Registration of Securities Issued in a Business-Combination Transaction — Form S-4 Filing Table of Contents
Document/ExhibitDescriptionPagesSize 1: S-4 Registration Statement HTML 1.06M
5: EX-3.10 By-Laws of Arcelormittal Usa Incoal Inc. HTML 67K
6: EX-3.11 Certificate of Incorporation of Arcelormittal HTML 44K
Minorca Mine Inc.
7: EX-3.12 By-Laws of Arcelormittal Minorca Mine Inc. HTML 56K
8: EX-3.13 Certificate of Incorporation of Arcelormittal HTML 44K
Service Inc.
9: EX-3.14 By-Laws of Arcelormittal Service Inc. HTML 57K
10: EX-3.15 Certificate of Incorporation of Arcelormittal HTML 40K
Cleveland Inc.
11: EX-3.16 By-Laws of Arcelormittal Cleveland Inc. HTML 62K
12: EX-3.17 Certificate of Incorporation of Arcelormittal HTML 41K
Weirton Inc.
13: EX-3.18 By-Laws of Arcelormittal Weirton Inc. HTML 66K
14: EX-3.19 Certificate of Incorporation of Arcelormittal HTML 37K
Hennepin Inc.
2: EX-3.2 Certificate of Formation HTML 31K
15: EX-3.20 By-Laws of Arcelormittal Hennepin Inc. HTML 63K
16: EX-3.21 Certificate of Formation of Arcelormittal Indiana HTML 33K
Harbor LLC
17: EX-3.22 Limited Liability Company Agreement HTML 52K
18: EX-3.23 Certificate of Incorporation of Arcelormittal HTML 40K
Warren Inc.
19: EX-3.24 By-Laws of Arcelormittal Warren Inc. HTML 62K
20: EX-3.25 Certificate of Incorporation of Arcelormittal HTML 41K
Riverdale Inc.
21: EX-3.26 By-Laws of Arcelormittal Riverdale Inc. HTML 66K
22: EX-3.27 Certificate of Incorporation of Mittal Steel Usa - HTML 35K
Venture Inc.
23: EX-3.28 By-Laws of Mittal Steel Usa - Venture Inc. HTML 66K
24: EX-3.29 Certificate of Formation of Arcelormittal Plate HTML 34K
LLC
3: EX-3.3 Limited Liability Company Operating Agreement HTML 54K
25: EX-3.30 Limited Liability Company Operating Agreement HTML 87K
26: EX-3.31 Certificate of Formation of Isg Sparrows Point LLC HTML 31K
27: EX-3.32 Limited Liability Company Operating Agreement HTML 86K
28: EX-3.33 Certificate of Formation of Arcelormittal Steelton HTML 34K
LLC
29: EX-3.34 Limited Liability Company Operating Agreement HTML 85K
30: EX-3.35 Certificate of Formation of Arcelormittal HTML 34K
Lackawanna LLC
31: EX-3.36 Limited Liability Company Operating Agreement HTML 81K
32: EX-3.37 Certificate of Formation of Arcelormittal Burns HTML 34K
Harbor LLC
33: EX-3.38 Limited Liability Company Operating Agreement HTML 81K
34: EX-3.39 Certificate of Formation of Arcelormittal Columbus HTML 34K
LLC
35: EX-3.40 Limited Liability Company Operating Agreement HTML 87K
36: EX-3.41 Certificate of Incorporation of Arcelormittal HTML 36K
Georgetown Inc.
37: EX-3.42 By-Laws of Arcelormittal Georgetown Inc. HTML 66K
38: EX-3.43 Certificate of Incorporation of Mittal Steel Usa - HTML 35K
Railways Inc.
39: EX-3.44 By-Laws of Mittal Steel Usa - Railways Inc. HTML 66K
40: EX-3.45 Certificate of Incorporation of Arceloemittal HTML 35K
Hibbing Inc.
41: EX-3.46 By-Laws of Arcelormittal Hibbing Inc. HTML 66K
42: EX-3.47 Articles of Incorporation of Hibbing Taconite HTML 45K
Holding Inc.
43: EX-3.48 By-Laws of Hibbing Taconite Holding Inc. HTML 66K
44: EX-3.49 Certificate of Incorporation of Isg Acquisition HTML 33K
Inc.
45: EX-3.50 By-Laws of Isg Acquisition Inc. HTML 66K
46: EX-3.51 Certificate of Incorporation of Arcelormittal Real HTML 35K
Estate Inc.
47: EX-3.52 By-Laws of Arcelormittal Real Estate Inc. HTML 66K
48: EX-3.53 Certificate of Incorporation of Arcelormittal Tow HTML 37K
Path Valley Business Park Development
Company
49: EX-3.54 By-Laws of Arcelormittal Tow Path Valley Business HTML 62K
Park Development Company
50: EX-3.55 Certificate of Formation of Arcelormittal Finance HTML 29K
LLC
51: EX-3.56 Limited Liability Company Operating Agreement HTML 53K
52: EX-3.57 Memorandum of Association and Articles of HTML 157K
Association
53: EX-3.58 Statement of Partnership Existence of HTML 30K
Arcelormittal Usa Partnership
54: EX-3.59 Agreement of Partnership of Arcelormittal Usa HTML 53K
Partnership
4: EX-3.9 Certificate of Incorporation of Arcelormittal Usa HTML 73K
Incoal Inc.
59: EX-4.10 Fifth Supplemental Indenture HTML 79K
60: EX-4.11 Sixth Supplemental Indenture HTML 80K
61: EX-4.12 Seventh Supplemental Indenture HTML 64K
62: EX-4.13 Eighth Supplemental Indenture HTML 64K
63: EX-4.15 Security Agreement HTML 158K
55: EX-4.3 Form of Fortieth Supplemental Indenture HTML 88K
56: EX-4.4 Form of Guarantee HTML 167K
57: EX-4.6 Supplemental Indenture HTML 51K
58: EX-4.7 Second Supplemental Indenture HTML 42K
64: EX-5.1 Opinion of Mayer Brown LLP HTML 39K
65: EX-5.2 Opinion of Stewart McKelvey HTML 39K
66: EX-5.3 Opinion of Bonn Schmitt Steichen HTML 35K
67: EX-12 Calculation of Ratio of Earnings to Fixed Charges HTML 36K
68: EX-23.4 Consent of Deloitte S.A. HTML 28K
69: EX-23.5 Consent of Deloitte Accountants B.V. HTML 28K
70: EX-23.6 Consent of Kpmg Audit S.A.R.L. HTML 30K
71: EX-25.1 Form T-1 Statement of Eligibility HTML 78K
72: EX-99.1 Form of Consent Letter HTML 116K
As
filed with the Securities and Exchange Commission on April 15, 2008 Registration No. 333
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-4* AND F-4*
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
ARCELORMITTAL FINANCIAL SERVICES LLC
(Exact Name of Registrant as Specified in its Charter)
(For Co-registrants, Please See Co-Registrant Information on the Following Page)
Delaware
5051
26-1604648
(State or Other Jurisdiction of
Incorporation or Organization)
(Primary Standard Industrial
Classification Code Number)
(I.R.S. Employer
Identification No.)
1 S. Dearborn, 19th Floor Chicago, Illinois60603
(312) 899-3400
(Address, Including Zip Code, and Telephone Number, Including Area Code,
of Registrant’s Principal Executive Offices)
Marc Jeske, Esq.
ArcelorMittal USA Inc.
1 S. Dearborn, 19th Floor Chicago, Illinois60603
(312) 899-3400
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent For Service) With a copy to:
Philip J. Niehoff
Sterling M. Dorish
Mayer Brown LLP
71 South Wacker Drive Chicago, Illinois60606
Telephone No.: (312) 782-0600
David C. Lopez, Esq.
Cleary Gottlieb Steen & Hamilton LLP
One Liberty Plaza New York, New York10006
Telephone No.: (212) 225-2000
Approximate date of commencement of proposed sale to the public: As soon as practicable after
the effective date of this Registration Statement.
If the securities being registered on this form are to be offered in connection with the
formation of a holding company and there is compliance with General Instruction G, check the
following box. o
If this Form is filed to register additional securities for an offering pursuant to
Rule 462(b) under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement for the same
offering. o
If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities
Act, check the following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer,
a non-accelerated filer, or a smaller reporting company.
See the definitions of “large
accelerated filer,”“accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer
o Accelerated filer
o
Non-accelerated filer
þ
Smaller reporting company
o
(Do not check if a smaller reporting company)
CALCULATION OF REGISTRATION FEE
Proposed
Proposed
Maximum
Maximum
Title of each Class of Securities to
Amount to be
Offering Price
Aggregate
Amount of
be Registered
registered
Per Unit(1)
Offering Price(1)
Registration Fee
9 3/4% Senior Secured Notes due 2014
$
422,500,000
100%
$
422,500,000
$ 16,604
Guarantees
N/A
N/A
N/A
(2)
Total
$
422,500,000
100%
$
422,500,000
$ 16,604
(1)
Calculated based on the book value of the securities in accordance with Rule 457(f)(2) under
the Securities Act.
(2)
Pursuant to Rule 457(n) under the Securities Act, no separate filing fee is payable in
respect of the guarantees.
The co-registrants hereby amend this registration statement on such date or dates as may be
necessary to delay its effective date until the co-registrants shall file a further amendment which
specifically states that this registration statement shall thereafter become effective in
accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement
shall become effective on such date as the SEC, acting pursuant to said Section 8(a), may
determine.
This registration statement comprises a filing on Form F-4 with respect to the securities of
the non-U.S. registrants and a filing on Form S-4 with respect to the securities of the U.S.
registrants.
The information contained in this consent solicitation statement and prospectus is not complete and
may be changed. We may not sell the securities offered by this consent solicitation statement and
prospectus until the registration statement filed with the securities and exchange commission is
effective.
ARCELORMITTAL FINANCIAL SERVICES LLC
Solicitation of Consents to Amendments to Indenture in Respect of $422,500,000 Aggregate Principal Amount Outstanding of its
9 3/4% Senior Secured Notes Due 2014 (the “Notes”) (CUSIP No. 46489N AD 4; ISIN No. US46489NAD49)
Secured by $422,500,000 First Mortgage Bonds of ArcelorMittal USA Inc. (“ArcelorMittal USA”)
Consent Payment: $1.25 per $1,000 principal amount of Notes
Subject to the terms and conditions set forth in this Consent Solicitation Statement and Prospectus
(this “Consent Solicitation Statement”) and the
accompanying consent letter (the “Consent Letter”), ArcelorMittal
Financial Services LLC, as successor issuer to Ispat Inland ULC, the original issuer of the Notes
(the “Issuer”) is hereby soliciting (the “Solicitation”) consents (“Consents”) from the holders of
record of the Notes (the “Holders”) as of 5:00 p.m., New York time, on [], 2008 (the “Record
Date”).
The Solicitation seeks Consents to amend (the “Proposed Amendments”) certain provisions of (i) the
Indenture dated as of March 25, 2004, as amended, governing the Notes (the “Indenture”), (ii) the
First Mortgage dated April 1, 1928, as amended (the “Mortgage”), governing the Series Z First
Mortgage Bonds and (iii) the Security Agreement, dated as of March 25, 2004 (the “Security
Agreement”), entered into in connection with the issuance of the Notes. The Proposed Amendments
will, among other things, permit us to re-establish a “tower” financing structure similar to that
which existed at the time of the initial issuance of the Notes.
The Solicitation is being made upon the terms and is subject to the conditions set forth in this
Consent Solicitation Statement and in the Consent Letter.
Approval of the Proposed Amendments requires Consents from Holders of a majority in outstanding
principal amount of the Notes (the “Requisite Consents”). The Issuer will pay to Holders a consent
fee (the “Consent Payment”) of $1.25 for each $1,000 principal amount of Notes with respect to
which such Holders have properly delivered valid and unrevoked Consents prior to the Expiration
Date (as defined herein), provided that the conditions set forth in this Consent Solicitation
Statement are satisfied or otherwise waived.
The Proposed Amendments constitute a single proposal, and a consenting Holder must consent to the
adoption of the Proposed Amendments as an entirety and may not consent selectively to certain
Proposed Amendments. Accordingly, a Consent delivered by a Holder purporting to consent only to
some of the Proposed Amendments will be treated as a Consent by such Holder to all of the Proposed
Amendments.
The Solicitation will commence on [], 2008 and will expire at 5:00 p.m., New York time, on
[], 2008, unless extended or earlier terminated by the Issuer (this date and time, as it may
be extended, the “Expiration Date”). The Issuer may, prior to the satisfaction or waiver of the
conditions set forth in this Consent Solicitation Statement and subject to applicable law,
terminate the Solicitation or extend the Solicitation for a specified period or on a daily basis.
Only a holder of record on the Record Date, in respect of which there has been delivered a valid
Consent prior to the Expiration Date (which has not been properly revoked), will be entitled to
receive the Consent Payment.
Consents may be revoked at any time prior to the execution of the Supplemental Indenture (such time
referred to herein as the “Execution Time”). Any notice of revocation received after the Execution
Time will not be effective, even if received prior to the Expiration Date. See “The Solicitation
Terms — Revocation of Consents”. Promptly following the receipt of the Requisite Consents, the
Issuer, LaSalle Bank National Association (the “Trustee”), ArcelorMittal USA Partnership (the
“Successor Issuer”), the New Finco Guarantors (as hereinafter defined) and the Guarantors (as
defined in the Indenture) may execute a Supplemental Indenture for the Notes substantially in the
form set forth in Exhibit A attached hereto (the “Supplemental Indenture”). The Supplemental
Indenture will become effective upon execution, but the Proposed Amendments will become operative
only upon payment of the Consent Payment. Once the Proposed Amendments become operative, each
present and future Holder of the Notes will be bound by the Proposed Amendments, whether or not
such Holder delivered a Consent. For a description of the Proposed Amendments, see “The Proposed
Amendments”.
None of the Issuer, the Guarantors, the Trustee, the Solicitation Agent, the Tabulation Agent or
the Information Agent makes any recommendation as to whether or not Holders should deliver Consents
in response to the Solicitation. Each Holder must make his, her or its own decision as to whether
to deliver Consents and, if so, as to how many Consents to deliver.
In connection with the Solicitation, Citigroup Global Markets Inc. is serving as the Solicitation
Agent (the “Solicitation Agent”) and Global Bondholder Services Corporation is serving as the
Tabulation Agent (the “Tabulation Agent”) and the Information Agent (the “Information Agent”).
Questions concerning the terms of the Solicitation should be directed to the Solicitation Agent at
the address or telephone number set forth on the back cover page of this Consent Solicitation
Statement. Requests for assistance in completing and delivering the Consent Letter or requests for
additional copies of this Consent Solicitation Statement, the Consent Letter or other related
documents should be directed to the Information Agent at the address or telephone number set forth
on the back cover page of this Consent Solicitation Statement.
This Consent Solicitation Statement incorporates important business and financial information
about ArcelorMittal (and its predecessor Mittal Steel Company N.V.), ArcelorMittal USA Inc.
(formerly Mittal Steel USA Inc.) and the other co-registrants from other documents that are not
included in or delivered with this document. These documents are identified under the section
entitled “Incorporation of Certain Documents by Reference” and may be obtained at Securities and
Exchange Commission’s (the “SEC”) website, http://www.sec.gov. This information is also available
to you without charge upon your written or oral request as described below:
ArcelorMittal
19, Avenue de la Liberté
L-2930 Luxembourg
Grand Duchy of Luxembourg
+352 4792-1
Attention: Investor Relations
In order for you to receive timely delivery of documents incorporated by reference prior to
the expiration of the Solicitation, we should receive your request by no later than [___], 2008.
This Consent Solicitation Statement contains or refers to important information that you
should read carefully before you make any decision with respect to delivery of a Consent pursuant
to the Solicitation. Holders are requested to read and carefully consider the information
contained or incorporated by reference herein and to give their Consent to the Proposed Amendments
by properly completing, executing and delivering the accompanying Consent Letter in accordance with
the instructions set forth herein and therein.
Notwithstanding anything to the contrary set forth in this Consent Solicitation Statement, and
except for an extension of the Solicitation in the event of an amendment, waiver or modification of
the Solicitation in a manner that is deemed to be material and subject to applicable law, the
Issuer reserves the right, in its sole discretion, at any time prior to the Execution Time to: (i)
waive any condition to the Solicitation and accept all Consents previously given pursuant to the
Solicitation; (ii) extend the Expiration Date and, unless otherwise provided in this Consent
Solicitation Statement, retain all Consents delivered pursuant to the Solicitation; (iii) amend the
terms of the Solicitation in any respect; (iv) terminate the Solicitation and not accept any
Consents; or (v) modify the form or amount of the consideration to be paid pursuant to the
Solicitation. See “The Solicitation Terms — Expiration Date; Extensions; Amendment”.
Holders who wish to Consent must deliver their properly completed and executed Consent Letter
to the Tabulation Agent prior to the Expiration Date at the address or facsimile number (with an
original delivered subsequently) set forth on the back cover page of this Consent Solicitation
Statement and in the Consent Letter in accordance with the instructions set forth herein and
therein. Consents should not be delivered to the Issuer, the Guarantors, the Trustee, the
Solicitation Agent or the Information Agent. However, the Issuer reserves the right to accept any
Consent received by it, the Guarantors, the Trustee, the Solicitation Agent or the Information
Agent. Under no circumstances should any person tender or deliver Notes to the Issuer, the
Guarantors, the Trustee, the Solicitation Agent, the Information Agent or the Tabulation Agent at
any time.
The delivery of a Consent to the Proposed Amendments will not affect a Holder’s right to sell
or transfer the Notes. Only Holders of record as of the Record Date, or their duly designated
proxies, including, for the purposes of this Consent Solicitation, DTC Participants (as defined
below), may submit a Consent Letter. A duly executed Consent Letter shall bind the Holder(s)
executing the same and any subsequent Holder or transferee of the Notes to which such Consent
Letter relates. No consent will be valid or effective for more than 120 days from the Record Date.
As of the Record Date, all of the Notes were held through The Depository Trust Company (“DTC”)
by participants in DTC (“DTC Participants”).
Notwithstanding anything to the contrary contained or incorporated by reference herein or in
any other document related to the Solicitation, if the Requisite Consents are not received and the
Supplemental Indenture is not executed, then the Proposed Amendments will not become operative and
the Issuer will not pay the Consent Payment to any Holder. The obligation to make the Consent
Payment with respect to the Notes is also subject to the satisfaction or waiver of the conditions
set forth in this Consent Solicitation Statement. See “The Solicitation Terms — Conditions to the
Solicitation”.
Recipients of this Consent Solicitation Statement and the accompanying materials should not
construe the contents hereof or thereof as legal, business or tax advice. Each recipient should
consult its own attorney, business advisor and tax advisor as to legal, business, tax and related
matters concerning the Solicitation.
Terms used in this Consent Solicitation Statement that are not otherwise defined herein have
the meanings set forth in the indenture dated as of March 25, 2004, as amended and supplemented by
the First Supplemental Indenture dated as of September 16, 2004, the Second Supplemental Indenture
dated as of March 14, 2005, the Third Supplemental Indenture dated as of December 31, 2005, the
Fourth Supplemental Indenture dated as of December 31, 2005, the Fifth Supplemental Indenture dated
as of December 31, 2006, the Sixth Supplemental Indenture dated as of September 3, 2007, the
Seventh Supplemental Indenture dated as of November 13, 2007 and the Eighth Supplemental Indenture
dated as of December 28, 2007, among the Issuer, the Guarantors and the Trustee.
No person has been authorized to give any information or make any representations other than
those contained in this Consent Solicitation Statement and, if given or made, such information or
representations must not be relied upon as having been authorized by the Issuer, the Guarantors,
the Solicitation Agent, the Tabulation Agent, the Information Agent or any other person. The
Solicitation is not being made to, and no Consents are being solicited from, Holders in any
jurisdiction in which it is unlawful to make such solicitation or grant such Consents. The
statements made in this Consent Solicitation Statement are made as of the date hereof, and delivery
of this Consent Solicitation Statement and the accompanying materials at any time does not imply
that the information herein or therein is correct as of any subsequent date.
The information contained or incorporated by reference in this Consent Solicitation Statement
is based upon information provided solely by the Issuer. The Solicitation Agent has not
independently verified and does not make any representation or warranty, express or implied, or
assume any responsibility, as to the accuracy or adequacy of the information contained or
incorporated by reference herein.
Questions concerning the terms of the Solicitation should be directed to the Solicitation
Agent at the address or telephone number set forth on the back cover page of this Consent
Solicitation Statement. Requests for assistance in completing and delivering the Consent Letter or
requests for additional copies of this Consent Solicitation Statement, the Consent Letter or other
related documents should be directed to the Information Agent at the address or telephone number
set forth on the back cover page of this Consent Solicitation Statement. In order to ensure timely
delivery of additional copies of this Consent Solicitation Statement, any request should be made no
less than five business days prior to the Expiration Date. The term “business day” in this Consent
Solicitation Statement means any day other than a Saturday, Sunday or a federal holiday in the
United States.
