SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT – June 19, 2013
(Date of Earliest Event Reported)
AK STEEL HOLDING CORPORATION
(Exact name of registrant as specified in its charter)
Commission File No. 1-13696
| Delaware | 31-1401455 | |
| (State of Incorporation) | (I.R.S. Employer Identification No.) | |
| 9227 Centre Pointe Drive, West Chester, OH | 45069 | |
| (Address of principal executive offices) | (Zip Code) | |
Registrant’s telephone number, including area code: (513) 425-5000
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):
| q | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| q | Solicitation material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| q | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| q | 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
On June 24, 2013, AK Steel Corporation (“AK Steel” or the “Company”) completed the private offering of $30.0 million aggregate principal amount of its 8.750% senior secured notes due 2018 (the “Add-on Notes”), which were offered as an add-on to its outstanding $350.0 million aggregate principal amount of 8.750% senior secured notes due 2018 (the “Existing Notes” and together with the Add-on Notes, the “Notes”). The Add-on Notes were issued at a price to the public of 106.5%. The Notes are governed by an indenture, dated as of November 20, 2012 (the “Indenture”), among AK Steel, as issuer, AK Holding Corporation, the parent company of AK Steel Corporation (“AK Holding”, and together with AK Steel, the “Companies”), as guarantor, and U.S. Bank National Association, as trustee (the “Trustee”) and collateral agent (the “Collateral Agent”). As such, the Add-on Notes are treated as a single series with, and have the same terms as, the Existing Notes. AK Steel expects to receive net proceeds from the Add-on Notes offering, after underwriting discount and commissions and estimated offering expenses, of approximately $31.1 million, and intends to use the net proceeds for general corporate purposes.
The Add-on Notes were issued pursuant to a purchase agreement (the “Purchase Agreement”), dated as of June 19, 2013, among the Companies and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as the initial purchaser (the “Initial Purchaser”), and are fully and unconditionally guaranteed by AK Holding. Pursuant to the Purchase Agreement and subject to the terms and conditions expressed therein, AK Steel agreed to sell the Add-on Notes to the Initial Purchaser, and the Initial Purchaser agreed to purchase the Add-on Notes for resale to the public. A copy of the Purchase Agreement is filed as Exhibit 10.1 hereto and incorporated herein by reference.
The Add-On Notes bear interest payable semiannually in cash in arrears on June 1 and December 1 of each year, commencing on December 1, 2013. The Indenture provides that the Notes are redeemable at AK Steel’s option, in whole or in part, at any time on or after December 1, 2015, 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 December 1, 2015 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 December 1 of the years indicated below:
| Year |
Redemption Price | |||
| 2015 |
104.375 | % | ||
| 2016 |
102.188 | % | ||
| 2017 and thereafter |
100.000 | % | ||
In addition, at any time prior to December 1, 2015, AK Steel may redeem up to 35% of the principal amount of the Notes (including the Existing Notes, the Add-On Notes and any additional Notes) with the net cash proceeds of one or more sales of AK Holding’s 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 108.750%, 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.
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; sell Notes Collateral (as defined below); and engage in a consolidated, merger or sale of assets.
The Add-on Notes were sold pursuant to Rule 144A and Regulation S under the Securities Act of 1933, as amended (the “Securities Act”), and have not been registered in the United States under the Securities Act or in any other jurisdiction and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements. However, the Companies have executed a registration rights agreement with the Initial Purchaser, dated as of June 24, 2013 (the “Registration Rights Agreement”), in which the Companies have agreed to use commercially reasonable efforts to cause to become effective a registration statement with respect to an offer to exchange the Add-on Notes for a new issue of substantially identical debt securities registered under the Securities Act. A copy of the Registration Rights Agreement is filed as Exhibit 10.2 hereto and incorporated herein by reference.
The Notes are secured by liens on AK Steel’s real property, plant and equipment, subject to certain exceptions, thresholds and permitted liens (“Notes Collateral”), pursuant to a security agreement, dated as of November 20, 2012, among AK Steel and the Collateral Agent. Pursuant to a collateral trust agreement, dated as of November 20, 2012, among AK Steel, the Trustee and the Collateral Agent, the Collateral Agent will act as collateral agent on behalf of the Trustee and the holders of the Notes.
The Initial Purchaser and its affiliates have previously provided, and may provide from time to time in the future, certain commercial banking, financial advisory, investment banking and other services to AK Holding, AK Steel and their affiliates in the ordinary course of their business, for which they have received and may continue to receive customary fees and commissions. In addition, from time to time, the Initial Purchaser and its respective affiliates may effect transactions for their own account or the account of customers, and hold on behalf of themselves or their customers, long or short positions in the Companies’ debt or equity securities or loans, and may do so in the future. Specifically, an affiliate of the Initial Purchaser serves as a lender and as administrative agent under the Company’s asset-backed revolving credit facility, and the Initial Purchaser served as a joint lead arranger and co-book manager.
Item 2.03 Creation of a Direct Financial Obligation
The disclosure under Item 1.01 above pertaining to the Add-on Notes is incorporated by reference into this Item 2.03.
Item 8.01 Other Events.
In recent weeks AK Steel repurchased an aggregate of $30.0 million of its senior unsecured notes in private, open market transactions. The Company repurchased approximately $20.2 million aggregate principal amount of its 7.625% Senior Notes due 2020 and approximately $9.8 million aggregate principal amount of its 8.375% Senior Notes due 2022. All of the repurchases were unsolicited and completed at a discount to the par value of the senior unsecured notes.
Item 9.01 Financial Statement and Exhibits.
| (d) | Exhibit |
| 10.1 | Purchase Agreement, dated as of June 19, 2013, among AK Steel Corporation, AK Steel Holding Corporation and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as the initial purchaser |
| 10.2 | Registration Rights Agreement, dated as of June 24, 2013, among AK Steel Holding Corporation, AK Steel Corporation and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as the initial purchaser |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| AK STEEL HOLDING CORPORATION | ||
| By: | /s/ David C. Horn | |
| David C. Horn Secretary | ||
Dated: June 24, 2013
EXHIBIT INDEX
| Exhibit No. |
Description | |
| 10.1 | Purchase Agreement, dated as of June 19, 2013, among AK Steel Corporation, AK Steel Holding Corporation and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as the initial purchaser | |
| 10.2 | Registration Rights Agreement, dated as of June 24, 2013, among AK Steel Holding Corporation, AK Steel Corporation and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as the initial purchaser | |
Exhibit 10.1
EXECUTION VERSION
$30,000,000
AK Steel Corporation
8.750% Senior Secured Notes due 2018
PURCHASE AGREEMENT
June 19, 2013
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
As Representative of the several Purchasers
c/o
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
One Bryant Park
New York, NY 10036,
Dear Sirs:
1. Introductory. AK Steel Corporation, a Delaware corporation (the “Company”) and AK Steel Holding Corporation (“Parent”) agree with the several initial purchasers named in Schedule A hereto (the “Purchasers”) to issue and sell to the several Purchasers U.S. $30,000,000 principal amount of the Company’s 8.750% Senior Secured Notes due 2018 (“Offered Securities”) to be issued as additional notes under an indenture, dated as of November 20, 2012 (the “Indenture”), between the Company, Parent and U.S. Bank National Association, as Trustee. The Offered Securities will be issued only in book-entry form in the name of Cede & Co., as nominee of The Depository Trust Company (the “Depositary”) pursuant to a letter of representations, to be dated on or before the Closing Date (the “DTC Agreement”), among the Company, the Trustee and the Depositary.
The holders of the Offered Securities will be entitled to the benefits of a registration rights agreement, to be dated as of the Closing Date (the “Registration Rights Agreement”), among the Company, Parent and the Purchasers, pursuant to which the Company and Parent will be required to file with the Commission (as defined below), under the circumstances set forth therein, (i) a registration statement under the Securities Act (as defined below) relating to another series of debt securities of the Company with terms substantially identical to the Offered Securities (the “Exchange Notes”) to be offered in exchange for the Offered Securities (the “Exchange Offer”) and (ii) a shelf registration statement pursuant to Rule 415 of the Securities Act relating to the resale by certain holders of the Offered Securities, and in each case, to use its best efforts to cause such registration statements to be declared effective. All references herein to Exchange Notes, Exchange Securities (as defined below) and the Exchange Offer are only applicable if the Company and Parent are in fact required to consummate the Exchange Offer pursuant to the terms of the Registration Rights Agreement.
The payment of principal of, premium, if any, and interest on the Offered Securities will be fully and unconditionally guaranteed under the Indenture on an unsecured, unsubordinated basis, by the Parent (the “Guarantor”), pursuant to the guarantee (the “Guarantee”). The Exchange Notes as guaranteed by the Guarantor under the Indenture are herein collectively referred to as the “Exchange Securities.”
The Company previously issued $350,000,000 in aggregate principal amount of its 8.750% Senior Secured Notes due 2018 under the Indenture (the “Existing Securities”). The Offered Securities constitute “Additional Notes” under the Indenture. The Offered Securities will have identical terms to the Existing Securities and will be treated as a single class with the Existing Securities for all purposes under the Indenture.
The Offered Securities will be secured by first priority liens on all of the real property, plants and equipment (other than certain excluded property and subject to liens permitted by the Indenture) of the Company (the “Notes Collateral”) as more particularly described in the General Disclosure Package and documented by mortgages delivered in connection with the Existing Securities (the “Mortgages”), certain amendments to the Mortgages to be delivered in connection with the issuance of the Offered Securities (the “Mortgage Amendments”) and security agreements and other instruments evidencing or creating a security interest (each such Mortgage, Mortgage Amendment and security agreement and other instrument listed on Schedule C hereto, the “Security Agreements”), in favor of U.S. Bank National Association, as collateral agent (in such capacity, the “Collateral Agent”), for its benefit and the benefit of the Trustee and the holders of the Offered Securities.
Each of the Company and the Guarantor hereby agrees with the several Purchasers as follows:
2. Representations and Warranties of the Company and the Guarantor. The Company and the Guarantor jointly and severally represent and warrant to, and agree with, the several Purchasers that:
(a) Offering Memoranda; Certain Defined Terms. The Company has prepared or will prepare a Preliminary Offering Memorandum and a Final Offering Memorandum.
For purposes of this Agreement:
“Applicable Time” means 1:35 p.m. (New York City time) on the date of this Agreement.
“Closing Date” has the meaning set forth in Section 3 hereof.
“Collateral Agent” has the meaning assigned to the term “Collateral Agent” in the Final Offering Memorandum.
“Commission” means the Securities and Exchange Commission.
“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 Offering Memorandum” means the Final Offering Memorandum relating to the Offered Securities to be offered by the Purchasers that discloses the offering price and other final terms of the Offered Securities and is dated as of the date of this Agreement (even if finalized and issued subsequent to the date of this Agreement).
“Free Writing Communication” means a written communication (as such term is defined in Rule 405) that constitutes an offer to sell or a solicitation of an offer to buy the Offered Securities and is made by means other than the Preliminary Offering Memorandum or the Final Offering Memorandum.
“General Disclosure Package” means the Preliminary Offering Memorandum together with any Issuer Free Writing Communication existing at the Applicable Time and the information which is intended for general distribution to prospective investors, as evidenced by its being specified in Schedule B hereto.
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“Issuer Free Writing Communication” means a Free Writing Communication prepared by or on behalf of the Company, used or referred to by the Company or containing a description of the final terms of the Offered Securities or of their offering, in the form retained in the Company’s records.
“Preliminary Offering Memorandum” means the Preliminary Offering Memorandum, dated June 19, 2013, relating to the Offered Securities to be offered by the Purchasers.
“Rules and Regulations” means the rules and regulations of the Commission.
“Securities Act” means the Securities Act of 1933.
“Securities Laws” means, collectively, the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley”), the Securities 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”).
“Subsidiary” means each direct and indirect subsidiary of Parent.
“Supplemental Marketing Material” means any Issuer Free Writing Communication other than any Issuer Free Writing Communication specified in Schedule B hereto. Supplemental Marketing Materials include, but are not limited to, the electronic Bloomberg roadshow slides and the accompanying audio recording.
Unless otherwise specified, a reference to a “rule” is to the indicated rule under the Securities Act.
(b) Disclosure. As of the Applicable Time, neither (i) the General Disclosure Package, nor (ii) any individual Supplemental Marketing Material, when considered together with the General Disclosure Package (each of (i) and (ii) including the documents incorporated or deemed to be incorporated by reference), 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 Final Offering Memorandum, as of its date and as of the Closing Date, did not include any untrue statement of a material fact or omit 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 second preceding sentence does not apply to statements in or omissions from the General Disclosure Package or any Supplemental Marketing Material based upon written information furnished to the Company by any Purchaser through the Representative specifically for use therein, it being understood and agreed that the only such information furnished by any Purchaser consists of the information described as such in Section 8(b) hereof. The Company’s Annual Report on Form 10-K most recently filed with the Commission and all subsequent reports (collectively, the “Exchange Act Reports”) which have been filed by the Company with the Commission or sent to stockholders pursuant to the Exchange Act and incorporated by reference in the Preliminary Offering Memorandum or the Final Offering Memorandum, when they were filed with the Commission, conformed in all material respects to the requirements of the Exchange Act and the Rules and Regulations.
(c) 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 and the Subsidiaries taken as a whole (“Material Adverse Effect”).
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(d) Subsidiaries. Each Subsidiary 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 Offering Memorandum, all of the capital stock of each Subsidiary is owned by Parent, directly or indirectly, free from liens, encumbrances and defects.
(e) Indenture; Offered Securities; Guarantee; Security Agreements. The Indenture has been duly authorized, executed and delivered by the Company and the Guarantor, conforms in all material respects to the information in the General Disclosure Package and the description of the Indenture in the Final Offering Memorandum and constitutes a valid and legally binding obligation of the Company and the Guarantor, 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, 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 Offering Memorandum 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; the Guarantee has been duly authorized by the 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 will have been duly delivered by the 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 Offering Memorandum and will constitute a valid and legally binding obligation of the Guarantor, enforceable against the Guarantor in accordance with its terms, subject to the Enforceability Exceptions; each of the Security Agreements, other than the Mortgage Amendments, has been duly authorized, executed and delivered by the Company, conforms in all material respects to the information in the General Disclosure Package and to the description of such Security Agreements contained in the Final Offering Memorandum and constitutes a valid and legally binding agreement of the Company in accordance with its terms, subject to the Enforceability Exceptions; each of the Mortgage Amendments has been duly authorized by the Company, and, when executed and delivered by the Company and the Collateral Agent, will conform in all material respects to the information in the General Disclosure Package and to the description of such Mortgage Amendments contained in the Final Offering Memorandum and will constitute a valid and legally binding agreement of the Company in accordance with its terms, subject to the Enforceability Exceptions; and the Security Agreements create, or, with respect to the Mortgage Amendments, on or prior to the Closing Date, will create, in favor of the Collateral Agent for the benefit of itself, the Trustee and the holders of the Offered Securities, valid and enforceable security interests in and liens on the Notes Collateral and the security interests in and liens on the rights of the Company in such Notes Collateral are perfected security interests and liens, superior to and prior to the liens of all third persons (other than certain liens permitted by the Indenture, in the reasonable discretion of the Purchasers after consultation with the Company).
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(f) Trust Indenture Act. The Indenture conforms in all material respects to the requirements of the Trust Indenture Act, and the rules and regulations of the Commission applicable to an indenture which is qualified thereunder.
(g) No Finder’s Fee. Except as disclosed in the General Disclosure Package and the Final Offering Memorandum, there are no contracts, agreements or understandings between the Company or the Guarantor and any person that would give rise to a valid claim against the Company, the Guarantor or any Purchaser for a brokerage commission, finder’s fee or other like payment in connection with this offering.
(h) Registration Rights Agreement. The Registration Rights Agreement has been duly authorized by the Company and the Guarantor and, on the Closing Date, will have been duly executed and delivered by, and will constitute a valid and legally binding agreement of, the Company and the Guarantor, enforceable against each of them in accordance with its terms, subject to the Enforceability Exceptions, and will conform in all material respects to the information in the General Disclosure Package and to the description of the Registration Rights Agreement contained in the Final Offering Memorandum.
(i) [Reserved.]
(j) Exchange Notes; Exchange Securities. The Exchange Notes have been duly and validly authorized for issuance by the Company, and when issued and authenticated in accordance with the terms of the Indenture, the Registration Rights Agreement and the Exchange Offer, 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 will be entitled to the benefits of the Indenture; and, when the Exchange Notes have been authenticated in the manner provided for in the Indenture and issued and delivered in accordance with the Registration Rights Agreement, the Guarantee of the Exchange Notes will constitute valid and binding agreements of the Guarantor, in each case, enforceable in accordance with its terms, subject to the Enforceability Exceptions and will be entitled to the benefits of the Indenture.
(k) No Registration Rights. There are no contracts, agreements or understandings between the Company or the Guarantor and any person granting such person the right to require the Company or such Guarantor to file a registration statement under the Securities Act with respect to any securities of the Company or such Guarantor, other than that certain Registration Rights Agreement by and between the Company, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Deutsche Bank Securities Inc., dated as of November 20, 2012, relating to the Existing Securities, or to require the Company or such Guarantor to include such securities with the Offered Securities and Guarantee registered pursuant to any registration statement.
(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, the Indenture, the Security Agreements and the Registration Rights Agreement in connection with the offering, issuance and sale of the Offered Securities by the Company and the sale of the Guarantee by the Guarantor except for (i) the order of the Commission declaring effective the Exchange Offer Registration Statement or, if required, the Shelf Registration Statement (each as defined in the Registration Rights Agreement), (ii) the recording of the Mortgage Amendments as set forth in Section 7 below, and (iii) 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 Guarantor 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 Offering Memorandum, the Company, Parent and the Subsidiaries 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 Offering Memorandum, the Company, Parent and the Subsidiaries hold all 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 the Indenture, this Agreement, the Security Agreements, the Mortgage Amendments and the Registration Rights Agreement, the issuance and sale of the Offered Securities and the Guarantee 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 pursuant to (i) the charter or by-laws of the Company, Parent or any of the Subsidiaries, (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 any of their properties, or (iii) any agreement or instrument to which the Company, Parent or any of the Subsidiaries 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 holder’s 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.
(o) Absence of Existing Defaults and Conflicts. Neither the Company, Parent nor any of the Subsidiaries 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 and the Guarantor.
(q) Possession of Licenses and Permits. The Company, Parent and the Subsidiaries 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 or any of the Subsidiaries, would individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
(r) Absence of Labor Dispute. Except as disclosed in the General Disclosure Package and the Final Offering Memorandum, no labor dispute with the employees of the Company, Parent or any of the Subsidiaries exists or, to the knowledge of the Company or the Guarantor, is threatened that would, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.
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(s) Possession of Intellectual Property. The Company, Parent and the Subsidiaries 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 or any of the Subsidiaries, 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 Offering Memorandum, (a)(i) none of the Company, Parent or any of the Subsidiaries 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 owns, occupies, operates or uses any real property contaminated with Hazardous Substances, (iii) none of the Company, Parent or any of the Subsidiaries 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 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 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, Parent and the Subsidiaries 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 Guarantor 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 Guarantor 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.
(u) Accurate Disclosure. The statements in the General Disclosure Package and the Final Offering Memorandum under the heading “Description of Notes,” “Description of Certain Indebtedness” and “Exchange Offer; Registration Rights” 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 Offering Memorandum under the caption “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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(w) Absence of Manipulation. Neither the Company nor the 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.
(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 Offering Memorandum are based on or derived from sources that the Company and the Guarantor believe 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 Offering Memorandum, Parent, the Company and the Subsidiaries and Parent’s 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 management’s 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 management’s 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 General Disclosure Package and the Final Offering Memorandum fairly presents the information called for in all material respects and is prepared in accordance with the Commission’s rules and guidelines applicable thereto. The Internal Controls are, or upon consummation of the offering of the Offered Securities will be, 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.
(z) Disclosure Controls. Except as set forth in the General Disclosure Package and the Final Offering Memorandum, 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 Commission’s rules and forms, including controls and procedures designed to ensure that such information is accumulated and communicated to Parent’s 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.
(aa) Litigation. Except as disclosed in the General Disclosure Package and the Final Offering Memorandum, 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 or any of their respective properties that, if determined adversely to the Company, Parent or any of the Subsidiaries, 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
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Offered Securities and the sale of the Guarantee; and to the Company’s or Parent’s 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 General Disclosure Package and the Final Offering Memorandum 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 General Disclosure Package and the Final Offering Memorandum, 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 General Disclosure Package and the Final Offering Memorandum fairly presents the information called for in all material respects and has been prepared in accordance with the Commission’s rules and guidelines applicable thereto.
(cc) No Material Adverse Change in Business. Except as disclosed in the General Disclosure Package and the Final Offering Memorandum, since the end of the period covered by the latest audited financial statements included in the General Disclosure Package and the Final Offering Memorandum (i) there has been no change, in the condition (financial or otherwise), results of operations, business, properties or prospects of the Company, Parent and the Subsidiaries, taken as a whole that is material and adverse, (ii) except as disclosed in or contemplated by the General Disclosure Package and the Final Offering Memorandum, 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.
(dd) Investment Company Act. Neither the Company nor the Guarantor is 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 Offering Memorandum, will not 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 Company’s 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(b)(ii) hereof.
(ff) Foreign Corrupt Practices Act. None of the Company, Parent or, to the best of the Company’s and Parent’s knowledge, any of the Subsidiaries 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 Company’s and Parent’s knowledge, the Subsidiaries and affiliates have conducted their businesses in compliance with the FCPA and have devised or instituted 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 Company’s and Parent’s knowledge, any of the Subsidiaries 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.
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(gg) Compliance with Money Laundering Laws. To the best of the Company’s and Parent’s knowledge, the operations of the Company, Parent and the Subsidiaries 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.
