10 of the Base Indenture; or |
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(iv) |
if such Subsidiary Guarantor was not required to Guarantee the Notes pursuant to Section 5.02 Section 5.02(a) but did so at its option, then if it requests such release at any time; provided that after
giving effect to such release the Company would be in compliance with the covenant set forth in this Section 5.02. |
Upon
delivery by the Company to the Trustee of an Officers Certificate and an Opinion of Counsel, the Trustee will execute any documents reasonably required in order to evidence the release of the Subsidiary Guarantor from its obligations under its
Note Guarantee.
ARTICLE 9
MISCELLANEOUS
Section 9.01. Trust Indenture Act of 1939. This Fifth Supplemental Indenture shall incorporate and be governed by the provisions
of the Trust Indenture Act that are required to be part of and to govern indentures qualified under the Trust Indenture Act.
21
Section 9.02. Governing Law. The laws of the State of New York shall govern this
Fifth Supplemental Indenture and the Notes.
Section 9.03. Duplicate Originals. The parties may sign any number of copies of
this Fifth Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement.
Section 9.04. Separability. In case any provision in this Fifth Supplemental Indenture or the Notes shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
Section 9.05. Ratification. The Base Indenture, as supplemented and amended by this Fifth Supplemental Indenture, is in all
respects ratified and confirmed. The Base Indenture and this Fifth Supplemental Indenture shall be read, taken and construed as one and the same instrument. All provisions included in this Fifth Supplemental Indenture supersede any conflicting
provisions included in the Base Indenture unless not permitted by law. The Trustee accepts the trusts created by the Base Indenture, as supplemented by this Fifth Supplemental Indenture, and agrees to perform the same upon the terms and conditions
of the Base Indenture, as supplemented by this Fifth Supplemental Indenture.
Section 9.06. Effectiveness. The provisions of
this Fifth Supplemental Indenture shall become effective as of the date hereof.
Section 9.07. Successors. All agreements of
the Company and the Parent Guarantor in this Fifth Supplemental Indenture shall bind their successors. All agreements of the Trustee in this Fifth Supplemental Indenture shall bind its successors.
Section 9.08. Trustees Disclaimer. The recitals contained herein shall be taken as the statements of the Company and the
Parent Guarantor and the Trustee assumes no responsibility for their correctness. The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Fifth Supplemental Indenture, the Notes, any
Guarantee or for or in respect of the recitals contained herein, all of which recitals are made solely by the Company and the Parent Guarantor.
[Remainder of page intentionally left blank.]
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IN WITNESS WHEREOF, the parties hereto have caused this Fifth Supplemental Indenture to be duly
executed as of the date first above written.
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AK STEEL CORPORATION as the
Company |
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By: |
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/s/ Roger K. Newport |
Name: |
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Roger K. Newport |
Title: |
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Vice President, Finance and Chief Financial Officer |
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AK STEEL HOLDING CORPORATION as
Parent Guarantor |
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By: |
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/s/ Roger K. Newport |
Name: |
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Roger K. Newport |
Title: |
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Vice President, Finance and Chief Financial Officer |
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AK STEEL PROPERTIES, INC. as
Guarantor |
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By: |
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/s/ David C. Horn |
Name: |
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David C. Horn |
Title: |
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President |
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AK TUBE LLC as
Guarantor |
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By: |
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/s/ Edward J. Urbaniak |
Name: |
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Edward J. Urbaniak |
Title: |
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President |
[Signature Page to Fifth Supplemental Indenture]
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U.S. BANK, NATIONAL ASSOCIATION,
as Trustee |
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By: |
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/s/ William E. Sicking |
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Name: |
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William E. Sicking |
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Title: |
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Vice President & Trust Officer |
[Signature Page to Fifth Supplemental Indenture]
EXHIBIT A
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, TO THE COMPANY OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IN EXCHANGE FOR THIS CERTIFICATE OR ANY PORTION HEREOF IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY OR SUCH OTHER REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO.),
ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON OTHER THAN THE DEPOSITORY TRUST COMPANY OR CEDE & CO. IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
[THIS NOTE IS A GLOBAL SECURITY AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A NOMINEE THEREOF. TRANSFERS OF THIS GLOBAL NOTE SHALL
BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF THE DEPOSITORY TRUST COMPANY OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSORS NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE
WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.]