PRESENTATION OF CERTAIN FINANCIAL AND OTHER INFORMATION
Financial Information
ArcelorMittal
This Consent Solicitation Statement incorporates by reference the audited consolidated
financial statements of ArcelorMittal (of which Mittal Steel Company N.V. is the predecessor) and
its consolidated subsidiaries (“ArcelorMittal”), including the consolidated balance sheets as of
December 31, 2006 and 2007, and the consolidated statements of income, changes in equity and cash
flows for each of the years ended December 31, 2005, 2006 and 2007, which we refer to as the
ArcelorMittal Consolidated Financial Statements. The ArcelorMittal Consolidated Financial
Statements were prepared in accordance with International Financial Reporting Standards as issued
by the International Accounting Standards Board (“IFRS”).
ArcelorMittal’s significant acquisitions in 2005, 2006 and 2007, including in particular
Arcelor, International Steel Group Inc., Kryvorizhstal and Sicartsa, have been accounted for using
the purchase method of accounting, with ArcelorMittal as the acquiring entity in accordance with
IFRS 3 (“Business Combinations”).
General
The financial information and certain other information presented in a number of tables
included or incorporated in this Consent Solicitation Statement have been rounded to the nearest
whole number or the nearest decimal. Therefore, the sum of the numbers in a column may not conform
exactly to the total figure given for that column. In addition, certain percentages presented in
the tables included or incorporated in this Consent Solicitation Statement reflect calculations
based upon the underlying information prior to rounding and, accordingly, may not conform exactly
to the percentages that would be derived if the relevant calculations were based upon the rounded
numbers.
In this document, references to “$”, “dollars”, “USD” or “U.S. dollars” are to United States
dollars.
This Consent Solicitation Statement includes or incorporates by reference industry data and
projections about ArcelorMittal’s and ArcelorMittal USA’s markets obtained from industry surveys,
market research, publicly available information and industry publications. Statements on
ArcelorMittal’s or ArcelorMittal USA’s competitive position contained or incorporated by reference
in this Consent Solicitation Statement are based primarily on public sources including, but not
limited to, publications of the International Iron and Steel Institute. Industry publications
generally state that the information they contain has been obtained from sources believed to be
reliable and that the projections they contain are based on a number of significant assumptions.
We have not independently verified this data or determined the reasonableness of such assumptions.
In addition, in many cases, each of ArcelorMittal and ArcelorMittal USA has made statements in this
Consent Solicitation Statement regarding its industry and its position in its industry based on
internal surveys, industry forecasts, market research and its own experience. While these
statements are believed to be reliable, they have not been independently verified.
Internet Sites
ArcelorMittal maintains an Internet site: www.arcelormittal.com. Information contained in or
otherwise accessible through this Internet site is not a part of this Consent Solicitation
Statement unless otherwise specifically incorporated by reference in this Consent Solicitation
Statement, as described in “Incorporation of Certain Documents by Reference”.
This Consent Solicitation Statement and the documents incorporated by reference in this
Consent Solicitation Statement contain forward-looking statements based on estimates and
assumptions. Forward-looking statements include, among other things, statements concerning the
business, future financial condition, results of operations and
prospects of ArcelorMittal,
including its acquired subsidiaries. These statements usually contain the words “believes”,
“plans”, “expects”, “anticipates”, “intends”, “estimates” or other similar expressions. For each
of these statements, you should be aware that forward-looking statements involve known and unknown
risks and uncertainties. Although it is believed that the expectations reflected in these
forward-looking statements are reasonable, there is no assurance that the actual results or
developments anticipated will be realized or, even if realized, that they will have the expected
effects on the business, financial condition, results of operations or prospects of ArcelorMittal.
These forward-looking statements speak only as of the date on which the statements were made,
and no obligation has been undertaken to publicly update or revise any forward-looking statements
made in this Consent Solicitation Statement or elsewhere as a result of new information, future
events or otherwise, except as required by applicable laws and regulations. In addition to the
factors described in ArcelorMittal’s Annual Report on Form 20-F for the year ended December 31,2007, the other documents filed with or furnished to the SEC from time to time or the other factors
and matters contained or incorporated by reference in this Consent Solicitation Statement, it is
believed that the following factors, among others, could cause actual results to differ materially
from those discussed in the forward-looking statements:
•
ArcelorMittal’s ability to manage its growth;
•
ArcelorMittal’s ability fully to realize anticipated cost savings, revenue
enhancements and other benefits from the acquisition by Mittal Steel of Arcelor;
•
Mr. Lakshmi N. Mittal’s ability to exercise significant influence over the outcome
of shareholder voting;
•
any loss or diminution in the services of Lakshmi N. Mittal, ArcelorMittal’s
President of the Board of Directors and Chief Executive Officer;
•
any downgrade of ArcelorMittal’s credit rating;
•
ArcelorMittal’s ability to operate within the limitations imposed by its financing
arrangements;
•
ArcelorMittal’s ability to refinance existing debt and obtain new financing on
acceptable terms to finance its growth;
•
mining risks;
•
the risk that non-fulfillment or breach of transitional arrangements may result in
the recovery of aid granted to some of ArcelorMittal’s subsidiaries;
•
ArcelorMittal’s ability to fund under-funded pension liabilities;
•
increased cost of wages and the risk of labor disputes;
•
general economic conditions, whether globally, nationally or in the markets in which
ArcelorMittal conducts business;
•
the risk of disruption or volatility in the economic, political or social
environment in the countries in which ArcelorMittal conducts business;
fluctuations in currency exchange rates, commodity prices, energy prices and
interest rates;
•
the risk of disruptions to ArcelorMittal’s operations;
•
the risk of unfavorable changes to, or interpretations of, the tax laws and
regulations in the countries in which ArcelorMittal operates;
•
the risk that ArcelorMittal may not be able to fully utilize its deferred tax
assets;
•
damage to ArcelorMittal’s production facilities due to natural disasters;
•
the risk that ArcelorMittal’s insurance policies may provide limited coverage;
•
the risk of product liability claims adversely affecting ArcelorMittal’s operations;
•
international trade actions or regulations;
•
the risk that U.S. investors may have difficulty enforcing civil liabilities against
ArcelorMittal and its directors and senior management;
•
the risk that a downturn in global economic conditions may have an adverse effect on
the results of ArcelorMittal;
•
ArcelorMittal’s ability to operate successfully within a cyclical industry;
•
the risk that changes in demand for and supply of steel products in China and other
developing economies may result in falling steel prices;
•
the risk of significant supply shortages and increasing costs of raw materials,
energy and transportation;
•
increased competition from substitute materials, such as aluminum; and
•
legislative or regulatory changes, including those relating to protection of the
environment and health and safety, and those resulting from international agreements
and treaties related to trade, accession to the European Union (“EU”) or otherwise.
Holders of Notes should take note of the dates and times set forth in the schedule below in
connection with the Solicitation. These dates and times may be changed by the Issuer in accordance
with the terms and conditions of the Solicitation, as described herein.
Date
Calendar Date
Event
Record Date
[___], 2008, at 5:00 p.m., New York time.
The date fixed by the
Issuer as the date for the
determination of Holders
entitled to give Consents
and receive the Consent
Payment.
Launch Date
[___], 2008.
Launch of the Solicitation.
Expiration Date
[___], 2008, at 5:00 p.m., New York
time, unless extended or earlier
terminated.
The deadline for Holders
to deliver Consents in
order to receive the
Consent Payment.
Execution Time
The time at which the Supplemental
Indenture is executed in accordance with
its terms following receipt of the
Requisite Consents. The Execution Time
may occur prior to the Expiration Date if
the Requisite Consents are received prior
to the Expiration Date.
The deadline for Holders
to validly revoke
Consents. A Holder who
validly revokes its
Consent will not be
eligible to receive the
Consent Payment.
Payment Date
Expected to be [___], 2008, if the
Solicitation is not extended or earlier
terminated.
The date the Tabulation
Agent will make the
Consent Payment on behalf
of the Issuer for all
Consents validly delivered
and not validly revoked
prior to the Expiration
Date.
This summary highlights information contained elsewhere or incorporated by reference in this
Consent Solicitation Statement. This summary may not contain all of the information that is
important to you, and it is qualified in its entirety by the more detailed information and
historical consolidated financial statements, including the notes to those financial statements,
that are included or incorporated by reference in this Consent Solicitation Statement. You should
carefully read the entire Consent Solicitation Statement and the information incorporated by
reference herein before making an investment decision.
Unless otherwise indicated in this Consent Solicitation Statement or unless the context
otherwise requires: the terms “we”, “us”, “our”, the “Company” and “ArcelorMittal USA” refer to
ArcelorMittal USA Inc. and its consolidated subsidiaries (except with respect to the guarantee of
the Notes, in which case such terms refer only to ArcelorMittal USA Inc.); “ArcelorMittal” or
“Parent” refers to ArcelorMittal (or its predecessor Mittal Steel Company N.V., which is referred
to herein as Mittal N.V.) and its subsidiaries (except with respect to the guarantee of the Notes,
in which case it refers only to ArcelorMittal or its predecessor, as applicable); and “Issuer”
refers to ArcelorMittal Financial Services LLC, as successor issuer to Ispat Inland ULC, the
original issuer of the Notes.
ArcelorMittal Financial Services LLC
ArcelorMittal Financial Services LLC is the issuer of the Notes. The Issuer is a limited
liability company that was recently formed under the laws of Delaware and is an indirect wholly
owned subsidiary of ArcelorMittal. The Issuer is a limited purpose finance company and, except for
$422.5 million in aggregate principal amount of Series Z First Mortgage Bonds of ArcelorMittal USA
due April 2014, and $90 million of Series A 8% Preferred Stock of ArcelorMittal USA, it has no
material assets or liabilities. The Issuer’s principal executive offices are located at 1 S.
Dearborn, 19th Floor, Chicago, Illinois60603. Its telephone number at that address is +1 (312)
899-3400.
ArcelorMittal USA Partnership
ArcelorMittal USA Partnership, an indirect, wholly owned subsidiary of ArcelorMittal, is a
partnership that was recently formed under the laws of Delaware for the purpose of becoming the
successor issuer of the Notes following the completion of a Permitted Finco Reconstitution
Transaction (as defined in “The Proposed Amendments — Proposed Amendments to the Indenture”).
ArcelorMittal USA Partnership’s principal executive offices are located at 1 S. Dearborn, 19th
Floor, Chicago, Illinois60603. Its telephone number at that address is +1 (312) 899-3400.
ArcelorMittal USA
ArcelorMittal USA Inc., formerly Mittal Steel USA Inc., has guaranteed the Notes and is the
issuer of the Series Z First Mortgage Bonds that, following the Permitted Finco Collapse
Transaction concluded on December 28, 2007, have been pledged by ArcelorMittal Financial Services
LLC to secure the Notes. Payments on the Series Z First Mortgage Bonds by ArcelorMittal USA are
used to make payments on the Notes.
ArcelorMittal USA is one of North America’s largest steelmakers and serves a broad U.S.
manufacturing base. ArcelorMittal USA is an indirect wholly owned subsidiary of ArcelorMittal, the
world’s largest and most global steel company. On April 15, 2005, ArcelorMittal’s predecessor
acquired International Steel Group Inc. and was renamed Mittal Steel USA ISG Inc. Effective
December 31, 2005, Mittal Steel USA ISG Inc. merged with another subsidiary of ArcelorMittal’s
predecessor, Ispat Inland Inc. Mittal Steel USA ISG Inc. was the surviving subsidiary and was
renamed Mittal Steel USA Inc. (which was subsequently renamed ArcelorMittal USA Inc.). Both
companies were indirect wholly owned subsidiaries of ArcelorMittal’s predecessor, Mittal N.V. As
of December 31, 2007, ArcelorMittal USA had operations in 13 states of the United States with an
annual raw steel production capability of approximately 27.0 million net tons.
ArcelorMittal USA’s principal products include a broad range of hot-rolled, cold-rolled and
coated sheets, tin mill products, carbon and alloy plates, wire rod, rail products, bars and
semi-finished shapes to serve the automotive, construction, pipe and tube, appliance, container and
machinery markets. All of these products are available in standard carbon grades as well as high
strength, low alloy grades for more demanding applications. For the year ended December 31, 2007,
ArcelorMittal USA had revenue of $12.8 billion and net income of $386 million.
ArcelorMittal USA’s principal executive offices are located at 1 S. Dearborn, 19th Floor,
Chicago, Illinois60603. Its telephone number at that address is +1 (312) 899-3400.
ArcelorMittal
ArcelorMittal has guaranteed the Notes. ArcelorMittal is the world’s largest and most global
steel producer. It results from the combination in 2006 of Mittal N.V. and Arcelor, a société
anonyme incorporated under Luxembourg law, which was acquired by Mittal N.V. on August 1, 2006, at
the time respectively the world’s largest and second largest steel companies by production volume.
ArcelorMittal produces a broad range of high-quality finished, semi-finished carbon steel
products and stainless steel products. Specifically, ArcelorMittal produces flat products,
including sheet and plate, long products, including bars, rods and structural shapes, and stainless
steel products. ArcelorMittal sells its products primarily in local markets and through its
centralized marketing organization to a diverse range of customers in approximately 170 countries,
including the automotive, appliance, engineering, construction and machinery industries.
ArcelorMittal is the largest steel producer in the Americas, Africa, and Europe, the second
largest producer in the Commonwealth of Independent States (the “CIS”) and it has a growing
presence in Asia, particularly China. ArcelorMittal has steelmaking operations in 20 countries on
four continents, including 65 integrated, mini-mill and integrated mini-mill steelmaking
facilities. As of December 31, 2007, ArcelorMittal had approximately 311,000 employees.
ArcelorMittal operates its business in six reportable operating segments: Flat Carbon
Americas; Flat Carbon Europe; Long Carbon Americas and Europe; Asia, Africa and CIS; Stainless
Steel; and ArcelorMittal Steel Solutions and Services (trading and distribution). ArcelorMittal’s
steelmaking operations have a high degree of geographic diversification. Approximately 35% of its
steel is produced in the Americas, approximately 46% is produced in Europe and approximately 19% is
produced in other countries, such as Kazakhstan, Algeria, Morocco and South Africa. In addition,
ArcelorMittal’s sales are spread over both developed and developing markets, which have different
consumption characteristics.
For the year ended December 31, 2007, ArcelorMittal had sales of approximately $105.2 billion,
steel shipments of approximately 109.7 million tonnes and crude steel production of approximately
116.4 million tonnes. “Tonnes” are metric tonnes and are used in measurements involving
iron ore, iron ore pellets, direct reduced iron, hot metal, coke, coal, pig iron and scrap. A
metric tonne is equal to 1,000 kilograms or 2,204.62 pounds. ArcelorMittal’s net income
attributable to equity holders of the parent for the year ended December 31, 2007, was $10.4
billion, or $7.41 per share. As of December 31, 2007, ArcelorMittal had equity of $61.5 billion,
total debt of $30.6 billion and cash and cash equivalents, including restricted cash, of $8.1
billion.
ArcelorMittal’s shares are listed and traded on the NYSE (symbol “MT”), are admitted to
trading on the Luxembourg Stock Exchange’s regulated market and listed on the Official List of the
Luxembourg Stock Exchange (symbol “MTL”), and are admitted to listing and trading on Euronext
Amsterdam by NYSE Euronext (symbol “MT”), Euronext Brussels by NYSE Euronext (symbol “MTBL”),
Euronext Paris by NYSE Euronext (symbol “MTP”) and the stock exchanges of Madrid, Barcelona, Bilbao
and Valencia (symbol “MTS”).
ArcelorMittal’s principal executive offices are located at 19, Avenue de la Liberté, L-2930
Luxembourg, Grand Duchy of Luxembourg. Its telephone number at that address is +352 4792-2414.
Permitted Finco Collapse Transaction
On December 28, 2007, we concluded a Permitted Finco Collapse Transaction within the meaning
of the Indenture. The Permitted Finco Collapse Transaction had, among other things, the following
effects:
•
ArcelorMittal Financial Services LLC became the Issuer of the Notes and was substituted
for Ispat Inland ULC (the original issuer of the Notes) for all purposes under the
Indenture and the pledge agreement by and among the Issuer, the Finco Guarantors
(ArcelorMittal Partnership (formerly Ispat Inland, L.P.), 3019693 Nova Scotia U.L.C. and
ArcelorMittal Finance LLC (formerly Ispat Inland Finance, LLC)) (collectively, the
“Pledgors”), and the Trustee (the “Pledge Agreement”), and Ispat Inland ULC was released
from its obligations under the Indenture and the Pledge Agreement;
the Series Z First Mortgage Bonds issued by ArcelorMittal USA to ArcelorMittal Finance
LLC (formerly Ispat Inland Finance, LLC) in connection with the original issuance of the
Notes, and the payments on which are used to make payments on the Notes, as well as $90
million of Series A 8% Preferred Stock of ArcelorMittal USA, were transferred to
ArcelorMittal Financial Services LLC and pledged to the Trustee as Collateral for the
Notes;
•
the rate of interest on the Series Z First Mortgage Bonds was reduced by 0.5%;
•
the covenants set forth in Section 4.19 of the Indenture, which limited the activities
of the Issuer and the Finco Guarantors (ArcelorMittal Partnership (formerly Ispat Inland,
L.P.), 3019693 Nova Scotia U.L.C. and ArcelorMittal Finance LLC (formerly Ispat Inland
Finance, LLC)) ceased to apply, and the covenants set forth in Section 4.20 of the
Indenture restricting the activities of the Issuer following the conclusion of the
Permitted Finco Collapse Transaction became operative. See “Description of the Notes —
Covenants of the Issuer Following a Permitted Finco Collapse Transaction”;
•
each of the Finco Guarantors was released from its respective obligation to guarantee
the Notes; and
•
in accordance with the Indenture, all remaining property or assets of the Finco
Guarantors constituting a portion of the Collateral securing the Notes were released from
the Lien (as defined in the Indenture) of the Pledge Agreement, after which the Finco
Guarantors may be dissolved.
See “Description of the Notes — Certain Definitions — Permitted Finco Collapse Transaction”
for a more detailed description of the Permitted Finco Collapse Transaction.
ArcelorMittal Financial Services LLC, as successor issuer to
Ispat Inland ULC, the original issuer of the Notes.
The Notes
9 3/4% Senior Secured Notes due 2014 of ArcelorMittal Financial
Services LLC issued under the Indenture.
Consent Solicitation Statement
Consent Solicitation Statement and Prospectus dated [___], 2008.
Purpose of the Solicitation
The Issuer is soliciting Consents of Holders to the Proposed
Amendments. The Proposed Amendments will, among other things,
permit us to re-establish a “tower” financing structure similar
to that which existed at the time of the initial issuance of the
Notes. See “The Proposed Amendments”.
The Proposed Amendments
The Proposed Amendments to the Indenture will be set forth in the
Supplemental Indenture, which is expected to be executed by the
Issuer, the Successor Issuer, the Guarantors, the New Finco
Guarantors and the Trustee following receipt of the Requisite
Consents. If (i) the Requisite Consents are obtained, and (ii)
the Proposed Amendments become operative, all Holders of the
Notes (including Holders that do not deliver a Consent) will be
bound by the Proposed Amendments. The Proposed Amendments will
not become operative, however, until the Consent Payment has been
made. See “The Proposed Amendments”.
Specifically, the Proposed Amendments would, among other things,
add a new definition to the Indenture entitled “Permitted Finco
Reconstitution Transaction”. We expect that the Permitted Finco
Reconstitution Transaction, which we intend to consummate once
the Proposed Amendments become operative, would have the
following effects:
• the capital stock of the Issuer would be transferred to
ArcelorMittal USA Partnership, a newly formed Delaware
partnership that we refer to as the Successor Issuer;
• the Issuer would merge with and into the Successor
Issuer, with the Successor Issuer being the survivor of such
merger;
• the Successor Issuer would become the successor issuer of
the Notes and assume all obligations of the Issuer with respect
thereto;
• the Successor Issuer’s newly formed Nova Scotia unlimited
company subsidiary, 3222193 Nova Scotia Company, which we refer
to as New Finco Guarantor #1, would guarantee the Notes, but
would not have any material assets or liabilities other than the
equity in its subsidiary referred to below;
• New Finco Guarantor #1’s newly formed Delaware limited
liability company subsidiary, ArcelorMittal Finance LLC, which we
refer to as New Finco Guarantor #2, would guarantee the Notes,
but would not have any material assets or liabilities other than
the Series Z First Mortgage Bonds and $90 million of Series A 8%
Preferred Stock of ArcelorMittal USA;
• the Successor Issuer would cause the Series Z First
Mortgage Bonds, as well as $90 million of Series A 8% Preferred
Stock of ArcelorMittal USA, to be transferred to New Finco
Guarantor #2 and pledged to the Trustee as collateral for the
Notes;
• the capital stock of the Successor Issuer, as well as the
capital stock of each New Finco Guarantor, would be pledged to
the Trustee as collateral for the Notes;
• the rate of interest on the Series Z First Mortgage Bonds
would be increased by 1.0%, unless and until the “tower” were to
be collapsed in accordance with the Indenture, as amended;
• in the event that
any portion of the Series Z First Mortgage Bonds are prepaid prior to
April 1, 2014, the rate of interest payable on the Series Z First Mortgage Bonds would be amended to provide for an additional payment equal to the sum of (x) the unamortized loan finance fees from the 2004
refinancing of the Issuer’s predecessor company, Ispat Inland
ULC, which are allocable to the portion of the Series Z First
Mortgage Bonds so prepaid and (y) the amount of transaction costs
incurred in respect of the
Permitted Finco Collapse Transaction or Permitted Finco
Reconstitution Transaction occurring on or prior to such date; and,
• the covenants set forth in Section 4.19 of the Indenture,
which restrict the activities of the Issuer following the
Permitted Finco Reconstitution Transaction, but prior to any
subsequent Permitted Finco Collapse Transaction, would again
become operative and the covenants set forth in Section 4.20 of
the Indenture would cease to apply.