(hh) Compliance with OFAC. None of the Company, Parent or any of the Subsidiaries nor, to the knowledge of the Company or the Guarantor, any director, officer, agent, employee or affiliate of the Company, Parent or any of the Subsidiaries is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”); and the Company will not directly or indirectly use the proceeds of the offering, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person or entity, for the purpose of financing the activities of any person currently subject to any U.S. sanctions administered by OFAC.
(ii) Taxes. The Company, Parent and the Subsidiaries 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 Offering Memorandum, the Company, Parent and the Subsidiaries 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, Parent and the Subsidiaries 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 or any of the Subsidiaries or their respective businesses, assets, employees, officers and directors are in full force and effect; the Company, Parent and the Subsidiaries 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 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 or any such Subsidiary has been refused any insurance coverage sought or applied for; and none of the Company, Parent or any such Subsidiary 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 Offering Memorandum.
(kk) Class of Securities Not Listed. No securities of the same class (within the meaning of Rule 144A(d)(3)) as the Offered Securities are listed on any national securities exchange registered under Section 6 of the Exchange Act or quoted in a U.S. automated inter-dealer quotation system.
(ll) No Registration. The offer and sale of the Offered Securities in the manner contemplated by this Agreement will be exempt from the registration requirements of the Securities Act by reason of Section 4(2) thereof and Regulation S thereunder; and until such time as the Exchange Securities are issued it is not necessary to qualify an indenture in respect of the Offered Securities under the United States Trust Indenture Act of 1939, as amended (the “Trust Indenture Act”).
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(mm) No General Solicitation; No Directed Selling Efforts. None of the Company, Parent, the Subsidiaries nor any of their respective affiliates, nor any person acting on their behalf (i) has, within the six-month period prior to the date hereof, offered or sold in the United States or to any U.S. person (as such terms are defined in Regulation S under the Securities Act) the Offered Securities or any security of the same class or series as the Offered Securities or (ii) has offered or will offer or sell the Offered Securities (A) in the United States by means of any form of general solicitation or general advertising within the meaning of Rule 502(c) or (B) with respect to any such securities sold in reliance on Rule 903 of Regulation S (“Regulation S”) under the Securities Act, by means of any directed selling efforts within the meaning of Rule 902(c) of Regulation S. The Company, Parent, the Subsidiaries, their respective affiliates and any person acting on their behalf have complied and will comply with the offering restrictions requirement of Regulation S. None of the Company, Parent nor the Guarantor has entered and none of the Company, Parent nor the Guarantor will enter into any contractual arrangement with respect to the distribution of the Offered Securities except for this Agreement.
(nn) Reporting Status. The Parent is subject to Section 13 or 15(d) of the Exchange Act.
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 Purchasers, and each of the Purchasers agrees, severally and not jointly, to purchase from the Company, at a purchase price of 104.5% of the principal amount thereof, plus accrued and unpaid interest on the principal amount thereof from June 1, 2013 to the Closing Date, the respective principal amounts of Securities set forth opposite the names of the several Purchasers in Schedule A hereto.
The Company will deliver against payment of the purchase price the Offered Securities to be offered and sold by the Purchasers in reliance on Regulation S (the “Regulation S Securities”) in the form of one or more temporary global Securities in registered form without interest coupons (the “Regulation S Global Securities”) which will be deposited with the Trustee as custodian for The Depository Trust Company (“DTC”) for the respective accounts of the DTC participants for Euroclear Bank, S.A./N.V., as operator of the Euroclear System (“Euroclear”), and Clearstream Banking, société anonyme (“Clearstream, Luxembourg”) and registered in the name of Cede & Co., as nominee for DTC. The Company will deliver against payment of the purchase price the Offered Securities to be purchased by each Purchaser hereunder and to be offered and sold by each Purchaser in reliance on Rule 144A (the “144A Securities”) in the form of one or more permanent global security in definitive form without interest coupons (the “Restricted Global Securities”) deposited with the Trustee as custodian for DTC and registered in the name of Cede & Co., as nominee for DTC. The Regulation S Global Securities and the Restricted Global Securities shall be assigned separate CUSIP numbers. The Restricted Global Securities shall include the legend regarding restrictions on transfer set forth under “Notice to Investors” in the Final Offering Memorandum. Until the termination of the distribution compliance period (as defined in Regulation S) with respect to the offering of the Offered Securities, interests in the Regulation S Global Securities may only be held by the DTC participants for Euroclear and Clearstream, Luxembourg. Interests in any Regulation S Global Securities will be held only in book-entry form through Euroclear, Clearstream, Luxembourg or DTC, as the case may be, except in the limited circumstances described in the Final Offering Memorandum.
Payment for the Regulation S Securities and the 144A Securities shall be made by the Purchasers in Federal (same day) funds by wire transfer to an account at a bank acceptable to the Representative 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 June 24, 2013, or at such other time not later than seven full business days thereafter as the Representative and the Company determine, such time being herein referred to as the “Closing Date”, against delivery to the Trustee as custodian for DTC of (i) the Regulation S Global Securities representing all of the Regulation S Securities for the respective accounts of
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the DTC participants for Euroclear and Clearstream, Luxembourg and (ii) the Restricted Global Securities representing all of the Offered 144A Securities. The Regulation S Global Securities and the Restricted Global Securities will be made available for checking at the above office of Davis Polk & Wardwell LLP at least 24 hours prior to the Closing Date.
4. Offer, Sale and Resale Procedures. Each of the Purchasers, on the one hand, and the Company and the Guarantor, on the other hand, hereby agrees to observe the following procedures in connection with the offer and sale of the Offered Securities:
(a) Offers and sales of the Offered Securities will be made only by the Purchasers or affiliates thereof qualified to do so in the jurisdictions in which such offers or sales are made. Each such offer or sale shall only be made to persons whom the offeror or seller reasonably believes to be Qualified Institutional Buyers or non-U.S. persons outside the United States to whom the offeror or seller reasonably believes offers and sales of the Offered Securities may be made in reliance upon Regulation S upon the terms and conditions set forth in Annex I hereto, which Annex I is hereby expressly made a part hereof.
(b) The Offered Securities will be offered by approaching prospective subsequent purchasers on an individual basis. No general solicitation or general advertising (within the meaning of Rule 502 under the Securities Act) will be used in the United States in connection with the offering of the Offered Securities.
(c) Upon original issuance by the Company, and until such time as the same is no longer required under the applicable requirements of the Securities Act, the Offered Securities (and all securities issued in exchange therefor or in substitution thereof, other than the Exchange Notes) shall bear the following legend:
“THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND THE SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1)(a) INSIDE THE UNITED STATES TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A UNDER THE SECURITIES ACT, (b) OUTSIDE THE UNITED STATES TO A NON-U.S. PERSON IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (c) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF APPLICABLE) OR (d) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO
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THE COMPANY IF THE COMPANY SO REQUESTS), (2) TO THE COMPANY OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THE SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN CLAUSE (A) ABOVE. NO REPRESENTATION CAN BE MADE AS TO THE AVAILABILITY OF THE EXEMPTION PROVIDED BY RULE 144 FOR RESALE OF THE SECURITY EVIDENCED HEREBY.”
Following the sale of the Offered Securities by the Purchasers to subsequent purchasers pursuant to the terms hereof, the Purchasers shall not be liable or responsible to the Company or the Guarantor for any losses, damages or liabilities suffered or incurred by the Company or the Guarantor including any losses, damages or liabilities under the Securities Act, arising from or relating to any resale or transfer of any Offered Security.
5. Certain Agreements of the Company and the Guarantor. The Company and the Guarantor jointly and severally agree with the several Purchasers that:
(a) Amendments and Supplements to Offering Memoranda. The Company and the Guarantor will promptly advise the Representative of any proposal to amend or supplement the Preliminary Offering Memorandum or the Final Offering Memorandum and will not effect such amendment or supplementation without the Representative’s consent. If, at any time prior to the completion of the resale of the Offered Securities by the Purchasers, there occurs an event or development as a result of which the Final Offering Memorandum, the General Disclosure Package or any Supplemental Marketing Material, if republished immediately following such event or development, 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, the Company will promptly notify the Representative of such event and will promptly prepare and furnish, at its own expense, to the Purchasers and the dealers and any other dealers upon request of the Representative, an amendment or supplement which will correct such statement or omission. Neither the Representative’s consent to, nor the Purchasers’ delivery of, any such amendment or supplement shall constitute a waiver of any of the conditions set forth in Section 7.
(b) Furnishing of Offering Memoranda. The Company will furnish to the Representative copies of the Preliminary Offering Memorandum, each other document comprising a part of the General Disclosure Package, the Final Offering Memorandum, all amendments and supplements to such documents and each item of Supplemental Marketing Material, in each case as soon as available and in such quantities as the Representative reasonably request. At any time when the Company is not subject to Section 13 or 15(d) of the Exchange Act, the Company and the Guarantor will promptly furnish or cause to be furnished to the Representative (and, upon request, to each of the other Purchasers) and, upon request of holders and prospective purchasers of the Offered Securities, to such holders and purchasers, copies of the information required to be delivered to holders and prospective purchasers of the Offered Securities pursuant to Rule 144A(d)(4) (or any successor provision thereto) in order to permit compliance with Rule 144A in connection with resales by such holders of the Offered Securities. The Company will pay the expenses of printing and distributing to the Purchasers all such documents.
(c) Blue Sky Qualifications. The Company will qualify the Offered Securities for offer and sale under the laws of such U.S. jurisdictions as the Representative shall reasonably request and will continue such qualifications in effect so long as required for distribution of the Offered 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.
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(d) Reporting Requirements. Parent, during the period when the Final Offering Memorandum 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.
(e) Transfer Restrictions. During the period of one year after the Closing Date, the Company will, upon request, furnish to the Representative and any holder of Offered Securities a copy of the restrictions on transfer applicable to the Offered Securities.
(f) No Resales by Affiliates. During the period of one year after the Closing Date, the Company will not, and will not permit any of its affiliates (as defined in Rule 144) to, resell any of the Offered Securities that have been reacquired by any of them.
(g) Investment Company. During the period of one year after the Closing Date, neither the Company nor the Guarantor will be or become, an open-end investment company, unit investment trust or face-amount certificate company that is or is required to be registered under Section 8 of the Investment Company Act.
(h) Payment of Expenses. The Company and the Guarantor will pay all expenses incident to the performance of its obligations under this Agreement, the Indenture, the Security Agreements and the Registration Rights Agreement, including but not limited to (i) any filing fees and other expenses (including fees and disbursements of counsel to the Purchasers) incurred in connection with qualification of the Offered Securities and the Guarantee for sale under the laws of such jurisdictions as the Representative designate and the preparation and printing of memoranda relating thereto, (ii) the filing fees for FINRA’s review of the offering of the Offered Securities, if any, and the reasonable fees and disbursements of counsel to the Purchasers in connection with compliance with FINRA’s 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 Company’s or Parent’s officers and employees and any other expenses of the Company or the Guarantor including the chartering of airplanes, (v) expenses incurred in distributing preliminary offering memoranda and the Final Offering Memorandum (including any amendments and supplements thereto) to the Purchasers and for expenses incurred for preparing, printing and distributing any Free Writing Communications to investors or prospective investors and (vi) all costs relating to the creation or perfection of liens on the Notes Collateral (including fees and expenses of Purchasers’ counsel). It is understood, however, that, except as provided in subclause (i), (ii) and (vi) of this clause (h), and Sections 8 and 10 hereof, the Purchasers will pay all of their own costs and expenses, including the fees of their counsel, transfer taxes on resale of any of the Offered 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 Offering Memorandum and, except as disclosed in the General Disclosure Package and the Final Offering Memorandum, 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 Purchaser.
(j) Absence of Manipulation. Neither the Company nor the 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.
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(k) Restriction on Sale of Securities. Neither the Company nor the 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 the Guarantor and having a maturity of more than one year from the date of issue, or publicly disclose the intention to make any such offer, sale, pledge, disposition or filing, other than the exchangeable senior notes to be sold concurrently with the Offered Securities, without the prior written consent of Merrill Lynch, Pierce, Fenner & Smith Incorporated, for a period beginning on the date hereof and ending 30 days after the Closing Date.
(l) The Depositary. The Company will cooperate with the Purchasers and use its best efforts to permit the Offered Securities to be eligible for clearance and settlement through the facilities of the Depositary.
(m) No Integration. Neither the Company nor Parent will, and each of the Company and Parent will cause its affiliates not to, make any offer or sale of securities of the Company or Parent of any class if, as a result of the doctrine of “integration” referred to in Rule 502 under the Securities Act, such offer or sale would render invalid (for the purpose of (i) the sale of the Offered Securities by the Company to the Purchasers, (ii) the resale of the Offered Securities by the Purchasers to subsequent purchasers or (iii) the resale of the Offered Securities by such subsequent purchasers to others) the exemption from the registration requirements of the Securities Act provided by Section 4(2) thereof or by Rule 144A or by Regulation S thereunder or otherwise. The Company will not sell any of the Offered Securities to any purchaser of shares of Common Stock in Parent’s public offering of Common Stock pursuant to its registration statement on Form S-3 (No. 333-166303).
6. Free Writing Communications. (a) Issuer Free Writing Communications. The Company and the Guarantor jointly and severally represent and agree that, unless the Company obtains the prior consent of the Representative, and each Purchaser represents and agrees that, unless it obtains the prior consent of the Company and the Representative, it has not made and will not make any offer relating to the Offered Securities that would constitute an Issuer Free Writing Communication.
(b) Term Sheets. The Company consents to the use by any Purchaser of a Free Writing Communication that (i) contains only (A) information describing the preliminary terms of the Offered Securities or their offering or (B) information that describes the final terms of the Offered Securities or their offering and that is included in or is subsequently included in the Final Offering Memorandum, including by means of a pricing term sheet in the form of Exhibit B-1 hereto, or (ii) does not contain any material information about the Company or the Guarantor or their securities that was provided by or on behalf of the Company or the Guarantor, it being understood and agreed that the Company and the Guarantor shall not be responsible to any Purchaser for liability arising from any inaccuracy in such Free Writing Communications referred to in clause (i) or (ii) as compared with the information in the Preliminary Offering Memorandum, the Final Offering Memorandum or the General Disclosure Package.
7. Conditions of the Obligations of the Purchasers. The obligations of the several Purchasers 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 Guarantor herein (as though made on the Closing Date), to the accuracy of the statements of officers of the Company and the Guarantor made pursuant to the provisions hereof, to the performance by the Company and the Guarantor of their respective obligations hereunder and to the following additional conditions precedent:
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(a) Accountants’ Comfort Letter. The Representative shall have received letters, dated, respectively, the date hereof and the Closing Date, of Ernst & Young LLP and Deloitte & Touche 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 Representative (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 the Closing Date).
(b) 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 and the Subsidiaries taken as a whole which, in the judgment of the Representative, 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 the 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 the 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 Representative, 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 the 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 Representative, 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.
(c) Opinion of Counsel for Company and the Guarantor. The Representative shall have received an opinion, dated the Closing Date, of Weil, Gotshal & Manges LLP, counsel for the Company and the Guarantor, substantially in the form attached hereto as Exhibit A.
(d) Opinion of Counsel for Purchasers. The Representative shall have received from Davis Polk & Wardwell LLP, counsel for the Purchasers, such opinion or opinions, dated the Closing Date, with respect to such matters as the Representative 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.
(e) Officers’ Certificate. The Representative shall have received a certificate, dated the Closing Date, of an executive officer of the Company and the Guarantor and a principal financial or accounting officer of the Company and the Guarantor in which such officers shall state that: the representations and warranties of the Company and the Guarantor in this Agreement are true and correct; the Company and the Guarantor 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; and, subsequent to the dates of the most recent financial statements in the General Disclosure Package and the Final Offering Memorandum, there has been no material adverse change in the condition (financial or otherwise), results of operations, business, properties or prospects of the Company, Parent and the Subsidiaries taken as a whole except as set forth in the General Disclosure Package and the Final Offering Memorandum or as described in such certificate.
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(f) Registration Rights Agreement. The Company and the Guarantor shall have executed and delivered the Registration Rights Agreement, in form and substance reasonably satisfactory to the Purchasers, and the Purchasers shall have received such executed counterparts.
(g) Real Property Deliverables. The Company shall deliver to the Collateral Agent on or prior to the Closing Date, with respect to each parcel of real property owned by the Company or the Guarantor that is included in the Notes Collateral, each of the following, in form and substance reasonably satisfactory to the Representative:
| i. | a fully executed Mortgage Amendment relating to each mortgage delivered in connection with the Existing Securities in form suitable for filing or recording and evidence that a counterpart of such Mortgage Amendment has been submitted for recording in all filing or recording offices that the Representative may reasonably deem necessary or desirable and that all filing, documentary, stamp, intangible and recording taxes and fees have been paid; |
| ii. | a fully paid policy or policies of title insurance relating to such mortgaged real property issued by a nationally-recognized title insurance company and in an amount reasonably satisfactory to the Representative, insuring the lien of such Mortgage (as amended) to be a valid first lien on the mortgaged real property described therein, free and clear of all liens other than liens permitted pursuant to the Indenture, together with coinsurance, reinsurance and such endorsements as are reasonably satisfactory to the Representative; and |
| iii. | an opinion of counsel, in the state in which such parcel of real property is located, from counsel reasonably satisfactory to the Representative with respect to such matters as the Representative may require, substantially in the forms attached hereto as Exhibits C-1, C-2, C-3 and C-4. |
The Company and the Guarantor will furnish the Purchasers with such conformed copies of such opinions, certificates, letters and documents as the Representative reasonably request.
8. Indemnification and Contribution. (a) Indemnification of Purchasers. The Company and the Guarantor will jointly and severally indemnify and hold harmless each Purchaser, its officers, employees, agents, partners, members, directors and its affiliates and each person, if any, who controls such Purchaser within the meaning of Section 15 of the Securities 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 Securities 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 any untrue statement or alleged untrue statement of any material fact contained in any part of the Preliminary Offering Memorandum or the Final Offering Memorandum, in each case as amended or supplemented, or any Issuer Free Writing Communication (including with limitation, any Supplemental Marketing Material), 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, 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 Guarantor 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 Purchaser through the Representative specifically for use therein, it being understood and agreed that the only such information furnished by any Purchaser consists of the information described as such in subsection (b) below.
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(b) Indemnification of Company. Each Purchaser will severally and not jointly indemnify and hold harmless each of the Company, the Guarantor, each of their respective directors, each of their respective officers and each person, if any, who controls the Company or the Guarantor within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act (each, a “Purchaser Indemnified Party”), against any losses, claims, damages or liabilities to which such Purchaser Indemnified Party may become subject, under the Securities 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 any untrue statement or alleged untrue statement of any material fact contained in the Preliminary Offering Memorandum or the Final Offering Memorandum, in each case as amended or supplemented, or any Issuer Free Writing Communication or arise out of or are based upon the omission or alleged omission of a material fact necessary in order to make the statements therein, 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 Purchaser through the Representative specifically for use therein, and will reimburse any legal or other expenses reasonably incurred by such Purchaser 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 Purchaser 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 Purchaser consists of the following information in the Preliminary Offering Memorandum and Final Offering Memorandum: under the caption “Plan of Distribution” paragraphs 10, 11 and 12 (Short Positions).
(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 any 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 Guarantor on
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the one hand and the Purchasers 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 Guarantor on the one hand and the Purchasers 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 Guarantor on the one hand and the Purchasers 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 bear to the total discounts and commissions received by the Purchasers from the Company under this Agreement. 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 Guarantor or the Purchasers 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 Purchaser shall be required to contribute any amount in excess of the amount by which the total price at which the Offered Securities purchased by it were resold exceeds the amount of any damages which such Purchaser 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 Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Purchasers’ obligations in this subsection (d) to contribute are several in proportion to their respective purchase obligations and not joint. The Company, the Guarantor and the Purchasers 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 Purchasers 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 Purchasers. If any Purchaser or Purchasers default in their obligations to purchase Offered Securities hereunder on the Closing Date and the aggregate principal amount of Offered Securities that such defaulting Purchaser or Purchasers agreed but failed to purchase does not exceed 10% of the total principal amount of Offered Securities that the Purchasers are obligated to purchase on the Closing Date, the Representative may make arrangements satisfactory to the Company for the purchase of such Offered Securities by other persons, including any of the Purchasers, but if no such arrangements are made by the Closing Date, the non-defaulting Purchasers shall be obligated severally, in proportion to their respective commitments hereunder, to purchase the Offered Securities that such defaulting Purchasers agreed but failed to purchase on the Closing Date. If any Purchaser or Purchasers 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 Purchasers are obligated to purchase on the Closing Date and arrangements satisfactory to the Representative 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 Purchaser or the Company, except as provided in Section 10. As used in this Agreement, the term “Purchaser” includes any person substituted for a Purchaser under this Section. Nothing herein will relieve a defaulting Purchaser 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 Guarantor or their respective officers and of the several Purchasers 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 Purchaser, the Company, the Guarantor 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 Purchasers is not consummated for any reason other than solely because of the termination of this Agreement pursuant to Section 9 hereof, the Company
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will reimburse the Purchasers 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 Guarantor and the Purchasers pursuant to Section 8 hereof shall remain in effect. For the avoidance of doubt, if this Agreement is terminated pursuant to Section 9 hereof, the respective obligations of the Company, the Guarantor and the Purchasers 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 Purchasers, will be mailed, delivered or faxed and confirmed to Merrill Lynch, Pierce, Fenner & Smith Incorporated, One Bryant Park, New York, NY 10036, Fax: (212) 901-7897, Attention: High Grade Transaction Management/Legal; or, if sent to the Company or the Guarantor, will be mailed, delivered or faxed 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 Purchaser pursuant to Section 8 will be mailed, delivered or telegraphed and confirmed to such Purchaser.
In accordance with the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)), the Purchasers 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 Purchasers to properly identify their respective clients.