7.625% Senior Note due 2021
AK STEEL CORPORATION
CUSIP: 001546 AS9
ISIN:
US001546AS98
AK STEEL CORPORATION, a corporation duly organized and existing under the laws of the State of Delaware
(herein called the Company, which term includes any successor corporation under the Indenture hereinafter referred to on the reverse hereof), for value received, promises to pay to CEDE & CO., or its registered assigns,
the Principal sum of FOUR HUNDRED AND THIRTY MILLION DOLLARS ($430,000,000) or such other amount as indicated on the Schedule of Increases and Decreases attached hereto on October 1, 2021.
A-1
Interest Rate: 7.625% per year
Interest Payment Dates: April 1 and October 1 of each year, commencing April 1, 2015
Record Dates: March 15 and September 15
Reference is hereby made to the further provisions of this Note set forth on the reverse hereof, which will for all purposes have the same
effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the Trustee referred to on the
reverse hereof, directly or through an Authenticating Agent, by the manual or facsimile signature of an authorized Officer, this Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.
A-2
IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed.
Dated: September 16, 2014
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AK STEEL CORPORATION |
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By: |
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Name: |
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Title: |
TRUSTEES CERTIFICATE OF AUTHENTICATION
This is one of the Notes of the series designated therein referred to in the within-mentioned Indenture.
Dated: September 16, 2014
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U.S. BANK, NATIONAL
ASSOCIATION
as the Trustee |
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By: |
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Name: |
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Title: |
[REVERSE OF NOTE]
7.625% SENIOR NOTE DUE 2021
Indenture. This Note is one of the 7.625% Senior Notes due 2021 (the Notes) of the Company issued under an
Indenture, dated as of May 11, 2010 (the Base Indenture), between the Company, AK Holding Corporation (the Parent Guarantor) and U.S. Bank, National Association, as Trustee (herein called the
Trustee, which term includes any successor trustee under the Indenture), as supplemented by the Fifth Supplemental Indenture dated September 5, 2014 (the Fifth Supplemental Indenture and, together with the
Base Indenture, the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company,
the Parent Guarantor, AK Tube LLC (AK Tube) and AK Steel Properties, Inc. (AK Steel Properties and AK Tube each a Subsidiary Guarantor and together the Subsidiary
Guarantors), as guarantors, the Trustee and the Holders of the Notes and of the terms upon which the Notes are, and are to be, authenticated and delivered. To the extent that the terms of the Indenture and this Note are inconsistent, the
terms of the Indenture shall govern. The aggregate principal amount of the Notes that may be authenticated and delivered under the Indenture, as amended hereby, shall be $430,000,000 on the Closing Date. The Company may, without notice to or the
consent of the Holders, create and issue additional Securities having the same terms as, and ranking equally and ratably with, the Notes in all respects and so that such additional Notes will be consolidated and form a single series with, and have
the same terms as to status, redemption or otherwise as, the Notes initially issued; provided that if the additional Securities are not fungible with the Notes for U.S. federal income tax purposes, the additional Securities will have a separate
CUSIP number.
Interest. The Company promises to pay interest on the principal amount of the Notes at the rate per year described
above. Interest on the Notes will accrue from September 16, 2014. Interest on the Notes will be payable semi-annually on April 1 and October 1 of each year, beginning April 1, 2015. The interest so payable and punctually paid or
duly provided for, on any interest payment date, will be paid to the Person in whose names the Notes are registered at the close of business on the record date for such interest, which shall be the March 15 or September 15, as the case may
be, preceding such interest payment date, except that interest payable at maturity will be paid to the same Persons to whom Principal of the Notes is payable. Interest will be computed on the basis of a 360-day year consisting of twelve 30-day
months. The interest period relating to an interest payment date (including the maturity date) shall be the period from, and including, the most recent preceding interest payment date (or, in the case of the first interest period, September 16,
2014) to, but excluding, the relevant interest payment date.
All payments on the Notes, including Principal of, premium, if any, and interest on, will be
payable at the Corporate Trust Office of the Trustee, as Paying Agent under the Indenture as set forth in the Indenture.
If any interest
payment date, maturity date or redemption date of a Note falls on a day that is not a Business Day, the required payment of Principal and interest may be made on the next succeeding Business Day as if made on the date that the payment was due and no
interest will accrue on that payment for the period from and after that interest payment date, maturity date or redemption date, as the case may be, to the date of that payment on the next succeeding Business Day.
Sinking Fund. The Notes will not be subject to any sinking fund.