From a credit impact perspective, we do not believe that the
holders of the Notes will be adversely impacted as a result of
the Permitted Finco Reconstitution Transaction because the
collateral, as well as the current guarantors of the Notes, will
be substantially similar after the consummation of the Permitted
Finco Reconstitution Transaction. Specifically, after the
Permitted Finco Reconstitution Transaction, (i) ArcelorMittal and
ArcelorMittal USA (and its significant subsidiaries) will continue to
be guarantors of the Notes, (ii) the Series Z First Mortgage Bonds
and $90 million of Series A 8% Preferred Stock of ArcelorMittal USA
will continue to be pledged to the Trustee as collateral for the
Notes and (iii) ArcelorMittal USA’s guarantee of the Notes will
continue to be secured by a second priority security interest in
certain inventory. In addition, the interest rate applicable to the
Series Z First Mortgage Bonds, which is currently equal to the
interest rate on the Notes (having been reduced by 50 basis points
per annum as a result of the Permitted Finco Collapse Transaction),
will be increased by 1.0% per annum as part of the Permitted Finco
Reconstitution Transaction. In addition, as was the case with respect
to the entities in the “tower” financing structure that
existed prior to the Permitted Finco Collapse Transaction, the
entities in the new “tower” financing structure (other than
the Successor Issuer) will guaranty the Notes on the same terms and
conditions as the prior entities and will be subject to restrictions
on their activities substantially similar to those restrictions that
applied to the entities prior to the Permitted Finco Collapse
Transaction. In addition, the covenants applicable to ArcelorMittal
USA and its subsidiaries under the Indenture will not be changed.
Because the “tower”
financing structure following the consummation of the Permitted Finco
Reconstitution Transaction will differ from the structure that
existed prior to the Permitted Finco Collapse Transaction, certain of
the intercompany obligations that existed prior to the Permitted
Finco Collapse transaction will not be replicated in the new
“tower” financing structure and will not be pledged as
collateral following the Permitted Finco Reconstitution Transaction.
Such obligations include the Finco Mirror Note (as defined in
“Description of the Notes — Background”) that was
payable to the Issuer by ArcelorMittal Partnership (formerly Ispat
Inland, L.P.), a $9.0 million note owing from the Issuer to
ArcelorMittal Partnership, and a $97.5 million note owing from
3019693 Nova Scotia ULC to ArcelorMittal Partnership.
The Proposed Amendments also include:
• amendments to the definition of Qualified Securitization
Transaction in the Indenture so that we may, even when we are not
in a Suspension Period (which, as defined in the Indenture,
renders certain covenants inapplicable) as is currently the case,
sell Receivables and Related Assets or Inventory and Related
Assets (as such terms are defined in the Indenture) to any person
and not just to a securitization subsidiary as the Indenture
currently contemplates;
• amendments to the Security Agreement to clarify that, in
addition to unsecured receivables and receivables secured by a
pool of assets, which are already excluded from the Collateral
securing the Notes, the Collateral securing the Notes also does
not extend to a receivable secured by specific goods to the
extent constituting “Chattel Paper” within the meaning of the
Uniform Commercial Code in effect in the State of New York (the
“UCC”); and
•
amendments to the Mortgage and Series Z First
Mortgage Bonds that (i) provide for the addition of ArcelorMittal and
substantially all of the domestic subsidiaries of ArcelorMittal USA
as additional guarantors of the Series Z First Mortgage Bonds, (ii) provide for
additional interest in the amount of 1.0% per annum after a
Permitted Finco Reconstitution Transaction has occurred, but
prior to the subsequent occurrence of a Permitted Finco Collapse
Transaction and (iii) provide that in the event that any portion of the Series Z First Mortgage Bonds
are prepaid prior to April 1, 2014, the rate of interest payable on the Series Z First Mortgage Bonds would
be amended to provide for an additional payment equal to the sum of (x) the unamortized loan finance fees from the 2004 refinancing of
the Issuer’s predecessor company, Ispat Inland ULC, which are
allocable to the portion of the Series Z First Mortgage Bonds so
prepaid and (y) the
amount of transaction costs incurred in respect of the Permitted
Finco Collapse Transaction or Permitted Finco Reconstitution
Transaction occurring on or prior to such date.
Requisite Consents
The Requisite Consents for the Notes means the receipt of valid,
unrevoked Consents from a majority in aggregate principal amount
of the Notes outstanding; provided that, for purposes of
determining whether any such requisite principal amount of Notes
have given their Consent, Notes owned by the Issuer, or by any
person directly or indirectly controlling or controlled by or
under direct or indirect common control with the Issuer, will be
considered as though not outstanding.
Consent Payment
If the Payment Conditions (as defined below) are satisfied or
otherwise waived with respect to the Notes, the Issuer will pay
or cause to be paid promptly to each Holder who delivered a valid
and unrevoked Consent to the Tabulation Agent prior to the
Expiration Date a one-time cash payment of $1.25 for each $1,000
principal amount of Notes held by such Holder in respect of which
a valid and unrevoked Consent was delivered (the “Consent
Payment”).
The obligation of the Company to make the Consent Payment with
respect to the Notes is subject to the following conditions: (i)
the execution by the Issuer, the Successor Issuer, the New Finco
Guarantors, the Guarantors and the Trustee of the Supplemental
Indenture implementing the Proposed Amendments following receipt
of the Requisite Consents; and (ii) the satisfaction of the
General Conditions set forth in “The Solicitation Terms —
Conditions to the Solicitation” (collectively, the “Payment
Conditions”).
The right to receive a Consent Payment is not transferable with a
Note. The Issuer will make Consent Payments only to the persons
who were Holders on the Record Date and who have delivered valid
and unrevoked Consents prior to the Expiration Date pursuant to
the terms hereof.
Record Date
The “Record Date” is 5:00 p.m., New York time, on [___], 2008.
Such date has been fixed by the Issuer as the date for the
determination of Holders entitled to give Consents and receive
the Consent Payment, if payable, pursuant to the Solicitation.
The Issuer reserves the right to establish, from time to time but
in all cases prior to receipt of the Requisite Consents, any new
date as such Record Date and, thereupon, any such new date will
be deemed to be the Record Date for purposes of the Solicitation.
Expiration Date
The “Expiration Date” is 5:00 p.m., New York time, on [___],
2008, unless the Solicitation is extended by the Issuer, in which
case the term “Expiration Date” will mean the latest date and
time to which the Solicitation is extended. The Issuer may
extend the Solicitation for a specified period or on a daily
basis, regardless of whether the Requisite Consents have been
obtained.
The time at which the Supplemental Indenture is executed in
accordance with its terms. Promptly following the receipt of the
Requisite Consents, the Issuer, the Successor Issuer, the
Guarantors and the New Finco Guarantors may, but are not required
to, execute the Supplemental Indenture containing the Proposed
Amendments to the Indenture with the Trustee. The Supplemental
Indenture will become effective upon its execution (subject to
compliance with the conditions set forth in the Indenture), but
the Proposed Amendments will become operative only upon payment
of the Consent Payment. The Execution Time may occur prior to
the Expiration Date if the Requisite Consents are received prior
to that time. Consents may not be revoked after the Execution
Time, even if such purported revocation occurs before the
Expiration Date.
Procedure for Delivering
Consents
Holders who wish to consent to the Proposed Amendments should
deliver one or more properly completed Consent Letters signed by
or on behalf of such Holder by mail, hand delivery, overnight
courier or by facsimile transmission to the Tabulation Agent at
its address or facsimile number set forth on the back cover page
of this Consent Solicitation Statement. The Issuer shall have
the right to determine whether any purported Consent satisfies
the requirements of this Consent Solicitation Statement and the
Indenture, and any such determination shall be final and binding
on the Holder who delivered such Consent or purported Consent.
Consent Letters must be delivered to the Tabulation Agent prior
to the Expiration Date. Only registered owners of Notes as of
the Record Date or their duly designated proxies, including, for
the purposes of the Solicitation, DTC Participants that have been
granted a proxy by the registered Holder, are eligible to consent
to the Proposed Amendments and receive the Consent Payment. See
“The Solicitation Terms — Procedures for Delivering Consents”.
Holders
For purposes of the Solicitation, the term “Holder” means (i) any
person in whose name a Note is registered in the registry
maintained by the Registrar at 5:00 p.m., New York time, on the
Record Date (the “Record Holder”) and (ii) any other person who
has obtained a proxy in a form reasonably acceptable to the
Issuer that authorizes such other person (or person claiming
title by or through such other person) to vote Notes on behalf of
such Record Holder. Accordingly, for purposes of the
Solicitation, the term “Holder” includes DTC Participants that
have been granted a proxy by DTC, through which a beneficial
owner’s Notes may be held of record as of the Record Date.
Special Procedures for
Beneficial Holders
Any beneficial owner whose Notes are held through a broker,
dealer, commercial bank, trust company or other nominee and who
wishes to consent to the Proposed Amendments should contact the
Holder of its Notes promptly and instruct such Holder to consent
on its behalf. See “The Solicitation Terms — Procedures for
Delivering Consents”.
Consequences to
Non-Consenting Holders
Holders that do not provide a valid and unrevoked Consent prior
to the Expiration Date will not be eligible to receive the
Consent Payment. If (i) the Requisite Consents are obtained,
(ii) the Supplemental Indenture is executed by the Issuer, the
Successor Issuer, the New Finco Guarantors, the Guarantors and
the Trustee and (iii) the Proposed Amendments become operative,
all Holders of Notes (including Holders that do not deliver a
Consent) will be bound by the Proposed Amendments.
Revocation Rights
Until the Execution Time, a Consent by a Holder is a continuing
Consent by the Holder and will bind every subsequent Holder of
the Note or portion of a Note that evidences the same debt as the
consenting Holder’s Note, even if notation of the Consent is not
made on any Note. However, a Holder of Notes may revoke its
Consent if the Tabulation Agent receives written notice of
revocation before the Execution Time. Any Holder who revokes a
Consent prior to the Execution Time will not receive a Consent
Payment, unless such Consent is redelivered and received by the
Tabulation Agent and accepted by the Issuer prior to the
Execution Time. A Holder may not revoke a Consent after the
Execution Time. In no event, however, will a Consent remain
valid for more than 120 days after the Record Date. See “The
Solicitation Terms — Revocation of Consents”.
Payment Date
The “Payment Date” is the date the Tabulation Agent will promptly
make the Consent Payment on behalf of the Issuer for all Consents
validly delivered and not validly revoked prior to the Expiration
Date, and is expected to be [___], 2008.
Certain U.S. Federal Income
Tax Considerations
For a summary of certain U.S. federal income tax considerations
of the Solicitation, see “Certain U.S. Federal Income Tax
Considerations”.
Waivers; Extensions;
Amendments; Termination
The Issuer expressly reserves the right, in its sole discretion,
subject to applicable law, at any time prior to the Execution
Time, to:
• waive any condition to the Solicitation and accept all
Consents previously given pursuant to the Solicitation;
• extend the Expiration Date and, unless otherwise provided
for in this Consent Solicitation Statement, retain all Consents
delivered pursuant to the Solicitation;
• amend the terms of the Solicitation in any respect;
• terminate the Solicitation and not accept any
Consents; and
• modify the form or amount of the consideration to be paid
pursuant to the Solicitation.
In order to extend the Expiration Date, the Issuer will notify
the Tabulation Agent of any extension by oral or written notice
and will make a public announcement thereof, each at or prior to
9:00 a.m., New York time, on the next business day after the
previously scheduled Expiration Date.
If the Solicitation is amended in any material manner, or the
Issuer waives or modifies any material conditions to the
Solicitation, the Issuer will promptly disclose such amendment,
waiver or modification in a public announcement and the Issuer
will extend the Solicitation to the extent required by applicable
law.
Without limiting the manner in which the Issuer may choose to
make a public announcement of any extension, amendment or
termination of the Solicitation, the Issuer shall have no
obligation to publish, advertise, or otherwise communicate any
such public announcement, other than by making a timely press
release and complying with any applicable notice provisions of
the Indenture and applicable law.
You may request assistance concerning the Solicitation by
contacting the Solicitation Agent at the address or telephone
number set forth on the back cover page of this Consent
Solicitation Statement. You may request assistance in completing
and delivering the Consent Letter or for additional copies of
this Consent Solicitation Statement, the Consent Letter or other
related documents by contacting the Information Agent at the
address and telephone number set forth on the back cover page of
this Consent Solicitation Statement.
In accordance with the terms and conditions set forth in the Indenture, on December 28, 2007,
we concluded a Permitted Finco Collapse Transaction that unwound the “tower” financing structure
that was established in connection with the original issuance of the Notes. Due to certain changes
in applicable tax law and for tax planning purposes, we needed to unwind this structure prior to
December 31, 2007. Specifically, the Permitted Finco Collapse Transaction had, among other things,
the following effects:
•
ArcelorMittal Financial Services LLC became the Issuer of the Notes and was
substituted for Ispat Inland ULC (the original issuer of the Notes) for all purposes
under the Indenture and the Pledge Agreement, and Ispat Inland ULC was released from
its obligations under the Indenture and the Pledge Agreement;
•
the Series Z First Mortgage Bonds issued by ArcelorMittal USA to ArcelorMittal
Finance LLC (formerly Ispat Inland Finance, LLC) in connection with the original
issuance of the Notes, and the payments on which are used to make payments on the
Notes, as well as $90 million of Series A 8% Preferred Stock of ArcelorMittal USA, were
transferred to ArcelorMittal Financial Services LLC and pledged to the Trustee as
Collateral for the Notes;
•
the rate of interest on the Series Z First Mortgage Bonds was reduced by 0.5%;
•
the covenants set forth in Section 4.19 of the Indenture, which limited the
activities of the Issuer and the Finco Guarantors (ArcelorMittal Partnership (formerly
Ispat Inland, L.P.), 3019693 Nova Scotia U.L.C. and ArcelorMittal Finance LLC (formerly
Ispat Inland Finance, LLC)) ceased to apply, and the covenants set forth in Section
4.20 of the Indenture restricting the activities of the Issuer following the conclusion
of the Permitted Finco Collapse Transaction became operative. See “Description of the
Notes — Covenants of the Issuer Following a Permitted Finco Collapse Transaction”;
•
each of the Finco Guarantors was released from its respective obligation to
guarantee the Notes; and
•
in accordance with the Indenture, all remaining property or assets of the Finco
Guarantors constituting a portion of the Collateral securing the Notes were released
from the Lien of the Pledge Agreement, after which the Finco Guarantors may be
dissolved.
If approved, the Proposed Amendments would, among other things, permit us to re-establish a
“tower” financing structure similar to that which existed prior to the Permitted Finco Collapse
Transaction. The establishment of the new “tower” financing structure, which we refer to as a
“Permitted Finco Reconstitution Transaction”, would restore our tax efficient cost of financing.
From a credit impact perspective, we do not believe that the holders of the Notes will be
adversely impacted as a result of the Permitted Finco Reconstitution Transaction because the
collateral, as well as the current guarantors of the Notes, will be substantially similar after the
consummation of the Permitted Finco Reconstitution Transaction. Specifically, after the Permitted
Finco Reconstitution Transaction, (i) ArcelorMittal and ArcelorMittal USA (and its significant
subsidiaries) will continue to be guarantors of the Notes, (ii) the Series Z First Mortgage Bonds
and $90 million of Series A 8% Preferred Stock of ArcelorMittal USA will continue to be pledged to
the Trustee as collateral for the Notes and (iii) ArcelorMittal USA’s guarantee of the Notes will
continue to be secured by a second priority security interest in certain inventory. In addition,
the interest rate applicable to the Series Z First Mortgage Bonds, which is currently equal to the
interest rate on the Notes (having been reduced by 50 basis points per annum as a result of the
Permitted Finco Collapse Transaction), will be increased by 1.0% per annum as part of the Permitted
Finco Reconstitution Transaction. In addition, as was the case with respect to the entities in the
“tower” financing structure that existed prior to the Permitted Finco Collapse Transaction, the
entities in the new “tower” financing structure (other than the Successor Issuer) will guaranty the
Notes on the same terms and conditions as the prior entities and will be subject to restrictions on
their activities substantially similar to those restrictions that applied to the entities prior to
the Permitted Finco Collapse Transaction. In addition, the covenants applicable to ArcelorMittal
USA and its subsidiaries under the Indenture will not be changed.
Because the “tower” financing structure following the consummation of the Permitted Finco
Reconstitution Transaction will differ from the structure that existed prior to the Permitted Finco
Collapse Transaction, certain of the intercompany obligations that existed prior to the Permitted
Finco Collapse transaction will not be replicated in the new “tower” financing structure and will
not be pledged as collateral following the Permitted Finco Reconstitution Transaction. Such
obligations include the Finco Mirror Note (as defined in “Description of the Notes — Background”)
that was payable to the Issuer by ArcelorMittal Partnership (formerly Ispat Inland, L.P.), a $9.0
million note owing from the Issuer to ArcelorMittal Partnership, and a $97.5 million note owing
from 3019693 Nova Scotia ULC to ArcelorMittal Partnership.
Proposed Amendments
Set forth below is a brief summary of the Proposed Amendments. This summary is qualified in
its entirety by reference to the form of Supplemental Indenture, which contains a full and complete
description of the terms of the Proposed Amendments to the Indenture. The form of Supplemental
Indenture is attached hereto as Exhibit A, and copies of the Indenture and the supplements thereto
are filed with the SEC as exhibits to the registration statement of which this Consent Solicitation
Statement forms a part. See “Where You Can Find More Information”. Holders of Notes should
carefully review Exhibit A and the exhibits to the registration statement before delivering a
Consent to the Proposed Amendments. Capitalized terms used in the following summary of the
Proposed Amendments but not otherwise defined have the meanings assigned to them in the Indenture.
If approved, the Proposed Amendments will be effected by (i) the Supplemental Indenture, which
will be executed by the Issuer, the Successor Issuer, the Guarantors, the New Finco Guarantors and
the Trustee, (ii) the Fortieth Supplemental Indenture to the Mortgage, which has been filed as an
exhibit to the registration statement of which this Consent Solicitation Statement forms a part and
(iii) an amendment to the Security Agreement. Although the Supplemental Indenture will become
effective upon execution, the Proposed Amendments will become operative only upon payment of the
Consent Payment. Until the Proposed Amendments become operative, however, the Indenture, without
giving effect to the Proposed Amendments, will remain in effect.
Proposed Amendments to the Indenture
The Proposed Amendments to the Indenture are as follows:
Additional Definition. If approved, the Proposed Amendments would add a new definition to
Section 1.01 of the Indenture entitled “Permitted Finco Reconstitution Transaction”. This
definition would permit us to establish a “tower” financing structure that is similar to the
structure that existed prior to the conclusion of the Permitted Finco Collapse Transaction on
December 28, 2007. We expect that a Permitted Finco Reconstitution Transaction would have the
following effects:
•
the Capital Stock of the Issuer would be transferred to the Successor Issuer, a
newly formed Delaware partnership which, immediately after giving effect to such
transfer, would have no other material assets or liabilities;
•
the Issuer would merge with and into the Successor Issuer, with the Successor Issuer
being the survivor of such merger;
•
the Successor Issuer would become the successor issuer of the Notes and assume all
obligations of the Issuer with respect thereto;
•
the Successor Issuer would form an unlimited company under the laws of Nova Scotia
(“New Finco Guarantor #1”). New Finco Guarantor #1 would be wholly owned by the
Successor Issuer and, except as discussed below, would not have any material assets or
liabilities;
•
the Successor Issuer would cause a limited liability company to be formed under the
laws of the United States of America, any state thereof or the District of Columbia
(“New Finco Guarantor #2” and, together with New Finco Guarantor #1, the “New Finco
Guarantors”). New Finco Guarantor #2 would be wholly owned by New Finco Guarantor #1
and would not have any material assets or liabilities;
the Successor Issuer would cause the Series Z First Mortgage Bonds, as well as $90
million of Series A 8% Preferred Stock of ArcelorMittal USA, to be transferred to New
Finco Guarantor #2 and pledged to the Trustee as Collateral for the Notes;
•
each of the New Finco Guarantors would guarantee the Notes;
•
the Capital Stock of the Successor Issuer, as well as the Capital Stock of each New
Finco Guarantor, would be pledged to the Trustee as Collateral for the Notes;
•
the rate of interest on the Series Z First Mortgage Bonds would be increased by
1.0%, unless and until the “tower” were to be collapsed in accordance with the
Indenture, as amended;
•
in the event that any portion of the Series Z First
Mortgage Bonds are prepaid prior to April 1, 2014, the rate of interest payable
on the Series Z First Mortgage Bonds would be amended to provide for an additional payment equal to
the sum of (x) the unamortized loan finance fees from
the 2004 refinancing of the Issuer’s predecessor company, Ispat
Inland ULC, which are allocable to the portion of the Series Z First
Mortgage Bonds so prepaid and (y) the
amount of transaction costs incurred in respect of the Permitted
Finco Collapse Transaction or Permitted Finco Reconstitution
Transaction occurring on or prior to such date; and,
•
the covenants set forth in Section 4.19 of the Indenture, which restrict the
activities of the Issuer following the conclusion of the Permitted Finco Reconstitution
Transaction, but prior to any subsequent Permitted Finco Collapse Transaction, would
again become operative and the covenants set forth in Section 4.20 of the Indenture
would cease to apply.