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, except that holders of Offered Securities shall be entitled to enforce the agreements for their benefit contained in the second and third sentences of Section 5(b) hereof against the Company as if such holders were parties thereto.
13. Representation of Purchasers. You will act for the several Purchasers in connection with this purchase, and any action under this Agreement taken by you jointly or individually will be binding upon all the Purchasers.
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 the Guarantor acknowledge and agree that:
(a) No Other Relationship. The Purchasers have been retained solely to act as Purchasers in connection with the sale of Offered Securities and that no fiduciary, advisory or agency relationship between the Company and the Guarantor, on the one hand, and the Purchasers, on the other hand, has been created in respect of any of the transactions contemplated by this Agreement or the Final Offering Memorandum, irrespective of whether the Purchasers have advised or is advising the Company or the Guarantor 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 Purchasers, and the Company and the Guarantor 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 Guarantor have been advised that the Purchasers and their affiliates are engaged in a broad range of transactions which may involve interests that differ from those of the Company and the Guarantor and that the Purchasers have no obligation to disclose such interests and transactions to the Company or the Guarantor by virtue of any fiduciary, advisory or agency relationship; and
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(d) Waiver. The Company and the Guarantor waive, to the fullest extent permitted by law, any claims they may have against the Purchasers for breach of fiduciary duty or alleged breach of fiduciary duty and agree that the Purchasers shall have no liability (whether direct or indirect) to the Company or the Guarantor 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 Guarantor, including stockholders, employees or creditors of the Company or the Guarantor.
16. Applicable Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York.
The Company and the Guarantor 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 Guarantor 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.
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EXECUTION VERSION
If the foregoing is in accordance with the Purchasers’ understanding of our agreement, kindly sign and return to us one of the counterparts hereof, whereupon it will become a binding agreement between the Company, the Guarantor and the several Purchasers in accordance with its terms.
| Very truly yours, | ||
| AK STEEL CORPORATION | ||
| By: | /s/ David E. Westcott | |
| Name: David E. Westcott | ||
| Title: Treasurer | ||
| AK STEEL HOLDING CORPORATION, as Parent and Guarantor | ||
| By: | /s/ David E. Westcott | |
| Name: David E. Westcott | ||
| Title: Treasurer | ||
[Signature Page to Purchase Agreement]
| The foregoing Purchase Agreement is hereby confirmed and accepted as of the date first above written. | ||||
| MERRILL LYNCH, PIERCE, FENNER & SMITH | ||||
| INCORPORATED | ||||
| By: | /s/ Mark W. Kushemba | |||
| Name: Mark W. Kushemba | ||||
| Title: Director | ||||
| Acting on behalf of itself and as the Representative of the several Purchasers | ||||
[Signature Page to Purchase Agreement]
SCHEDULE A
| Purchaser |
Principal Amount of Offered Securities |
|||
| Merrill Lynch, Pierce, Fenner & Smith Incorporated |
$ | 30,000,000 | ||
| Total |
$ | 30,000,000 | ||
|
|
|
|||
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SCHEDULE B
Issuer Free Writing Communications (included in the General Disclosure Package)
1. Final Term Sheet, dated June 19, 2013, a copy of which is attached hereto as Exhibit B-1.
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Exhibit B-1
AK Steel Corporation
Pricing Term Sheet
$30,000,000 8.750% Senior Secured Notes due 2018
| Issuer: | AK Steel Corporation | |
| Security Type: | Senior Secured Notes (the “Notes”) | |
| Principal Amount: | US $30,000,000 | |
| Maturity: | December 1, 2018 | |
| Coupon: | 8.750% | |
| Price to Public: | 106.5%, plus accrued and unpaid interest from June 1, 2013 | |
| Yield to Worst: | 7.017% | |
| Interest Payment Dates: | June 1 and December 1, commencing December 1, 2013 | |
| Optional Redemption: | At any time prior to December 1, 2015, the Notes will be redeemable at AK Steel’s option, in whole or in part, at a redemption price equal to 100% of 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 Steel’s option, in whole or in part, at any time on or after December 1, 2015 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 December 1 of the years indicated below: | |
| Year |
Redemption Price | |||
| 2015 |
104.375 | % | ||
| 2016 |
102.188 | % | ||
| 2017 and thereafter |
100.000 | % | ||
| At any time prior to December 1, 2015, AK Steel may redeem up to 35% of the principal amount of the Notes (including the existing Notes, the Notes offered hereby and any additional Notes) with the net cash proceeds of offerings of AK Holding’s shares of common stock at a redemption price of 108.750% 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 remains outstanding after the redemption. |
| CUSIP/ISIN: | U00974 AC6 / USU00974AC68 (Regulation S) 001546AQ3 / US001546AQ33 (Rule 144A) | |
| Distribution: | 144A / Reg S with Registration Rights | |
| Pricing Date: | June 19, 2013 | |
| Settlement Date: | June 24, 2013 (T + 3) | |
| Sole Book-Running Manager: | Merrill Lynch, Pierce, Fenner & Smith Incorporated | |
The information in this Pricing Term Sheet dated June 19, 2013 (the “Pricing Supplement”) to the Preliminary Offering Memorandum dated June 19, 2013 (the “Preliminary Offering Memorandum”) supplements the Preliminary Offering Memorandum and supersedes the information in the Preliminary Offering Memorandum to the extent inconsistent with the information in the Preliminary Offering Memorandum. In all other respects, this term sheet is qualified in its entirety by reference to the Preliminary Offering Memorandum.
This communication is confidential and is intended for the sole use of the person to whom it is provided by the sender. The information in this communication does not purport to be a complete description of these Notes or the offering. Please refer to the Preliminary Offering Memorandum for a more complete description.
This communication shall not constitute an offer to sell or the solicitation of an offer to buy securities nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the laws of any such jurisdiction.
The Notes have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or the laws of any other place. The Notes may not be offered or sold in the United States or to U.S. persons (as defined in Regulation S) except in transactions exempt from, or not subject to, the registration requirements of the Securities Act and are being offered only (1) to “qualified institutional buyers” as defined in Rule 144A under the Securities Act and (2) outside the United States to non-U.S. persons in compliance with Regulation S under the Securities Act.
June 19, 2013
SCHEDULE C
Security Agreements
| 1. | Security Agreement between the Company and U.S. Bank National Association. |
| 2. | Collateral Trust Agreement between the Company and U.S. Bank National Association. |
| 3. | Blocked Account Control Agreement between the Company, U.S. Bank National Association, as Collateral Agent, and U.S. Bank National Association as Depositary Bank. |
| 4. | Mortgages over the Company’s owned real properties constituting Notes Collateral located in Ashland, KY; Coshocton, OH; Mansfield, OH; Middletown, OH; Zanesville, OH; Rockport, IN; and Butler, PA. |
| 5. | Mortgage Amendments over the Company’s owned real properties constituting Notes Collateral located in Ashland, KY; Coshocton, OH; Mansfield, OH; Middletown, OH; Zanesville, OH; Rockport, IN; and Butler, PA. |
ANNEX I
Resale Pursuant to Regulation S or Rule 144A. Each Purchaser understands that:
Such Purchaser agrees that it has not offered or sold and will not offer or sell the Offered Securities in the United States or to, or for the benefit or account of, a U.S. person (other than a distributor), in each case, as defined in Rule 902 of Regulation S (i) as part of its distribution at any time and (ii) otherwise until 40 days after the later of the commencement of the offering of the Offered Securities pursuant hereto and the Closing Date, other than in accordance with Regulation S or another exemption from the registration requirements of the Securities Act. Such Purchaser agrees that, during such 40-day restricted period, it will not cause any advertisement with respect to the Offered Securities (including any “tombstone” advertisement) to be published in any newspaper or periodical or posted in any public place and will not issue any circular relating to the Offered Securities, except such advertisements as are permitted by and include the statements required by Regulation S.
Such Purchaser agrees that, at or prior to confirmation of a sale of Offered Securities by it to any distributor, dealer or person receiving a selling concession, fee or other remuneration during the 40-day restricted period referred to in Rule 903 of Regulation S, it will send to such distributor, dealer or person receiving a selling concession, fee or other remuneration a confirmation or notice to substantially the following effect:
“The Securities covered hereby have not been registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”), and may not be offered and sold within the United States or to, or for the account or benefit of, U.S. persons (i) as part of your distribution at any time or (ii) otherwise until 40 days after the later of the date the Securities were first offered to persons other than distributors in reliance upon Regulation S and the Closing Date, except in either case in accordance with Regulation S under the Securities Act (or in accordance with Rule 144A under the Securities Act or to accredited investors in transactions that are exempt from the registration requirements of the Securities Act), and in connection with any subsequent sale by you of the Securities covered hereby in reliance on Regulation S under the Securities Act during the period referred to above to any distributor, dealer or person receiving a selling concession, fee or other remuneration, you must deliver a notice to substantially the foregoing effect. Terms used above have the meanings assigned to them in Regulation S under the Securities Act.”
EXHIBIT A
Form of Opinion from Weil, Gotshal & Manges LLP
June [ ], 2013
Merrill Lynch, Pierce, Fenner & Smith Incorporated
One Bryant Park
New York, NY 10036
Ladies and Gentlemen:
We have acted as counsel to AK Steel Corporation (the “Company”) and AK Steel Holding Corporation (“Parent” and together with the Company, the “Companies”) in connection with the preparation, authorization, execution and delivery of, and the consummation of the transactions contemplated by, the purchase agreement, dated June [ ], 2013 (the “Agreement”) between the Companies and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as initial purchaser (the “Initial Purchaser”), relating to the issuance by the Company of $30,000,000 aggregate principal amount of its 8.750% Senior Secured Notes due 2018 (the “Notes”). The Notes are being issued pursuant to an indenture, dated as of November 20, 2012 (the “Indenture”), among the Companies and U.S. Bank National Association, as trustee (the “Trustee”). The Company’s obligations under the Indenture and the Notes are guaranteed by Parent, and such guarantee (the “Guarantee”) is set forth in the Indenture. The Notes are required to be exchanged for new notes (the “Exchange Notes” and the guarantee by Parent thereof, the “Exchange Guarantee”) in accordance with the terms and conditions of the Registration Rights Agreement, dated as of June [ ], 2013 (the “Registration Rights Agreement”), among the Companies and the Initial Purchaser. This opinion is being rendered to you pursuant to Section 7(c) 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 Guarantee; (v) the Preliminary Offering Memorandum, dated June [ ], 2013 (the “Preliminary Offering Memorandum”); (vi) the written communications identified in Schedule B to the Agreement (together with the Preliminary Offering Memorandum, the “Time of Sale Documents”) (vii) the Final Offering Memorandum, dated June [ ], 2013 (the “Offering Memorandum”); (viii) the certificate of incorporation of each of the Companies; (ix) the by-laws of each of the Companies; (x) the Registration Rights Agreement; (xi) the Security Agreement, dated as of November 20, 2012 (the “Security Agreement”), among the Company and U.S. Bank National Association, as collateral agent (the “Collateral Agent”); (xii) the Collateral Trust Agreement, dated as of November 20, 2012 (the “Collateral Trust Agreement”), among the Company, the Trustee and the Collateral Agent; (xiii)
the Blocked Account Control Agreement, dated as of November 20, 2012 (the “Control Agreement” and together with the Security Agreement and the Collateral Trust Agreement, the “Security Documents”) among the Company, the Collateral Agent and U.S. Bank National Association as depositary bank (the “Bank”), (xiv) the financing statements on Form UCC-1 attached hereto as Schedule A (the “Delaware Financing Statements”) and (xv) 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.
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” and “of which we are 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. Each of the Companies is a corporation validly existing and in good standing under the laws of the State of Delaware and each of the Companies 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. Each of the Companies 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 Companies have been duly authorized by all necessary corporate action on the part of each of the Companies. The Agreement has been duly and validly executed and delivered by each of the Companies.
3. Each of the Companies 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 the Companies have been duly authorized by all necessary corporate 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). No opinion is expressed in this paragraph as to the attachment, perfection or priority of any liens granted pursuant to the Indenture.
4. 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 Initial Purchaser 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).
5. Parent has all requisite corporate power and authority to execute and deliver the Guarantee and to perform its obligations thereunder. The execution, delivery and performance of the Guarantee by Parent have been duly authorized by all necessary corporate action on the part of Parent. The Guarantee has been duly and validly executed and delivered by Parent and, when the Notes have been duly authenticated by the Trustee in accordance with the Indenture and delivered to and paid for by the Initial Purchaser in accordance with the terms of the Agreement, will constitute the legal, valid and binding obligation of Parent, enforceable against Parent 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).
6. Each of the Companies has all requisite corporate power and authority to execute and deliver the Registration Rights Agreement and to perform its obligations thereunder. The execution, delivery and performance of the Registration Rights Agreement by the Companies have been duly authorized by all necessary corporate action on the part of each of the Companies. The Registration Rights Agreement has been duly and validly executed and delivered by the Companies and (assuming the due authorization, execution and delivery thereof by the other parties thereto) constitutes the legal, valid and binding obligations of each of the Companies, enforceable against each of them 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) except that rights to indemnification and contribution thereunder may be limited by federal or state securities laws or public policy relating thereto.
7. The Company has all requisite corporate power and authority to execute and deliver the Exchange Notes and to perform its obligations thereunder. The execution, delivery and performance of the Exchange Notes by the Company have been duly authorized by all necessary corporate action on the part of the Company. When the Exchange Notes have been duly and validly executed and delivered by the Company in accordance with the terms of the Registration Rights Agreement and the Exchange Offer (assuming the due authentication thereof by the Trustee) they 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).
8. Parent has all requisite corporate power and authority to execute and deliver the Exchange Guarantee and to perform its obligations thereunder. The execution, delivery and performance of the Exchange Guarantee by Parent have been duly authorized by all necessary corporate action on the part of Parent. When the Exchange Notes have been duly and validly executed and delivered by the Company in accordance with the terms of the Registration Rights Agreement and the Exchange Offer (assuming the due authentication thereof by the Trustee), the Exchange Guarantee will constitute the legal, valid and binding obligation of Parent, 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).
9. The Company has all requisite corporate power and authority to execute and delivery the Security Documents and to perform its obligations thereunder. The execution, delivery and performance of the Security Documents by the Company have been duly authorized by all necessary corporate action on the part of the Company. The Security Documents have been duly and validly executed and delivered by the Company and (assuming the due authorization, execution and delivery thereof by the other parties party thereto) constitute the legal, valid and binding obligations of the Company, 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) and except that certain remedial provisions of the Security Agreement are or may be unenforceable in whole or in part under the laws of the State of New York, but the inclusion of such provisions does not affect the validity of the Security Agreement, and the Security Agreement contains adequate provisions for the practical realization of the rights and benefits afforded thereby. No opinion is expressed in this paragraph as to the attachment, perfection or priority of any liens granted pursuant to the Security Documents.
10. The execution and delivery by each of the Companies of the Agreement, the Indenture, the Notes, the Guarantee, the Registration Rights Agreement, the Exchange Notes and the Security Documents, 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 by-laws; (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.
11. 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, the Notes, the Guarantee, the Registration Rights Agreement, the Exchange Notes and the Security Documents, 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.
12. Except as set forth in the Time of Sale Documents, the Offering Memorandum or the documents incorporated by reference therein, to our knowledge, there is no litigation, proceeding or governmental investigation pending or overtly threatened against Parent or any of its subsidiaries that relates to any of the transactions contemplated by the Agreement or which, if adversely determined, would have a material adverse effect on the business, assets or financial condition of Parent and its subsidiaries taken as a whole.
13. (a) The security interests created by the Security Agreement continue to be valid security interests in the Collateral (as defined in the Security Agreement), as security for the Secured Obligations (as defined in the Security Agreement), including the Notes. In reliance upon acknowledgement copies of the Delaware Financing Statements, and assuming that the Delaware Financing Statements have not been released, amended or terminated, such security interests continue to be perfected, to the extent a security interest in the Collateral may be perfected by the filing of a financing statement under the Uniform Commercial Code of the State of Delaware (the “DE UCC”).
(b) The security interests created by the Security Agreement continue to be valid security interests in the Collateral Proceeds Account described therein. We have assumed that (i) the Bank’s jurisdiction (within the meaning of Section 9-304(b)) of the UCC is the State of New York (the “NY UCC” and, together with the DE UCC, the “UCC”) and (ii) the Collateral Proceeds Account is a “deposit account” as defined in Section 9-102(a)(29) of the NY UCC.
The opinions in subparagraph (a) (and, with respect to clauses (A) and (B) below, the opinions in subparagraph (b)) are subject to the following exceptions:
A. that with respect to rights in the Collateral of the Company, we express no opinion, and have assumed that the Company has rights in the Collateral;
B. that with respect to any Collateral as to which the perfection of a lien or security interest is governed by the laws of any jurisdiction other than the States of Delaware and New York, we express no opinion;
C. that with respect to any Collateral which is or may become fixtures (as defined in Section 9-102(a)(41) of the UCC) or a commercial tort claim (as defined in Section 9-102(a)(13) of the UCC), we express no opinion.
In addition, the opinions in this paragraph 13 are subject to (i) the limitations on perfection of security interests in proceeds resulting from the operation of Section 9-315 of the UCC; (ii) the limitations with respect to buyers in the ordinary course of business imposed by Sections 9-318 and 9-320 of the UCC; (iii) the limitations with respect to documents, instruments and securities imposed by Sections 8-302, 9-312 and 9-331 of the UCC; (iv) the provisions of Section 9-203 of the UCC relating to the time of attachment; and (v) Section 552 of Title 11 of the United States Code (the “Bankruptcy Code”) with respect to any Collateral acquired by any Company subsequent to the commencement of a case against or by the Company under the Bankruptcy Code.
We further assume that all filings will be timely made and duly filed as necessary (i) in the event of a change in the name, identity or corporate structure of the Company, (ii) in the event of a change in the location of any Company and (iii) to continue to maintain the effectiveness of the original filings.
14. Assuming (i) the representations of the Initial Purchaser and the Companies contained in the Agreement are true, correct and complete; (ii) compliance by the Initial Purchaser and the Companies with their respective covenants set forth in the Agreement; (iii) the accuracy of the representations and warranties made in accordance with the Agreement and the Offering Memorandum by purchasers to whom the Initial Purchaser initially resells the Notes; and (iv) that purchasers to whom the Initial Purchaser initially resells the Notes receive a copy of the Offering Memorandum prior to such sale or a preliminary offering memorandum containing a section captioned “Notice to Investors” that is substantially similar to the section captioned “Notice to Investors” in the Offering Memorandum, it is not necessary in connection with the offer, sale and delivery of the Notes to the Initial Purchaser pursuant to the Agreement or the offer and resales of the Notes by the Initial Purchaser, in the manner contemplated by the Agreement and described in the Offering Memorandum, to register the Notes under the Securities Act of 1933 (it being understood that we express no opinion with respect to any subsequent reoffer or resale of the Notes), or to qualify the Indenture under the Trust Indenture Act of 1939, as amended (the “Trust Indenture Act”).
15. The Indenture conforms in all material respects to the requirements of the Trust Indenture Act and the rules and regulations of the Commission applicable to an indenture which is qualified thereunder.
16. The statements in the Time of Sale Documents and the Offering Memorandum under the captions “Description of the Notes” and “Description of Certain Indebtedness,” in each case insofar as such statements constitute summaries of the legal matters or documents referred to therein, fairly summarize the matters referred to therein in all material respects.
17. The statements in the Time of Sale Documents and the Offering Memorandum under the caption “U.S. Federal Income Tax Consequences,” 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.
18. Neither of the Companies is, and immediately after giving effect to the sale of the Notes and the application of the proceeds thereof as described in the Offering Memorandum neither will be, an “investment company” as defined in the Investment Company Act of 1940, as amended.
The opinions expressed herein are limited to the laws of the State of New York, the corporate laws of the State of Delaware, Articles 8 and 9 of the DE UCC 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,
Form of 10b-5 letter from Weil, Gotshal & Manges LLP
June [ ], 2013
Merrill Lynch, Pierce, Fenner & Smith Incorporated
One Bryant Park
New York, NY 10036
Ladies and Gentlemen:
Reference is made to the Preliminary Offering Memorandum, dated June [ ], 2013 (the “Preliminary Offering Memorandum”) and the Offering Memorandum, dated June [ ], 2013 (the “Offering Memorandum”), relating to the 8.750% Senior Secured Notes due 2018 (the “Securities”) of AK Steel Corporation (the “Company”), as to which we have acted as counsel to the Company. We refer to the Preliminary Offering Memorandum, taken together with the term sheet and other documents listed on Schedule A hereto, as the “Pricing Disclosure Package.” We refer to the Preliminary Offering Memorandum, the term sheet and other documents listed on Schedule A hereto, and the Offering Memorandum as the “Offering Documents.” This letter is furnished to you pursuant to Section [7(c)] of the Purchase Agreement, dated as of June [ ], 2013, among the Company, AK Steel Holding Corporation, as guarantor, and you, as the initial purchaser (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 16 and 17 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.