Optional Redemption. (a) At any time prior to October 1, 2017, the Company may redeem the Notes at its option, in whole at
any time or in part, at a redemption price equal to 100% of the principal amount of the Notes to be redeemed plus the Applicable Premium, plus accrued and unpaid interest to the redemption date.
For the purposes of the preceding paragraph, the following terms shall have the following definitions:
Applicable Premium means, with respect to any Note on any redemption date, the greater of
(1) 1.0% of the principal amount of such Note, and
(2) the excess, if any of
(a) the present value at such redemption date of (i) the redemption price of such Note at October 1, 2017 (as set
forth in the table below), plus (ii) all required interest payments due on such Note through October 1, 2017 (excluding accrued and unpaid interest to the redemption date), computed using a discount rate equal to the Treasury Rate as of
such redemption date plus 50 basis points; over
(b) the then outstanding principal amount of such Note.
Treasury Rate means, as of any redemption date, the yield to maturity as of such redemption date of United States Treasury
securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15(519) that has become publicly available at least two business days prior to the redemption date (or, if such Statistical
Release is no longer published, any publicly available source of similar market data)) most nearly equal to the period from the redemption date to October 1, 2017; provided, however, that if the period from the redemption date to
October 1, 2017, is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year will be used.
(b) At any time on or after October 1, 2017, the Company may redeem the Notes, in whole or
in part, at the redemption price for the Notes (expressed as a percentage of principal amount) set forth below, plus accrued and unpaid interest to the redemption date, if redeemed during the twelve-month period commencing on October 1 of the
years indicated below:
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Year |
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Redemption Price |
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2017 |
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103.813 |
% |
2018 |
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101.906 |
% |
2019 and thereafter |
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100.000 |
% |
(c) At any time prior to October 1, 2017, the Company may redeem up to 35% of the principal amount of the
Notes (including any additional Notes) with the net cash proceeds of one or more sales of the Parent Guarantors common stock occurring after the Closing Date (to the extent proceeds are contributed to the Company as equity) at a redemption
price (expressed as a percentage of principal amount) of 107.625%, plus accrued and unpaid interest to the redemption date; provided that at least 65% of the aggregate principal amount of Notes originally issued on the Closing Date remains
outstanding after each such redemption and notice of any such redemption is mailed within 60 days of each such sale of common stock.
(d)
No Note of $2,000 principal amount or less shall be redeemed in part. If any Note is to be redeemed in part only, the notice of redemption relating to such Note will state the portion of the principal amount to be redeemed. A new Note in principal
amount equal to the unredeemed portion will be issued upon cancellation of the original Note.
Events of Default. If an Event of
Default with respect to Notes of this series shall occur and be continuing, the Principal of the Notes of this series may be declared due and payable in the manner and with the effect provided in the Indenture.
The Guarantees. The Notes are fully and unconditionally guaranteed by the Parent Guarantor and each Subsidiary Guarantor, if any.
Amendment; Waiver. The Indenture provides that the Company, the Parent Guarantor and the Trustee may take certain actions to amend the
Indenture or the Notes without notice to or the consent of any Holder of Notes. In addition, the Indenture permits, with certain exceptions as therein provided, the Company, the Parent Guarantor and the Trustee to otherwise amend the Indenture or
the Notes with the consent of the Holders of a majority in principal amount of the Notes affected by such amendment. However, certain actions of the Company require the consent of each Holder of outstanding Notes affected thereby.
The Company may elect in any particular instance not to comply with certain covenants set forth
in the Indenture or the Notes if, before the time for such compliance, the Holders of a majority in principal amount of the Notes either waive compliance in that instance or generally waive compliance with those provisions, but the waiver may not
extend to or affect any term, provision or condition except to the extent expressly so waived, and, until the waiver becomes effective, the Companys obligations and the duties of the Trustee in respect of any such provision will remain in full
force and effect.
Payments. No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or
impair the obligation of the Company, which is absolute and unconditional, to pay the Principal of (and premium, if any) and interest on this Note at the times, place and rate, and in the coin or currency, herein prescribed.
Registered Form. The Notes will be issued in fully registered form only in minimum denominations of $2,000 and integral multiples of
$1,000 in excess thereof.
Choice of Law. This Note shall be governed by, and construed in accordance with, the laws of the State
of New York.
Defined Terms. All terms used in this Note which are defined in the Indenture shall have the meanings assigned to
them in the Indenture.
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations.