Set forth below are structure charts illustrating the existing corporate structure of
ArcelorMittal and its structure following the Permitted Finco Reconstitution Transaction. For
simplicity, wholly owned, intermediate subsidiaries of ArcelorMittal have not been depicted below.
Existing Corporate Structure
Corporate Structure Following the
Permitted Finco Reconstitution Transaction
*The other subsidiary guarantors include Burnham Trucking Company, Inc., ArcelorMittal USA Incoal
Inc. (formerly Incoal Company), ArcelorMittal Minorca Mine Inc., ArcelorMittal Service Inc.,
ArcelorMittal Cleveland Inc., ArcelorMittal Weirton Inc., ArcelorMittal Hennepin Inc.,
ArcelorMittal Indiana Harbor LLC, ArcelorMittal Warren Inc., ArcelorMittal Riverdale Inc., Mittal
Steel USA – Venture Inc., ArcelorMittal Plate LLC, ISG Sparrows Point LLC, ArcelorMittal Steelton
LLC, ArcelorMittal Lackawanna LLC, ArcelorMittal Burns Harbor LLC, ArcelorMittal Columbus LLC,
ArcelorMittal Georgetown Inc., Mittal Steel USA – Railways Inc., ArcelorMittal Hibbing Inc.,
Hibbing Taconite Holding Inc., ISG Acquisition Inc., ArcelorMittal Real Estate Inc. and
ArcelorMittal Tow Path Valley Business Park Development Company.
Amendment of Certain Definitions. If approved, the Proposed Amendments would amend or amend
and restate the definitions set forth below:
Finco Guarantors. Prior to the Permitted Finco Collapse Transaction, this term was
defined to mean each of ArcelorMittal Partnership (formerly Ispat Inland, L.P.), 3019693 Nova
Scotia U.L.C. and ArcelorMittal Finance LLC (formerly Ispat Inland Finance, LLC). The Proposed
Amendments provide that, after a Permitted Finco Reconstitution Transaction, the term “Finco
Guarantors” would mean each of ArcelorMittal Finance LLC and 3222193 Nova Scotia Company.
Permitted Finco Collapse Transaction. This term sets forth the specific manner in
which the “tower” financing structure could be collapsed without obtaining the prior consent of the
Holders. See “Description of the Notes — Certain Definitions — Permitted Finco Collapse
Transaction”. The Proposed Amendments would amend this definition to permit us to collapse the new
“tower” financing structure we intend to establish in connection with a Permitted Finco
Reconstitution Transaction.
Qualified Securitization Transaction. This term describes certain transactions in
which the Company or any of its Restricted Subsidiaries is permitted to sell (or grant a security
interest in) Receivables and Related Assets or Inventory and Related Assets. See “Description of
the Notes — Certain Definitions — Qualified Securitization Transaction”. The Proposed Amendments
would amend this definition to permit us to sell, even when we are not in a Suspension Period as is
currently the case, Receivables and Related Assets or Inventory and Related Assets to any Person,
not just to a Securitization Subsidiary as the Indenture currently contemplates.
Amendment of Certain Covenants. If approved, the Proposed Amendments would amend the
covenants set forth below:
Section 4.13. Legal Existence. This covenant requires, with certain exceptions, the
Issuer to do or cause to be done all things necessary to preserve and keep in full force and effect
its legal existence, the corporate, partnership or other existence of the Company, the Finco
Guarantors and each Restricted Subsidiary and the material rights (charter and statutory), licenses
and franchises of the Issuer, the Company, the Finco Guarantors and the Restricted Subsidiaries.
The Proposed Amendments would amend this covenant to permit us to engage in the Permitted Finco
Reconstitution Transaction.
Section 4.19. Limitation on Business Activities of the Issuer and the Finco Guarantors
Prior to a Permitted Finco Collapse Transaction. Prior to the Permitted Finco Collapse
Transaction that concluded on December 28, 2007, this covenant restricted the business activities
of the Issuer and the Finco Guarantors. The Proposed Amendments provide that this covenant, in
similar form to that which existed prior to the conclusion of the Permitted Finco Collapse
Transaction, would become operative until such time as there is a subsequent Permitted Finco
Collapse Transaction.
Section 4.20. Limitation on Business Activities of the Issuer following a Permitted Finco
Collapse Transaction. This covenant currently restricts the business activities of the Issuer,
including its ability to engage in the Permitted Finco Reconstitution Transaction. See
“Description of the Notes — Covenants of the Issuer Following a Permitted Finco Collapse
Transaction”. The Proposed Amendments would amend this covenant to permit us to engage in the
Permitted Finco Reconstitution Transaction.
Proposed
Amendments to the Mortgage and Series Z First Mortgage Bonds
The
Proposed Amendments to the Mortgage and Series Z First Mortgage Bonds include, among other things:
•
the addition of ArcelorMittal and substantially all of the
domestic subsidiaries of ArcelorMittal USA as additional guarantors of the Series Z First Mortgage Bonds;
a requirement that ArcelorMittal USA pay additional interest on the Series Z First
Mortgage Bonds in an amount of 1.0% per annum after a Permitted Finco Reconstitution
Transaction has occurred, but prior to any subsequent Permitted Finco Collapse
Transaction (as such term is defined in the Supplemental Indenture); and
•
a requirement that in the event
that any portion of the Series Z First Mortgage Bonds are prepaid prior to
April 1, 2014, the rate of interest payable on the Series Z First Mortgage Bonds
would be amended to provide for an additional payment equal to the sum of (x) the unamortized loan finance fees from the 2004
refinancing of the Issuer’s predecessor company, Ispat Inland
ULC, which are allocable to the portion of the Series Z First
Mortgage Bonds so prepaid and (y) the
amount of transaction costs incurred in respect of the Permitted
Finco Collapse Transaction or Permitted Finco Reconstitution
Transaction occurring on or prior to such date.
Proposed Amendments to the Security Agreement
The Proposed Amendment to the Security Agreement would amend and restate the proviso at the
end of Section 2 of the Security Agreement to clarify that Receivables and Related Assets, other
than any right of payment in respect of Inventory that is not an Account or Chattel Paper (as such
terms are defined in the Security Agreement), are not part of the Collateral securing the Notes.
The effect of this amendment would be to exclude from the Collateral securing the Notes any
receivables secured by specific goods (including specific sold inventory) to the extent
constituting Chattel Paper (within the meaning of the UCC). This is in addition to the exclusion
that already exists for receivables secured by property other than specific goods to the extent
constituting an Account, as such term is defined in the UCC.
The Proposed Amendments constitute a single proposal, and a consenting Holder must consent to
the adoption of the Proposed Amendments as an entirety and may not consent selectively with respect
to certain Proposed Amendments. Accordingly, a Consent delivered by a Holder purporting to consent
only to some of the Proposed Amendments will be treated as a Consent by such Holder to all of the
Proposed Amendments. Once the Proposed Amendments become operative, each present and future holder
of the Notes will be bound by the Proposed Amendments, whether or not such holder delivered a
Consent.
In order to approve the Proposed Amendments, the Issuer must receive the Requisite Consents,
which means valid and unrevoked consents of Holders of not less than a majority in outstanding
aggregate principal amount of the Notes. As of the Record Date, there was $422,500,000 aggregate
principal amount of Notes outstanding. As of the Record Date, neither the Issuer nor any person
directly or indirectly controlling or controlled by or under direct or indirect common control with
the Issuer held any Notes.
Promptly following the receipt of the Requisite Consents, and compliance with the conditions
contained in the Indenture, the Supplemental Indenture may be executed, and the Supplemental
Indenture will, upon such execution, become immediately effective. The Proposed Amendments will
not become operative, however, until the Consent Payment has been made, which is expected to be
[], 2008 (the “Payment Date”). If the Proposed Amendments become operative, they will be
binding on all Holders of the Notes and their successors and transferees, whether or not such
holders consented to the Proposed Amendments.
The delivery of a Consent will not affect a Holder’s right to sell or transfer its Notes, and
a sale or transfer of Notes after the Record Date will not have the effect of revoking any Consent
theretofore validly given by the Holder of such Note. Therefore, each properly executed and
delivered Consent will be counted notwithstanding any sale or transfer of the Note to which such
Consent relates, unless the applicable Holder has complied with the procedure for revoking
Consents, as described herein and in the Consent Letter. No consent will be valid or effective for
more than 120 days from the Record Date.
Failure to deliver a Consent will have the same effect as if a Holder had voted “No” to the
Proposed Amendments. A transferee of a Note whose Holder consented to the Proposed Amendments may
not revoke such Consent, except pursuant to a proxy granted to such transferee by such Holder.
The Consent Payment
If the Payment Conditions are satisfied or otherwise waived with respect to the Notes, the
Issuer will pay to each Holder who delivered a valid and unrevoked Consent to the Tabulation Agent
prior to the Expiration Date a one-time cash payment of $1.25 for each $1,000 principal amount of
Notes held by such Holder (and to which such Consent relates).
The right to receive a Consent Payment is not transferable with a Note. The Tabulation Agent,
on behalf of the Issuer, will make the Consent Payments only to the persons who were Holders on the
Record Date and who have delivered valid and unrevoked Consents prior to the Expiration Date
pursuant to the terms hereof. No other holder of Notes will be entitled to receive any Consent
Payment. The Consent Payment will be paid on the Payment Date.
Consents will expire if the Requisite Consents have not been obtained on or before the
Expiration Date (which term includes any extension of the original Expiration Date). No consent
will be valid or effective for more than 120 days from the Record Date. Interest will not accrue
on or be payable with respect to any Consent Payments.
Record Date
This Consent Solicitation Statement and the Consent Letter are being sent to all persons who
were Holders on the Record Date (defined to be 5:00 p.m., New York time, on [], 2008) and as
many beneficial owners of the Notes as the Issuer is reasonably able to identify. Such date has
been fixed by the Issuer as the date for the determination of Holders entitled to give Consents and
receive the Consent Payment, if payable, pursuant to the Solicitation. The Issuer reserves the
right to establish, from time to time but in all cases prior to receipt of the Requisite Consents,
any new date as such Record Date for the Notes and, thereupon, any such new date will be deemed to
be the Record Date for the Notes for purposes of the Solicitation.
Holders who wish to consent to the Proposed Amendments should deliver one or more properly
completed Consent Letters signed by such Holder by mail, hand delivery, overnight courier or by
facsimile transmission to the Tabulation Agent at its address or facsimile number set forth on the
back cover page of this Consent Solicitation Statement. The Issuer shall have the right to
determine whether any purported Consent satisfies the requirements of this Consent Solicitation
Statement and the Indenture, and any such determination shall be final and binding on the Holder
who delivered such Consent or purported Consent. Consent Letters must be delivered to the
Tabulation Agent prior to the Expiration Date.
Only Holders (i.e., persons in whose name a Note is registered or their duly designated
proxies) may execute and deliver a Consent. For purposes of the Solicitation, the term “Holder”
means (i) any Record Holder and (ii) any other person who has obtained a proxy in a form reasonably
acceptable to the Issuer that authorizes such other person (or person claiming title by or through
such other person) to vote Notes on behalf of such Record Holder. Accordingly, for purposes of the
Solicitation, the term “Holder” includes DTC Participants that have been granted a proxy by DTC,
through which a beneficial owner’s Notes may be held of record as of the Record Date. DTC is
expected to grant an omnibus proxy authorizing DTC Participants to deliver Consents. Any
beneficial owner whose Notes are held through a broker, dealer, commercial bank, trust company or
other nominee and who wishes to consent to the Proposed Amendments should contact the Holder of its
Notes promptly and instruct such Holder to consent on its behalf.
All Consent Letters that are properly completed, signed and delivered to the Tabulation Agent
prior to the Expiration Date (and accepted by the Issuer as such), and not revoked prior to the
Execution Time, will be given effect in accordance with the specifications thereof. Signatures
must be guaranteed in accordance with paragraph 6 of the instructions in the Consent Letter.
Holders who desire to consent to the Proposed Amendments should so indicate by signing and
dating the Consent Letter and mailing, faxing (with an original delivered subsequently) or
otherwise delivering it to the Tabulation Agent at the address or facsimile number listed on the
back cover page of this Consent Solicitation Statement in accordance with the instructions
contained herein and in the Consent Letter. Consent Letters should not be delivered to the Issuer,
the Guarantors, the Trustee or the Solicitation Agent. However, the Issuer reserves the right to
accept any Consent received by it, the Guarantors, the Trustee or the Solicitation Agent. Under no
circumstances should any person tender or deliver Notes to the Issuer, the Guarantors, the Trustee,
the Solicitation Agent, the Tabulation Agent or the Information Agent.
If Notes to which a Consent relates are held by two or more joint Holders, all such Holders
must sign the relevant Consent Letter. If a signature is by a trustee, executor, administrator,
guardian, attorney-in-fact, officer of a corporation or other Holder acting in a fiduciary or
representative capacity, such person should so indicate when signing and must submit proper
evidence satisfactory to the Issuer of such person’s authority so to act. If Notes are held in
different names, separate Consent Letters must be executed covering each name.
If a Consent relates to fewer than all of the Notes held of record as of the Record Date by
the Holder providing such Consent, such Holder must indicate on the Consent Letter the principal
amount (in integral multiples of $1,000) of Notes to which the Consent relates. Otherwise, the
Consent will be deemed to relate to all such Notes held by such Holder. A Consent Payment will be
paid only for such portion of the Notes to which a Consent relates.
HOLDERS WHO WISH TO CONSENT SHOULD MAIL, HAND DELIVER, SEND BY OVERNIGHT COURIER OR FACSIMILE
(FOLLOWED BY DELIVERY BY HAND OR OVERNIGHT COURIER OF AN ORIGINAL) THEIR PROPERLY COMPLETED,
EXECUTED AND DATED CONSENT LETTER TO THE TABULATION AGENT IN ACCORDANCE WITH THE INSTRUCTIONS SET
FORTH HEREIN AND IN THE CONSENT LETTER. REVOCATIONS OF CONSENTS SHOULD BE SENT TO THE TABULATION
AGENT. THE CONSENT PAYMENT WILL BE PAID ONLY TO HOLDERS WHOSE CONSENT LETTERS ARE RECEIVED BY THE
TABULATION AGENT (AND NOT SUBSEQUENTLY REVOKED) PRIOR TO THE EXPIRATION DATE. NEITHER CONSENTS NOR
REVOCATIONS OF CONSENTS SHOULD BE SENT TO THE ISSUER, THE GUARANTORS, THE TRUSTEE, THE SOLICITATION
AGENT OR THE INFORMATION AGENT. THE METHOD OF DELIVERY OF ALL DOCUMENTS, INCLUDING CONSENT LETTERS
AND
REVOCATIONS, IS AT THE ELECTION AND RISK OF THE HOLDER. IN NO EVENT SHOULD A HOLDER TENDER OR
DELIVER CERTIFICATES EVIDENCING SUCH HOLDER’S NOTES.
THE ISSUER RESERVES THE RIGHT TO RECEIVE CONSENTS BY ANY OTHER REASONABLE MEANS OR IN ANY FORM
THAT REASONABLY EVIDENCES THE GIVING OF A CONSENT.
All questions as to the validity, form, eligibility (including time of receipt) and acceptance
and revocation of a Consent will be resolved by the Issuer, in its sole discretion, which
resolution shall be final and binding, subject only to such final review as may be prescribed by
the Trustee concerning proof of execution and ownership. The Issuer reserves the right to reject
any and all Consents not validly given or any Consent the Issuer’s acceptance of which could, in
the opinion of the Issuer or its counsel, be unlawful. The Issuer also reserves the right to waive
any defects or irregularities in the delivery of a Consent or modify the conditions to the
Solicitation (subject to any requirement to extend the Expiration Date in accordance with
applicable law). The interpretation by the Issuer of the terms and conditions of the Solicitation
(including the Consent Letter and the instructions thereto) shall be final and binding on all
parties. Unless waived, any defects or irregularities in connection with deliveries of Consents
must be cured within such time as the Issuer shall determine. None of the Issuer, the Guarantors,
the Trustee, the Solicitation Agent, the Tabulation Agent, the Information Agent or any other
person shall be under any duty to give notification of defects, irregularities or waivers with
respect to deliveries of Consents, nor shall any of them incur any liability for failure to give
such notification.
Expiration Date; Extensions; Amendment
The Expiration Date shall occur at 5:00 p.m., New York time, on [___], 2008, unless the
Issuer, in its sole discretion, extends the period during which the Solicitation is open, in which
event the Expiration Date shall be the last date for which an extension is effective. In order to
extend the Expiration Date, the Issuer will notify the Tabulation Agent of any extension by oral or
written notice and will make a public announcement thereof, each at or prior to 9:00 a.m., New York
time, on the next business day after the previously scheduled Expiration Date. Such announcements
may state that the Issuer is extending the Solicitation for a specified period of time or on a
daily basis. Failure of any Holder or beneficial owner of Notes to be so notified will not affect
the extension of the Solicitation.
Notwithstanding anything to the contrary set forth in this Consent Solicitation Statement
(other than an extension of the Solicitation pursuant to the next paragraph), the Issuer reserves
the right, in its sole discretion and subject to applicable law, at any time prior to the Execution
Time to: (i) waive any condition to the Solicitation and accept all Consents previously given
pursuant to the Solicitation; (ii) extend the Expiration Date and, unless otherwise provided for in
this Consent Solicitation Statement, retain all Consents delivered pursuant to the Solicitation;
(iii) amend the terms of the Solicitation in any respect; (iv) terminate the Solicitation and not
accept any Consents; or (v) modify the form or amount of the consideration to be paid pursuant to
the Solicitation.
If the Solicitation is amended in any material manner, or the Issuer waives or modifies any
material conditions to the Solicitation, the Issuer will promptly disclose such amendment, waiver
or modification in a public announcement, and the Issuer will extend the Solicitation to the extent
required by applicable law. Pursuant to Rule 14e-1 under the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), if the Issuer (a) reduces the principal amount of the Notes subject
to the Solicitation or (b) reduces or increases the Consent Payment, then the Issuer will extend
the Solicitation as required by applicable law and, if required by applicable law, extend the
Expiration Date. Any change in the Consent Payment offered to Holders will be paid to all Holders
who have previously delivered a valid and unrevoked Consent.
Without limiting the manner in which the Issuer may choose to make a public announcement of
any extension, amendment or termination of the Solicitation, the Issuer shall have no obligation to
publish, advertise, or otherwise communicate any such public announcement, other than by making a
timely press release and complying with any applicable notice provisions of the Indenture and
applicable law.
Consents may be revoked by Holders at any time prior to the Execution Time. Unless properly
revoked, a Consent by a Holder shall bind the Holder of such Notes and every subsequent Holder of
such Notes or portion of such Notes that evidences the same debt as the consenting Holder’s Notes,
even if a notation of the Consent is not made on any such Notes. No consent will be valid or
effective for more than 120 days from the Record Date.
Any Holder of Notes as to which a Consent has been given may revoke such Consent as to such
Notes or any portion of such Notes (in integral multiples of $1,000) by delivering a written notice
of revocation or a changed Consent Letter bearing a date later than the date of the prior Consent
Letter to the Tabulation Agent at any time prior to the Execution Time with respect to such Notes.
Any notice of revocation received after the Execution Time with respect to any Notes will not be
effective.
To be effective, a notice of revocation must be in writing signed by the Holder, must contain
the name of the Holder and the principal amount of the Notes to which it relates, must be received
by the Tabulation Agent before the Execution Time and must be signed in the same manner as the
original Consent Letter. All revocations of Consents should be addressed to the Tabulation Agent
at the address set forth on the back cover of this Consent Solicitation Statement.
The Issuer reserves the right to contest the validity of any revocation and all questions as
to the validity (including time of receipt) of any revocation will be determined by the Issuer in
its sole discretion, which determination will be conclusive and binding subject only to such final
review as may be prescribed by the Trustee concerning proof of execution and ownership. None of
the Issuer, any of its affiliates, the Solicitation Agent, the Tabulation Agent, the Information
Agent, the Trustee or any other person will be under any duty to give notice of any defects or
irregularities with respect to any revocation and none of them shall incur any liability for
failure to give any such notice.
Conditions to the Solicitation
Notwithstanding any other provision of the Solicitation and in addition to (and not in
limitation of) the Issuer’s rights to terminate, extend and or amend the Solicitation in compliance
with applicable securities laws, the obligation of the Issuer to make a Consent Payment with
respect to the Notes is subject to: (i) the execution by the Issuer, the Successor Issuer, the New
Finco Guarantors, the Guarantors and the Trustee of the Supplemental Indenture implementing the
Proposed Amendments following receipt of the Requisite Consents; and (ii) the satisfaction of the
General Conditions (as hereinafter defined) (collectively, the “Payment Conditions”).