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, no facts have come to our attention which cause us to believe that the Pricing Disclosure Package (including the Incorporated Documents), as of [6:30] PM on June [ ], 2013, 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 the Offering Memorandum (including the Incorporated Documents), as of its date 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 initial purchaser 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,
EXHIBIT C-1
Form of Opinion from Indiana Counsel
[TO BE PLACED ON LETTERHEAD OF WYATT, TARRANT & COMBS, LLP]
June [ ], 2013
U.S. Bank National Association, as
Collateral Agent for the benefit of
the Secured Parties, as described
in the Mortgage
c/o U.S. Bank National Association
425 Walnut Street, 6th Floor
Cincinnati, OH 45202
Attn: Corporate Trust Department
Re: The Mortgage Amendment and other Documents (as defined below)
Ladies and Gentlemen:
We have acted as special legal counsel in the State of Indiana (the “State”) in connection with the original closing of the transactions contemplated by that certain Indenture dated as of November 20, 2012 (the “Indenture”), entered into among AK Steel Corporation, a Delaware corporation, as the Company described therein (the “Mortgagor”), AK Steel Holding Corporation, a Delaware corporation, as the Parent Guarantor described therein (the “Guarantor”), U.S. Bank National Association (“U.S. Bank”), as the Trustee described therein (U.S. Bank, when acting in such capacity, is referred to herein as the “Trustee”), and U.S. Bank, as the Collateral Agent for the Secured Parties (U.S. Bank, when acting in such capacity, is referred to herein as the “Collateral Agent”), and in connection with the delivery of the mortgage more particularly described in Schedule I attached hereto (the “Mortgage”). Certain initially capitalized terms used but not defined herein shall have the respective meanings assigned to them in the Mortgage.
As legal counsel in the State to Mortgagor as described above, we have examined copies each of the following documents: [i] the Indenture; [ii] the Mortgage; [iii] the Security Agreement dated as of November 20, 2012 (the “Security Agreement”), entered into among Mortgagor, the other grantors party thereto and the Collateral Agent; [iv] the Collateral Trust Agreement dated as of November 20, 2012
(the “Collateral Trust Agreement”), entered into among Mortgagor, the other grantors party thereto, U.S. Bank, as Trustee and Collateral Agent; [v] the Fixture Filing more particularly described in Schedule II attached hereto (the “Fixture Filing”); and [vi] Amendment No. 1 to Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing (the “Mortgage Amendment”). The Indenture, the Mortgage, the Security Agreement, the Collateral Trust Agreement, the Fixture Filing and the Mortgage Amendment are collectively referred to herein as the “Documents”. Mortgagor, Parent Guarantor, Trustee and Collateral Agent and all other parties to any of the Documents are sometimes collectively referred to herein as the “Transaction Parties”.
This opinion (the “Opinion”) is furnished at the request of the Collateral Agent and in accordance with the requirements set forth in the Documents and supplements the previous opinion letter dated March 20, 2013, which we rendered to the Collateral Agent as special legal counsel in the State for Mortgagor in connection with the original closing of the transactions contemplated by the Mortgage (the “Prior Opinion”). This Opinion and the matters addressed herein are expressly made and rendered subject to (and with reliance upon) all of the assumptions, qualifications and limitations set forth in our Prior Opinion, as restated with respect to the matters set forth herein as of the date hereof as is fully set forth herein.
We call your attention to the fact that our engagement in this matter has been limited to representing Mortgagor with respect to matters of Indiana law relating to the Mortgage Amendment. Accordingly, there may be matters of a legal nature that could have a bearing on the ability of Mortgagor or one or more of the other Transaction Parties to perform under the Documents with respect to which we have not been consulted, and to the extent the obligations of Mortgagor may be dependent on such matters and their possible effect upon Mortgagor and/or this transaction, we express no opinion.
As to certain questions of fact material to our Opinion, we have relied without independent investigation on, and we have assumed the accuracy and validity of, the representations and warranties made in the Documents. Except for the Documents described above, we have not reviewed any other documents or instruments executed or delivered by the Transaction Parties or conducted any other examination of any public records, and the opinions rendered herein are limited accordingly.
For purposes of this Opinion, we have assumed with your permission and without independent investigation, the following:
(a) Mortgagor is a corporation duly formed, validly existing and in good standing under the laws of the State of Delaware and has all requisite corporate power and all material governmental licenses, authorizations, consents and approvals necessary to own and operate the Mortgaged Property and to enter into and consummate the transactions contemplated by the Documents.
(b) To the extent the obligations of Mortgagor may be dependent on such matters, each of the other Transaction Parties is duly formed or organized, as applicable, is validly existing and in good standing under the laws of the applicable jurisdiction of formation or organization, as applicable, and has all requisite power and authority (entity, corporate or otherwise) and all material governmental licenses, authorizations, consents and approvals necessary to enter into and consummate the transactions contemplated by the Documents.
(c) The execution, delivery and performance by each of the Transaction Parties of the Documents to which it is a party: [i] are within its stated powers and authority; [ii] have been duly authorized by all necessary action of and by such Transaction Parties; [iii] do not require any authorization, approval or consent of, or filings or registrations with, any governmental or regulatory authority or agency outside of the State, except for authorizations, consents or approvals that we have been advised have already been obtained or filings that have already been made and that remain in effect; [iv] do not contravene any provision of its certificate of incorporation or bylaws or other applicable organizational or governance documents of such party; and [v] do not contravene or constitute a breach of or default under any applicable provision of the laws of any jurisdiction other than the State or any applicable regulation thereunder or under any agreement, judgment, injunction, order, decree or other instrument binding upon it, as applicable.
(d) Each of the Documents has been duly executed and delivered by each of the applicable Transaction Parties and contains the required acknowledgment (where applicable) with notary’s seal affixed of the parties thereto and all required exhibits attached.
(e) The persons who have executed and delivered the Documents on behalf of each of the Transaction Parties thereto are duly authorized to do so by and on behalf of such party.
(f) The genuineness of the signatures of all persons signing any document, instrument or certificate and the legal capacity of natural persons.
(g) Each of the Documents: [i] except with respect to Mortgagor (and only to the limited extent set forth herein), constitutes the legal, valid and binding obligation of the Transaction Parties and is enforceable against each of such Transaction Parties in accordance with its respective terms; and [ii] are enforceable under the laws of the State of New York, as applicable.
(h) The Mortgaged Property exists and Mortgagor owns and has sufficient rights in the Mortgaged Property purported to be owned by it necessary to grant the security interests in such Mortgaged Property contemplated by the Documents.
(i) The Mortgage Amendment will be duly recorded and properly and timely filed in the appropriate records of the Filing Office (as hereinafter defined), as applicable, in accordance with State law.
(j) The documents submitted to us as originals are authentic and the documents submitted to us as copies conform to the original, executed documents.
(k) The Collateral Agent and each of the Secured Parties are either: [i] duly qualified to do business and are in good standing as a foreign entity in the State or are otherwise exempt from qualification requirements; or [ii] if not qualified or entitled to exemption from qualification, are engaged in no activities or transactions in the State that would require them to qualify to do business in the State.
(l) The Collateral Agent, the Secured Parties and the Noteholders have each given value for the security interests created and the Liens granted under the Documents.
(m) There has been no mutual mistake of fact or misunderstanding, fraud, duress or undue influence on the part of any party to or beneficiary of the Documents with respect to the transactions provided for therein.
(n) The Collateral Agent and each of the other Transaction Parties have complied with and will comply with all material terms and conditions of the Documents to be complied with by such parties and their conduct has complied and will comply with all requirements of good faith, fair dealing and conscionability.
(o) The Collateral Agent and each of the other Transaction Parties have complied with all legal requirements pertaining to its respective status as such status relates to its rights to enforce the Documents against Mortgagor.
(p) The indebtedness evidenced by the Notes complies with any lending limitations and other restrictions applicable to the Noteholders.
(q) No bankruptcy or insolvency proceeding is pending by or against Mortgagor.
(r) There are no agreements or understandings among the Transaction Parties, written or oral, and there is no usage of trade or course of prior dealing among the Transaction Parties that would, in either case, define, supplement or qualify the terms of the Documents.
Upon the basis of the foregoing, and subject to the assumptions, qualifications and limitations set forth herein, we are of the opinion, under applicable State law in effect on the date of this Opinion, that:
1. The execution, delivery and/or recordation of an amendment to the Mortgage is required or recommended in order to assure that: [i] the Collateral Agent will continue to have a valid and enforceable mortgage lien on the Mortgaged Property for the benefit of the Secured Parties with the same priority as provided by the lien of the Mortgage; and [ii] the Mortgage will continue to secure the Secured Obligations described in the Mortgage, as amended by the Mortgage Amendment to include the Initial Additional Notes issued pursuant to the Indenture. The Mortgage, as amended by the Mortgage Amendment, will continue to constitute legal, valid and binding obligations of Mortgagor, enforceable in accordance with its terms, except as the enforceability thereof may be limited by bankruptcy, insolvency or other similar laws relating to the enforcement of creditors’ rights generally and by general equitable principles.
2. The Mortgage, as amended by the Mortgage Amendment, will continue to constitute a legal, valid and binding obligation of Mortgagor and, to the extent it is governed by the laws of the State, will be enforceable against Mortgagor in accordance with its terms, except as set forth below and in our Prior Opinion.
3. None of the execution, delivery and performance by Mortgagor of the Mortgage Amendment nor the consummation of the transactions contemplated thereby require any authorization, approval or consent of, or filings or registrations with any governmental or regulatory authority or agency of or in the State, except as contemplated hereby.
4. The Mortgage Amendment is in appropriate form for recording in the applicable Recorder’s Office of the County in the State in which the Real Property is located (the “Filing Office”).
5. Neither the Collateral Agent nor any of the other Secured Parties is required [a] to pay any tax in the State or be qualified to do business or file any designation for service of process or file any reports in the State, or [b] comply with any statutory or regulatory rule or requirement applicable only to financial institutions chartered or qualified to do business in the State, in each instance solely by reason of its execution and delivery or acceptance of the Mortgage Amendment or the other Documents or by reason of its participation in any of the transactions under or contemplated by the Documents.
6. Upon proper recording of the Mortgage Amendment in the Filing Office, the security interests originally granted by Mortgagor in favor of the Collateral Agent for the benefit of the Secured Parties pursuant to the Mortgage upon such of the Mortgaged Property described in the Mortgage as constitutes real property (the “Real Property”) and as constitutes fixtures under the laws of the State (which such security interests were originally perfected upon the recording of the Mortgage and the filing of the Fixture Filing as described in our Prior Opinion) will continue to be perfected as originally accomplished by the recording of the Mortgage and the filing of the Fixture Filing in the Filing Office as described in our Prior Opinion to the extent that a security interest in such Mortgaged Property can be perfected by such recording and filing in the Filing Office, and will not require any further consent or authorization of, approval by, notice to, filing with or other act by or in respect of, any governmental authority of the State.
7. The recording of the Mortgage Amendment in the appropriate records of the applicable Filing Office is the only action, recording or filing necessary to publish notice and to establish of record the rights of the parties under the Mortgage, as amended by the Mortgage Amendment, with respect to which such rights where perfection can be accomplished upon recordation of the Mortgage.
8. No state or local recording taxes, fees or other charges (including without limitation mortgage taxes, intangible taxes, documentary stamp taxes, recording taxes, transfer taxes or similar taxes or charges), are payable to the State or any jurisdiction therein in connection with the execution, delivery, or filing for record of the Mortgage Amendment, except for filing fees and recording fees in a nominal amount.
The foregoing opinions are subject to and are expressly limited by the following assumptions, qualifications and limitations, in addition to those previously set forth:
A. The opinion concerning enforceability of the Mortgage, as amended by the Mortgage Amendment, is subject to: [i] all applicable bankruptcy, insolvency, reorganization, fraudulent conveyancing, preferential transfer, moratorium or similar laws of general application and court decisions affecting the rights of creditors; [ii] general principles of equity (regardless of whether enforceability is considered in a proceeding at law or in equity), including concepts of good faith, fair dealing, commercial reasonableness, unconscionability and materiality; and [iii] the assumption that [a] there has not been any mutual mistake of fact or misunderstanding, fraud, duress, or undue influence with respect to any of the Transaction Parties, and [b] the Collateral Agent, the Secured Parties and any agent acting for any such parties in connection with the Secured Obligations have acted without notice of any valid defense against the enforcement of any rights created by, or adverse claim to any property or security interest transferred or created as part of, the Secured Obligations.
B. Certain rights, remedies and other provisions in the Documents may be limited or rendered unenforceable by applicable State laws or judicial decisions governing such provisions, but in our opinion such laws and judicial decisions do not, subject to the other qualifications and limitations in this opinion, render the Documents invalid as a whole, and there exist, in the Documents or pursuant to applicable law, adequate rights, remedies and provisions for the practical realization of the principal benefits intended to be provided by the Documents, except for the economic consequences of any judicial, administrative or other procedural delay which may be imposed by, relate to or result from such laws and judicial decisions.
(d) C. Without limitation of Paragraph B above:
(1) The provisions of the Documents that attempt to incorporate by reference the provisions of any unrecorded document may not constitute constructive notice to third-parties without actual notice of the contents of the unrecorded document.
(2) Any provisions contained in the Mortgage which provide that the Documents secure future advances are limited by IC §32-29-1-10 which provides, in pertinent part, that a loan secured by a mortgage lien on real property in the State may secure future obligations and advances up to the maximum amount stated in the mortgage. The lien of the Mortgage will secure such future obligations and advances only to the extent of the dollar amount so specified in the Mortgage, as amended by the Mortgage Amendment.
(3) The provisions contained in the Documents regarding the immediate right to realize upon the Mortgaged Property and institute an action with respect to the Secured Obligations are subject to the provisions of IC §32-30-10-10 regarding the commencement of actions to recover on the same debt.
(4) IC §32-28-1-2 requires a holder of a lien on real property to release the lien in the Recorder’s Office where the lien is recorded within fifteen (15) days from the date of satisfaction, and any provisions in the Mortgage in conflict with this requirement may not be enforceable.
(5) Any provisions contained in the Documents for waiver of jury trial by the Transaction Parties or that impose liquidated damages, penalties, forfeitures, late payment charges or an increase in the applicable interest rate upon default by the Transaction Parties or upon other conditions, that appoint the Collateral Agent, the Secured Parties or others as the agent or attorney-in-fact for the Transaction Parties that provide that the Collateral Agent, the Secured Parties or any other Person shall be liable only for gross negligence or willful misconduct, or that purport to select a particular court as the forum for the resolution of disputes may not be enforceable under State law but their inclusion in the Documents will not impair the enforceability of the other provisions of the Documents.
(6) We express no opinion as to the enforceability of any provisions of the Documents that purport to make the Mortgaged Property secure future indebtedness of Mortgagor that is not evidenced by the Notes and is of a materially different class or character than the indebtedness evidenced by the Notes and/or the Secured Obligations. We express no opinion regarding the effectiveness of the change in the amount of future advances purported to be secured by the Mortgage to the extent of and in relation to intervening matters of record between the date the Mortgage was originally recorded in the Filing Office and the date an amendment to the Mortgage is filed in the Filing Office.
(7) No opinion is expressed on [a] the laws, statutes and ordinances, administrative decisions, rules and regulations and other legal requirements of counties, towns, municipalities and political subdivisions of the State (other than the county, town, municipality and political subdivision of the State in which the Mortgage shall be recorded) or [b] any law or regulation concerning securities, taxation, labor, employee benefits, environmental protection, anti-trust or unfair competition.
D. Our opinions expressed in above are not intended to pertain in any way to any consents, authorizations or approvals which the Transaction Parties or any other person may be required to obtain after the date of this Opinion, in order to comply with the covenants required to be performed by such party contained in the Documents.
(e) E. We have assumed that: [1] the Mortgaged Property exists and that Mortgagor has sufficient rights in the applicable Mortgaged Property to grant a security interest in such Mortgaged Property, and we express no opinion as to the nature or extent of the rights of Mortgagor or title of any party in or to any of the Mortgaged Property; and [2] adequate consideration has been provided to Mortgagor to support the enforceability and performance of the obligations of Mortgagor arising under the Mortgage Amendment and each of the other Documents.
(f) F. We express no opinion regarding the validity or enforceability: [1] of the security interests under the Mortgage as security for any future liabilities or obligations of Mortgagor to the Collateral Agent, the Secured Parties or the Noteholders that are determined, in the case of liabilities or obligations created in the future, not to constitute “future advances” within the meaning of Section 9.1-204(c) of the Uniform Commercial Code as adopted in the State (the “UCC”), or are determined not to have been within the contemplation of the parties at the time the Documents were executed; [2] of the liens, assignments or security interests under the Mortgage in the Mortgaged Property consisting of contracts, agreements or instruments that contain provisions that prohibit or impose conditions upon the granting of an assignment, security interest, pledge or similar transfer thereof, except to the extent such provisions are rendered ineffective under Sections 9.1-406, 9.1-407, 9.1-408 or 9.1-409 of the UCC; or [3] of the security interests under the Mortgage as they relate to any interest in or claim in, or under, any policy of insurance. With respect to future advances that are not “obligatory”, the mortgage lien created by the Mortgage will be subordinate to the claims of any lienholders, purchasers and other persons of which the Collateral Agent or the Secured Parties have actual notice at the time the advances are made.
(g) G. The security interest created in [1] proceeds of the Mortgaged Property and the perfection of such security interest is limited to the extent set forth in Section 9.1-315 of the UCC and [2] any after-acquired commercial tort claim is limited to the extent set forth in Section 9.1-204 of the UCC.
(h) H. Provisions contained in the Documents purporting to make the Transaction Parties liable for attorneys’ fees incurred by the Collateral Agent, the Secured Parties or any other Person are enforceable only to the extent of “reasonable attorney fees”.
(i) I. We have not examined title to or ownership of any of the real or personal property intended to be encumbered pursuant to the Documents and express no opinion with regard to: [1] title to or ownership of such real or personal property; [2] priority of the liens, security interests or assignments created by the Documents; [3] the factual adequacy of the descriptions of the real or personal property for the
purpose of encumbering the actual property intended to be encumbered pursuant to the Documents; and [4] survey, zoning or land use (including subdivision) matters relating to the property intended to be encumbered pursuant to the Documents. We understand that with respect to title matters (including matters relating to the perfection and priority of the liens on the Mortgaged Property), the Collateral Agent and the Secured Parties will be relying on the title insurance commitment issued by a national title insurance company. We have not made any investigation of, and do not express an opinion as to, any such matters.
(j) This Opinion is limited to the law (excluding the principles of conflict of laws) of the State, and we do not express any opinion concerning any other law. Our advice on each legal issue addressed in this letter represents our opinion as to how that issue would be resolved were it to be considered by the courts of the jurisdiction upon whose law our opinion on that issue is based. The manner in which any particular issue would be treated in any actual court case would depend in part on facts and circumstances particular to the case, and this letter is not intended to guarantee the outcome of any legal dispute which may arise in the future.
(k) The opinions expressed in this letter are given solely the benefit of [i] Collateral Agent, its successors and assigns, [ii] the Secured Parties from time-to-time, their successors and assigns, [iii] any Person who shall acquire a participation interest in the interest of any of the Secured Parties (collectively, the “Reliance Parties”), and no other person or entity may rely hereon without our prior written consent except that our prior written consent is not needed to furnish a copy of this Opinion to any Reliance Party (or any Person considering whether to become a Reliance Party), or otherwise as may be required of any Reliance Party by applicable law or regulation or in accordance with any auditing or oversight function or request of regulatory agencies to which a Reliance Party is subject. We expressly disclaim any responsibility for advising you of any change occurring hereafter in circumstances concerning the transaction which is the subject of this Opinion, including any changes in the law or in factual matters occurring after the date of this Opinion.
(l) We are members of the Bar of the State of Indiana and we do not hold ourselves out as being conversant with, and express no opinion as to, the laws of any jurisdiction other than the laws of the State of Indiana. While certain members of this firm are admitted to practice in other jurisdictions, for purposes of this Opinion we have not examined any laws other than the laws of the State and the federal laws of the United States, nor have we consulted with members of this firm who are admitted in other jurisdictions with respect to the laws of such jurisdictions.
Sincerely,
WYATT, TARRANT & COMBS, LLP
cc: Opinions & Standards Committee
SCHEDULE I
(Description of the Mortgage)
Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing dated as of March 20, 2013, made by AK Steel Corporation, as Mortgagor, in favor of U.S. Bank National Association, as Collateral Agent for the Secured Parties, as Mortgagee, relating to the Mortgaged Property having an address of 6500 North U.S. 231 in the City of Rockport, County of Spencer, State of Indiana, recorded as [ ] in the Office of the Recorder of Spencer County, Indiana.
SCHEDULE II
(Description of Fixture Filing)
Uniform Commercial Code Financing Statement on form UCC-1 naming AK Steel Corporation, as the “Debtor”, and U.S. Bank National Association, as Collateral Agent, as the “Secured Party”, filed in the real estate records as a fixture filing in Fixture Filing Book [ ], Page [ ], the Office of the Recorder of Spencer County, Indiana.
EXHIBIT C-2
Form of Opinion from Kentucky Counsel
[TO BE PLACED ON LETTERHEAD OF WYATT, TARRANT & COMBS, LLP]
June [ ], 2013
U.S. Bank National Association, as
Collateral Agent for the benefit of
the Secured Parties, as described
in the Mortgage
c/o U.S. Bank National Association
425 Walnut Street, 6th Floor
Cincinnati, OH 45202
Attn: Corporate Trust Department
Re: The Mortgage Amendment and other Documents (as defined below)
Ladies and Gentlemen:
We have acted as special legal counsel in the Commonwealth of Kentucky (the “State”) in connection with the original closing of the transactions contemplated by that certain Indenture dated as of November 20, 2012 (the “Indenture”), entered into among AK Steel Corporation, a Delaware corporation, as the Company described therein (the “Mortgagor”), AK Steel Holding Corporation, a Delaware corporation, as the Parent Guarantor described therein (the “Guarantor”), U.S. Bank National Association (“U.S. Bank”), as the Trustee described therein (U.S. Bank, when acting in such capacity, is referred to herein as the “Trustee”), and U.S. Bank, as the Collateral Agent for the Secured Parties (U.S. Bank, when acting in such capacity, is referred to herein as the “Collateral Agent”), and in connection with the delivery of the mortgage more particularly described in Schedule I attached hereto (the “Mortgage”). Certain initially capitalized terms used but not defined herein shall have the respective meanings assigned to them in the Mortgage.