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship and not as tenants in common
UNIF GIFT MIN ACT -
Custodian
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(Cust) (Minor)
Under Uniform Gifts to Minors Act |
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Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto
PLEASE
INSERT SOCIAL SECURITY NUMBER OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
(Please print or type name and address, including postal zip code, of assignee)
the within Note and all rights thereunder, hereby irrevocably constitutes and appoints
to transfer said Note on the books of the Company,
with full power of substitution in the premises.
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Dated: |
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NOTICE: The signature to this assignment must correspond with the name as written upon the face of the within instrument in every particular, without alteration or enlargement or any change whatsoever. |
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Note purchased by the Company pursuant to Article 4 of the Fifth Supplemental Indenture, check the Box: ¨
If you wish to have a portion of this Note purchased by the Company pursuant to Article 4 of
the Fifth Supplemental Indenture, state the principal amount: $ .
Date:
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Your Signature: |
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(Sign exactly as your name appears on the other side of this Note) |
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Signature Guarantee: |
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Signature must be guaranteed by a participant in a recognized signature guaranty medallion program or other
signature guarantor acceptable to the Trustee.
Schedule I
[Include Schedule I only for a Global Note]
SCHEDULE OF INCREASES OR DECREASES
The initial principal amount of this Global Note is $430,000,000. The following increases or decreases in the Principal amount of this Global Note have
been made:
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Principal Amount of this Global Note following such increase or decrease |
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EXHIBIT B
FORM OF SUPPLEMENTAL INDENTURE
TO BE DELIVERED BY SUBSIDIARY GUARANTORS
SUPPLEMENTAL INDENTURE (this Supplemental Indenture), dated as of
, among
(the Guaranteeing Subsidiary), a subsidiary of (or its permitted successor), AK Steel Corporation (the
Company), a corporation organized under the laws of Delaware, AK Steel Holding Corporation, a Delaware corporation (the Parent Guarantor) and U.S. Bank, National Association, as trustee under the Indenture
referred to below (the Trustee).
W I T N E S S E T H
WHEREAS, the Company, the Parent Guarantor and the Trustee executed and delivered an Indenture, dated as of May 11, 2010 (the
Base Indenture and as supplemented by the Fifth Supplemental Indenture dated September 16, 2014 among the Company, the Parent Guarantor, AK Tube LLC (AK Tube) and AK Steel Properties, Inc. (AK
Steel Properties and AK Tube each a Subsidiary Guarantor and together the Subsidiary Guarantors), as guarantors, and U. and the Trustee, the Indenture), to provide for the issuance
by the Company of $430,000,000 aggregate Principal amount of the Securities of the Company designated as its 7.625% Senior Notes due 2021;
WHEREAS, the Indenture provides that under certain circumstances a Subsidiary shall execute and deliver to the Trustee a supplemental
indenture pursuant to which the Subsidiary shall unconditionally Guarantee all of the Companys obligations under the Notes and the Indenture on the terms and conditions set forth herein; and
WHEREAS, pursuant to Section 11.01 of the Base Indenture, the Trustee is authorized to execute and deliver this Supplemental
Indenture.
NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is
hereby acknowledged, the Guaranteeing Subsidiary, the Company, the Parent Guarantor and the Trustee mutually covenant and agree for the equal and ratable benefit of Holders as follows:
1. Capitalized Terms. Capitalized terms used herein without definition shall have the meanings assigned to them in the Indenture.
2. Guarantee. The Guaranteeing Subsidiary hereby agrees to become a party to the Indenture as a Subsidiary Guarantor and shall have all
of the rights
B-1
and be subject to all of the obligations and agreements of a Subsidiary Guarantor under the Indenture. The Guaranteeing Subsidiary agrees to be bound by all of the provisions of the Indenture
applicable to a Subsidiary Guarantor and to perform all of the obligations and agreements as follows:
(a) Subject to the
provisions of this Supplemental Indenture, the Guaranteeing Subsidiary hereby irrevocably and unconditionally Guarantees on an unsecured unsubordinated basis, the full and punctual payment (whether at stated maturity, upon redemption, purchase
pursuant to an offer to purchase or acceleration, or otherwise) of the Principal of, interest on and all other amounts payable under, each Note, and the full and punctual payment of all other amounts payable by the Company under the Indenture in
respect of the Notes. Upon failure by the Company to pay punctually any such amount, each Guarantor shall forthwith on demand pay the amount not so paid at the place and in the manner specified in the Indenture.