The General Conditions shall be deemed to have been satisfied unless any of the following
conditions (the “General Conditions”) shall occur on or after the date of this Consent Solicitation
Statement and prior to the Execution Time, subject to the next paragraph:
(a)
there shall have been any action taken or threatened, or any statute, rule,
regulation, judgment, order, stay, decree or injunction promulgated, enacted, entered,
enforced or deemed applicable to the Solicitation or the Proposed Amendments by or
before any court or governmental regulatory or administrative agency or authority or
tribunal, domestic or foreign, which (i) challenges the making of the Consent Payment
or the implementation of the Proposed Amendments or might, directly or indirectly,
prohibit, prevent, restrict or delay the consummation of the Solicitation or the
Proposed Amendments or otherwise adversely affects in any material manner the
Solicitation or the Proposed Amendments or (ii) in the reasonable judgment of the
Issuer, will, or is reasonably likely to, (A) materially adversely affect the business,
condition (financial or otherwise), income, operations, properties, assets, liabilities
or prospects of the Issuer and its subsidiaries, taken as a whole, or (B) materially
impair the contemplated benefits of the Solicitation or the Proposed Amendments to the
Issuer or any of its affiliates;
(b)
there shall have occurred or be reasonably likely to occur any event affecting
the business or financial condition or results of operations of the Issuer or its
affiliates that, in the reasonable judgment of the Issuer, (i) would or might prohibit,
prevent, restrict or delay consummation of the
Solicitation or the Proposed Amendments or (ii) will, or is reasonably likely to,
materially impair the contemplated benefits of the Solicitation or the Proposed
Amendments to the Issuer or any of its affiliates;
(c)
there shall have occurred, in each case in the reasonable judgment of the
Issuer, (i) any general suspension of or limitation on trading in securities in the
United States securities or financial markets (whether or not mandatory), (ii) any
significant adverse change in the price of the Notes, (iii) a material impairment in
the trading market for debt securities, (iv) a declaration of a banking moratorium or
any suspension of payments in respect of banks by federal or state authorities in the
United States (whether or not mandatory), (v) any limitation (whether or not mandatory)
by any governmental authority on, or other event having a reasonable likelihood of
affecting, the extension of credit by banks or other lending institutions in the United
States, (vi) a commencement of a war, armed hostilities, act of terrorism or other
national or international crisis directly or indirectly relating to the United States,
(vii) any significant adverse change in United States securities or financial markets
generally, (viii) any change in U.S. or international financial, political or economic
conditions or currency exchange rates or exchange controls as would be likely to
materially impair the contemplated benefits of the of the Solicitation or the Proposed
Amendments to the Issuer or its affiliates or (ix) in the case of any of the foregoing
existing at the time of the commencement of the Solicitation, an acceleration or
worsening thereof; or
(d)
the Trustee shall have objected in any respect to, or taken any action that
could, in the reasonable judgment of the Issuer, adversely affect the consummation of
the Solicitation or the Proposed Amendments or shall have taken any action that
challenges the validity or effectiveness of the procedures used by the Issuer in
soliciting Consents to the Proposed Amendments (including the form thereof).
The foregoing conditions are for the sole benefit of the Issuer and may be asserted by the
Issuer regardless of the circumstances giving rise to any such condition (including any action or
inaction by the Issuer or its affiliates) and, where possible, may be waived by the Issuer, in
whole or in part, at any time and from time to time, in the sole discretion of the Issuer, subject
to applicable law. The failure by the Issuer at any time to exercise any of the foregoing rights
will not be deemed a waiver of any other right, and each right will be deemed an ongoing right
which may be asserted at any time and from time to time.
Solicitation Agent, Tabulation Agent and Information Agent
The Issuer has retained Citigroup Global Markets Inc. to serve as its Solicitation Agent and
Global Bondholder Services Corporation to serve as its Tabulation Agent and as its Information
Agent in connection with the Solicitation. In its capacity as Solicitation Agent, Citigroup Global
Markets Inc. may contact Holders regarding the Notes and may request brokers, dealers, commercial
banks, trust companies and other nominees to forward this Consent Solicitation Statement and
related materials to the beneficial owners of the Notes. The Solicitation Agent has not been
retained to render an opinion as to the fairness of the Solicitation. The Issuer has agreed to
reimburse the Solicitation Agent for its out-of -pocket expenses, including the fees and expenses
of its counsel, and to indemnify the Solicitation Agent against certain liabilities and expenses,
including certain liabilities under the federal securities laws. At any time, the Solicitation
Agent may trade the Notes for its own account or for the accounts of its customers and,
accordingly, may have a long or short position in the Notes. The Solicitation Agent and its
affiliates have provided in the past, and are currently providing, other investment banking,
commercial banking and/or financial advisory services to the Issuer or its affiliates. The
Solicitation Agent and its affiliates may make a market in the Notes and may hold Notes for their
own accounts. The Solicitation Agent, the Tabulation Agent and the Information Agent each will
receive a fee from the Issuer for serving in such capacities.
THE ISSUER HAS NOT AUTHORIZED ANY PERSON (INCLUDING THE SOLICITATION AGENT, THE TABULATION
AGENT AND THE INFORMATION AGENT) TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATIONS IN CONNECTION
WITH THE SOLICITATION OTHER THAN AS SET FORTH HEREIN, AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE ISSUER, THE GUARANTORS,
THE
SOLICITATION AGENT, THE TABULATION AGENT, THE INFORMATION AGENT OR ANY OTHER PERSON.
Requests for assistance in filling out and delivering Consent Letters or for additional copies
of this Consent Solicitation Statement or the Consent Letter may be directed to the Information
Agent at its address or telephone number set forth on the back cover of this Consent Solicitation
Statement.
Fees and Expenses
The Issuer will bear the costs of the Solicitation, including the fees and expenses of the
Solicitation Agent, the Tabulation Agent and the Information Agent. The Issuer will pay the
Trustee under the Indenture “reasonable compensation for its services”, plus reimbursement for
reasonable disbursements, expenses and advances incurred or made by it, in connection with the
Solicitation.
Miscellaneous
The Solicitation is not being made to, and Consent Letters will not be accepted from or on
behalf of, Holders in any jurisdiction in which the making of the Solicitation or the acceptance
thereof would not be in compliance with the laws of such jurisdiction. However, the Issuer may, in
its discretion, take such action as it may deem necessary to make the Solicitation lawfully in any
such jurisdiction and to extend the Solicitation to Holders in such jurisdiction. In any
jurisdiction in which the securities laws or blue sky laws require the Solicitation to be made by a
licensed broker or dealer, the Solicitation will be deemed to be made on behalf of the Issuer by
the Solicitation Agent or one or more registered brokers or dealers that are licensed under the
laws of such jurisdiction.
You should carefully consider the information set forth in this section, together with the
other information provided to you or incorporated into this Consent Solicitation Statement, before
delivering a Consent to the Proposed Amendments.
The risk factors set forth in the section entitled “Risk Factors” in ArcelorMittal’s Annual
Report on Form 20-F for the year ended December 31, 2007, and in the other documents ArcelorMittal
files with or furnishes to the SEC after the date of this Consent Solicitation Statement, are
incorporated by reference into this Consent Solicitation Statement.
There is no established trading market for the Notes, and you may find it difficult to sell your
Notes.
There is no existing trading market for the Notes. We have not applied, and do not intend to
apply, for listing or quotation of the Notes on any exchange. Therefore, we do not know the extent
to which investor interest will lead to the development of a trading market or how liquid that
market might be, nor can we make any assurances regarding the ability of holders of Notes to sell
their Notes or the price at which Notes might be sold. As a result, the market price of the Notes
could be adversely affected. Historically, the market for non investment grade debt, which the
Notes were when they were originally issued, has been subject to disruptions that have caused
substantial volatility in the prices of securities. Any disruptions may make it more difficult for
holders to sell their Notes and may have an adverse effect on the price at which the Notes might be
sold.
There may not be sufficient collateral to pay all or any of the Notes.
The value of the collateral securing the Notes may be insufficient to secure their payment.
The Notes are secured by the First Mortgage Bonds that are secured by a mortgage on essentially all
the real property comprising our Indiana Harbor East plant, a 1,900 acre facility located in East
Chicago, Indiana. Additionally, a substantial portion of the property, plant and equipment of the
Indiana Harbor East facility is subject to the lien of the Mortgage. The Series Z First Mortgage
Bonds are the only bonds outstanding under the Mortgage. As of December 31, 2007, the property,
plant and equipment of the Indiana Harbor East facility securing the First Mortgage Bonds had a net
book value of approximately $1.5 billion. However, the net book value may not be indicative of the
value that could be realized in connection with a sale upon foreclosure. Additionally, the
Indenture permits ArcelorMittal USA to grant liens ranking senior to the liens securing the Notes
to secure indebtedness in a principal amount based on the book value of ArcelorMittal USA’s
inventory and receivables and on an unlimited basis during a Suspension Period (as defined in
“Description of the Notes — Certain Definitions”). As of the date of this Consent Solicitation
Statement, a Suspension Period was in effect, which generally means that the Notes are rated
Investment Grade (as defined in “Description of the Notes — Certain Definitions”) by two Rating
Agencies (as defined in “Description of the Notes — Certain Definitions”). See “Description of the
Notes — Limitation on Liens”.
The actual value of the collateral at any time will depend upon market and other economic
conditions. By its nature, much of the collateral will consist of illiquid assets that may have to
be sold at a substantial discount in an insolvency situation and may have no readily ascertainable
market value. In the event of a foreclosure, liquidation, bankruptcy or similar proceeding, the
proceeds from any sale or liquidation of this collateral may not be sufficient to pay the
obligations under the Notes and the other indebtedness secured by First Mortgage Bonds. In the
event that the proceeds from any sale or liquidation of the collateral received by the trustee are
insufficient to pay our obligations under the Notes, the holders of the Notes (to the extent not
repaid from the proceeds of the sale of the collateral) would only have an unsecured claim against
ArcelorMittal USA’s remaining assets.
In the event of a bankruptcy of any pledgor of the First Mortgage Bonds or ArcelorMittal USA, the
ability of the trustee for the Notes or the trustee for the First Mortgage Bonds to realize upon
the collateral will be subject to certain bankruptcy law limitations.
The ability of holders of the Notes to realize upon the collateral securing the Notes and the
ability of the trustee for the First Mortgage Bonds to realize on the collateral securing the First
Mortgage Bonds will be subject to certain bankruptcy law limitations in the event of a bankruptcy
of any entity pledging the First Mortgage Bonds or ArcelorMittal USA. Under applicable federal
bankruptcy laws, secured creditors are prohibited from repossessing their security from a debtor in
a bankruptcy case, or from disposing of security repossessed from such a debtor,
without bankruptcy court approval. Moreover, applicable federal bankruptcy laws generally
permit the debtor to continue to retain collateral even though the debtor is in default under the
applicable debt instruments, provided generally that the secured creditor is given “adequate
protection”. The meaning of the term “adequate protection” may vary according to the
circumstances, but is intended in general to protect the value of the secured creditor’s interest
in the collateral at the commencement of the bankruptcy case and may include cash payments or the
granting of additional security, if and at such times as the court in its discretion determines,
for any diminution in the value of the collateral as a result of the stay of repossession or
disposition of the collateral by the debtor during the pendency of the bankruptcy case. In view of
the lack of a precise definition of the term “adequate protection” and the broad discretionary
powers of a bankruptcy court, we cannot predict whether payments under the Notes would be made
following commencement of and during a bankruptcy case, whether or when the trustees under the
indentures for the Notes or the First Mortgage Bonds could foreclose upon or sell the collateral or
whether or to what extent holders of Notes would be compensated for any delay in payment or loss of
value of the collateral through the requirement of “adequate protection”.
A downgrade in our or ArcelorMittal’s credit rating could adversely affect the trading price of the
Notes.
The trading prices for the Notes is directly affected by our and ArcelorMittal’s credit
rating. Credit rating agencies continually revise their ratings for companies that they follow,
including us. Any ratings downgrade could adversely affect the trading price of the Notes or the
trading market for the Notes to the extent a trading market for the Notes develops. The condition
of the financial and credit markets and prevailing interest rates have fluctuated in the past and
are likely to fluctuate in the future. Fluctuations in interest rates may give rise to arbitrage
opportunities based upon changes in the relative value of the Notes. Any trading by arbitrageurs
could, in turn, affect the trading prices of the Notes.
You may not be able to recover in civil proceedings against ArcelorMittal for U.S. securities laws
violations.
ArcelorMittal is organized under the laws of Luxembourg with its principal executive offices
and corporate seat in Luxembourg. The majority of ArcelorMittal’s directors and senior management
are residents of jurisdictions outside the United States. The majority of ArcelorMittal’s assets
and the assets of these persons are located outside the United States. As a result, U.S. investors
may find it difficult to effect service of process within the United States upon ArcelorMittal or
these persons or to enforce outside the United States judgments obtained against ArcelorMittal or
these persons in U.S. courts, including actions predicated upon the civil liability provisions of
the U.S. federal securities laws. Likewise, it may also be difficult for an investor to enforce in
U.S. courts judgments obtained against ArcelorMittal or these persons in courts in jurisdictions
outside the United States, including actions predicated upon the civil liability provisions of the
U.S. federal securities laws. It may also be difficult for a U.S. investor to bring an original
action in a Luxembourg court predicated upon the civil liability provisions of the U.S. federal
securities laws against ArcelorMittal’s directors and senior management and non-U.S. experts named
in this Consent Solicitation Statement.
Luxembourg insolvency laws may adversely affect a recovery by the holders of the Notes under the
ArcelorMittal guarantee.
ArcelorMittal, a guarantor of the Notes, is a Luxembourg company. If ArcelorMittal had to pay
the holders of the Notes under the guarantee, because Luxembourg insolvency laws differ
significantly from insolvency proceedings in the United States, such laws may make it more
difficult for holders of the Notes to effect a restructuring of ArcelorMittal or to recover the
amount they would have recovered in a liquidation or bankruptcy proceeding in the United States.
There are a number of insolvency regimes under Luxembourg law. Bankruptcy proceedings (faillite)
are primarily designed to liquidate and distribute the assets of a debtor to its creditors. Two
formal corporate rescue procedures exist – controlled management (gestion contrôlée), which
involves one or several auditors preparing a plan of re-organization or a plan for the realization
and distribution of the assets, and composition proceedings (concordat préventif de la faillite),
whereby a judge is appointed to oversee the negotiation of an agreement between the debtor and his
creditors. A judgment in bankruptcy proceedings has the effect of removing the power from the
company to manage its assets and of stopping all attachment or garnishment proceedings brought by
unsecured or non-privileged creditors. However, this type of judgment has no effect on creditors
holding certain forms of security, such as pledges. A secured creditor holding a pledge can retain
possession of the pledged assets until he receives payment. The ratification of the composition in
composition proceedings will have no effect on creditors who, having secured claims, did not
participate in the composition
proceedings and did not, therefore, waive their rights or priority, their mortgages or
pledges. These creditors may continue to act against the debtor in order to obtain payment of
their claims and they may enforce their rights, obtain attachments and obtain the sale of the
assets securing their claims.
A recovery under Luxembourg law, therefore, could involve a sale of the assets of the debtor
in a manner that does not reflect the going concern value of the debtor. Consequently, Luxembourg
insolvency laws could preclude or inhibit the ability of the holders of the Notes to effect a
restructuring of ArcelorMittal and could reduce their recovery in a Luxembourg insolvency
proceeding. As December 31, 2007, ArcelorMittal’s subsidiaries had approximately $30.3 billion of debt.
In connection with Luxembourg bankruptcy proceedings, the assets of a debtor are generally
liquidated and the proceeds distributed to the debtor’s creditors on the basis of the relative
claims of those creditors, and certain parties (such as secured creditors) will have special rights
that may adversely affect the interests of holders of the Notes. The claim of a creditor may be
limited depending on the date the claim becomes due and payable in accordance with its terms. Each
of these claims will have to be resubmitted to the receiver of ArcelorMittal to be verified by the
receiver. Any dispute as to the valuation of claims will be subject to court proceedings. These
verification procedures could cause holders of the Notes to recover less than the principal amount
of their Notes or less than they could recover in a U.S. liquidation. Such verification procedures
could also cause payments to the holders of the Notes to be delayed compared with holders of
undisputed claims.
Canadian insolvency laws may adversely affect a recovery by holders of the Notes.
3222193 Nova Scotia Company, which will become a guarantor of the Notes upon the consummation
of the Permitted Finco Reconstitution Transaction, is an unlimited company incorporated under the
laws of the Province of Nova Scotia, Canada. The ability of the holders of the Notes to realize
upon the assets of 3222193 Nova Scotia Company may be subject to certain bankruptcy and insolvency
law limitations in the event of the bankruptcy or insolvency of this entity.
Canadian insolvency legislation of general application is federal. It consists of the
Bankruptcy and Insolvency Act (Canada), or the BIA, the Winding up and Restructuring Act (Canada),
or the WURA, and the Companies’ Creditors Arrangement Act (Canada), or the CCAA. Under the BIA and
the WURA, the assets of an insolvent company may be liquidated subject to the rights of secured
creditors and the proceeds distributed to ordinary creditors who have proved claims against the
debtor company. Alternatively, each of the BIA, the CCAA and the WURA permits an insolvent company
to obtain a stay of proceedings and restructure its obligations to creditors subject to court
supervision and the provisions of those statutes. Under the BIA and the CCAA, a restructuring of
the obligations of the debtor company must be approved by a majority in number representing
two-thirds in value of each class of creditors affected by the restructuring. Under the WURA, the
requirement for approval is a majority in number representing three-quarters in value of each class
of creditors affected by the restructuring.
If it applies, the CCAA is often the statute of choice. Under the CCAA, an insolvent company
applies to the court for an order obtaining a temporary stay of proceedings against it by creditors
and other persons dealing with the insolvent company of up to 30 days, which can be extended by the
court in order to permit the debtor company to present a restructuring plan to its creditors, seek
approval and implement such plan. The CCAA requires that a court officer be appointed to monitor
the affairs of the insolvent company while it is under court supervision and to report to the court
on the state of the insolvent company’s business and financial affairs, including any material
adverse change therein while the insolvent company is under court protection. Subject to orders of
the court either increasing the powers of the monitor or appointing an interim receiver, the
insolvent company and its management remain in possession and control of the assets of the
insolvent company while it is under court protection. Secured creditors would be prevented from
exercising remedies based on defaults under their security without court approval.
ArcelorMittal is a holding company with no material assets other than its ownership interest in its
subsidiaries. ArcelorMittal’s guarantee of the Notes is structurally subordinated to all
liabilities of its subsidiaries that are not obligors on the Notes.
ArcelorMittal has guaranteed the Notes. In addition to guaranteeing the Notes, ArcelorMittal
has guaranteed the debt and liabilities of some of its other subsidiaries. As of December 31,2007, ArcelorMittal’s total consolidated debt (including ArcelorMittal USA’s debt) was
approximately $30.6 billion. Of this debt, approximately $24.0 billion was guaranteed by
ArcelorMittal. In addition, ArcelorMittal expects that it may enter into liquidity support
agreements that may require it to make capital contributions or loans to certain of its
subsidiaries. The Indenture governing the Notes does not restrict ArcelorMittal or its
subsidiaries (other than the Issuer, ArcelorMittal USA and its restricted subsidiaries and the
Finco Guarantors) from incurring additional debt or guaranteeing any debt of others in the future.
ArcelorMittal is a holding company and does not directly conduct any business operations. Its
business is carried out by several operating subsidiaries consisting of us and its other
subsidiaries. Your rights to receive payments under the guarantee will be junior to all
liabilities of ArcelorMittal’s subsidiaries (other than the Issuer and the Guarantors).
The Issuer may be unable to purchase the Notes upon a change of control.
Upon the occurrence of “change of control” events, holders of the Notes may require the Issuer
to purchase their Notes at 101% of their principal amount, plus accrued interest. The Issuer’s
ability to repurchase Notes will depend on ArcelorMittal USA’s ability to repurchase a like
aggregate amount of First Mortgage Bonds that have been pledged as collateral for the Notes. We
cannot assure you that we will have the financial resources to repurchase the First Mortgage Bonds,
particularly if that change of control event triggers a similar repurchase requirement for, or
results in the acceleration of, other indebtedness. Future debt we incur may further limit our
ability to purchase the First Mortgage Bonds upon a change of control. Moreover, the exercise by
the holders of the Notes of their repurchase right could cause a default under that debt, even if
the change of control itself does not cause a default, due to the financial effect on us. See
“Description of the Notes — Change of Control”.
No title insurance policies or surveys were obtained with respect to the real property collateral
that secures the First Mortgage Bonds.