As legal counsel in the State to Mortgagor as described above, we have examined copies each of the following documents: [i] the Indenture; [ii] the Mortgage; [iii] the Security Agreement dated as of November 20, 2012 (the “Security Agreement”), entered into among Mortgagor, the other grantors party thereto and the Collateral Agent; [iv] the Collateral Trust Agreement dated as of November 20, 2012
(the “Collateral Trust Agreement”), entered into among Mortgagor, the other grantors party thereto, U.S. Bank, as Trustee and Collateral Agent; [v] the Fixture Filing more particularly described in Schedule II attached hereto (the “Fixture Filing”); and [vi] Amendment No. 1 to Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing (the “Mortgage Amendment”). The Indenture, the Mortgage, the Security Agreement, the Collateral Trust Agreement, the Fixture Filing and the Mortgage Amendment are collectively referred to herein as the “Documents”. Mortgagor, Parent Guarantor, Trustee and Collateral Agent and all other parties to any of the Documents are sometimes collectively referred to herein as the “Transaction Parties”.
This opinion (the “Opinion”) is furnished at the request of the Collateral Agent and in accordance with the requirements set forth in the Documents and supplements the previous opinion letter dated March 20, 2013, which we rendered to the Collateral Agent as special legal counsel in the State for Mortgagor in connection with the original closing of the transactions contemplated by the Mortgage (the “Prior Opinion”). This Opinion and the matters addressed herein are expressly made and rendered subject to (and with reliance upon) all of the assumptions, qualifications and limitations set forth in our Prior Opinion, as restated with respect to the matters set forth herein as of the date hereof as is fully set forth herein.
We call your attention to the fact that our engagement in this matter has been limited to representing Mortgagor with respect to matters of Indiana law relating to the Mortgage Amendment. Accordingly, there may be matters of a legal nature that could have a bearing on the ability of Mortgagor or one or more of the other Transaction Parties to perform under the Documents with respect to which we have not been consulted, and to the extent the obligations of Mortgagor may be dependent on such matters and their possible effect upon Mortgagor and/or this transaction, we express no opinion.
As to certain questions of fact material to our Opinion, we have relied without independent investigation on, and we have assumed the accuracy and validity of, the representations and warranties made in the Documents. Except for the Documents described above, we have not reviewed any other documents or instruments executed or delivered by the Transaction Parties or conducted any other examination of any public records, and the opinions rendered herein are limited accordingly.
For purposes of this Opinion, we have assumed with your permission and without independent investigation, the following:
(a) Mortgagor is a corporation duly formed, validly existing and in good standing under the laws of the State of Delaware and has all requisite corporate power and all material governmental licenses, authorizations, consents and approvals necessary to own and operate the Mortgaged Property and to enter into and consummate the transactions contemplated by the Documents.
(b) To the extent the obligations of Mortgagor may be dependent on such matters, each of the other Transaction Parties is duly formed or organized, as applicable, is validly existing and in good standing under the laws of the applicable jurisdiction of formation or organization, as applicable, and has all requisite power and authority (entity, corporate or otherwise) and all material governmental licenses, authorizations, consents and approvals necessary to enter into and consummate the transactions contemplated by the Documents.
(c) The execution, delivery and performance by each of the Transaction Parties of the Documents to which it is a party: [i] are within its stated powers and authority; [ii] have been duly authorized by all necessary action of and by such Transaction Parties; [iii] do not require any
authorization, approval or consent of, or filings or registrations with, any governmental or regulatory authority or agency outside of the State, except for authorizations, consents or approvals that we have been advised have already been obtained or filings that have already been made and that remain in effect; [iv] do not contravene any provision of its certificate of incorporation or bylaws or other applicable organizational or governance documents of such party; and [v] do not contravene or constitute a breach of or default under any applicable provision of the laws of any jurisdiction other than the State or any applicable regulation thereunder or under any agreement, judgment, injunction, order, decree or other instrument binding upon it, as applicable.
(d) Each of the Documents has been duly executed and delivered by each of the applicable Transaction Parties and contains the required acknowledgment (where applicable) with notary’s seal affixed of the parties thereto and all required exhibits attached.
(e) The persons who have executed and delivered the Documents on behalf of each of the Transaction Parties thereto are duly authorized to do so by and on behalf of such party.
(f) The genuineness of the signatures of all persons signing any document, instrument or certificate and the legal capacity of natural persons.
(g) Each of the Documents: [i] except with respect to Mortgagor (and only to the limited extent set forth herein), constitutes the legal, valid and binding obligation of the Transaction Parties and is enforceable against each of such Transaction Parties in accordance with its respective terms; and [ii] are enforceable under the laws of the State of New York, as applicable.
(h) The Mortgaged Property exists and Mortgagor owns and has sufficient rights in the Mortgaged Property purported to be owned by it necessary to grant the security interests in such Mortgaged Property contemplated by the Documents.
(i) The Mortgage Amendment will be duly recorded and properly and timely filed in the appropriate records of the Filing Office (as hereinafter defined), as applicable, in accordance with State law.
(j) The documents submitted to us as originals are authentic and the documents submitted to us as copies conform to the original, executed documents.
(k) The Collateral Agent and each of the Secured Parties are either: [i] duly qualified to do business and are in good standing as a foreign entity in the State or are otherwise exempt from qualification requirements; or [ii] if not qualified or entitled to exemption from qualification, are engaged in no activities or transactions in the State that would require them to qualify to do business in the State.
(l) The Collateral Agent, the Secured Parties and the Noteholders have each given value for the security interests created and the Liens granted under the Documents.
(m) There has been no mutual mistake of fact or misunderstanding, fraud, duress or undue influence on the part of any party to or beneficiary of the Documents with respect to the transactions provided for therein.
(n) The Collateral Agent and each of the other Transaction Parties have complied with and will comply with all material terms and conditions of the Documents to be complied with by such parties and their conduct has complied and will comply with all requirements of good faith, fair dealing and conscionability.
(o) The Collateral Agent and each of the other Transaction Parties have complied with all legal requirements pertaining to its respective status as such status relates to its rights to enforce the Documents against Mortgagor.
(p) The indebtedness evidenced by the Notes complies with any lending limitations and other restrictions applicable to the Noteholders.
(q) No bankruptcy or insolvency proceeding is pending by or against Mortgagor.
(r) There are no agreements or understandings among the Transaction Parties, written or oral, and there is no usage of trade or course of prior dealing among the Transaction Parties that would, in either case, define, supplement or qualify the terms of the Documents.
Upon the basis of the foregoing, and subject to the assumptions, qualifications and limitations set forth herein, we are of the opinion, under applicable State law in effect on the date of this Opinion, that:
1. The execution, delivery and/or recordation of an amendment to the Mortgage is required or recommended in order to assure that: [i] the Collateral Agent will continue to have a valid and enforceable mortgage lien on the Mortgaged Property for the benefit of the Secured Parties with the same priority as provided by the lien of the Mortgage; and [ii] the Mortgage will continue to secure the Secured Obligations described in the Mortgage, as amended by the Mortgage Amendment to include the Initial Additional Notes issued pursuant to the Indenture. The Mortgage, as amended by the Mortgage Amendment, will continue to constitute legal, valid and binding obligations of Mortgagor, enforceable in accordance with its terms, except as the enforceability thereof may be limited by bankruptcy, insolvency or other similar laws relating to the enforcement of creditors’ rights generally and by general equitable principles.
2. The Mortgage, as amended by the Mortgage Amendment, will continue to constitute a legal, valid and binding obligation of Mortgagor and, to the extent it is governed by the laws of the State, will be enforceable against Mortgagor in accordance with its terms, except as set forth below and in our Prior Opinion.
3. None of the execution, delivery and performance by Mortgagor of the Mortgage Amendment nor the consummation of the transactions contemplated thereby require any authorization, approval or consent of, or filings or registrations with any governmental or regulatory authority or agency of or in the State, except as contemplated hereby.
4. The Mortgage Amendment is in appropriate form for recording in the applicable Clerk’s Office of the County in the State in which the Real Property is located (the “Filing Office”).
5. Neither the Collateral Agent nor any of the other Secured Parties is required [a] to pay any tax in the State or be qualified to do business or file any designation for service of process or file any reports in the State, or [b] comply with any statutory or regulatory rule or requirement applicable only to financial institutions chartered or qualified to do business in the State, in each instance solely by reason of its execution and delivery or acceptance of the Mortgage Amendment or the other Documents or by reason of its participation in any of the transactions under or contemplated by the Documents.
6. Upon proper recording of the Mortgage Amendment in the Filing Office, the security interests originally granted by Mortgagor in favor of the Collateral Agent for the benefit of the Secured Parties pursuant to the Mortgage upon such of the Mortgaged Property described in the Mortgage as constitutes real property (the “Real Property”) and as constitutes fixtures under the laws of the State (which such security interests were originally perfected upon the recording of the Mortgage and the filing of the Fixture Filing as described in our Prior Opinion) will continue to be perfected as originally accomplished by the recording of the Mortgage and the filing of the Fixture Filing in the Filing Office as described in our Prior Opinion to the extent that a security interest in such Mortgaged Property can be perfected by such recording and filing in the Filing Office, and will not require any further consent or authorization of, approval by, notice to, filing with or other act by or in respect of, any governmental authority of the State.
7. The recording of the Mortgage Amendment in the appropriate records of the applicable Filing Office is the only action, recording or filing necessary to publish notice and to establish of record the rights of the parties under the Mortgage, as amended by the Mortgage Amendment, with respect to which such rights where perfection can be accomplished upon recordation of the Mortgage.
8. No state or local recording taxes, fees or other charges (including without limitation mortgage taxes, intangible taxes, documentary stamp taxes, recording taxes, transfer taxes or similar taxes or charges), are payable to the State or any jurisdiction therein in connection with the execution, delivery, or filing for record of the Mortgage Amendment, except for filing fees and recording fees in a nominal amount.
The foregoing opinions are subject to and are expressly limited by the following assumptions, qualifications and limitations, in addition to those previously set forth:
C. The opinion concerning enforceability of the Mortgage, as amended by the Mortgage Amendment, is subject to: [i] all applicable bankruptcy, insolvency, reorganization, fraudulent conveyancing, preferential transfer, moratorium or similar laws of general application and court decisions affecting the rights of creditors; [ii] general principles of equity (regardless of whether enforceability is considered in a proceeding at law or in equity), including concepts of good faith, fair dealing, commercial reasonableness, unconscionability and materiality; and [iii] the assumption that [a] there has not been any mutual mistake of fact or misunderstanding, fraud, duress, or undue influence with respect to any of the Transaction Parties, and [b] the Collateral Agent, the Secured Parties and any agent acting for any such parties in connection with the Secured Obligations have acted without notice of any valid defense against the enforcement of any rights created by, or adverse claim to any property or security interest transferred or created as part of, the Secured Obligations.
D. Certain rights, remedies and other provisions in the Documents may be limited or rendered unenforceable by applicable State laws or judicial decisions governing such provisions, but in our opinion such laws and judicial decisions do not, subject to the other qualifications and limitations in this opinion, render the Documents invalid as a whole, and there exist, in the Documents or pursuant to applicable law, adequate rights, remedies and provisions for the practical realization of the principal benefits intended to be provided by the Documents, except for the economic consequences of any judicial, administrative or other procedural delay which may be imposed by, relate to or result from such laws and judicial decisions.
(m) C. Without limitation of Paragraph B above:
(1) The provisions of the Documents that attempt to incorporate by reference the provisions of any unrecorded document may not constitute constructive notice to third-parties without actual notice of the contents of the unrecorded document.
(2) Any provisions contained in the Mortgage which provide that the Documents secure future advances are limited by KRS §382.520 which provides, in pertinent part, that a loan secured by a mortgage lien on real property in the State may secure future obligations and advances up to the maximum amount stated in the mortgage. The lien of the Mortgage will secure such future obligations and advances only to the extent of the dollar amount so specified in the Mortgage, as amended by the Mortgage Amendment.
(3) KRS §382.365 requires a holder of a lien on real property to release the lien in the Recorder’s Office where the lien is recorded within fifteen (15) days from the date of satisfaction, and any provisions in the Mortgage in conflict with this requirement may not be enforceable.
(4) Any provisions contained in the Documents for waiver of jury trial by the Transaction Parties or that impose liquidated damages, penalties, forfeitures, late payment charges or an increase in the applicable interest rate upon default by the Transaction Parties or upon other conditions, that appoint the Collateral Agent, the Secured Parties or others as the agent or attorney-in-fact for the Transaction Parties that provide that the Collateral Agent, the Secured Parties or any other Person shall be liable only for gross negligence or willful misconduct, or that purport to select a particular court as the forum for the resolution of disputes may not be enforceable under State law but their inclusion in the Documents will not impair the enforceability of the other provisions of the Documents.
(5) We express no opinion as to the enforceability of any provisions of the Documents that purport to make the Mortgaged Property secure future indebtedness of Mortgagor that is not evidenced by the Notes and is of a materially different class or character than the indebtedness evidenced by the Notes and/or the Secured Obligations. We express no opinion regarding the effectiveness of the change in the amount of future advances purported to be secured by the Mortgage to the extent of and in relation to intervening matters of record between the date the Mortgage was originally recorded in the Filing Office and the date an amendment to the Mortgage is filed in the Filing Office.
(6) No opinion is expressed on [a] the laws, statutes and ordinances, administrative decisions, rules and regulations and other legal requirements of counties, towns, municipalities and political subdivisions of the State (other than the county, town, municipality and political subdivision of the State in which the Mortgage shall be recorded) or [b] any law or regulation concerning securities, taxation, labor, employee benefits, environmental protection, anti-trust or unfair competition.
D. Our opinions expressed in above are not intended to pertain in any way to any consents, authorizations or approvals which the Transaction Parties or any other person may be required to obtain after the date of this Opinion, in order to comply with the covenants required to be performed by such party contained in the Documents.
(n) E. We have assumed that: [1] the Mortgaged Property exists and that Mortgagor has sufficient rights in the applicable Mortgaged Property to grant a security interest in such Mortgaged Property, and we express no opinion as to the nature or extent of the rights of Mortgagor or title of any party in or to any of the Mortgaged Property; and [2] adequate consideration has been provided to Mortgagor to support the enforceability and performance of the obligations of Mortgagor arising under the Mortgage Amendment and each of the other Documents.
(o) F. We express no opinion regarding the validity or enforceability: [1] of the security interests under the Mortgage as security for any future liabilities or obligations of Mortgagor to the Collateral Agent, the Secured Parties or the Noteholders that are determined, in the case of liabilities or obligations created in the future, not to constitute “future advances” within the meaning of Section 9-204(c) of the Uniform Commercial Code as adopted in the State (the “UCC”), or are determined not to have been within the contemplation of the parties at the time the Documents were executed; [2] of the liens, assignments or security interests under the Mortgage in the Mortgaged Property consisting of contracts, agreements or instruments that contain provisions that prohibit or impose conditions upon the granting of an assignment, security interest, pledge or similar transfer thereof, except to the extent such provisions are rendered ineffective under Sections 9-406, 9-407, 9-408 or 9-409 of the UCC; or [3] of the security interests under the Mortgage as they relate to any interest in or claim in, or under, any policy of insurance. With respect to future advances that are not “obligatory”, the mortgage lien created by the Mortgage will be subordinate to the claims of any lienholders, purchasers and other persons of which the Collateral Agent or the Secured Parties have actual notice at the time the advances are made.
(p) G. The security interest created in [1] proceeds of the Mortgaged Property and the perfection of such security interest is limited to the extent set forth in Section 9-315 of the UCC and [2] any after-acquired commercial tort claim is limited to the extent set forth in Section 9-204 of the UCC.
(q) H. Provisions contained in the Documents purporting to make the Transaction Parties liable for attorneys’ fees incurred by the Collateral Agent, the Secured Parties or any other Person are enforceable only to the extent of “reasonable attorney fees”.
(r) I. We have not examined title to or ownership of any of the real or personal property intended to be encumbered pursuant to the Documents and express no opinion with regard to: [1] title to or ownership of such real or personal property; [2] priority of the liens, security interests or assignments created by the Documents; [3] the factual adequacy of the descriptions of the real or personal property for the purpose of encumbering the actual property intended to be encumbered pursuant to the Documents; and [4] survey, zoning or land use (including subdivision) matters relating to the property intended to be encumbered pursuant to the Documents. We understand that with respect to title matters (including matters relating to the perfection and priority of the liens on the Mortgaged Property), the Collateral Agent and the Secured Parties will be relying on the title insurance commitment issued by a national title insurance company. We have not made any investigation of, and do not express an opinion as to, any such matters.
(s) This Opinion is limited to the law (excluding the principles of conflict of laws) of the State, and we do not express any opinion concerning any other law. Our advice on each legal issue addressed in this letter represents our opinion as to how that issue would be resolved were it to be considered by the courts of the jurisdiction upon whose law our opinion on that issue is based. The manner in which any particular issue would be treated in any actual court case would depend in part on facts and circumstances particular to the case, and this letter is not intended to guarantee the outcome of any legal dispute which may arise in the future.
(t) The opinions expressed in this letter are given solely the benefit of [i] Collateral Agent, its successors and assigns, [ii] the Secured Parties from time-to-time, their successors and assigns, [iii] any Person who shall acquire a participation interest in the interest of any of the Secured Parties (collectively, the “Reliance Parties”), and no other person or entity may rely hereon without our prior written consent except that our prior written consent is not needed to furnish a copy of this Opinion to any Reliance Party (or any Person considering whether to become a Reliance Party), or otherwise as may be required of any Reliance Party by applicable law or regulation or in accordance with any auditing or oversight function or request of regulatory agencies to which a Reliance Party is subject. We expressly disclaim any responsibility for advising you of any change occurring hereafter in circumstances concerning the transaction which is the subject of this Opinion, including any changes in the law or in factual matters occurring after the date of this Opinion.
(u) We are members of the Bar of the Commonwealth of Kentucky and we do not hold ourselves out as being conversant with, and express no opinion as to, the laws of any jurisdiction other than the laws of the Commonwealth of Kentucky. While certain members of this firm are admitted to practice in other jurisdictions, for purposes of this Opinion we have not examined any laws other than the laws of the State and the federal laws of the United States, nor have we consulted with members of this firm who are admitted in other jurisdictions with respect to the laws of such jurisdictions.
| Sincerely, |
| WYATT, TARRANT & COMBS, LLP |
cc: Opinions & Standards Committee
SCHEDULE I
(Description of the Mortgage)
Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing dated as of March 20, 2013, made by AK Steel Corporation, as Mortgagor, in favor of U.S. Bank National Association, as Collateral Agent for the Secured Parties, as Mortgagee, relating to the Mortgaged Property being comprised of two (2) separate tracts both having an address of 170 Armco Road in the City of Ashland, located in the Counties of both Boyd and Greenup, Commonwealth of Kentucky, recorded as [ ] in the Office of the Clerk of Boyd County, Kentucky, and also being recorded as [ ] in the Office of the Clerk of Greenup County, Kentucky.
SCHEDULE II
(Description of Fixture Filing)
Uniform Commercial Code Financing Statement on form UCC-1 naming AK Steel Corporation, as the “Debtor”, and U.S. Bank National Association, as Collateral Agent, as the “Secured Party”, filed in the real estate records as a fixture filing in Fixture Filing Book [ ], Page [ ], the Office of the Clerk of Boyd County, Kentucky, and also filed in the real estate records as a fixture filing in Fixture Filing Book [ ], Page [ ], the Office of the Clerk of Greenup County, Kentucky.
EXHIBIT C-3
Form of Opinion from Ohio Counsel
Michael C. Fletcher, Esq.
Direct: (513) 763-3513
mfletcher@gfh-law.com
June , 2013
To the Collateral Agent and the other
Secured Parties Referred to Below
c/o U.S. Bank National Association
425 Walnut Street, 6th Floor
Cincinnati, OH 45202
Attention: Corporate Trust Department
Ladies and Gentlemen:
We have acted as special counsel in the State of Ohio in connection with the transactions contemplated by the Indenture dated as of November 20, 2012 (the “Indenture”) among AK Steel Corporation, as issuer (the “Mortgagor”), AK Steel Holding Corporation, the parent guarantor party thereto, U.S. Bank National Association (“U.S. Bank”), as trustee, and U.S. Bank, as collateral agent for the Secured Parties (in such capacity, the “Collateral Agent”), and, in connection with those certain mortgages delivered pursuant to the Indenture by the Mortgagor and described on Schedule 1 hereto (the “Mortgages”), delivered an opinion of counsel dated March 20, 2013, to the Collateral Agent.
We have examined the Indenture, pursuant to which, among other things, the Mortgagor issued on the date hereof an additional $30,000,000 in aggregate principal amount of the Mortgagor’s 8.750% Senior Secured Notes Due 2018 (the “Initial Additional Notes”). Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to them in the Mortgages and, if such terms are not in the Mortgages, then the Amendments.
In addition we have examined the amendments to the Mortgages described in Schedule 2 hereto (collectively, the “Amendments”).
We have also examined and relied upon the originals, or copies certified or otherwise identified to our satisfaction, of such documents, corporate records, certificates of public officials and other instruments, and have conducted such other investigations of fact and law as we have deemed necessary or advisable for purposes of this opinion.
We are of the opinion that, under applicable law in effect on the date of this opinion:
1. The execution, delivery and/or recordation of amendments to the Mortgages is required or recommended in order to assure that (i) the Secured Parties continue to have valid and enforceable Liens on the Mortgaged Properties with the same priorities as pursuant to the Mortgages; and (ii) the Mortgages as amended by the Amendments will secure the Initial Additional Notes issued pursuant to the Indenture. The Mortgages, as amended by the Amendments, constitute legal, valid and binding obligations of the Mortgagor, enforceable in accordance with their terms, except as the enforceability thereof may be limited by bankruptcy, insolvency or other similar laws relating to the enforcement of creditors’ rights generally and by general equitable principles.