(b) The obligations of each Guaranteeing Subsidiary hereunder are unconditional and absolute and, without limiting the
generality of the foregoing, will not be released, discharged or otherwise affected by:
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any extension, renewal, settlement, compromise, waiver or release in respect of any obligation of the Company under the Indenture or any Note, by operation of law or otherwise; |
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any modification or amendment of or supplement to the Indenture or any Note; |
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any change in the corporate existence, structure or ownership of the Company, or any insolvency, bankruptcy, reorganization or other similar proceeding affecting the Company or its assets or any resulting release or
discharge of any obligation of the Company contained in the Indenture or any Note; |
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the existence of any claim, set-off or other rights which the Guaranteeing Subsidiary may have at any time against the Company, the Trustee or any other Person, whether in
connection with the Indenture or any unrelated transactions, provided that nothing herein prevents the assertion of any such claim by separate suit or compulsory counterclaim; |
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any invalidity or unenforceability relating to or against the Company for any reason of the Indenture or any Note, or any provision of applicable law or regulation purporting to prohibit the payment by the Company of
the Principal of or interest on any Note or any other amount payable by the Company under the Indenture; or |
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any other act or omission to act or delay of any kind by the Company, the Trustee or any other Person or any other circumstance whatsoever which might, but for the provisions of this paragraph, constitute a legal or
equitable discharge of or defense to such Guaranteeing Subsidiarys obligations hereunder. |
(c) Except
as otherwise provided in the Indenture, each Guaranteeing Subsidiarys obligations hereunder will remain in full force and effect until the Principal of and interest on the Notes and all other amounts payable by the Company under the Indenture
have been paid in full. If at any time any payment of the Principal of or interest on any Note or any other amount payable by the Company under the Indenture is rescinded or must be otherwise restored or returned upon the insolvency, bankruptcy or
reorganization of the Company or otherwise, each Guaranteeing Subsidiarys obligations hereunder with respect to such payment will be reinstated as though such payment had been due but not made at such time.
(d) Each Guaranteeing Subsidiary irrevocably waives acceptance hereof, presentment, demand, protest and any notice not provided
for herein, as well as any requirement that at any time any action be taken by any Person against the Company or any other Person.
(e) Upon making any payment with respect to any obligation of the Company under this Article, the Guaranteeing Subsidiary
making such payment will be subrogated to the rights of the payee against the Company with respect to such obligation, provided that the Guaranteeing Subsidiary may not enforce either any right of subrogation, or any right to receive payment
in the nature of contribution, or otherwise, from any other Guarantor, with respect to such payment so long as any amount payable by the Company hereunder or under the Notes remains unpaid.
(f) If acceleration of the time for payment of any amount payable by the Company under the Indenture or the Notes is stayed
upon the insolvency, bankruptcy or reorganization of the Company, all such amounts otherwise subject to acceleration under the terms of the Indenture are nonetheless payable by the Guaranteeing Subsidiary hereunder forthwith on demand by the Trustee
or the Holders.
(g) Notwithstanding anything to the contrary in this Supplemental Indenture, each Guaranteeing Subsidiary,
and by its acceptance of Notes, each Holder, confirms that it is the intention of all such parties that the Note Guarantee of such Guaranteeing Subsidiary not
B-3
constitute a fraudulent conveyance under applicable fraudulent conveyance provisions of the United States Bankruptcy Code or any comparable provision of state law. To effectuate that intention,
the Trustee, the Holders and each Guaranteeing Subsidiary irrevocably agree that the obligations of each Guaranteeing Subsidiary under its Note Guarantee are limited to the maximum amount that would not render the Guaranteeing Subsidiarys
obligations subject to avoidance under applicable fraudulent conveyance provisions of the United States Bankruptcy Code or any comparable provision of state law.
3. Notation not Required. Neither the Company nor the Guaranteeing Subsidiary shall be required to make a notation on the Securities to
reflect the Note Guarantee or any release, termination or discharge thereof.
4. Governing Law. The laws of the State of New York
shall govern this Supplemental Indenture.
4. Counterparts. The parties may sign any number of copies of this Supplemental
Indenture. Each signed copy shall be an original, but all of them together represent the same agreement.
5. Effect of Headings.
The Section headings herein are for convenience only and shall not affect the construction hereof.
6. The Trustee. The Trustee
shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Supplemental Indenture or for or in respect of the recitals contained herein, all of which recitals are made solely by the Guaranteeing
Subsidiary, the Company and the Parent Guarantor.
7. Successors. All agreements of the Guaranteeing Subsidiary in the Indenture,
this Supplemental Indenture and the Note Guarantee shall bind its successors. All agreements of the Trustee in this Supplemental Indenture shall bind its successors.