Customary title insurance policies and surveys were not obtained with respect to the land and
improvements located at the Indiana Harbor East facility that secure the First Mortgage Bonds,
which, in turn, secure the Notes. As a result, no title insurance proceeds will be available in
the event of any loss arising out of any challenge to our title to such mortgaged property or any
liens or claims against such property that may have priority over the first mortgage, as amended
and supplemented, which secures the First Mortgage Bonds. In addition, surveys that are provided
typically to, among other things, confirm boundary lines of the mortgaged property and improvements
located thereon and reveal the existence of encroachments or adverse possession claims will not be
obtained. The existence of any such title defects, liens, claims or encroachments against such
mortgaged property could impair the value of such property and reduce the amount that may be
recovered upon foreclosure of the liens thereon.
The Notes and the subsidiary guarantees may not be enforceable because of fraudulent conveyance
laws.
The guarantees by ArcelorMittal USA’s subsidiaries may be subject to review under U.S. federal
bankruptcy law or relevant state fraudulent conveyance laws if a bankruptcy case or lawsuit is
commenced by or on behalf of our unpaid creditors. Generally, under these laws, if in such a case
or lawsuit a court were to find that at the time a subsidiary of ArcelorMittal USA issued a
guarantee:
•
such subsidiary issued a guarantee with the intent of hindering, delaying or
defrauding current or future creditors; or
•
such subsidiary guarantor received less than reasonably equivalent value of fair
consideration for its guarantee and such subsidiary guarantor:
o
was insolvent or was rendered insolvent by reason of the issuance
of its guarantee;
was engaged, or was about to engage, in a business or transaction
for which such guarantor’s remaining assets constituted unreasonably small
capital to carry on its business; or
o
intended to incur, or believed that it would incur, indebtedness
or other obligation beyond the ability to pay such indebtedness or obligation as
it matured (as all of the foregoing terms are defined in or interpreted under
the relevant fraudulent transfer or conveyance statutes);
then a court could void such subsidiary guarantee, subordinate the amounts owing under such
guarantee to its presently existing or future indebtedness or take other actions detrimental to
holders of Notes.
The measure of insolvency for purposes of the foregoing considerations will vary depending
upon the law of the jurisdiction that is being applied in any such proceeding. Generally, a
subsidiary would be considered insolvent if, at the time it incurred indebtedness or issued a
guarantee:
•
it could not pay its debt or contingent liabilities as they become due;
•
the sum of its debts (including contingent liabilities) is greater than its assets,
at fair valuation; or
•
the present fair saleable value of its assets is less than the amount required to
pay the probable liability on its total existing debts and liabilities (including
contingent liabilities) as they become absolute and matured.
If a guarantee is voided as a fraudulent conveyance or is found to be unenforceable for any other
reason, holders of the Notes will not have a claim against such subsidiary guarantor.
If there is a foreclosure on the collateral securing the First Mortgage Bonds, you may be subject
to claims and liabilities under environmental laws and regulations.
Lenders that hold a security interest in real property may be held liable under environmental
laws for the costs of remediating or preventing releases or threatened releases of hazardous
materials at or from the mortgaged property. While lenders that neither foreclose on nor
participate in the management of a mortgaged property generally have not been subject to liability,
lenders that take possession of a mortgaged property or that participate in the management of a
mortgaged property must carefully and strictly adhere to federal and state rules to avoid
liability. In this regard, the trustee for the Notes and the trustee for the First Mortgage Bonds
would need to evaluate the impact of these potential liabilities before determining to foreclose on
the mortgaged properties securing the First Mortgage Bonds and exercising other available remedies.
In addition, the trustee for the Notes may refuse to direct the trustee under the First Mortgage
Bonds to foreclose on the collateral securing the First Mortgage Bonds and the trustee under the
First Mortgage Bonds may decline to foreclose upon the mortgaged properties or exercise remedies
available to the extent that they do not receive indemnification to their satisfaction from the
holders of the Notes.
The United Steelworkers of America could raise objections to a foreclosure sale by the trustee for
the First Mortgage Bonds, which could delay the distribution of the proceeds of the foreclosure
sale to the holders of the Notes.
In 1994, ArcelorMittal USA granted the United Steelworkers of America a subordinated mortgage
on the Indiana Harbor East facility as collateral security for the payment of those post-retirement
medical and life insurance benefits to retired employees that are not funded under ArcelorMittal
USA’s welfare plan and trust, which are referred to as the Unfunded OPEB Obligations. By its
terms, the United Steelworkers of America mortgage was subordinate in all respects to the First
Mortgage, and the trustee under the First Mortgage was given full latitude to take all actions
thereunder without the consent of, or notice to, the United Steelworkers of America. In addition,
upon an event of default under the First Mortgage, the United Steelworkers of America agreed not to
take any enforcement action under the subordinated mortgage except to join in any such action as is
then being asserted by the trustee under the First Mortgage.
The subordinated mortgage contained a condition subsequent requiring that it be approved by the U.S. Department of Labor under the Employee Retirement Income Security Act of 1974, or ERISA, which approval was denied on November 22, 2004. The subordinated mortgage further provided that if such approval was not obtained, the mortgage would be null and void and the United Steelworkers of America
would sign a release of the subordinated mortgage. Notwithstanding this requirement, to date the
United Steelworkers of America have refused to sign a release. While we believe that the subordinated mortgage, by its express terms, is no longer in effect, we cannot assure you that the United Steelworkers of America would not assert a contrary position. If the subordinated mortgage were ultimately determined to be enforceable, in any future foreclosure sale by the Trustee for the First Mortgage Bonds, which would be governed by the Indiana mortgage foreclosure statute, the United Steelworkers of America could claim procedural deficiencies in the foreclosure action and seek to set aside the Sheriff’s sale if the sale proceeds were insufficient to pay off both the First Mortgage Bonds and the Unfunded OPEB Obligations. As a result, the distribution of the proceeds to the holders of the Notes from any foreclosure sale could be delayed pending a judicial resolution of any such claim.
The ratio of earnings to fixed charges is computed by dividing earnings by fixed charges. Earnings
represent consolidated net income before extraordinary charges, income allocable to minority
interests in consolidated entities that incurred fixed charges, consolidated provision for income
taxes, fixed charges less interest capitalized, and undistributed earnings of less-than-50% owned
affiliates. Fixed charges include interest expensed and capitalized and the interest portion of
rental obligations. Amounts were prepared in accordance with IFRS. The ratio for 2003 is not
available because Mittal N.V.’s financial statements were not prepared in accordance with IFRS for
that year and doing so would be a significant effort and expense.
ArcelorMittal USA Inc., or ArcelorMittal USA, is one of North America’s largest steelmakers
and serves a broad U.S. manufacturing base. On April 15, 2005, ArcelorMittal’s predecessor acquired
International Steel Group Inc. and was renamed Mittal Steel USA ISG Inc. Effective December 31,2005, Mittal Steel USA ISG Inc. merged with another subsidiary of ArcelorMittal’s predecessor,
Ispat Inland Inc. Mittal Steel USA ISG Inc. was the surviving subsidiary and was renamed Mittal
Steel USA Inc. (and was subsequently renamed ArcelorMittal USA Inc.). Both companies were indirect
wholly owned subsidiaries of ArcelorMittal’s predecessor, Mittal N.V. As of December 31, 2007,
ArcelorMittal USA had operations in 13 states of the United States with an annual raw steel
production capability of approximately 27.0 million net tons. When referring to ArcelorMittal
USA’s operations, net tons means short tons equal to 2,000 pounds.
ArcelorMittal USA is an indirect wholly owned subsidiary of ArcelorMittal, the world’s largest
and most global steel company. ArcelorMittal has steelmaking operations in 20 countries on four
continents, including 65 integrated, mini-mill and integrated mini-mill steelmaking facilities.
Steel Production
Steel is produced either by integrated steel facilities or electric arc furnaces. Integrated
mills use blast furnaces to produce hot metal typically from iron ore, limestone and coke. Coke is
a refined carbon product produced by firing coal in large coke ovens. Hot metal is then converted
through the basic oxygen process into liquid steel where it can be metallurgically refined. For
flat rolled steel products, liquid steel is either teemed into ingots for later processing or cast
into slabs in a continuous caster machine. The slabs are further shaped or rolled at a plate mill
or hot strip mill. In the production of sheet products, the hot strip mill process may be followed
by various finishing processes, including pickling, cold-rolling, annealing, tempering or coating
processes, including galvanizing (zinc coating). These various processes are often distinct steps
undertaken at different times rather than during a continuous process and may take place in
separate facilities. Steel produced by integrated mills tends to be cleaner or purer than steel
produced by electric arc furnaces since less scrap is used in the production process and scrap
contains non-ferrous tramp elements. These purer products are more often required for value-added
applications.
A mini-mill uses an electric arc furnace to melt steel scrap or scrap substitutes, which for
flat rolled products are then cast into slabs in a continuous casting process. The slabs are then
rolled into finished product. Mini-mills are designed to accommodate shorter production runs with
relatively fast product change-over time. Mini-mills generally produce a narrower range of steel
products than do integrated producers and their products tend to be more of a commodity; however,
mini-mills have historically enjoyed certain competitive advantages as compared to integrated
mills, including lower required capital investment and lower labor costs per ton shipped.
Products
ArcelorMittal USA’s principal products include a broad range of hot-rolled, cold-rolled and
coated sheets, tin mill products, carbon and alloy plates, wire rod, rail products, bars and
semi-finished shapes to serve the automotive, construction, pipe and tube, appliance, container and
machinery markets. All of these products are available in standard carbon grades, as well as high
strength, low alloy grades for more demanding applications.
Hot-Rolled Products. All coiled flat-rolled steel is initially hot-rolled by passing a slab
through a multistand rolling mill to reduce its thickness to less than 5/8 inch. Hot-rolled steel
destined for the sheet market can be either shipped as black band, or cleaned in an acid bath and
sold as pickled band. These products are used in non-critical surface applications such as
automotive frames and wheels, construction products, pipe, off-highway equipment and guardrails.
Cold-Rolled Products. Cold-rolled sheet is hot-rolled coil that has been further processed
through a pickler and then passed through a rolling mill without reheating until the desired gauge,
or thickness, and other physical properties have been achieved. Cold-rolling reduces gauge and
hardens the steel. Further processing through an annealing furnace and a temper mill improves
ductility and formability. Cold-rolling can also impart various surface finishes and textures.
Cold-rolled sheet is used in, among other things, steel applications that demand higher surface
quality, such as exposed automobile and appliance panels. Cold-rolled sheet prices are usually
higher than hot-rolled steel prices. For certain applications, cold-rolled sheet is coated or
painted.
Coated Products. Either hot-rolled or cold-rolled coil may be coated with zinc, aluminum or a
combination thereof to render it corrosion resistant and to improve its paintability. Hot-dipped
galvanized, galvannealed, GalvalumeTM, electrogalvanized and aluminized products are
types of coated steel. These are also among the highest value-added sheet products because they
require the greatest degree of processing and usually have the strictest quality requirements.
Coated steel products are generally used in applications such as automobiles, household appliances,
roofing and siding, heating and air conditioning equipment, air ducts, switch boxes, chimney flues,
awnings and grain bins.
Plate. Plate is steel that is generally more than 3/16 inch thick. It can be made on either a
coiled plate mill up to 1-inch thick or a discrete plate mill. The coiled plate or discrete mill
plate is then cut into sections for specific end uses. Commodity steel plate is used in a variety
of applications such as storage tanks, ships and railcars, large diameter pipe and machinery parts.
More specialized steel plate, such as high-strength-low alloy, heat-treated, or alloy plate, can
have superior strength and performance characteristics for particular applications such as the
manufacture of construction, mining and logging equipment; pressure vessels and oil and gas
transmission lines; and the fabrication of bridges and buildings. Quenched and tempered plate is
harder and stronger and can be used in products such as military armor and hard rock mining
equipment.
Tin Products. Tin mill sheet steel is used to produce food and other containers. It is
available as black plate, tin plate and tin-free steel. Black plate is an uncoated thin gauge cold
rolled steel, tin plate is black plate electrolytically plated with metallic tin and tin-free steel
is black plate that has been electrolytically plated with metallic chromium and chromium oxides.
Both tin plate and tin-free steel undergo a plating process whereby the molecules from the
positively charged tin or chromium anode attach to the negatively charged sheet steel. The
thickness of the coating is readily controlled through regulation of the voltage and speed of the
sheet through the plating area.
Bars. Bars are long steel products that are rolled from billets. Merchant bars include rounds,
flats, angles, squares, and channels that are used by fabricators to manufacture a wide variety of
products such as furniture, stair railings, and farm equipment.
Rail. Billets and blooms are fed through rollers that form rail. Rail is produced in a number
of sections determined by their weight per yard and relative strengths. Rail is sold to railroad
companies and regional transit authorities for new track projects, as well as for the repair of
existing track.
Wire Rod. Billets are fed through rolls that form wire rod. Wire rod is produced in a variety
of grades and dimensions for further processing into wire products or fabricated to make fasteners.
Reinforcing Bar (Rebar). Billets are fed through rolls to form rebar. Rebar is used in
construction with concrete and masonry structures.
Customers
ArcelorMittal USA sells its products to a highly diversified customer base representing all
major steel-consuming markets as well as to third-party processors and service centers. Its
customers are primarily in the Midwest and along the eastern seaboard of the United States.
Direct Sales to End-Users. ArcelorMittal USA primarily sells directly to end-users
representing a wide range of consuming markets, including automotive, construction, appliance,
transportation, container, machinery and equipment. Its sales, technical and engineering staff are
organized with both a specific product (plate, flat rolled, tinplate, bar, wire rod and rail
products) and geographic market focus.
Sales to Intermediate Processors and Steel Service Centers. A significant portion of
ArcelorMittal USA’s sales are to intermediate processors and steel service centers. These
processors and steel service centers typically act
as intermediaries between steel producers and various end-user manufacturers that require
further processing or inventory programs. The additional services performed by steel service
centers and processors include pickling, galvanizing, cutting to length, slitting to size,
leveling, blanking, shape correcting, edge rolling, shearing and stamping.
Contract and Spot Sales. Less than half of ArcelorMittal USA’s sales in 2006 were on the spot
market with price terms of three months or less. The majority of sales in 2006 were through
longer-term customer contracts.
International Sales. Historically, the opportunities for sales outside the United States of
steel products have been intermittent and highly competitive and ArcelorMittal USA’s international
sales have been minimal.
Sales, Customer Service and Product Development
To properly service its customers, ArcelorMittal USA has a knowledgeable and dedicated sales
force responsible for soliciting and servicing steel consumers. The sales organization is focused
and organized by steel consuming market segments and is directed from a centralized commercial
leadership group, which provides clarity and uniformity to the market. In addition, ArcelorMittal
USA has a customer service organization at each of its producing locations that work closely with
ArcelorMittal USA’s scheduling, operations, quality, and logistics organizations to provide
information and service related to order fulfillment.
Technical resources exist within each division sales group, supported by plant technical
personnel to help customers specify the proper material for each end-use. ArcelorMittal USA has a
research and product development facility in Northwest Indiana.
Competition
Competition within the steel industry, both in the United States and globally, is intense and
expected to remain so. ArcelorMittal USA’s primary U.S. competitors are United States Steel
Corporation, Nucor Corporation, AK Steel Holding Corporation, and IPSCO Inc. The steel market in
the United States is also served by a number of non-U.S. sources, and U.S. supply is subject to
changes in worldwide demand and currency fluctuations, among other factors.
Numerous companies in the steel industry declared bankruptcy in the past ten years. They have
either ceased production or more often continued to operate after being acquired or reorganized. In
addition, some non-U.S. steel producers are owned and supported by their governments and their
decisions with respect to production and sales may be influenced by political and economic policy
considerations rather than by prevailing market conditions. The steel industry is highly cyclical
in nature and subject to significant fluctuations in demand as a result of macroeconomic changes in
global economies, including those resulting from currency volatility. The global steel industry is
also generally characterized by overcapacity, which can result in downward pressure on steel prices
and gross margins.
ArcelorMittal USA competes with other flat-rolled steel producers (both integrated steel mills
and mini-mills) and producers of plastics, aluminum, ceramics, carbon fiber, concrete, glass,
plastic and wood that can be used in lieu of flat-rolled steels in manufactured products.
Mini-mills generally offer a narrower range of products than do integrated steel mills but can have
some cost advantages as a result of their different production processes.
The competition in the discrete plate business, both carbon and alloy, is somewhat fragmented
with ArcelorMittal USA having the largest capability and the widest product range domestically.
Price, quality, delivery and service are the primary competitive factors in all markets that
ArcelorMittal USA serves and vary in relative importance according to the product category and
specific customer.
ArcelorMittal USA’s business depends on continued access to reliable supplies of various raw
materials, principally, iron ore, coal, coke, scrap, energy and industrial gases. ArcelorMittal USA
believes there will be adequate sources of its principal raw materials to meet its near term needs.
Iron Ore
For an integrated steelmaker, iron ore is an essential element in the production of steel.
ArcelorMittal USA annually consumes approximately 25.0 million net tons of iron ore pellets and
iron ore fines. Substantially all of its ore requirements are under contract or supplied by
entities in which ArcelorMittal USA maintains an ownership interest. ArcelorMittal USA has a
contract with Cleveland-Cliffs Inc., or Cliffs, to purchase iron ore through 2010. ArcelorMittal
USA also has long-term contracts with several producers to supply its Sparrows Point facility.
ArcelorMittal USA’s Hibbing Taconite joint venture’s mine and processing facilities supply
substantially all of Burns Harbor’s current annual iron ore pellet requirements and are operated by
Cliffs, which also owns 23% of the joint venture. ArcelorMittal USA also owns the Minorca Mine in
Minnesota that supplies its Indiana Harbor East facility.
On March 19, 2007, ArcelorMittal USA and certain of its subsidiaries executed an umbrella
agreement with Cliffs that covers the prices to be paid and the amounts to be purchased under three
separate pre-existing iron ore pellet supply agreements with Cliffs for ArcelorMittal USA’s
Cleveland and Indiana Harbor West, Indiana Harbor East, and Weirton facilities. This umbrella
agreement replaces the Letter of Agreement dated as of April 12, 2006, between Cliffs and
ArcelorMittal USA.
Under the terms of the umbrella agreement, the Pellet Sale and Purchase Agreement dated as of
April 10, 2002 for ArcelorMittal Cleveland and ArcelorMittal Indiana Harbor, as previously amended,
the Pellet Sale and Purchase Agreement dated as of December 31, 2002 for Ispat Inland, and the
Amended and Restated Pellet Sale and Purchase Agreement dated as of May 17, 2004 for ISG Weirton
are modified to aggregate ArcelorMittal USA’s purchases during the years 2006 through and including
2010. The pricing provisions are determined in accordance with the supply contract agreements for
each of the covered facilities in the three agreements listed above.
During 2006 through 2010, ArcelorMittal USA is obligated to purchase specified minimum
tonnages of iron ore pellets on an aggregate basis. ArcelorMittal USA is permitted under the
umbrella agreement to transfer any of the committed volume for use at any iron and steel
facility(s) owned directly or indirectly by ArcelorMittal, which enhances flexibility. The umbrella
agreement also sets the minimum annual tonnage at ArcelorMittal USA’s approximately budgeted usage
levels through 2010, with pricing then in effect at the facility where ArcelorMittal USA directs
pellets to be delivered. Pricing for iron pellets shipped to other ArcelorMittal facilities will be
agreed to in the future and will be based upon one of the three separate pre-existing iron-ore
pellet supply agreements. There is no minimum tonnage purchase obligation associated with any of
the three separate pre-existing iron ore pellet supply agreements. The terms of the umbrella
agreement allow ArcelorMittal USA to manage its ore inventory levels through buy down provisions,
which permit ArcelorMittal USA to reduce its tonnage purchase obligation each year at a specified
price per ton, and through deferral provisions, which permit ArcelorMittal USA to defer a portion
of its annual tonnage purchase obligation beginning in 2007. The umbrella agreement also
establishes consistent procedures for administering the deliveries of ore through 2010.
Coal and Coke
Coke, a refined carbon product produced by baking coal to drive off volatile matter, is the
principal fuel used to produce hot metal in ArcelorMittal USA’s blast furnaces. ArcelorMittal USA
annually consumes approximately 7.0 million dry net tons of coke. ArcelorMittal USA’s coke
batteries in Warren, Ohio and Burns Harbor, Indiana supply approximately 2.3 million net tons.
ArcelorMittal USA has multiple long-term contracts with various coke producers, including one that
operates a coke oven battery located at its Indiana Harbor East facility. ArcelorMittal USA also
purchases coke from other ArcelorMittal facilities. ArcelorMittal USA obtains the balance of its
requirements from international sources at market prices. ArcelorMittal USA uses approximately 5.0
million net tons of coal per year. ArcelorMittal USA has contracts for substantially all of its
requirements for its
coke oven batteries and coal injection systems. ArcelorMittal USA does, however, periodically
buy small amounts of coal in the spot market for specific needs.
Scrap
Historically, ArcelorMittal USA uses hot metal for approximately 75% of its basic oxygen
furnace charge and scrap for approximately 25%. These percentages could vary depending on the
relative costs, availability and other factors. Approximately half of such scrap used by
ArcelorMittal USA is generated at its own facilities. ArcelorMittal USA’s electric arc furnaces use
scrap for all of their production, of which only a small portion is internally generated.