2. No authorizations, approvals or consents of, or filings or registrations with, any governmental or regulatory authority or agency of or in the State of Ohio are necessary for the execution, delivery, performance or recordation by the Mortgagor of the Amendments, except for authorizations, consents, approvals that have already been obtained or filings that have already been made and that remain in effect, and those filings that are referred to below.
3. The Amendments will not result in a loss of, or adverse affect on, the priority of the Liens created by the Mortgages. The Mortgages, as amended by the Amendments, are sufficient to create valid mortgage Liens upon such of the Mortgaged Property described therein (the “Real Property”) as constitutes real property under the laws of the State of Ohio and create valid security interests in any goods located or to be located on the Real Property that now or may hereafter constitute “fixtures” within the meaning of Article 9 of the Uniform Commercial Code as in effect in the State of Ohio on the date hereof (the “ Ohio UCC”) (such goods being hereinafter referred to as “Fixtures”), in each case, in favor of the Collateral Agent for the benefit of the Secured Parties and securing the Secured Obligations, including without limitation the Original Notes and the Initial Additional Notes. The recording of the Amendments in the offices designated in Schedule 2 hereto are the only filings, recordings and registrations necessary to perfect, publish notice of and preserve the Liens on the Mortgaged Property and security interest in the Fixtures created by the Mortgages, as amended by the Amendments.
4. No taxes or other charges, including, without limitation, intangible or documentary stamp taxes, mortgage or recording taxes, transfer taxes or similar charges, are payable to the State of Ohio or to any jurisdiction therein on account of the execution, delivery or recordation of the Amendments, the issuance of the Initial Additional Notes or the filing, recording or registration of the Amendments except for nominal filing or recording fees.
5. The Amendments are in a form suitable for recording in the Recorder’s Office of Muskingum County, Butler County, Richland County and Coshocton County, in the State of Ohio.
This Opinion is intended to supplement the previous opinion dated March 20, 2013 (the “March Opinion”) addressed to the Collateral Agent. The comments and qualifications set forth in the March Opinion apply to the opinions set forth herein.
We are admitted to practice in the State of Ohio and the foregoing opinions are limited to the laws of said State and the federal laws of the United States of America. We express no opinion with respect to the laws of any other jurisdiction.
This opinion may not be relied upon by any person or entity, other than the addressees hereof, their respective successors and/or assigns and their respective counsels, without our prior consent.
Very truly yours,
Schedule 1
Mortgages:
| 1. | Open-End Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing dated as of March 20, 2013, from AK Steel Corporation, the Mortgagor, to U.S. Bank National Association, as Collateral Agent for the Secured Parties, the Mortgagee, relating to the Mortgaged Property known as 17400 State Route 16, in the City/Town of Coshocton, County of Coshocton, State of Ohio recorded in Mortgage Official Record Book 603, page 350 in the Recorder’s Office, County of Coshocton, State of Ohio. |
| 2. | Open-End Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing dated as of March 20, 2013 from AK Steel Corporation the Mortgagor, to U.S. Bank National Association, as Collateral Agent for the Secured Parties, the Mortgagee, relating to the Mortgaged Property known as 913 Bowman Street, in the City/Town of Mansfield, County of Richland, State of Ohio, recorded in Official Record Book 2212, page 379 of the Recorder’s Office, County of Richland, State of Ohio. |
| 3. | Open-End Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing dated as of March 20, 2013 from AK Steel Corporation the Mortgagor, to U.S. Bank National Association, as Collateral Agent for the Secured Parties, the Mortgagee, relating to the Mortgaged Properties known as 1801 Crawford Street and 705 Curtis Street, in the City/Town of Middletown, County of Butler, State of Ohio, recorded in Book 8562, page 716 in the Recorder’s Office, County of Butler, State of Ohio. |
| 4. | Open-End Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing dated as of March 20, 2013 from AK Steel Corporation the Mortgagor, to U.S. Bank National Association, as Collateral Agent for the Secured Parties, the Mortgagee, relating to the Mortgaged Property known as 1724 Linden Avenue, in the City/Town of Zanesville, County of Muskingum, State of Ohio, recorded in Book 2458, page 681 in the Recorder’s Office, County of Muskingum, State of Ohio. |
Schedule 2
Amendments to Mortgages:
| 1. | Amendment No. 1 to Open-End Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing dated as of June , 2013, from AK Steel Corporation, the Mortgagor, to U.S. Bank National Association, as Collateral Agent for the Secured Parties, the Mortgagee, relating to the Mortgaged Property known as 17400 State Route 16, in the City/Town of Coshocton, County of Coshocton, State of Ohio to be filed in the Ohio Recorder’s Office, County of Coshocton, State of Ohio. |
| 2. | Amendment No. 1 to Open-End Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing dated as of June , 2013, from AK Steel Corporation, the Mortgagor, to U.S. Bank National Association, as Collateral Agent for the Secured Parties, the Mortgagee, relating to the Mortgaged Property known as 913 Bowman Street, in the City/Town of Mansfield, County of Richland, State of Ohio to be filed in the Ohio Recorder’s Office, County of Richland, State of Ohio. |
| 3. | Amendment No. 1 to Open-End Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing dated as of June , 2013, from AK Steel Corporation, the Mortgagor, to U.S. Bank National Association, as Collateral Agent for the Secured Parties, the Mortgagee, relating to the Mortgaged Property known as 1801 Crawford Street and 705 Curtis Street, in the City/Town of Middletown, County of Butler, State of Ohio to be filed in the Ohio Recorder’s Office, County of Butler, State of Ohio. |
| 4. | Amendment No. 1 to Open-End Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing dated as of June , 2013, from AK Steel Corporation, the Mortgagor, to U.S. Bank National Association, as Collateral Agent for the Secured Parties, the Mortgagee, relating to the Mortgaged Property known as 1724 Linden Avenue, in the City/Town of Zanesville, County of Muskingum, State of Ohio to be filed in the Ohio Recorder’s Office, County of Muskingum, State of Ohio. |
EXHIBIT C-4
Form of Opinion from Pennsylvania Counsel
June , 2013
To the Collateral Agent and the other
Secured Parties Referred to Below
c/o U.S. Bank National Association
425 Walnut Street, 6th Floor
Cincinnati, OH 45202
Attention: Corporate Trust Department
Ladies and Gentlemen:
We have acted as special counsel in the Commonwealth of Pennsylvania in connection with the transactions contemplated by the Indenture dated as of November 20, 2012 (the “Indenture”) among AK Steel Corporation, as issuer (the “Mortgagor”), AK Steel Holding Corporation, the parent guarantor party thereto, U.S. Bank National Association (“U.S. Bank”), as trustee, and U.S. Bank, as collateral agent for the Secured Parties (in such capacity, the “Collateral Agent”), and, in connection with that certain mortgage delivered pursuant to the Indenture by the Mortgagor and described on Schedule 1 hereto (the “Mortgage”), delivered an opinion of counsel dated March 20, 2013, to the Collateral Agent. More recently, we have assisted in the preparation of the Amendment (defined below), and have been requested to render this opinion pursuant to Section 11.02(b) of the Indenture.
We have examined the Indenture, pursuant to which, among other things, the Mortgagor issued on the date hereof an additional $30,000,000 in aggregate principal amount of the Mortgagor’s 8.750% Senior Secured Notes Due 2018 (the “Initial Additional Notes”). Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to them in the Mortgage and, if such terms are not in the Mortgage, then the Amendment.
In addition we have examined the amendment to the Mortgage described in Schedule 2 hereto ( the “Amendment”).
We have also examined and relied upon the originals, or copies certified or otherwise identified to our satisfaction, of such documents, corporate records, certificates of public officials and other instruments, and have conducted such other investigations of fact and law as we have deemed necessary or advisable for purposes of this opinion. In rendering our opinion, we have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as originals and the conformity to authentic original documents of all documents submitted to us as certified, conformed or photostatic copies. In rendering this opinion, we have assumed that:
(a) Mortgagor is a corporation duly formed, validly existing and in good standing under the laws of Delaware, and has all requisite corporate power and all material governmental licenses, authorizations, consents and approvals necessary to own and operate the Mortgaged Property.
(b) The Documents, as that term is defined in our March 20, 2013 opinion, remain in full force and effect, and continue to be legal, valid and binding obligations of the parties thereto.
(c) The execution, delivery and performance by Mortgagor of the Amendment, as well as its grant of the rights set forth in the Mortgage, as modified by the Amendment, and the continuing performance by Mortgagor of each of the other Documents to which it is a party (i) are within its corporate powers, (ii) have been duly authorized by all necessary corporate action, (iii) do not require any authorization, approval or consent of, or filings or registrations with, any governmental or regulatory authority or agency outside of the Commonwealth of Pennsylvania, except for authorizations, consents or approvals that have already been obtained or filings that have already been made and that remain in effect, (iv) do not contravene any provision of its certificate of incorporation or bylaws, and (v) do not contravene or constitute a breach of or default under any applicable provision of the laws of any jurisdiction other than the Commonwealth of Pennsylvania or the federal laws of the United States or any applicable regulation thereunder or under any agreement, judgment, injunction, order, decree or other instrument binding upon it.
(d) The Mortgage was duly recorded in the office and under the instrument number set forth on Schedule 1, and no document has been executed or delivered by Mortgagor, nor has any document been recorded in any official records in Butler County, PA, in either case, which could adversely affect the perfected status of the liens, encumbrances and security interests of the Mortgage.
(e) The Amendment has been duly executed and delivered by Mortgagor.
(f) Mortgagor owns the Mortgaged Property.
(g) The Amendment will be duly recorded in the office described in Schedule 1.
(h) All factual matters, including but not limited to representations and warranties, contained in the Indenture, the Mortgage and the Amendment are true and correct as set forth therein.
(i) To the extent the obligations of Mortgagor may be dependent upon such matters, other than with respect to Mortgagor, the Collateral Agent is duly formed, validly existing and in good standing under the laws of its jurisdiction of formation; it has the requisite corporate or organizational power and authority to perform its obligations under the Amendment; the Amendment has been duly authorized, executed and delivered by, and each constitutes the legally valid and binding obligations of, the Collateral Agent, enforceable against the Collateral Agent in accordance with its respective terms.
(j) The Collateral Agent is a federally chartered financial institution.
We are of the opinion that, under applicable law in effect on the date of this opinion:
1. The execution, delivery and/or recordation of an amendment to the Mortgage is required or recommended in order to assure that (i) the Secured Parties continue to have a valid and enforceable Lien on the Mortgaged Property; and (ii) the Mortgage, as modified by the recorded Amendment, will secure the Initial Additional Notes issued pursuant to the Indenture. The Lien imposed by the Mortgage on the Real Property (defined below) will continue to have priority from the date that the Mortgage
was recorded, except to the extent that the principal balance of the Secured Obligations exceeds the amount set forth in Recital (A) of the Mortgage prior to the execution, delivery and recordation of the Amendment, in which case that Lien will (a) to the extent that said principal balance does not exceed the amount set forth in Recital (A) of the Mortgage, as increased by the Amendment, have priority as of the date the Amendment is recorded, or (b) to the extent said principal balance exceeds the increased amount set forth in Recital (A) of the Mortgage, as amended by the Amendment, have priority as of the date such excess principal amount was advanced. The Mortgage, as modified by the Amendment, constitutes a legal, valid and binding obligation of the Mortgagor, enforceable in accordance with its terms, except as the enforceability thereof may be limited by bankruptcy, insolvency or other similar laws relating to the enforcement of creditors’ rights generally, including but not limited to fraudulent transfer laws, and limitations on self-help, and by general equitable principles, including but not limited to concepts of materiality, reasonableness, good faith and fair dealing, and the possible unavailability of specific performance or injunctive relief.
2. No authorizations, approvals or consents of, or filings or registrations with, any governmental or regulatory authority or agency of or in the Commonwealth of Pennsylvania are necessary for the execution, delivery, performance or recordation by the Mortgagor of the Amendment, except for authorizations, consents, approvals that have already been obtained or filings that have already been made and that remain in effect, and those filings that are referred to below.
3. The Amendment will not result in a loss of, or adverse affect on, the priority of the Lien created by the Mortgage. The Mortgage, as amended by the Amendment, continues to impose a valid mortgage Lien upon such of the Mortgaged Property described therein (the “Real Property”) as constitutes real property under the laws of the Commonwealth of Pennsylvania, and continues to attach a valid security interest in any goods located or to be located on the Real Property that now or may hereafter constitute “fixtures” within the meaning of Article 9 of the Uniform Commercial Code as in effect in the Commonwealth of Pennsylvania on the date hereof (the “Pennsylvania UCC”) (such goods being hereinafter referred to as “Fixtures”), in each case, in favor of the Collateral Agent for the benefit of the Secured Parties and securing the Secured Obligations, including without limitation the Original Notes and the Initial Additional Notes. The recording of the Amendment in the office designated in Schedule 1 hereto is the only filing, recording and registration necessary to continue the perfected status of, publish notice of and preserve the Lien on the Mortgaged Property and security interest in the Fixtures created by the Mortgage, as amended by the Amendments.
4. No taxes or other charges, including, without limitation, intangible or documentary stamp taxes, mortgage or recording taxes, transfer taxes or similar charges, are payable to the Commonwealth of Pennsylvania or to any jurisdiction therein on account of the execution, delivery or recordation of the Amendment, the issuance of the Initial Additional Notes or the filing, recording or registration of the Amendment, except for nominal filing or recording fees.
5. The Amendment is in a form suitable for recording in the office designated in Schedule 1.
The opinions expressed above as to the enforceability of the Mortgage, as modified by the Amendment, are subject to the qualification that certain of the remedial provisions thereof, including but not limited to provisions providing for non-judicial foreclosure, may be limited by applicable law, although such limitations do not in our opinion make the remedies provided for therein inadequate for the practical realization of the benefits of the security intended to be afforded thereby. Our opinions as to the enforceability and perfected status of the Mortgage is also subject to the qualification that if Collateral Agent receives notice pursuant to the Pennsylvania Open-End Mortgage Law, 42 Pa. C.S.A. 8143 et. seq., the lien and security interest provided by the Mortgage with respect to Additional Secured Obligations arising subsequent to Collateral Agent’s receipt of such notice may be impaired by that law. Our opinions as to the perfected status of the liens imposed upon the Mortgaged Property are contingent upon the proper indexing of the Mortgage and the Amendment in the office designated on Schedule 1.
We have made no examination of and express no opinion with respect to: (i) title to or descriptions of the Mortgaged Property; (ii) the nature or extent of Mortgagor’s rights in or title to the Mortgaged Property; (iii) the existence or non-existence of liens, security interests, charges or encumbrances on or in the Mortgaged Property; (iv) the priority of any liens on any part of the Mortgaged Property; and (v) the applicability of any laws governing the issuance of securities.
We are admitted to practice in the Commonwealth of Pennsylvania, and the foregoing opinions are limited to the laws of said Commonwealth and the federal laws of the United States of America. This opinion is given as of the date hereof, and we disclaim any obligation to update this opinion letter in reaction to events occurring after the date of this opinion letter.
This opinion is rendered only to the Collateral Agent and the Secured Parties and their respective successors and assigns, and is solely for their benefit in connection with the transactions contemplated by the Documents and may not be relied upon by the Collateral Agent or any Secured Party or any of their respective successors or assigns for any other purpose without our prior written consent.
Very truly yours,
Schedule 1
Mortgage and Recording Office:
Open-End Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing executed on March 14, 2013, to be effective as of March 20, 2013 from AK Steel Corporation, successor by merger to ARMCO, INC., to U.S. Bank National Association, as Collateral Agent for the Secured Parties, relating to the Mortgaged Property described therein and located in the Township of Butler, County of Butler, Commonwealth of Pennsylvania recorded on March 22, 2013 in the office set forth below at Instrument No. 201303220008355.
The Recording Office is the Office of the Recorder of Deeds of Butler County, Pennsylvania.
Schedule 2
Amendment to Mortgage:
Amendment No. 1, to the Mortgage described in Schedule 1, which Amendment No.1 was executed by the Mortgagor on May , 2013, and by the Mortgagee on May , 2013, to be effective on May , 2013.
Exhibit 10.2
EXECUTION VERSION
REGISTRATION RIGHTS AGREEMENT
by and among
AK Steel Corporation
AK Steel Holding Corporation
and
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Dated as of June 24, 2013
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this “Agreement”) is made and entered into as of June 24, 2013, by and among AK Steel Corporation, a Delaware corporation (the “Company”), AK Steel Holding Corporation, a Delaware corporation (the “Guarantor”), and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as the initial purchaser (the “Initial Purchaser”), who has agreed to purchase $30,000,000 aggregate principal amount of the Company’s 8.750 % Senior Secured Notes due 2018 (the “Initial Notes”) fully and unconditionally guaranteed under the Indenture by the Guarantor (the “Guarantee”) pursuant to the Purchase Agreement (as defined below). The Initial Notes and the Guarantee are herein collectively referred to as the “Initial Securities.”
This Agreement is made pursuant to the Purchase Agreement, dated June 19, 2013 (the “Purchase Agreement”), among the Company, the Guarantor and the Initial Purchaser (i) for the benefit of the Initial Purchaser and (ii) for the benefit of the holders from time to time of the Initial Securities, including the Initial Purchaser. In order to induce the Initial Purchaser to purchase the Initial Securities, the Company has agreed to provide the registration rights set forth in this Agreement. The execution and delivery of this Agreement is a condition to the obligations of the Initial Purchaser set forth in Section 7(f) of the Purchase Agreement.
The parties hereby agree as follows:
SECTION 1. Definitions. As used in this Agreement, the following capitalized terms shall have the following meanings:
Additional Interest: As defined in Section 5 hereof.
Additional Interest Payment Date: With respect to the Initial Notes, each Interest Payment Date.
Broker-Dealer: Any broker or dealer registered under the Exchange Act.
Business Day: Any day other than a Saturday, Sunday or U.S. federal holiday or a day on which banking institutions or trust companies located in New York, New York are authorized or obligated to be closed.
Closing Date: November 20, 2012.
Commission: The Securities and Exchange Commission.
Consummate: A registered Exchange Offer shall be deemed “Consummated” for purposes of this Agreement upon the occurrence of (i) the filing and effectiveness under the Securities Act of the Exchange Offer Registration Statement relating to the Exchange Securities to be issued in the Exchange Offer, (ii) the maintenance of such Registration Statement continuously effective and the keeping of the Exchange Offer open for a period not less than the minimum period required pursuant to Section 3(b) hereof, and (iii) the delivery by the Company to the Registrar under the Indenture of Exchange Securities in the same aggregate principal amount as the aggregate principal amount of Initial Notes that were tendered by Holders thereof pursuant to the Exchange Offer.
Effectiveness Target Date: As defined in Section 5 hereof.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Exchange Offer: The registration by the Company under the Securities Act of the Exchange Securities pursuant to a Registration Statement pursuant to which the Company offers the Holders of all outstanding Transfer Restricted Securities the opportunity to exchange all such outstanding Transfer Restricted Securities held by such Holders for Exchange Securities in an aggregate principal amount equal to the aggregate principal amount of the Transfer Restricted Securities tendered in such exchange offer by such Holders.
Exchange Offer Registration Statement: The Registration Statement relating to the Exchange Offer, including the related Prospectus.
Exchange Securities: The 8.750% Senior Secured Notes due 2018, of the same series under the Indenture as the Initial Notes, and the guarantee of such notes by the Guarantor under the Indenture, to be issued to Holders in exchange for Transfer Restricted Securities pursuant to this Agreement.
Exempt Resales: The transactions in which the Initial Purchaser proposes to sell the Initial Securities to certain “qualified institutional buyers,” as such term is defined in Rule 144A under the Securities Act and to certain non-U.S. persons pursuant to Regulation S under the Securities Act.
FINRA: Financial Industry Regulatory Authority, Inc.
Guarantee: As defined in the preamble hereto.
Guarantor: As defined in the preamble hereto.
Holders: As defined in Section 2(b) hereof.
Indemnified Holder: As defined in Section 8(a) hereof.
Indenture: The Indenture, dated as of November 20, 2012, by and among the Company, the Guarantor, U.S. Bank National Association, as trustee (the “Trustee”) and U.S. Bank National Association, as collateral agent, pursuant to which the Initial Securities are to be issued, as such Indenture is amended or supplemented from time to time in accordance with the terms thereof.
Initial Notes: As defined in the preamble hereto.
Initial Placement: The issuance and sale by the Company and the Guarantor of the Initial Securities to the Initial Purchaser pursuant to the Purchase Agreement.
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Initial Purchaser: As defined in the preamble hereto.
Initial Securities: As defined in the preamble hereto.
Interest Payment Date: As defined in the Indenture and the Initial Notes.
Person: Any individual, corporation, limited liability company, partnership, joint venture, trust, unincorporated organization or government or any agency or political subdivision thereof.
Prospectus: The prospectus included in a Registration Statement (including, without limitation, a prospectus that discloses information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A under the Securities Act), as amended or supplemented by any prospectus supplement and by all other amendments thereto, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference into such Prospectus.
Purchase Agreement: As defined in the preamble hereto.
Registration Default: As defined in Section 5 hereof.
Registration Statement: Any registration statement of the Company relating to (a) an offering of Exchange Securities pursuant to an Exchange Offer or (b) the registration for resale of Transfer Restricted Securities pursuant to the Shelf Registration Statement, which is filed pursuant to the provisions of this Agreement, in each case, including the Prospectus included therein, all amendments and supplements thereto (including post-effective amendments) and all exhibits and material incorporated by reference or deemed to be incorporated by reference therein.
Securities Act: The Securities Act of 1933, as amended.
Shelf Filing Deadline: As defined in Section 4(b) hereof.
Shelf Registration Statement: As defined in Section 4(b) hereof.