8. No Waiver. Neither a failure nor a delay on the part of either the Trustee or the Holders in exercising any right, power or
privilege under this Supplemental Indenture shall operate as a waiver thereof, nor shall a single or partial exercise thereof preclude any other or further exercise of any right, power or privilege. The rights, remedies and benefits of the Trustee
and the Holders herein expressly specified are cumulative and are not exclusive of any other rights, remedies or benefits which either may have under this Supplemental Indenture at law, in equity, by statute or otherwise.
9. Modification. No modification, amendment or waiver of any provision of this Supplemental Indenture, nor the consent to any departure
by the Guaranteeing Subsidiary therefrom, shall in any event be effective unless the
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same shall be in writing and signed by the Trustee, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. No notice to or demand on
the Guaranteeing Subsidiary in any case shall entitle the Guaranteeing Subsidiary to any other or further notice or demand in the same, similar or other circumstance.
B-5
IN WITNESS WHEREOF, the parties have caused this Supplemental Indenture to be duly executed as of
the date first written above.
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[Name of Guaranteeing Subsidiary],
as the Guaranteeing Subsidiary |
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By: |
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U.S. BANK, NATIONAL ASSOCIATION as
the Trustee |
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AK STEEL CORPORATION as the
Company |
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AK STEEL HOLDING CORPORATION as the
Parent Guarantor |
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B-6
Exhibit 5.1
767 Fifth Avenue
New York, NY
10153-0119
+1 212 310 8000 tel
+1 212 310 8007 fax
September 16, 2014
AK Steel Holding Corporation
AK Steel Corporation
9227 Centre Pointe Drive
West Chester, OH 45069
Dear Ladies and Gentlemen:
We have acted as counsel to AK Steel
Holding Corporation, a Delaware corporation (the Company), in connection with the offer and sale by the Company of 40,250,000 shares of common stock, par value $0.01 per share (the Shares),
pursuant to the Underwriting Agreement, dated as of September 10, 2014 (the Agreement), among the Company and J.P. Morgan Securities LLC, Credit Suisse Securities (USA) LLC and Merrill Lynch, Pierce, Fenner &
Smith Incorporated, as representatives of the several underwriters named therein.
In so acting, we have examined originals or copies
(certified or otherwise identified to our satisfaction) of (i) the Restated Certificate of Incorporation of the Company and the Certificate of Amendment of Restated Certificate of Incorporation of the Company; (ii) the Amended and Restated
Bylaws of the Company; (iii) the Registration Statement on Form S-3 (Registration No. 333-194078), filed by the Company and AK Steel Corporation on February 21, 2014 (as amended by Post-Effective Amendment No. 1 filed on
September 8, 2014, the Registration Statement); (iv) the prospectus, dated September 8, 2014 (the Base Prospectus), which forms a part of the Registration Statement; (v) the
prospectus supplement, dated September 10, 2014 (the Prospectus Supplement); (vi) the form of certificate of common stock of the Company; and (vii) such corporate records, agreements, documents and other
instruments, and such certificates or comparable documents of public officials and of officers and representatives of the Company, and have made such inquiries of such officers and representatives, as we have deemed relevant and necessary as a basis
for the opinion hereinafter set forth. We refer to the Base Prospectus as supplemented by the Prospectus Supplement as the Prospectus.
In such examination, we have assumed the genuineness of all signatures, the legal capacity of all natural persons, the authenticity of all documents submitted
to us as originals, the conformity to original documents of all documents submitted to us as certified, conformed or photostatic copies and the authenticity of the originals of such latter documents. As to all questions of fact material to this
opinion that have not been independently established, we have relied upon certificates or comparable documents of officers and representatives of the Company.
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AK Steel Holding Corporation
September 16, 2014
Page 2 |
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Based on and subject to the foregoing we are of the opinion that the Shares have been duly authorized and are
validly issued, fully paid and nonassessable.
The opinions expressed herein are limited to the laws of the State of New York and the corporate laws of
the State of Delaware, and we express no opinion as to the effect on the matters covered by this letter of the laws of any other jurisdiction.
We hereby
consent to the use of this letter as an exhibit to the Registration Statement and to any and all references to our firm in the Prospectus which is a part of the Registration Statement. In giving such consent we do not hereby admit that we are in the
category of persons whose consent is required under Section 7 of the Securities Act or the rules and regulations of the Securities and Exchange Commission.