ArcelorMittal USA consumes about 5.0 million net tons of purchased scrap per year. There are no
long-term scrap contracts available as all purchases are in a short-term open market. Electric arc
furnace steelmakers primarily use scrap in products and are therefore vulnerable to scrap price
movements. ArcelorMittal USA expects scrap to continue to be in sufficient supply to satisfy its
needs.
Energy and Industrial Gases
ArcelorMittal USA’s steel operations consume large amounts of electricity, natural gas, oxygen
and other industrial gases. ArcelorMittal USA purchases its electrical power requirements from
various suppliers. In addition, ArcelorMittal USA operates cogeneration facilities on certain of
its sites that utilize waste gases from the blast furnaces to supplement its electrical power
requirements and control its energy costs. ArcelorMittal USA purchases natural gas under short-term
supply contracts with a common group of suppliers. ArcelorMittal USA uses financial instruments to
hedge such purchases when appropriate. Various service providers provide transportation of the
natural gas to its facilities. ArcelorMittal USA also has several long-term contracts to supply its
oxygen, hydrogen, argon and nitrogen gas requirements.
Employees
Approximately 80% of ArcelorMittal USA’s employees are represented by unions, primarily the
United Steelworkers. The collective bargaining agreement between ArcelorMittal USA and the United
Steelworkers expires on September 1, 2008.
Unfair Trade Practices and Trade Remedies
Under international agreement and U.S. law, remedies are available to domestic industries
where imports are “dumped” or “subsidized” and such imports cause material injury to a domestic
industry. Dumping involves selling for export a product at a price lower than the same or similar
product is sold in the home market of the exporter or where the export prices are lower than a
value that typically must be at or above the full cost of production. Subsidies from governments
(including, among other things, grants and loans at artificially low interest rates) under certain
circumstances are similarly actionable. The remedy available is an antidumping duty order or
suspension agreement where injurious dumping is found and a countervailing duty order or suspension
agreement where injurious subsidization is found. When dumping or subsidies continue after the
issuance of an order, a duty equal to the amount of dumping or subsidization is imposed on the
importer of the product. Such orders and suspension agreements do not prevent the importation of a
product, but rather require either that the product be priced at an undumped level or without the
benefit of subsidies or that the importer pay the difference between such undumped or unsubsidized
price and the actual price to the U.S. government as a duty.
Environmental Matters
ArcelorMittal USA’s operations are subject to a broad range of laws and regulations relating
to the protection of human health and the environment. The prior owners of ArcelorMittal USA’s
facilities expended in the past, and ArcelorMittal USA expects to expend in the future, substantial
amounts to achieve or maintain ongoing compliance with U.S. federal, state, and local laws and
regulations, including the Resource Conservation and Recovery Act, or RCRA, the Clean Air Act, and
the Clean Water Act. These environmental expenditures are not projected to have a material adverse
effect on ArcelorMittal USA’s consolidated financial position or on
ArcelorMittal USA’s competitive position with respect to other similarly situated U.S.
steelmakers subject to the same environmental requirements.
RCRA
Under RCRA and similar U.S. state programs, the owners of certain facilities that manage
hazardous wastes are required to investigate and, if appropriate, remediate historic environmental
contamination found at such facilities. All of ArcelorMittal USA’s major operating and inactive
facilities are or may be subject to a corrective action program or other laws and regulations
relating to environmental remediation, including projects relating to the reclamation of industrial
properties, also known as brownfield projects.
Clean Air Act
ArcelorMittal USA’s facilities are subject to a variety of permitting requirements under the
Clean Air Act that restrict the type and amount of air pollutants that may be emitted from
regulated emission sources. In 2003, the U.S. Environmental Protection Agency, or EPA, issued a
final rule to reduce hazardous air pollutant emissions from integrated iron and steel manufacturing
facilities. The final rule requires affected facilities to meet standards reflecting the
application of maximum achievable control technology, or MACT, standards. Many of ArcelorMittal
USA’s facilities subject to the new MACT standards demonstrated compliance with such standards in
May 2006. Other facilities were granted an extension until May 20, 2007 to meet the MACT
requirements. ArcelorMittal is currently in compliance with the new MACT standards.
Other Clean Air Act requirements, such as revisions to national ambient air quality standards
for ozone, particulate matter, and mercury emissions may have significant impacts on ArcelorMittal
USA in the future, although whether and how it will be affected cannot be determined for many
years. ArcelorMittal USA also may be affected if the U.S. federal government or the states in which
it operates begin to regulate emissions of greenhouse gases such as carbon dioxide. However,
because ArcelorMittal USA cannot predict what requirements will be imposed on it or the timing of
such requirements, it is unable to evaluate the ultimate future cost of compliance with respect to
these potential developments.
Clean Water Act
ArcelorMittal USA’s facilities also are subject to a variety of permitting requirements under
the Clean Water Act, which restricts the type and amount of pollutants that may be discharged from
regulatory sources into receiving bodies of waters, such as rivers, lakes and oceans. The EPA
issued regulations that require existing wastewater dischargers to comply with effluent
limitations. Several of ArcelorMittal USA’s facilities are subject to these regulations, and
compliance with such regulations will be required as new discharge permits are issued for continued
operation. ArcelorMittal USA is unable to evaluate the cost with respect to these future permit
requirements.
Intellectual Property
ArcelorMittal USA owns a number of U.S. and non-U.S. patents that relate to a wide variety of
products and processes, has filed pending patent applications and is licensed under a number of
patents. However, ArcelorMittal USA believes no single patent or license or group of patents or
licenses is of material importance to its overall business. ArcelorMittal USA also owns registered
trademarks for certain of its products and service marks for certain of its services, which, unlike
patents and licenses, are renewable so long as they are continued in use and properly protected.
Properties
Principal Operating Facilities
As of December 31, 2007, ArcelorMittal USA’s steel operations consisted of five integrated
steelmaking plants, one basic oxygen furnace/compact strip mill, four electric arc furnace plants
with raw steel production
capability of approximately 27.0 million net tons and five finishing plants. As of December31, 2007, ArcelorMittal USA owned all or substantially all of each plant. As of December 31, 2007,
ArcelorMittal USA also owned interests in various joint ventures that support these facilities, as
well as several raw material, railroad and transportation assets.
Integrated Steelmaking Facilities
Burns Harbor. ArcelorMittal USA’s Burns Harbor facility is located on approximately 3,300
acres in Indiana on Lake Michigan, approximately 50 miles southeast of Chicago, Illinois. Burns
Harbor is an integrated mill capable of producing hot-rolled sheet, cold-rolled sheet, hot dip
galvanized sheet and steel plate for use in automotive, appliance, service center, construction,
and ship building applications. Burns Harbor’s iron producing facilities include a sintering plant,
two coke oven batteries and two blast furnaces with granularized coal injection capable of
producing approximately 4.8 million net tons of hot metal per year. The steel producing shop
consists of three basic oxygen furnaces, one degasser, two ladle treatment stations, two continuous
slab casters (an 84-inch two strand and a 76-inch two strand) capable of producing approximately
4.7 million net tons of raw steel per year. Finishing facilities include an 80-inch hot-strip mill,
two 80-inch continuous pickling lines, an 80-inch five-stand tandem mill, batch annealing
facilities, a continuous anneal line, an 80-inch five stand temper mill, a 72-inch hot dip
galvanizing line, which is capable of producing both galvanized and galvannealed sheets, and two
plate mills (160-inch and 110-inch). Burns Harbor also operates a third plate mill and associated
heat-treating facilities in Gary, Indiana.
Indiana Harbor West. ArcelorMittal USA’s Indiana Harbor West facility is located on
approximately 1,200 acres in Indiana, 20 miles southeast of Chicago, Illinois on Lake Michigan.
Indiana Harbor West is an integrated mill capable of producing hot-rolled sheet, cold-rolled sheet,
and hot dip galvanized sheet for use in automotive, appliance, service center, tubular, strip
converters, and contractor applications. Indiana Harbor’s iron producing facilities include a
sintering plant and two blast furnaces capable of producing approximately 3.6 million net tons of
hot metal per year. The steel producing shop consists of two basic oxygen furnaces, two ladle
metallurgy stations, a vacuum degasser and two continuous slab casters (88-inch one strand and
80-inch one strand) capable of producing approximately 4.0 million net tons of raw steel per year.
Finishing facilities include an 84-inch hot-strip mill, a 76-inch pickle line, an 80-inch
five-stand tandem mill, batch annealing facilities, a two-stand temper mill, and 72-inch and
60-inch hot dip galvanizing lines.
Indiana Harbor East. ArcelorMittal USA’s Indiana Harbor East facility is located on
approximately 1,900 acres in Indiana next to its Indiana Harbor West facility. This is an
integrated mill capable of producing hot-rolled sheet, cold-rolled sheet, hot dip galvanized sheet
and bar products for use in automotive, appliance, service center, tubular, strip converters, and
contractor applications. Indiana Harbor East’s iron producing facilities include three blast
furnaces capable of producing approximately 5.7 million net tons of hot metal per year. The steel
producing shop consists of four basic oxygen furnaces and three slab and bloom casters capable of
producing 5.9 million net tons of raw steel per year. Finishing facilities include an 80-inch
hot-strip mill, two continuous pickle lines, 56-inch and 80-inch tandem mills, continuous and batch
annealing facilities, three temper rolling mills, and three coating lines.
Cleveland. ArcelorMittal USA’s Cleveland facility is located on approximately 1,200 acres on
opposite banks of the Cuyahoga River, near Lake Erie in Cleveland, Ohio. Cleveland is an integrated
mill capable of producing hot-rolled sheet, cold-rolled sheet, and hot dip galvanized sheet for
automotive, strip converter, service center and tubular applications. Its iron producing facilities
includes a coke oven battery located in Warren, Ohio and two blast furnaces that are capable of
producing approximately 3.1 million net tons of hot metal per year. Cleveland has two steel
producing shops. The west side shop consists of two basic oxygen furnaces, a ladle metallurgy
station and a 63-inch two strand caster. The east side shop includes two basic oxygen furnaces, a
ladle metallurgy station, a degasser and a 73-inch two strand caster. The two shops combined are
capable of producing approximately 3.8 million net tons of raw steel per year. Finishing facilities
include an 84-inch hot strip mill, an 84-inch continuous pickling line, an 84-inch five stand
tandem mill, batch annealing facilities, an 84-inch one stand temper mill and a hot dip galvanize
line.
Sparrows Point. ArcelorMittal USA’s Sparrows Point facility is located on approximately 3,100
acres on the Chesapeake Bay near Baltimore, Maryland. Sparrows Point is an integrated mill capable
of producing hot-rolled
sheet, cold-rolled sheet, galvanized and GalvalumeTM sheets, and tin plate products
for use in the construction, service center, container, and export markets. The iron producing
facilities include a sintering plant, and a blast furnace with pulverized coal injection capable of
producing approximately 4.0 million net tons of hot metal per year. The steel producing shop
includes two vessel basic oxygen furnaces, two ladle metallurgy stations and two continuous slab
casters (104-inch single strand and 89-inch single strand) capable of producing approximately 3.9
million net tons of raw steel per year. Finishing facilities include a 68-inch hot-strip mill, a
61-inch continuous pickling line, a 67-inch continuous pickling line and five stand tandem mill, a
48-inch five stand tin tandem mill, batch annealing facilities, one continuous anneal line, a
67-inch one stand temper mill, a 48-inch hot dip galvanizing line, two 48-inch
galvanize/GalvalumeTM lines, and tin mill facilities (one 48-inch two stand tin temper
mill, a 48-inch two stand double cold reducing mill, and three 38-inch electrolytic tin plating
lines). Sparrows Point’s location on the Chesapeake Bay makes it the only domestic integrated steel
mill with direct ocean access and provides ArcelorMittal USA with a deep-water port and the
capability to ship products and receive raw materials by ship, thereby reducing its freight costs.
On August 1, 2006, in order to resolve certain U.S. competition concerns raised in connection
with Mittal N.V.’s acquisition of Arcelor, a Luxembourg steel company, the U.S. Department of
Justice, or DOJ, filed with the U.S. District Court in Washington, D.C. a consent decree in which
Mittal N.V. agreed to use its best efforts to sell Dofasco Inc., a subsidiary of Arcelor, to
ThyssenKrupp AG, or, if Dofasco could not be sold due to certain Dutch legal constraints, to sell
either its Weirton or Sparrows Point facility, at the election of the DOJ. On February 20, 2007,
the DOJ informed Mittal N.V. that it had selected the Sparrows Point steel mill for divestiture
under the consent decree. A trustee has been appointed by the U.S. District Court to supervise the
divestiture. On March 26, 2008, ArcelorMittal confirmed that the
trustee had entered into an agreement to sell the Sparrows
Point steel mill to OAO Severstal for $810.0 million, net of debt.
Basic Oxygen Furnace/Compact Strip Mill
Riverdale. ArcelorMittal USA’s Riverdale, Illinois facility is located on 165 acres
approximately 14 miles west of its Indiana Harbor facilities. Riverdale produces hot rolled sheet
for strip converter and service center applications. Hot metal is supplied from ArcelorMittal USA’s
Indiana Harbor and Burns Harbor blast furnaces to Riverdale’s basic oxygen furnaces. Principal
facilities include a steel producing shop with two basic oxygen furnaces, two ladle metallurgy
facilities and a 63-inch one strand continuous slab caster, which uses a compact strip process
capable of producing approximately 0.8 million net tons of raw steel per year. This caster directly
feeds a 62-inch wide tunnel furnace and a seven-stand hot-strip rolling mill. The Riverdale compact
strip mill incorporates the latest casting and rolling technology designs.
Electric Arc Furnaces
Georgetown. ArcelorMittal USA’s Georgetown, South Carolina facility is located on 60 acres on
Winyah Bay. Georgetown produces wire rod for use by converters and original equipment
manufacturers. Steel producing facilities consist of two alternating current electric arc furnaces
capable of producing approximately 1.0 million net tons of liquid steel per year, with two ladle
metallurgy stations, and a six strand continuous billet caster capable of producing approximately
1.0 million net tons of raw steel per year. Finishing operations include a wire rod rolling mill
capable of producing approximately 0.8 million net tons of wire rod per year. Georgetown’s location
provides deep water access and the capability to ship products and receive raw materials by ship,
thereby reducing its freight costs.
Coatesville. ArcelorMittal USA’s Coatesville facility is located in Coatesville, Pennsylvania,
about 45 miles west of Philadelphia, Pennsylvania. Coatesville is capable of producing
approximately 450 different chemistries, which generally refers to the mix of elements contained
within a particular grade of steel, including a wide range of carbon and alloy discrete plate
products (including carbon, high-strength, low alloy, commercial alloy, military alloy, flame-cut
and clad) for use in infrastructure, chemical process facilities and shipbuilding applications.
Steel producing facilities consist of an alternating current electric arc furnace capable of
producing approximately 0.9 million tons of liquid steel per year, a vacuum degasser, an ingot
teaming facility, and an 85-inch strand slab caster capable of producing approximately 0.8 million
net tons of raw steel per year. Finishing facilities include two plate mills (a 140-inch and a
206-inch) and heat-treating facilities. An additional finishing facility in Piedmont, North
Carolina provides plasma arc cutting capabilities.
Steelton. ArcelorMittal USA’s Steelton facility is located in Steelton, Pennsylvania, about
100 miles west of Philadelphia, Pennsylvania. Steelton produces railroad rails, specialty blooms,
and flat bars for use in railroad and forging markets. Steelton’s steel producing facilities
consist of a direct current electric arc furnace capable of producing approximately 1.1 million net
tons of liquid steel per year, a ladle arc reheating furnace, a vacuum degasser, a three strand
continuous bloom caster and an ingot teaming facility capable of producing approximately 1.0
million net tons of raw steel per year. Finishing operations include a 44-inch blooming mill, a
28-inch rail mill, in-line rail head-hardening facilities, rail finishing and a 20-inch bar mill.
Indiana Harbor East. Located within the integrated plant in Indiana is an electric arc furnace
capable of producing approximately 0.6 million tons of liquid steel per year, a continuous billet
caster and a 12-inch bar mill.
Vinton. ArcelorMittal USA’s Vinton facility is located in Vinton, Texas, about 20 miles north
of El Paso. It has two electric arc furnaces capable of producing approximately 0.2 million net
tons of liquid steel, a continuous caster, and a rolling mill. It produces reinforcing bar and
grinding balls, which it sells in the southwestern United States.
Rolling and Finishing Facilities
Weirton. ArcelorMittal USA’s Weirton, West Virginia facility is located on approximately
2,700 acres near the Ohio River. Weirton is capable of producing hot-rolled sheet, cold-rolled
sheet, galvanized, electro-galvanized, and tin plate products for use in construction, service
center, container and tubular markets. Finishing facilities include a 54-inch hot strip mill,
54-inch and 48-inch continuous picklers, two 48-inch five stand and one 48-inch four stand tandem
cold mills, batch anneal, three continuous anneal lines, three temper mills, (48-inch one stand for
sheet products, a 40-inch two stand and 45-inch two stand for tin products), two double cold
reducing mills, two-48 inch and one 42-inch hot dip galvanizing lines, one 38-inch
electro-galvanizing line, and four tin plate lines. The finishing facilities are being supplied
from steel produced at ArcelorMittal USA’s other facilities.
Weirton’s primary facilities were permanently idled in 2005. They included an iron producing
shop including two blast furnaces capable of producing approximately 2.5 million net tons of hot
metal per year. The steel producing shop included two vessel basic oxygen furnaces with two ladle
treatment stations and two vacuum degassing facilities, and a 48-inch four strand continuous caster
capable of producing approximately 3.0 million tons of raw steel per year. Its hot strip mill was
permanently idled at the end of 2007.
Hennepin. ArcelorMittal USA’s Hennepin, Illinois finishing facility is located on
approximately 860 acres on the Illinois River, about 100 miles west of Chicago, Illinois. Hennepin
produces cold-rolled sheet and hot dip galvanized sheet for the electrical, appliance, and
construction markets. Hot band substrate is supplied from ArcelorMittal USA’s Burns Harbor and
Indiana Harbor facilities. Principal operating facilities include an 84-inch continuous pickling
line, an 84-inch five strand tandem mill, batch annealing, an 84-inch temper mill and an 84-inch
hot dip galvanizing line. Hennepin’s location on the Illinois River makes it capable of shipping
and receiving by barge.
Columbus. ArcelorMittal USA’s Columbus Coatings facility is located in Columbus, Ohio.
Columbus produces hot dip galvanized sheet for the automotive market. ArcelorMittal USA’s Burns
Harbor facility supplies cold-rolled coils and is responsible for marketing the finished product.
The principal operating facility includes a 72-inch hot dip galvanizing line. ArcelorMittal USA
also operate a steel slitter and warehousing facility at its Columbus facility through its Columbus
Processing Company.
Conshohocken. ArcelorMittal USA’s Conshohocken facility is located in Conshohocken,
Pennsylvania, about 15 miles north of Philadelphia, Pennsylvania. Conshohocken produces both coil
and discrete plate for use in construction and military applications. Slabs are provided by
ArcelorMittal USA’s Sparrows Point and Coatesville facilities. Principal facilities consist of a
110-inch Steckel mill and heat treat facilities.
Lackawanna. ArcelorMittal USA’s Lackawanna facility is located in Lackawanna, New York, about
5 miles south of Buffalo. Lackawanna produces cold-rolled sheet and hot dip galvanized sheet for
use in the automotive and original equipment manufacturer, or OEM, markets. Hot band substrate is
supplied principally from
ArcelorMittal USA’s Burns Harbor and Cleveland facilities. Principal facilities include a
75-inch continuous pickling line, a 75-inch four-stand tandem mill, batch annealing, a temper mill,
and a 72-inch galvanizing line.
Railroads, Transportation and Research
ArcelorMittal USA owns the assets of seven short-line railroads that transport raw materials
and semi-finished steel products within its various facilities, and an interstate truck broker that
serves its facilities.
ArcelorMittal USA owns a fleet of coal hopper cars used in unit trains to move coal and coke
to Indiana Harbor. ArcelorMittal USA time-charters three vessels for the transportation of iron ore
and limestone on the Great Lakes.
ArcelorMittal USA also owns and maintains research and development laboratories in East
Chicago, Indiana. Such facilities are believed to be adequate to serve ArcelorMittal USA’s present
and anticipated needs.
Significant Joint Ventures
I/N Tek. ArcelorMittal USA owns a 60% interest in a partnership that has constructed a 1.7
million ton annual capacity cold-rolling mill on approximately 200 acres of land, which it owns in
fee, located near New Carlisle, Indiana. Substantially all the property, plant and equipment owned
by I/N Tek is subject to a lien securing related indebtedness. ArcelorMittal USA does not exercise
control over this entity.
I/N Kote. ArcelorMittal USA owns a 50% interest in a partnership that has constructed a 1.0
million ton annual capacity steel galvanizing facility on approximately 25 acres of land, which it
owns in fee, located adjacent to the I/N Tek site.
PCI Associates. ArcelorMittal USA owns a 50% interest in a partnership that has constructed a
pulverized coal injection facility on land located within Indiana Harbor East. PCI Associates
leases the land upon which the facility is located. A 50% undivided interest in substantially all
of the property, plant and equipment at the PCI facility is subject to a long-term lease, with the
balance of the PCI facility owned by PCI Associates.