Transfer Restricted Securities: Each Initial Security, until the earliest to occur of (a) the date on which such Initial Security is exchanged in the Exchange Offer for an Exchange Security entitled to be resold to the public by the Holder thereof without complying with the prospectus delivery requirements of the Securities Act, (b) the date on which such Initial Security has been effectively registered under the Securities Act and disposed of in accordance with a Shelf Registration Statement and (c) the date on which such Initial Security is distributed to the public by a Broker-Dealer pursuant to the “Plan of Distribution” contemplated by the Exchange Offer Registration Statement (including delivery of the Prospectus contained therein).
Trust Indenture Act: The Trust Indenture Act of 1939, as amended.
Trustee: Pursuant to the Indenture, U.S. Bank National Association.
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Underwritten Registration or Underwritten Offering: A registration in which securities of the Company are sold to an underwriter for reoffering to the public.
SECTION 2. Securities Subject to this Agreement.
(a) Transfer Restricted Securities. The securities entitled to the benefits of this Agreement are the Transfer Restricted Securities.
(b) Holders of Transfer Restricted Securities. A Person is deemed to be a holder of Transfer Restricted Securities (each, a “Holder”) whenever such Person owns Transfer Restricted Securities.
SECTION 3. Registered Exchange Offer.
(a) Unless the Exchange Offer shall not be permissible under applicable law or Commission policy (after the procedures set forth in Section 6(a) hereof have been complied with), each of the Company and the Guarantor shall (i) use commercially reasonable efforts to cause to be filed with the Commission no later than 270 days after the Closing Date (or if such 270th day is not a Business Day, the next succeeding Business Day), the Exchange Offer Registration Statement, (ii) use commercially reasonable efforts to cause such Registration Statement to become effective by the Commission at the earliest possible time, but in no event later than 360 days after the Closing Date (or if such 360th day is not a Business Day, the next succeeding Business Day), (iii) in connection with the foregoing, file (A) all pre-effective amendments to such Registration Statement as may be necessary in order to cause such Registration Statement to become effective, (B) if applicable, a post-effective amendment to such Registration Statement pursuant to Rule 430A under the Securities Act and (C) cause all necessary filings in connection with the registration and qualification of the Exchange Securities to be made under the state securities or blue sky laws of such jurisdictions as are necessary to permit Consummation of the Exchange Offer, and (iv) upon the effectiveness of such Registration Statement, commence the Exchange Offer. The Exchange Offer shall be on the appropriate form permitting registration of the Exchange Securities to be offered in exchange for the Transfer Restricted Securities and to permit resales of Initial Securities held by Broker-Dealers as contemplated by Section 3(c) hereof.
(b) The Company and the Guarantor shall use commercially reasonable efforts to cause the Exchange Offer Registration Statement to be effective continuously and shall keep the Exchange Offer open for a period of not less than the minimum period required under applicable federal and state securities laws to Consummate the Exchange Offer; provided, however, that in no event shall such period be less than 30 days after the date notice of the Exchange Offer is mailed to the Holders. The Company shall cause the Exchange Offer to comply with all applicable federal and state securities laws. No securities other than the Exchange Securities shall be included in the Exchange Offer Registration Statement.
(c) The Company shall indicate in a “Plan of Distribution” section contained in the Prospectus forming a part of the Exchange Offer Registration Statement that any Broker-Dealer who holds Initial Securities that are Transfer Restricted Securities and that were acquired for its own account as a result of market-making activities or other trading activities (other than
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Transfer Restricted Securities acquired directly from the Company), may exchange such Initial Securities pursuant to the Exchange Offer; however, such Broker-Dealer may be deemed to be an “underwriter” within the meaning of the Securities Act and must, therefore, deliver a prospectus meeting the requirements of the Securities Act in connection with any resales of the Exchange Securities received by such Broker-Dealer in the Exchange Offer, which prospectus delivery requirement may be satisfied by the delivery by such Broker-Dealer of the Prospectus contained in the Exchange Offer Registration Statement. Such “Plan of Distribution” section shall also contain all other information with respect to such resales by Broker-Dealers that the Commission may require in order to permit such resales pursuant thereto, but such “Plan of Distribution” shall not name any such Broker-Dealer or disclose the amount of Initial Notes held by any such Broker-Dealer except to the extent required by the Commission as a result of a change in policy after the date of this Agreement.
Each of the Company and the Guarantor shall use commercially reasonable efforts to keep the Exchange Offer Registration Statement continuously effective, supplemented and amended as required by the provisions of Section 6(c) hereof to the extent necessary to ensure that it is available for resales of Initial Securities acquired by Broker-Dealers for their own accounts as a result of market-making activities or other trading activities, and to ensure that it conforms with the requirements of this Agreement, the Securities Act and the policies, rules and regulations of the Commission as announced from time to time, for a period ending on the earlier of (i) 180 days from the date on which the Exchange Offer Registration Statement is declared effective and (ii) the date on which a Broker-Dealer is no longer required to deliver a prospectus in connection with market-making or other trading activities.
The Company shall provide sufficient copies of the latest version of such Prospectus to Broker-Dealers promptly upon request at any time during such 180-day (or shorter as provided in the foregoing sentence) period in order to facilitate such resales.
SECTION 4. Shelf Registration.
(a) Shelf Registration. If (i) the Company is not required to file an Exchange Offer Registration Statement or to Consummate the Exchange Offer because the Exchange Offer is not permitted by applicable law or Commission policy (after the procedures set forth in Section 6(a) hereof have been complied with), (ii) for any reason the Exchange Offer is not Consummated within 400 days after the Closing Date (or if such 400th day is not a Business Day, the next succeeding Business Day), or (iii) with respect to any Holder of Transfer Restricted Securities that notifies the Company (A) such Holder is prohibited by applicable law or Commission policy from participating in the Exchange Offer, or (B) such Holder may not resell the Exchange Securities acquired by it in the Exchange Offer to the public without delivering a prospectus and that the Prospectus contained in the Exchange Offer Registration Statement is not appropriate or available for such resales by such Holder, or (C) such Holder is a Broker-Dealer and holds Initial Securities acquired directly from the Company or one of its affiliates, then, upon such Holder’s request, the Company and the Guarantor shall use commercially reasonable efforts to
(x) cause to be filed a shelf registration statement pursuant to Rule 415 under the Securities Act, which may be an amendment to the Exchange Offer Registration Statement (in either event, the “Shelf Registration Statement”) on or prior to the 45th day after the date on
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which such filing obligation arises (or if such 45th day is not a Business Day, the next succeeding Business Day) (such date being the “Shelf Filing Deadline”), which Shelf Registration Statement shall provide for resales of all Transfer Restricted Securities the Holders of which shall have provided the information required pursuant to Section 4(b) hereof; and
(y) cause such Shelf Registration Statement to be declared effective by the Commission on or before the 120th day after the Shelf Filing Deadline (or if such 120th day is not a Business Day, the next succeeding Business Day).
Each of the Company and the Guarantor shall use commercially reasonable efforts to keep such Shelf Registration Statement continuously effective, supplemented and amended as required by the provisions of Sections 6(b) and (c) hereof to the extent necessary to ensure that it is available for resales of Initial Securities by the Holders of Transfer Restricted Securities entitled to the benefit of this Section 4(a), and to ensure that it conforms with the requirements of this Agreement, the Securities Act and the policies, rules and regulations of the Commission as announced from time to time, for a period of at least two years following the effective date of such Shelf Registration Statement (or shorter period that will terminate when all the Initial Securities covered by such Shelf Registration Statement have been sold pursuant to such Shelf Registration Statement).
(b) Provision by Holders of Certain Information in Connection with the Shelf Registration Statement. No Holder of Transfer Restricted Securities may include any of its Transfer Restricted Securities in any Shelf Registration Statement pursuant to this Agreement unless and until such Holder furnishes to the Company in writing, within 20 Business Days after receipt of a request therefor, such information as the Company may reasonably request for use in connection with any Shelf Registration Statement or Prospectus or preliminary Prospectus included therein. Each Holder as to which any Shelf Registration Statement is being effected agrees to furnish promptly to the Company all information required to be disclosed in order to make the information previously furnished to the Company by such Holder not materially misleading.
SECTION 5. Additional Interest. If (i) any of the Registration Statements required by this Agreement are not filed with the Commission on or prior to the date specified for such filing in this Agreement, (ii) any of such Registration Statements has not been declared effective by the Commission on or prior to the date specified for such effectiveness in this Agreement (the “Effectiveness Target Date”), (iii) the Exchange Offer has not been Consummated within 30 Business Days (or if such 30th day is not a Business Day, the next succeeding Business Day) after the Effectiveness Target Date with respect to the Exchange Offer Registration Statement or (iv) any Registration Statement required by this Agreement is filed and declared effective but shall thereafter cease to be effective or fail to be usable for its intended purpose without being succeeded immediately by a post-effective amendment to such Registration Statement that cures such failure and that is itself immediately declared effective (each such event referred to in clauses (i) through (iv), a “Registration Default”), the Company hereby agrees that the interest rate borne by the Transfer Restricted Securities shall be increased by 0.25% per annum during the 90-day period immediately following the occurrence of any Registration Default and shall increase by 0.25% per annum at the end of each subsequent 90-day period, but in no event shall such increase exceed 1.00% per annum (“Additional Interest”). Following the cure of all
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Registration Defaults relating to any particular Transfer Restricted Securities, the interest rate borne by the relevant Transfer Restricted Securities will be reduced to the original interest rate borne by such Transfer Restricted Securities; provided, however, that, if after any such reduction in interest rate, a different Registration Default occurs, the interest rate borne by the relevant Transfer Restricted Securities shall again be increased pursuant to the foregoing provisions.
All obligations of the Company and the Guarantor set forth in the preceding paragraph that are outstanding with respect to any Transfer Restricted Security at the time such security ceases to be a Transfer Restricted Security shall survive until such time as all such obligations with respect to such security shall have been satisfied in full.
SECTION 6. Registration Procedures.
(a) Exchange Offer Registration Statement. In connection with the Exchange Offer, the Company and the Guarantor shall comply with all of the provisions of Section 6(c) hereof, shall use commercially reasonable efforts to effect such exchange to permit the sale of Transfer Restricted Securities being sold in accordance with the intended method or methods of distribution thereof, and shall comply with all of the following provisions:
(i) As a condition to its participation in the Exchange Offer pursuant to the terms of this Agreement, each Holder of Transfer Restricted Securities shall furnish, upon the request of the Company, prior to the Consummation thereof, a written representation to the Company (which may be contained in the letter of transmittal contemplated by the Exchange Offer Registration Statement) to the effect that (A) it is not an affiliate of the Company, (B) it is not engaged in, and does not intend to engage in, and has no, and will not have any, arrangement or understanding with any Person to participate in, the distribution of the Exchange Securities to be issued in the Exchange Offer and (C) it is acquiring the Exchange Securities in its ordinary course of business. In addition, all such Holders of Transfer Restricted Securities shall otherwise cooperate in the Company’s preparations for the Exchange Offer. Each Holder hereby acknowledges and agrees that any Broker-Dealer and any such Holder using the Exchange Offer to participate in a distribution of the securities to be acquired in the Exchange Offer (1) could not under Commission policy as in effect on the date of this Agreement rely on the position of the Commission enunciated in Morgan Stanley and Co., Inc. (available June 5, 1991) and Exxon Capital Holdings Corporation (available May 13, 1988), as interpreted in the Commission’s letter to Shearman & Sterling dated July 2, 1993, and similar no-action letters (which may include any no-action letter obtained pursuant to clause (i) above), and (2) must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any such secondary resale transaction and that such a secondary resale transaction should be covered by an effective registration statement containing the selling security holder information required by Item 507 or 508, as applicable, of Regulation S-K or any successor provisions under the Securities Act if the resales are of Exchange Securities obtained by such Holder in exchange for Initial Securities acquired by such Holder directly from the Company.
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(b) Shelf Registration Statement. In connection with the Shelf Registration Statement, each of the Company and the Guarantor shall comply with all the provisions of Section 6(c) hereof and shall use commercially reasonable efforts to effect such registration to permit the sale of the Transfer Restricted Securities being sold in accordance with the intended method or methods of distribution thereof, and pursuant thereto each of the Company and the Guarantor will as expeditiously as possible prepare and file with the Commission a Registration Statement relating to the registration on any appropriate form under the Securities Act, which form shall be available for the sale of the Transfer Restricted Securities in accordance with the intended method or methods of distribution thereof.
(c) General Provisions. In connection with any Registration Statement and any Prospectus required by this Agreement to permit the sale or resale of Transfer Restricted Securities (including, without limitation, any Registration Statement and the related Prospectus required to permit resales of Initial Securities by Broker-Dealers), each of the Company and the Guarantor shall:
(i) use commercially reasonable efforts to keep such Registration Statement continuously effective and provide all requisite financial statements (including, if required by the Securities Act or any regulation thereunder, financial statements of the Guarantor for the period specified in Section 3 or 4 hereof, as applicable); upon the occurrence of any event that would cause any such Registration Statement or the Prospectus contained therein (A) to contain a material misstatement or omission or (B) not to be effective and usable for resale of Transfer Restricted Securities during the period required by this Agreement, the Company shall file promptly an appropriate amendment to such Registration Statement, in the case of clause (A), correcting any such misstatement or omission, and, in the case of either clause (A) or (B), use commercially reasonable efforts to cause such amendment to be declared effective and such Registration Statement and the related Prospectus to become usable for their intended purpose(s) as soon as practicable thereafter;
(ii) prepare and file with the Commission such amendments and post-effective amendments to the applicable Registration Statement as may be necessary to keep the Registration Statement effective for the applicable period set forth in Section 3 or 4 hereof, as applicable, or such shorter period as will terminate when all Transfer Restricted Securities covered by such Registration Statement have been sold; cause the Prospectus to be supplemented by any required Prospectus supplement, and as so supplemented to be filed pursuant to Rule 424 under the Securities Act, and to comply fully with the applicable provisions of Rules 424 and 430A under the Securities Act in a timely manner; and comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such Registration Statement during the applicable period in accordance with the intended method or methods of distribution by the sellers thereof set forth in such Registration Statement or supplement to the Prospectus;
(iii) advise the underwriter(s), if any, and selling Holders that, in each case, have provided in writing to the Company and the Guarantor a telephone or facsimile number and address for notices, promptly and, if requested by such Persons, to confirm such advice in writing, (A) when the Prospectus or any Prospectus supplement or post-effective amendment has been filed, and, with respect to any Registration Statement or any post-effective amendment thereto, when the same has become effective, (B) of any
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request by the Commission for amendments to the Registration Statement or amendments or supplements to the Prospectus or for additional information relating thereto, (C) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement under the Securities Act or of the suspension by any state securities commission of the qualification of the Transfer Restricted Securities for offering or sale in any jurisdiction, or the initiation of any proceeding for any of the preceding purposes, (D) of the existence of any fact or the happening of any event that makes any statement of a material fact made in the Registration Statement, the Prospectus, any amendment or supplement thereto, or any document incorporated by reference therein untrue, or that requires the making of any additions to or changes in the Registration Statement or the Prospectus in order to make the statements therein not misleading. If at any time the Commission shall issue any stop order suspending the effectiveness of the Registration Statement, or any state securities commission or other regulatory authority shall issue an order suspending the qualification or exemption from qualification of the Transfer Restricted Securities under state securities or blue sky laws, each of the Company and the Guarantor shall use commercially reasonable efforts to obtain the withdrawal or lifting of such order at the earliest possible time;
(iv) upon request, furnish without charge to the Initial Purchaser, each selling Holder named in any Registration Statement, and each of the underwriter(s), if any, before filing with the Commission, copies of any Registration Statement or any Prospectus included therein or any amendments or supplements to any such Registration Statement or Prospectus (including all documents incorporated by reference after the initial filing of such Registration Statement), which documents will be subject to the review and comment of such Holders and underwriter(s) in connection with such sale, if any, for a period of at least five Business Days, and the Company will not file any such Registration Statement or Prospectus or any amendment or supplement to any such Registration Statement or Prospectus (including all such documents incorporated by reference) to which an Initial Purchaser of Transfer Restricted Securities covered by such Registration Statement or the underwriter(s), if any, shall reasonably object in writing within five Business Days after the receipt thereof (such objection to be deemed timely made upon confirmation of telecopy transmission within such period). The objection of an Initial Purchaser or underwriter, if any, shall be deemed to be reasonable if such Registration Statement, amendment, Prospectus or supplement, as applicable, as proposed to be filed, contains a material misstatement or omission;
(v) promptly prior to the filing of any document that is to be incorporated by reference into a Registration Statement or Prospectus, provide copies of such document to the Initial Purchaser, each selling Holder named in any Registration Statement, and to the underwriter(s), if any, make the Company’s and the Guarantor’s representatives available for discussion of such document and other customary due diligence matters, and include such information in such document prior to the filing thereof as such selling Holders or underwriter(s), if any, reasonably may request;
(vi) make available at reasonable times for inspection by the Initial Purchaser, the managing underwriter(s), if any, participating in any disposition pursuant to such Registration Statement and any attorney or accountant retained by such Initial Purchaser
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or any of the underwriter(s), all relevant financial and other records, pertinent corporate documents and properties of each of the Company and the Guarantor that shall be reasonably available for such inspection and cause the Company’s and the Guarantor’s officers, directors and employees to supply all relevant information reasonably requested by any such Holder, underwriter, attorney or accountant in connection with such Registration Statement or any post-effective amendment thereto subsequent to the filing thereof and prior to its effectiveness as is customary for similar due diligence exercises and to participate in meetings with investors to the extent requested by the managing underwriter(s), if any;
(vii) if requested by any selling Holders or the underwriter(s), if any, promptly incorporate in any Registration Statement or Prospectus, pursuant to a supplement or post-effective amendment if necessary, such information as such selling Holders and underwriter(s), if any, may reasonably request to have included therein, including, without limitation, information relating to the “Plan of Distribution” of the Transfer Restricted Securities, information with respect to the principal amount of Transfer Restricted Securities being sold to such underwriter(s), the purchase price being paid therefor and any other terms of the offering of the Transfer Restricted Securities to be sold in such offering; and make all required filings of such Prospectus supplement or post-effective amendment as soon as practicable after the Company is notified of the matters to be incorporated in such Prospectus supplement or post-effective amendment;
(viii) use commercially reasonable efforts to cause the Transfer Restricted Securities covered by the Registration Statement to be rated with the appropriate rating agencies, if so requested by the Holders of a majority in aggregate principal amount of Securities covered thereby or the underwriter(s), if any;
(ix) furnish to the Initial Purchaser, each selling Holder and each of the underwriter(s), if any, without charge, at least one copy of the Registration Statement, as first filed with the Commission, and of each amendment thereto, including (if specifically requested) financial statements and schedules, all documents incorporated by reference therein and all exhibits (including exhibits incorporated therein by reference);
(x) deliver to each selling Holder and each of the underwriter(s), if any, without charge, as many copies of the Prospectus (including each preliminary prospectus) and any amendment or supplement thereto as such Holders reasonably may request; each of the Company and the Guarantor hereby consents to the use of the Prospectus and any amendment or supplement thereto by each of the selling Holders and each of the underwriter(s), if any, in connection with the offering and the sale of the Transfer Restricted Securities covered by the Prospectus or any amendment or supplement thereto;
(xi) enter into such customary agreements (including, if requested, an underwriting agreement in customary form), and make such representations and warranties in form, substance and scope as are customarily made by issuers to underwriters in similar underwritten offerings (consistent with the Purchase Agreement), and take all such other actions in connection therewith in order to expedite or facilitate the disposition of the Transfer Restricted Securities pursuant to any Registration
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Statement contemplated by this Agreement, all to such extent as may be requested by the Initial Purchaser or by any Holder of Transfer Restricted Securities or underwriter in connection with any sale or resale pursuant to any Registration Statement contemplated by this Agreement; and whether or not an underwriting agreement is entered into and whether or not the registration is an Underwritten Registration, each of the Company and the Guarantor shall:
(A) furnish to the Initial Purchaser, each selling Holder and each underwriter, if any, in such form, substance and scope as they may reasonably request and as are customarily made by issuers to underwriters in primary underwritten offerings, upon the date of the Consummation of the Exchange Offer or, if applicable, the effectiveness of the Shelf Registration Statement:
(1) a certificate, dated the date of Consummation of the Exchange Offer or the date of effectiveness of the Shelf Registration Statement, as the case may be, signed by (y) the President or any Vice President and (z) a principal financial or accounting officer of each of the Company and the Guarantor, confirming, as of the date thereof, the matters set forth in paragraphs (b) and (e) of Section 7 of the Purchase Agreement and such other matters as such parties may reasonably request;
(2) an opinion, dated the date of Consummation of the Exchange Offer or the date of effectiveness of the Shelf Registration Statement, as the case may be, of counsel for the Company and the Guarantor, covering the matters set forth in Exhibit A to the Purchase Agreement and such other matter as such parties may reasonably request, and in any event including a statement to the effect that such counsel has participated in conferences with officers and other representatives of the Company and the Guarantor, representatives of the independent public accountants for the Company and the Guarantor, representatives of the underwriter(s), if any, and counsel to the underwriter(s), if any, in connection with the preparation of such Registration Statement and the related Prospectus and have considered the matters required to be stated therein and the statements contained therein, although such counsel has not independently verified the accuracy, completeness or fairness of such statements; and that such counsel advises that, on the basis of the foregoing, no facts came to such counsel’s attention that caused such counsel to believe that the applicable Registration Statement, at the time such Registration Statement or any post-effective amendment thereto became effective, and, in the case of the Exchange Offer Registration Statement, as of the date of Consummation, 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, or that the Prospectus contained in such Registration Statement as of its date and, in the case of the opinion dated the date of Consummation of the Exchange Offer, as of the date of Consummation, contained an untrue statement of a material fact or omitted to state a material fact necessary in
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order to make the statements therein not misleading. Without limiting the foregoing, such counsel may state further that such counsel assumes no responsibility for, and has not independently verified, the accuracy, completeness or fairness of the financial statements, notes and schedules and other financial data included in any Registration Statement contemplated by this Agreement or the related Prospectus; and
(3) a customary comfort letter, dated the date of effectiveness of the Shelf Registration Statement, from the Company’s independent accountants, in the customary form and covering matters of the type customarily requested to be covered in comfort letters by underwriters in connection with primary underwritten offerings, and covering or affirming the matters set forth in the comfort letters delivered pursuant to Section 7(a) of the Purchase Agreement, without exception;
(B) set forth in full or incorporate by reference in the underwriting agreement, if any, the indemnification provisions and procedures of Section 8 hereof with respect to all parties to be indemnified pursuant to said Section; and
(C) deliver such other documents and certificates as may be reasonably requested by such parties to evidence compliance with Section 6(c)(xi)(A) hereof and with any customary conditions contained in the underwriting agreement or other agreement entered into by the Company or any of the Guarantor pursuant to this Section 6(c)(xi), if any.