Very truly yours,
/s/ Weil, Gotshal & Manges LLP
Exhibit 5.2
767 Fifth Avenue
New York, NY
10153-0119
+1 212 310 8000 tel
+1 212 310 8007 fax
September 16, 2014
AK Steel Holding Corporation
AK Steel Corporation
9227 Centre Pointe Drive
West Chester, OH 45069
Dear Ladies and Gentlemen:
We have acted as counsel to AK Steel
Corporation, a Delaware corporation (AK Steel), AK Steel Holding Corporation, a Delaware corporation (Parent), AK Tube LLC, a Delaware limited liability company (AK Tube)
and AK Steel Properties, Inc., a Delaware corporation (AK Steel Properties and together with AK Steel, Parent and AK Tube, the Companies), in connection with the offer and sale by AK Steel of
$430,000,000 aggregate principal amount of 7.625% Senior Notes due 2021 (the Notes), pursuant to the Underwriting Agreement, dated as of September 11, 2014 (the Agreement), among the
Companies, J.P. Morgan Securities LLC, Credit Suisse Securities (USA) LLC and Citigroup Global Markets Inc., as representatives of the several underwriters named therein. AK Steels obligations under the Notes are fully and unconditionally
guaranteed (the Guarantees) by Parent, AK Tube and AK Steel Properties (the Guarantors). The Notes will be issued pursuant to a base indenture dated as of May 11, 2010 (the Base
Indenture), as supplemented by the Fifth Supplemental Indenture dated as of September 16, 2014 (the Supplemental Indenture and together with the Base Indenture, the Indenture),
each among the Companies and U.S. Bank National Association, as trustee (the Trustee).
In so acting, we have examined originals
or copies (certified or otherwise identified to our satisfaction) of (i) the Registration Statement on Form S-3 (Registration No. 333-194078), filed by the Companies on February 21, 2014 (as amended by Post-Effective Amendment
No. 1 filed on September 8, 2014, the Registration Statement); (ii) the prospectus, dated September 8, 2014 (the Base Prospectus), which forms a part of the Registration
Statement; (iii) the prospectus supplement, dated September 11, 2014 (the Prospectus Supplement); (iv) the Indenture (including the Guarantees contained therein); (v) an executed copy of the global note
representing the Notes; (vi) the Restated Certificate of Incorporation of Parent and the Certificate of Amendment of Restated Certificate of Incorporation of the Company; (vii) the Amended and Restated Bylaws of Parent; and
(viii) such records, agreements, documents and other instruments, and such certificates or comparable documents of public officials and of officers and representatives of each of the Companies, and have made such inquiries of such officers and
representatives, as we have deemed relevant and necessary as a basis for the opinion hereinafter set forth. We refer to the Base Prospectus as supplemented by the Prospectus Supplement as the Prospectus.
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AK Steel Holding Corporation
September 16, 2014
Page 2 |
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In such examination, we have assumed the genuineness of all signatures, the legal capacity of all natural
persons, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as certified, conformed or photostatic copies and the authenticity of the originals of such latter
documents. As to all questions of fact material to this opinion that have not been independently established, we have relied upon certificates or comparable documents of officers and representatives of each of the Companies.
Based on and subject to the foregoing we are of the opinion that:
1. The Notes, when authenticated by the Trustee, will constitute valid and binding obligations of AK Steel, enforceable against it in
accordance with their terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws affecting creditors rights and remedies generally, and subject, as to enforceability, to general
principles of equity, including principles of commercial reasonableness, good faith and fair dealing (regardless of whether enforcement is sought in a proceeding at law or in equity).
2. The Guarantees, upon authentication of the Notes by the Trustee, will constitute a valid and binding obligation of each Guarantor,
enforceable against such Guarantor in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws affecting creditors rights and remedies generally, and subject,
as to enforceability, to general principles of equity, including principles of commercial reasonableness, good faith and fair dealing (regardless of whether enforcement is sought in a proceeding at law or in equity).
The opinions expressed herein are limited to the laws of the State of New York and the corporate laws of the State of Delaware, and we express no opinion as
to the effect on the matters covered by this letter of the laws of any other jurisdiction.
We hereby consent to the use of this letter as an exhibit to
the Registration Statement and to any and all references to our firm in the Prospectus which is a part of the Registration Statement. In giving such consent we do not hereby admit that we are in the category of persons whose consent is required
under Section 7 of the Securities Act or the rules and regulations of the Securities and Exchange Commission.