If at any time the representations and warranties of the Company and the Guarantor contemplated in Section 6(c)(xi)(A)(1) hereof cease to be true and correct, the Company or the Guarantor shall so advise the Initial Purchaser and the underwriter(s), if any, and each selling Holder promptly and, if requested by such Persons, shall confirm such advice in writing;
(xii) prior to any public offering of Transfer Restricted Securities, cooperate with the selling Holders, the underwriter(s), if any, and their respective counsel in connection with the registration and qualification of the Transfer Restricted Securities under the state securities or blue sky laws of such jurisdictions as the selling Holders or underwriter(s), if any, may reasonably request in writing and do any and all other acts or things necessary or advisable to enable the disposition in such jurisdictions of the Transfer Restricted Securities covered by the Shelf Registration Statement; provided, however, that neither the Company nor the Guarantor shall be required to register or qualify as a foreign corporation where it is not then so qualified or to take any action that would subject it to the service of process in suits or to taxation, other than as to matters and transactions relating to the Registration Statement, in any jurisdiction where it is not then so subject;
(xiii) shall issue, upon the request of any Holder of Initial Securities covered by the Shelf Registration Statement, Exchange Securities having an aggregate principal amount equal to the aggregate principal amount of Initial Notes surrendered to the
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Company by such Holder in exchange therefor or being sold by such Holder; such Exchange Securities to be registered in the name of such Holder or in the name of the purchaser(s) of such Securities, as the case may be; in return, the Initial Securities held by such Holder shall be surrendered to the Company for cancellation;
(xiv) cooperate with the selling Holders and the underwriter(s), if any, to facilitate the timely preparation and delivery of certificates representing Transfer Restricted Securities to be sold and not bearing any restrictive legends; and enable such Transfer Restricted Securities to be in such denominations and registered in such names as the Holders or the underwriter(s), if any, may reasonably request (consistent with the provisions of the Indenture) at least two Business Days prior to any sale of Transfer Restricted Securities made by such Holders or underwriter(s);
(xv) use commercially reasonable efforts to cause the Transfer Restricted Securities covered by the Registration Statement to be registered with or approved by such other governmental agencies or authorities as may be necessary to enable the seller or sellers thereof or the underwriter(s), if any, to consummate the disposition of such Transfer Restricted Securities, subject to the proviso contained in Section 6(c)(xii) hereof;
(xvi) if any fact or event contemplated by Section 6(c)(iii)(D) hereof shall exist or have occurred, prepare a supplement or post-effective amendment to the Registration Statement or related Prospectus or any document incorporated therein by reference or file any other required document so that, as thereafter delivered to the purchasers of Transfer Restricted Securities, the Prospectus will not contain an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein not misleading;
(xvii) provide a CUSIP number for all Securities not later than the effective date of the Registration Statement covering such Securities and provide the Trustee under the Indenture with printed certificates for such Securities which are in a form eligible for deposit with the Depository Trust Company and take all other action necessary to ensure that all such Securities are eligible for deposit with the Depository Trust Company;
(xviii) cooperate and assist in any filings required to be made with FINRA and in the performance of any due diligence investigation by any underwriter (including any “qualified independent underwriter”) that is required to be retained in accordance with the rules and regulations of FINRA;
(xix) otherwise use commercially reasonable efforts to comply with all applicable rules and regulations of the Commission, and make generally available to its security holders, as soon as practicable, a consolidated earnings statement meeting the requirements of Rule 158 (which need not be audited) for the twelve-month period (A) commencing at the end of any fiscal quarter in which Transfer Restricted Securities are sold to underwriters in a firm commitment or commercially reasonable efforts Underwritten Offering or (B) if not sold to underwriters in such an offering, beginning with the first month of the Company’s first fiscal quarter commencing after the effective date of the Registration Statement;
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(xx) cause the Indenture to be qualified under the Trust Indenture Act not later than the effective date of the first Registration Statement required by this Agreement, and, in connection therewith, cooperate with the Trustee and the Holders of Securities to effect such changes to the Indenture as may be required for such Indenture to be so qualified in accordance with the terms of the Trust Indenture Act; and to execute and use commercially reasonable efforts to cause the Trustee to execute all documents that may be required to effect such changes and all other forms and documents required to be filed with the Commission to enable such Indenture to be so qualified in a timely manner;
(xxi) use commercially reasonable efforts to cause all Securities covered by the Registration Statement to be listed on each securities exchange or automated quotation system on which similar securities issued by the Company are then listed if requested by the Holders of a majority in aggregate principal amount of Initial Notes or the managing underwriter(s), if any; and
(xxii) provide promptly to each Holder upon request each document filed with the Commission pursuant to the requirements of Section 13 and Section 15 of the Exchange Act.
Each Holder agrees by acquisition of a Transfer Restricted Security that, upon receipt of any notice from the Company of the existence of any fact of the kind described in Section 6(c)(iii)(D) hereof, such Holder will forthwith discontinue disposition of Transfer Restricted Securities pursuant to the applicable Registration Statement until such Holder’s receipt of the copies of the supplemented or amended Prospectus contemplated by Section 6(c)(xvi) hereof, or until it is advised in writing (the “Advice”) by the Company that the use of the Prospectus may be resumed, and has received copies of any additional or supplemental filings that are incorporated by reference in the Prospectus. If so directed by the Company, each Holder will deliver to the Company (at the Company’s expense) all copies, other than permanent file copies then in such Holder’s possession, of the Prospectus covering such Transfer Restricted Securities that was current at the time of receipt of such notice. In the event the Company shall give any such notice, the time period regarding the effectiveness of such Registration Statement set forth in Section 3 or 4 hereof, as applicable, shall be extended by the number of days during the period from and including the date of the giving of such notice pursuant to Section 6(c)(iii)(D) hereof to and including the date when each selling Holder covered by such Registration Statement shall have received the copies of the supplemented or amended Prospectus contemplated by Section 6(c)(xvi) hereof or shall have received the Advice; provided, however, that no such extension shall be taken into account in determining whether Additional Interest is due pursuant to Section 5 hereof or the amount of such Additional Interest, it being agreed that the Company’s option to suspend use of a Registration Statement pursuant to this paragraph shall be treated as a Registration Default for purposes of Section 5 hereof. Each Holder also agrees not to make any offer relating to the Transfer Restricted Securities that would constitute a free writing prospectus as defined in Rule 405 of the Securities Act required to be filed with the Commission.
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SECTION 7. Registration Expenses.
(a) All expenses incident to the Company’s and the Guarantor’s performance of or compliance with this Agreement will be borne by the Company and the Guarantor, jointly and severally, regardless of whether a Registration Statement becomes effective, including, without limitation: (i) all registration and filing fees and expenses (including filings made by the Initial Purchaser or any Holder with FINRA (and, if applicable, the fees and expenses of any “qualified independent underwriter” and its counsel that may be required by the rules and regulations of FINRA)); (ii) all fees and expenses of compliance with federal securities and state securities or blue sky laws; (iii) all expenses of printing (including printing certificates for the Exchange Securities to be issued in the Exchange Offer and printing of Prospectuses), messenger and delivery services and telephone; (iv) all fees and disbursements of counsel for the Company, the Guarantor and, subject to Section 7(b) hereof, the Holders of Transfer Restricted Securities; (v) all application and filing fees in connection with listing the Exchange Securities on a securities exchange or automated quotation system pursuant to the requirements thereof; and (vi) all fees and disbursements of independent certified public accountants of the Company and the Guarantor (including the expenses of any special audit and comfort letters required by or incident to such performance). Each of the Company and the Guarantor will, in any event, bear its internal expenses (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the expenses of any annual audit and the fees and expenses of any Person, including special experts, retained by the Company or the Guarantor.
(b) In connection with any Registration Statement required by this Agreement (including, without limitation, the Exchange Offer Registration Statement and the Shelf Registration Statement), the Company and the Guarantor, jointly and severally, will reimburse the Initial Purchaser and the Holders of Transfer Restricted Securities being tendered in the Exchange Offer and/or resold pursuant to the “Plan of Distribution” contained in the Exchange Offer Registration Statement or registered pursuant to the Shelf Registration Statement, as applicable, for the reasonable fees and disbursements of not more than one counsel, who shall be Davis Polk & Wardwell LLP or such other counsel as may be chosen by the Holders of a majority in principal amount of the Transfer Restricted Securities for whose benefit such Registration Statement is being prepared.
SECTION 8. Indemnification.
(a) The Company and the Guarantor, jointly and severally, agree to indemnify and hold harmless (i) each Holder and (ii) each Person, if any, who controls (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) any Holder (any of the Persons referred to in this clause (ii) being hereinafter referred to as a “controlling person”) and (iii) the respective officers, directors, partners, employees, representatives and agents of any Holder or any controlling person (any Person referred to in clause (i), (ii) or (iii) may hereinafter be referred to as an “Indemnified Holder”), to the fullest extent lawful, from and against any and all losses, claims, damages, liabilities, judgments, actions and expenses (including, without limitation, and as incurred, reimbursement of all reasonable costs of investigating, settling, compromising, paying or defending any claim or action, or any investigation or proceeding by any governmental agency or body, commenced or threatened, including the reasonable fees and
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expenses of counsel to any Indemnified Holder), joint or several, directly or indirectly caused by, related to, based upon, arising out of or in connection with any untrue statement or alleged untrue statement of a material fact contained in any Registration Statement, Prospectus (or any amendment or supplement thereto) or issuer free writing prospectus, or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as such losses, claims, damages, liabilities or expenses are caused by an untrue statement or omission or alleged untrue statement or omission that is made in reliance upon and in conformity with information relating to any of the Holders furnished in writing to the Company by any of the Holders expressly for use therein. This indemnity agreement shall be in addition to any liability which the Company or the Guarantor may otherwise have.
In case any action or proceeding (including any governmental or regulatory investigation or proceeding) shall be brought or asserted against any of the Indemnified Holders with respect to which indemnity may be sought against the Company or the Guarantor, such Indemnified Holder (or the Indemnified Holder controlled by such controlling person) shall promptly notify the Company and the Guarantor in writing; provided, however, that the failure to give such notice shall not relieve the Company or the Guarantor of its obligations pursuant to this Agreement except to the extent that the Company or the Guarantor has been materially prejudiced (through the forefeiture of substantive rights or defenses) by such failure; provided, further, that failure to notify the Company or the Guarantor shall not relieve the Company or the Guarantor from any liability that it may have to any of the Indemnified Holders otherwise than under this provision. Such Indemnified Holder shall have the right to employ its own counsel in any such action and the fees and expenses of such counsel shall be paid, as incurred, by the Company and the Guarantor (regardless of whether it is ultimately determined that an Indemnified Holder is not entitled to indemnification hereunder). The Company and the Guarantor shall not, in connection with any one such action or proceeding or separate but substantially similar or related actions or proceedings in the same jurisdiction arising out of the same general allegations or circumstances, be liable for the reasonable fees and expenses of more than one separate firm of attorneys (in addition to any local counsel) at any time for such Indemnified Holders, which firm shall be designated by the Holders. The Company and the Guarantor shall be liable for any settlement of any such action or proceeding effected with the Company’s and the Guarantor’ prior written consent, which consent shall not be withheld unreasonably, and each of the Company and the Guarantor agrees to indemnify and hold harmless any Indemnified Holder from and against any loss, claim, damage, liability or expense by reason of any settlement of any action effected with the written consent of the Company and the Guarantor. The Company and the Guarantor shall not, without the prior written consent of each Indemnified Holder (which shall not be unreasonably withheld, delayed or conditioned), settle or compromise or consent to the entry of judgment in or otherwise seek to terminate any pending or threatened action, claim, litigation or proceeding in respect of which indemnification or contribution may be sought hereunder (whether or not any Indemnified Holder is a party thereto), unless such settlement, compromise, consent or termination includes an unconditional release of each Indemnified Holder from all liability arising out of such action, claim, litigation or proceeding.
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(b) Each Holder of Transfer Restricted Securities agrees, severally and not jointly, to indemnify and hold harmless the Company, the Guarantor and their respective directors, officers of the Company and the Guarantor who sign a Registration Statement, and any Person controlling (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) the Company or the Guarantor, and the respective officers, directors, partners, employees, representatives and agents of each such Person, to the same extent as the foregoing indemnity from the Company and the Guarantor to each of the Indemnified Holders, with respect to losses, claims, damages, liabilities, judgments, actions and expenses (including, without limitation, and as incurred, reimbursement of all reasonable costs of investigating, settling, compromising, paying or defending any claim or action, or any investigation or proceedings by any governmental agency or body, commenced or threatened, including the reasonable fees and expenses of counsel), but only with respect to such losses, claims, damages, liabilities and judgments based on information relating to such Holder furnished in writing by such Holder expressly for use in any Registration Statement, Prospectus or issuer free writing prospectus. In case any action or proceeding shall be brought against the Company, the Guarantor or their respective directors or officers or any such controlling person in respect of which indemnity may be sought against a Holder of Transfer Restricted Securities, such Holder shall have the rights and duties given the Company and the Guarantor, and the Company, the Guarantor, their respective directors and officers and such controlling person shall have the rights and duties given to each Holder by the preceding paragraph.
(c) If the indemnification provided for in this Section 8 is unavailable to an indemnified party under Section 8(a) or (b) hereof (other than by reason of exceptions provided in those Sections) in respect of any losses, claims, damages, liabilities, judgments, actions or expenses referred to therein, then each applicable indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages, liabilities or expenses in such proportion as is appropriate to reflect the relative benefits received by the Company and the Guarantor, on the one hand, and the Holders, on the other hand, from the Initial Placement (which in the case of the Company and the Guarantor shall be deemed to be equal to the total gross proceeds to the Company and the Guarantor from the Initial Placement), the amount of Additional Interest which did not become payable as a result of the filing of the Registration Statement resulting in such losses, claims, damages, liabilities, judgments actions or expenses, and such Registration Statement, or if such allocation is not permitted by applicable law, the relative fault of the Company and the Guarantor, on the one hand, and the Holders, on the other hand, in connection with the statements or omissions which resulted in such losses, claims, damages, liabilities or expenses, as well as any other relevant equitable considerations. The relative fault of the Company on the one hand and of the Indemnified Holder on the other shall be determined by reference to, among other things, whether any 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 Guarantor, on the one hand, or the Indemnified Holders, on the other hand, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such untrue statement or omission. The amount paid or payable by a party as a result of the losses, claims, damages, liabilities and expenses referred to above shall be deemed to include, subject to the limitations set forth in the second paragraph of Section 8(a) hereof, any legal or other fees or expenses reasonably incurred by such party in connection with investigating or defending any action or claim.
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The Company, the Guarantor and each Holder of Transfer Restricted Securities agree that it would not be just and equitable if contribution pursuant to this Section 8(c) were determined by pro rata allocation (even if the Holders 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 the immediately preceding paragraph. The amount paid or payable by an indemnified party as a result of the losses, claims, damages, liabilities or expenses referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 8, none of the Holders (and its related Indemnified Holders) shall be required to contribute, in the aggregate, any amount in excess of the amount by which the total discount received by such Holder with respect to the Initial Securities exceeds the amount of any damages which such Holder 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 Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. The Holders’ obligations to contribute pursuant to this Section 8(c) are several in proportion to the respective principal amount of Initial Notes held by each of the Holders hereunder and not joint.
SECTION 9. Rule 144A. Each of the Company and the Guarantor hereby agrees with each Holder, for so long as any Transfer Restricted Securities remain outstanding, upon request of such Holder, to make available to any Holder or beneficial owner of Transfer Restricted Securities in connection with any sale thereof and any prospective purchaser of such Transfer Restricted Securities from such Holder or beneficial owner, the information required by Rule 144A(d)(4) under the Securities Act in order to permit resales of such Transfer Restricted Securities pursuant to Rule 144A under the Securities Act.
SECTION 10. Participation in Underwritten Registrations. No Holder may participate in any Underwritten Registration hereunder unless such Holder (a) agrees to sell such Holder’s Transfer Restricted Securities on the basis provided in any underwriting arrangements approved by the Persons entitled hereunder to approve such arrangements and (b) completes and executes all reasonable questionnaires, powers of attorney, indemnities, underwriting agreements, lock-up letters and other documents required under the terms of such underwriting arrangements.
SECTION 11. Selection of Underwriters. The Holders of Transfer Restricted Securities covered by the Shelf Registration Statement who desire to do so may sell such Transfer Restricted Securities in an Underwritten Offering. In any such Underwritten Offering, the investment banker(s) and managing underwriter(s) that will administer such offering will be selected by the Holders of a majority in aggregate principal amount of the Transfer Restricted Securities included in such offering; provided, however, that such investment banker(s) and managing underwriter(s) must be reasonably satisfactory to the Company.
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SECTION 12. Miscellaneous.
(a) Remedies. Each of the Company and the Guarantor hereby agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Agreement and hereby agree to waive the defense in any action for specific performance that a remedy at law would be adequate.
(b) No Inconsistent Agreements. Each of the Company and the Guarantor will not on or after the date of this Agreement enter into any agreement with respect to its securities that is inconsistent with the rights granted to the Holders in this Agreement or otherwise conflicts with the provisions hereof. Neither the Company nor the Guarantor has previously entered into any agreement granting any registration rights with respect to its securities to any Person. The rights granted to the Holders hereunder do not in any way conflict with and are not inconsistent with the rights granted to the holders of the Company’s or the Guarantor’s securities under any agreement in effect on the date hereof.
(c) Adjustments Affecting the Initial Securities. The Company will not take any action, or permit any change within its control to occur, with respect to the Initial Securities that would materially and adversely affect the ability of the Holders to Consummate any Exchange Offer.
(d) Amendments and Waivers. The provisions of this Agreement may not be amended, modified or supplemented, and waivers or consents to or departures from the provisions hereof may not be given unless the Company has (i) in the case of Section 5 hereof and this Section 12(d)(i), obtained the written consent of Holders of all outstanding Transfer Restricted Securities and (ii) in the case of all other provisions hereof, obtained the written consent of Holders of a majority of the outstanding principal amount of Transfer Restricted Securities (excluding any Transfer Restricted Securities held by the Company or its Affiliates). Notwithstanding the foregoing, a waiver or consent to departure from the provisions hereof that relates exclusively to the rights of Holders whose securities are being tendered pursuant to the Exchange Offer and that does not affect directly or indirectly the rights of other Holders whose securities are not being tendered pursuant to such Exchange Offer may be given by the Holders of a majority of the outstanding principal amount of Transfer Restricted Securities being tendered or registered; provided, however, that, with respect to any matter that directly or indirectly affects the rights of the Initial Purchaser hereunder, the Company shall obtain the written consent of the Initial Purchaser with respect to which such amendment, qualification, supplement, waiver, consent or departure is to be effective.
(e) Notices. All notices and other communications provided for or permitted hereunder shall be made in writing by hand-delivery, first-class mail (registered or certified, return receipt requested), fax, or air courier guaranteeing overnight delivery:
(i) if to a Holder, at the address set forth on the records of the Registrar under the Indenture, with a copy to the Registrar under the Indenture; and
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(ii) if to the Company:
AK Steel Corporation
9227 Centre Pointe Drive
West Chester, OH 45069
Fax: (513) 425-5580
Attention: General Counsel
All such notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five Business Days after being deposited in the mail, postage prepaid, if mailed; when receipt acknowledged, if faxed; and on the next Business Day, if timely delivered to an air courier guaranteeing overnight delivery.
Copies of all such notices, demands or other communications shall be concurrently delivered by the Person giving the same to the Trustee at the address specified in the Indenture.
(f) Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties, including, without limitation, and without the need for an express assignment, subsequent Holders of Transfer Restricted Securities; provided, however, that this Agreement shall not inure to the benefit of or be binding upon a successor or assign of a Holder unless and to the extent such successor or assign acquired Transfer Restricted Securities from such Holder.
(g) Counterparts. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.
(h) Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.
(i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE CONFLICTS OF LAW RULES THEREOF.
(j) Severability. In the event that any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions contained herein shall not be affected or impaired thereby.
(k) Entire Agreement. This Agreement is intended by the parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein with respect to the registration rights granted by the Company with respect to the Transfer Restricted Securities. This Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.
| AK STEEL CORPORATION | ||||
| By: | /s/ Roger K. Newport | |||
| Name: | Roger K. Newport | |||
| Title: | Vice President, Finance and Chief Financial Officer | |||
| AK STEEL HOLDING CORPORATION | ||||
| By: | /s/ Roger K. Newport | |||
| Name: | Roger K. Newport | |||
| Title: | Vice President, Finance and Chief Financial Officer | |||
[Signature Page to Registration Rights Agreement]
The foregoing Registration Rights Agreement is hereby confirmed and accepted as of the date first above written:
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
| By: | /s/ Mark W. Kushemba | |
| Name: Mark W. Kushemba | ||
| Title: Director |
[Signature Page to Registration Rights Agreement]