Very truly yours,
/s/ Weil, Gotshal & Manges LLP
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Exhibit 99.1 |
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News Release |
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Contacts: Media Michael P. Wallner, General
Manager, Communications and PR (513) 425-2688 Investors Roger K. Newport, Sr. Vice President, Finance and Chief Financial Officer (513) 425-5270
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AK Steel Completes Acquisition of Severstal Dearborn
Summary of Benefits:
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Increased scale enhances companys ability to better serve customers |
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Highly modernized, state-of-the-art steelmaking equipment and facilities |
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Additional operational and maintenance flexibility |
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Significant cost-based synergies |
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Accretive and credit-enhancing |
WEST CHESTER, OH, September 16, 2014 AK Steel (NYSE: AKS) said
today that it has completed its acquisition of Severstal North Americas integrated steelmaking assets located in Dearborn, Michigan. The transaction also included a cokemaking facility and interests in three joint ventures that process
flat-rolled steel products. AK Steel said that it paid $707 million in cash for the acquisition, which includes $314 million for working capital. The acquisition was financed with a combination of debt and equity securities offerings. The company
will refer to its Dearborn, Michigan facility as Dearborn Works.
At AK Steel, the future is now, and the future is
bright, as our acquisition of Dearborn Works makes us a larger, stronger and more flexible company, said James L. Wainscott, Chairman, President and CEO of AK Steel. The acquisition is transformational to AK Steel, and it combines much
more than the operational assets of two outstanding companies. It combines great employees who will strengthen a terrific company that is better able to compete, and to win, in the global steel marketplace.
Dearborn Works, which produces high-quality, flat-rolled steels primarily for the automotive, construction and appliance markets, completed a
large-scale modernization campaign in 2011. During the campaign, more than $1.2 billion was invested in new state-of-the-art equipment and various operational improvements. The Dearborn facility is strategically located in close proximity to many of
AK Steels customers, and the assets at the steel plant and the other acquired facilities complement AK Steels existing carbon steel operations.
The acquisition also increases AK Steels operational and maintenance flexibility and provides the platform for significant cost-based
synergies. In addition to operational and productivity enhancements, the acquisition will create purchasing, transportation and overhead cost savings. AK Steel expects the transaction to be credit-enhancing and accretive to its earnings, which will
help create significant long-term value for the company, its employees, customers and shareholders. AK Steel anticipates annual cost-based synergies of approximately $50 million, with approximately $25 million realized in 2015.
The Dearborn Works blast furnace, which was rebuilt in 2007, is among the most efficient and productive blast furnaces in the world for its
size. The plant also began operating a new pickle line tandem cold mill and a new hot dip galvanizing line in 2011. Similar to AK Steels other carbon steel operations, Dearborn Works produces hot and cold rolled sheet and hot dip galvanized
products, as well as other flat-rolled steel products. The plant employs approximately 1,400 people and is capable of producing approximately 2.5 million tons of finished steel per year. With the acquisition now completed, AK Steels
annual shipments are expected to exceed 7.5 million tons. AK Steel said that it intends to utilize all of the production units at Dearborn Works, and the company has no plans to cease operations at any of its current steelmaking or steel
finishing facilities.
-more-
Forward-Looking Statements
Some of the statements in this release are intended to be, and hereby are identified as forward-looking statements for purposes of the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995. The company cautions readers that such forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those currently expected
by management, including those risks and uncertainties discussed in AK Holdings Annual Report on Form 10-K for the year ended December 31, 2013 and Quarterly Report on Form 10-Q for the quarter ended June 30, 2014, as updated in its
subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K filed with or furnished to the Securities and Exchange Commission. Except as required by law, the company disclaims any obligation to update any forward-looking statements to
reflect future developments or events.
AK Steel
AK Steel is a world leader in the production of flat-rolled carbon, stainless and electrical steel products, primarily for automotive, infrastructure and
manufacturing, construction and electrical power generation and distribution markets. The companys AK Tube subsidiary produces carbon and stainless electric resistance welded tubular steel products for truck, automotive and other markets.
Headquartered in West Chester, Ohio (Greater Cincinnati), the company employs approximately 7,900 men and women at eight steel plants and two tube manufacturing plants across five states: Indiana, Kentucky, Michigan, Ohio and Pennsylvania. The
company also has interests in iron ore through its Magnetation LLC joint venture and in metallurgical coal through its AK Coal subsidiary. Additional information about AK Steel is available at www.aksteel.com.
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AK Steel (NYSE:AKS)
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AK Steel (NYSE:AKS)
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