Hibbing Taconite. ArcelorMittal USA owns a total 62.3% direct and indirect interest in
Hibbing Taconite Company, located in Hibbing, Minnesota, that operates mines and a pelletizing
plant. Hibbing Taconite has mining and processing facilities that can supply all of Burns Harbor’s
iron ore pellet expected needs. ArcelorMittal USA owns a 90% interest in Ontario Iron Company,
which is located in Hibbing, Minnesota and owns mineral leases used by Hibbing Taconite. Because
ArcelorMittal USA owns an undivided interest in each asset and is liable for its share of each
liability, it proportionally consolidates Hibbing Taconite.
Empire Iron Mining. ArcelorMittal USA owns a 21% interest in Empire Iron Mining Partnership,
located in Palmer, Michigan, which operates an iron ore mine and pelletizing plant.
Bethlehem Roll Technologies LLC. ArcelorMittal USA owns a 50% interest in Bethlehem Roll
Technologies LLC, which is located in Sparrows Point, Maryland and operates a facility for grinding
steel mill rolls.
Double G Coatings. ArcelorMittal USA owns a 50% interest in Double G Coatings Company, L.P.,
which is located near Jackson, Mississippi. Double G Coatings operates a 270,000-ton-per year sheet
coating line that produces galvanized and GalvalumeTM coated sheets primarily for the
construction market. Sparrows Point provides cold-rolled coils for ArcelorMittal USA’s share of
production and is responsible for marketing its share of the finished product.
Steel Health Resources, LLC. ArcelorMittal USA owns a 47.5% interest in Steel Health
Resources, L.L.C., which is located in Chesterton, Indiana and owns the building of a healthcare
clinic.
Steel Construction Systems. ArcelorMittal USA owns a 45% interest in Steel Construction
Systems, which is located in Orlando, Florida and manufactures steel studs and roll-formed trusses
for residential and light commercial buildings.
Indiana Pickling and Processing Company. ArcelorMittal USA owns a 20% interest in Indiana
Pickling and Processing Company, which is located in Portage, Indiana and operates a pickling line.
ArcelorMittal USA accounts for all these joint ventures on the equity method except Hibbing
Taconite, which is proportionally consolidated.
Legal Proceedings
In the ordinary course of its business, ArcelorMittal USA is involved in various pending or
threatened legal proceedings. ArcelorMittal USA cannot predict with certainty the outcome of any
legal or environmental proceedings to which its is a party. In its opinion, however, adequate
liabilities have been recorded for losses that are probable to result from legal proceedings and
environmental remediation requirements. If such liabilities prove to be inadequate, however, it is
reasonably possible that ArcelorMittal USA could be required to record a charge to earnings that
could be material to the results of operations and cash flows in a particular future quarterly or
annual period. ArcelorMittal USA believes that any ultimate additional liability arising from these
actions, that is reasonably possible over what has been recorded, will not be material to its
consolidated financial condition and sufficient liquidity will be available for required payments.
In April 2007, ArcelorMittal USA acquired a steel plant in Vinton, Texas, formerly known as
Border Steel, from Viga Investments Inc. (“Viga”). In July 2007, Viga filed a lawsuit seeking
damages and other relief against ArcelorMittal USA alleging breaches relating to post-closing
purchase price adjustment procedures under the purchase agreement. In a related transaction, ArcelorMittal
Mexico Holdings B.V. (“ArcelorMittal Mexico”) purchased the stock of Sicartsa in Mexico. The
purchase of Sicartsa and Border Steel were interrelated (each purchase agreement refers to the
other) and part of an overarching, integrated transaction. The Sicartsa sellers dispute
the validity of the closing balance sheet of Sicartsa. By filing a lawsuit in New York state court
and seeking a judicial determination of the appropriate purchase price adjustment, we believe Viga
breached a requirement under the Viga purchase agreement that disputes concerning post-closing
purchase price adjustment procedures under the agreement be submitted
to binding arbitration. Because the two transactions are interrelated, ArcelorMittal USA, ArcelorMittal, and
ArcelorMittal Mexico asserted counterclaims against the Sicartsa sellers in the Viga litigation.
We are unable to assess the outcome of these proceedings or to reasonably estimate the amount of
ArcelorMittal USA, ArcelorMittal, or ArcelorMittal Mexico’s liabilities relating to these matters,
if any.
ISG purchased only specified assets of Georgetown, Weirton, Bethlehem Steel Corporation, Acme
Steel Corporation and LTV Corporation through sales in bankruptcy proceedings. The sellers in those
transactions retained liability for certain claims related to the assets that ArcelorMittal USA
purchased, including personal injury claims. The sale orders issued by the U.S. Bankruptcy Courts
having jurisdiction over each respective transaction entered orders barring assertion of claims
(other than those in respect of certain specifically assumed liabilities, which did not include
asbestos-related liabilities) against ArcelorMittal USA related to the assets in question, and
confirming that neither ArcelorMittal USA nor its subsidiaries shall be responsible for any
liabilities related to the assets (other than those in respect of certain specifically assumed
liabilities which did not include asbestos-related liabilities). The sale orders issued by the U.S.
Bankruptcy Courts also found that under no circumstances could ArcelorMittal USA be deemed a
successor to any of the sellers for purposes of any liabilities. ArcelorMittal USA believes the
manner through which its facilities were purchased in conjunction with the attendant orders of the
U.S. Bankruptcy Courts places ArcelorMittal USA in a better position than other steelmakers with
substantial exposure to asbestos-related liability or off-site environmental liability. Despite the
foregoing, it is possible that future claims with respect to historic asbestos exposure could be
directed at ArcelorMittal USA. The risk of incurring liability as the result of such claims is
considered remote.
The following description is only a summary of the material provisions of the Indenture and
the Collateral Documents. We urge you to read the Indenture and the Collateral Documents because
these documents, and not this description, define your rights as holders of Notes. You may request
copies of these agreements at the address set forth under the heading “Where You Can Find More
Information”. Certain terms used in this description are defined under the subheading “— Certain
Definitions”. In this description, the term “series of Notes” refers to all of the Notes, as a
single series, and all outstanding Floating Rate Notes, as a single series. Except as otherwise
provided, the Notes and the Floating Rate Notes will be treated as a single class of securities
under the Indenture, including with respect to matters requiring the approval of holders of Notes.
Additionally, the following terms refer to the entities indicated below:
Term
Entity
“Issuer”
Prior to the Permitted Finco Collapse Transaction,
Ispat Inland ULC. Thereafter, the term “Issuer”
refers to the Successor Issuer, ArcelorMittal
Financial Services LLC, a Delaware limited
liability company.
“Finco Guarantors”
Prior to the Permitted Finco Collapse Transaction,
each of ArcelorMittal Partnership (formerly Ispat
Inland, L.P.), 3019693 Nova Scotia U.L.C. and
ArcelorMittal Finance LLC (formerly Ispat Inland
Finance, LLC).
“Company”
ArcelorMittal USA Inc. (formerly Ispat Inland Inc.).
“Company Guarantors”
Each existing domestic Restricted Subsidiary of the
Company that is an operating company (other than
any Securitization Subsidiary) and certain of the
Company’s future Restricted Subsidiaries.
On the Issue Date, the Company Guarantors were
Burnham Trucking Company, Inc., Incoal Company,
Ispat Inland Mining Company and Ispat Inland
Service Corp.
On the date of this Consent Solicitation Statement,
the Company Guarantors were Burnham Trucking
Company, Inc., ArcelorMittal USA Incoal Inc.
(formerly Incoal Company), ArcelorMittal Minorca
Mine Inc., ArcelorMittal Service Inc.,
ArcelorMittal Cleveland Inc., ArcelorMittal Weirton
Inc., ArcelorMittal Hennepin Inc., ArcelorMittal
Indiana Harbor LLC, ArcelorMittal Warren Inc.,
ArcelorMittal Riverdale Inc., Mittal Steel USA –
Venture Inc., ArcelorMittal Plate LLC, ISG Sparrows
Point LLC, ArcelorMittal Steelton LLC,
ArcelorMittal Lackawanna LLC, ArcelorMittal Burns
Harbor LLC, ArcelorMittal Columbus LLC,
ArcelorMittal Georgetown Inc., Mittal Steel USA –
Railways Inc., ArcelorMittal Hibbing Inc., Hibbing
Taconite Holding Inc., ISG Acquisition Inc.,
ArcelorMittal Real Estate Inc. and ArcelorMittal
Tow Path Valley Business Park Development Company.
“Parent”
ArcelorMittal (formerly Ispat International N.V.).
“Guarantors”
Prior to the Permitted Finco Collapse Transaction,
the Guarantors were the Parent, the Company, the
Company Guarantors and the Finco Guarantors.
Thereafter, the “Guarantors” are the Parent, the
Company and the Company Guarantors.
On March 25, 2004 (the “Issue Date”), the Issuer issued $650.0 million in aggregate principal
amount of the Notes and $150.0 million in aggregate principal amount of Senior Secured Floating
Rate Notes due 2010 (the “Floating Rate Notes”) under an indenture, dated as of the Issue Date,
among itself, the Guarantors and LaSalle Bank National Association, as Trustee, as amended and
supplemented by the First Supplemental Indenture dated as of September 16, 2004, the Second
Supplemental Indenture dated as of March 14, 2005, the Third Supplemental Indenture dated as of
December 31, 2005, the Fourth Supplemental Indenture dated as of December 31, 2005, the Fifth
Supplemental Indenture dated as of December 31, 2006, the Sixth Supplemental Indenture dated as of
September 3, 2007, the Seventh Supplemental Indenture dated as of November 13, 2007 and the Eighth
Supplemental Indenture dated as of December 28, 2007 (the “Indenture”). The terms of the Notes and
the Floating Rate Notes include those stated in the Indenture, as the same has been amended and
supplemented through the date of this Consent Solicitation Statement, and those made part of the
Indenture by reference to the Trust Indenture Act of 1939, as amended.
On the Issue Date, ArcelorMittal Partnership (formerly Ispat Inland, L.P.) issued a Finco
Subordinated Note to the Company in exchange for approximately $23.0 million of proceeds and used
such proceeds to reimburse the Issuer for fees and expenses of the offering of the Notes and the
Floating Rate Notes and/or loan such proceeds to the Issuer. The Issuer loaned the net proceeds of
the Notes and the Floating Rate Notes, together with the net proceeds from such contribution/loan
to ArcelorMittal Partnership in exchange for a mirror note (the “Finco Mirror Note”) of
ArcelorMittal Partnership having substantially similar payment terms as the Notes and the Floating
Rate Notes. ArcelorMittal Partnership used the proceeds from the issuance of the Finco Mirror Note
to make a contribution and/or loan to its direct Subsidiary, 3019693 Nova Scotia U.L.C., which in
turn contributed such proceeds to its direct Subsidiary, ArcelorMittal Finance LLC (formerly Ispat
Inland Finance, LLC). ArcelorMittal Finance LLC used the proceeds of this capital contribution to
purchase $800.0 million of First Mortgage Bonds (Series Y, in a principal amount of $150.0 million,
and Series Z, in a principal amount of $650.0 million), at a price equivalent to the price of the
Notes and the Floating Rate Notes, from the Company, with the First Mortgage Bonds having
substantially similar payment terms as the Notes and the Floating Rate Notes. See “Description of
First Mortgage Bonds”. The First Mortgage Bonds were pledged as collateral for the Note Guarantee
of ArcelorMittal Finance LLC as described below under “— Collateral”.
On September 21, 2004, all of the Notes and Floating Rate Notes were exchanged for new notes
that were substantially identical to the Notes and the Floating Rate Notes, except that the new
notes were registered under the Securities Act. Except as the context otherwise requires,
references to the Notes and the Floating Rate Notes means the new notes that were registered under
the Securities Act.
In December 2004, the Company redeemed $227.5 million in aggregate principal amount of the
Series Z First Mortgage Bonds from ArcelorMittal Finance LLC, which in turn used the proceeds to
redeem $227.5 million in aggregate principal amount of the Notes, at a redemption price equal to
109.75% of the outstanding principal amount redeemed, plus accrued and unpaid interest.
On April 1, 2006, the Company redeemed all $150.0 million of the Series Y First Mortgage Bonds
from ArcelorMittal Finance LLC, which in turn used the proceeds to redeem all $150.0 million in
outstanding principal amount of Floating Rate Notes at a redemption price equal to 103% of the
outstanding principal amount, plus accrued interest to, but excluding, April 1, 2006.
As of the date of this Consent Solicitation Statement there were $422,500,000 in aggregate
principal amount of Notes and Series Z First Mortgage Bonds outstanding, and a Suspension Period
was in effect, which generally means that the Notes are rated Investment Grade by two Rating
Agencies. As a result of the Suspension Period, certain of the covenants in the Indenture and
described in this section are not currently applicable to the Company.
On December 28, 2007, the Issuer and the Finco Guarantors concluded a Permitted Finco Collapse
Transaction. Additionally, following the Permitted Finco Collapse Transaction (including, following
the transfer to the Successor Issuer of all First Mortgage Bonds and Preferred Stock issued by the
Company held by the Finco Guarantors and the pledge by the Successor Issuer of such First Mortgage
Bonds and Preferred Stock as Collateral and the other actions required to be taken in connection
with the Collateral), the assets of the entities that were Finco
Guarantors immediately prior to such Permitted Finco Collapse Transaction ceased to be
Collateral and were released from the Lien of the Pledge Agreement. See “The Proposed Amendments —
Background and Purpose of the Solicitation”.
Issuance of Additional Notes
The Issuer is permitted to issue up to an additional $100.0 million aggregate principal amount
of notes consisting of additional Floating Rate Notes and/or Notes (collectively, the “Additional
Notes”) following the Issue Date; provided that the Company issues a like aggregate principal
amount of additional First Mortgage Bonds securing all of the Additional Notes in a transaction
that complies with the covenant described under “— Certain Covenants — Limitation on Indebtedness”
(including the limitation on the aggregate principal amount of Bonds that is permitted to be
outstanding at any time under the Mortgage pursuant to clause (c) of such covenant). Any
Additional Notes will be treated as part of the same series of notes as the Floating Rate Notes and
the Notes, as applicable, issued on the Issue Date for all purposes under the Indenture, and all
references thereto shall include any Additional Notes of such series, respectively.
Principal, Maturity and Interest
The Issuer issued an aggregate principal amount of $650.0 million of Notes on the Issue Date.
The Notes were issued in denominations of $1,000 and integral multiples of $1,000. The Notes will
mature on April 1, 2014. Interest on the Notes accrues at the rate of 9 3/4% per annum and is
payable semiannually in arrears on April 1 and October 1 of each year, to the holders of record on
the immediately preceding March 15 and September 15.
Interest on the Notes accrues from the date of original issuance or, if interest has already
been paid, from the date it was most recently paid. Interest is computed on the basis of a 360-day
year comprised of twelve 30-day months.
The Issuer will pay interest on overdue principal at the rate of 1% per annum in excess of the
above rate and will pay interest on overdue installments of interest at such higher rate, in each
case, to the extent lawful.
Ranking
The Notes
The Notes:
•
are senior obligations of the Issuer and will be the only indebtedness permitted to
be incurred by the Issuer (other than Subordinated Obligations owed to a Finco
Guarantor);
•
are guaranteed by each of the Guarantors; and
•
are secured to the extent set forth under “ — Collateral”.
The Note Guarantees
The Note Guarantees:
•
are joint and several, senior obligations of the Guarantors;
•
are the only indebtedness permitted to be incurred by the Finco Guarantors (other
than Subordinated Obligations owed to the Issuer or another Finco Guarantor) and are
secured to the extent set forth under “— Collateral”;
•
rank senior in right of payment to all existing and future indebtedness of the
Guarantors that is subordinated to the Note Guarantees;
the Company had approximately $1.1 billion of senior indebtedness, including $422.5
million of indebtedness secured by Bonds and $565 million of senior unsecured
indebtedness; and
•
Parent had approximately $31.3 billion of unsubordinated indebtedness, consisting
of $31.0 billion of indebtedness with its Subsidiaries; and
•
Subsidiaries of Parent (other than the Issuer and the
Guarantors) had approximately $27.1 billion of indebtedness that would have ranked
effectively senior to the Notes.
Additionally, all of the operations of Parent are conducted through its Subsidiaries. Claims
of creditors of such Subsidiaries (other than the Issuer and the Guarantors), including trade
creditors and creditors holding indebtedness or guarantees issued by such Subsidiaries, and claims
of preferred stockholders of such Subsidiaries, generally will have priority with respect to the
assets and earnings of such subsidiaries over the claims of Parent’s creditors including the
holders of the Notes. Accordingly, Parent’s Note Guarantee will be effectively subordinated to
creditors (including trade creditors) and preferred stockholders, if any, of Parent’s Subsidiaries
(other than the Issuer and any other Subsidiary of Parent that is a Guarantor). The Indenture does
not impose any limitation on the incurrence of indebtedness by Parent or Parent’s Subsidiaries
(other than the Issuer, the Finco Guarantors, the Company and the Company’s Restricted
Subsidiaries).
Collateral
Pursuant to the Pledge Agreement, the Notes and the Note Guarantees of the Finco Guarantors
are secured by a first priority security interest in (i) the First Mortgage Bonds (which in turn
are secured to the extent set forth under “Description of the First Mortgage Bonds — First Mortgage
Bonds Collateral”) and (ii) all Capital Stock and indebtedness (including any Company Note) held by
the Issuer and the Finco Guarantors (collectively, the “Securities Collateral”).
Subject to certain terms and conditions set forth in the Indenture and the Pledge Agreement,
the Pledgors are entitled to exercise any voting and other consensual rights on the Collateral and
to collect, invest and dispose of any income thereon. Upon the occurrence and during the
continuance of an Event of Default, subject to the conditions set forth in the Indenture and the
Pledge Agreement:
(a)
all of the rights of the Pledgors to exercise voting or other consensual rights
with respect to all Capital Stock included in the Collateral shall cease (except that
the Pledgors may continue to exercise any such rights with respect to any Nova Scotia
unlimited company provided that no such exercise is adverse to the holders of Notes),
and all such rights (other than any such rights with respect to Capital Stock of any
Nova Scotia unlimited company) shall become vested in the Trustee, which shall have the
sole right to exercise such voting and other consensual rights; and
(b)
the Trustee may take possession of and sell the Collateral or any part thereof
in accordance with the terms of the Pledge Agreement.
Additionally, to secure the payment by the Company under its Note Guarantee, the Company has
granted a second priority security interest in certain inventory (the “Inventory Collateral” and,
together with the Securities Collateral, the “Collateral”) pursuant to the Inventory Security
Agreement (the “Inventory Security Agreement”) between the Company and the Trustee. A first
priority security interest in the Inventory Collateral as well as in certain additional assets not
constituting part of the Collateral was previously granted to the lenders under the GECC
Credit Agreement. In 2005, however, the GECC Credit Agreement was terminated and the
corresponding first priority security interest in the Inventory Collateral was released.
In the case of an Event of Default, the Trustee will be permitted, subject to applicable laws,
regulatory requirements and, in the case of the Inventory Collateral, any Inventory Intercreditor
Agreement (as defined under “— Certain Limitations on the Collateral”), to exercise remedies and
sell the Collateral under the Collateral Documents at the direction of the holders of a majority in
aggregate principal amount of the Notes then outstanding, or, in the absence of such direction, in
any manner the Trustee determines to be reasonable, and the Trustee will be permitted to demand
that the Company immediately repay the principal of the First Mortgage Bonds. The proceeds
received by the Trustee from any exercise of its remedies under the Collateral Documents will be
applied by the Trustee, first, to pay the reasonable expenses of such foreclosure and fees and
other amounts then payable to the Trustee under the Indenture and the Collateral Documents, second,
pro rata to each holder of a Note in respect of all unpaid principal on such holder’s Note, third,
pro rata to each holder of a Note in respect of all premium, if any, accrued interest and other
amounts payable on the Notes and fourth, to the applicable Pledgor (in the case of the Securities
Collateral) or the Company (in the case of the Inventory Collateral), or any other person legally
entitled thereto.
The Collateral may be released as only described under “— Release of Liens on Collateral”.
Certain Limitations on the Collateral
There can be no assurance that the proceeds of any sale of Collateral following an Event of
Default with respect to the Notes would be sufficient to satisfy, or would not be substantially
less than, amounts due on the Notes.
The right of the Trustee to take possession and dispose of the Collateral upon the occurrence
of an Event of Default and the right of the trustee for the First Mortgage Bonds to foreclose on
the First Mortgage Bonds Collateral following an event of default under the Mortgage are likely to
be significantly impaired by applicable bankruptcy law if a bankruptcy proceeding were to be
commenced by a Pledgor or the Company, as applicable, prior to the Trustee or the trustee for the
First Mortgage Bonds having taken possession and disposed of the Collateral or the First Mortgage
Bonds Collateral. Under the U.S. Bankruptcy Code, a secured creditor is prohibited from taking its
security from a debtor in a bankruptcy case, or from disposing of security taken from such debtor,
without bankruptcy court approval. Although the Issuer is prohibited, with limited exceptions,
under the terms of the Indenture from incurring additional Indebtedness and engaging in other
activities, because the Issuer is part of Parent’s controlled group of companies, the Issuer may
have joint and several liability with other members of Parent’s controlled group of companies,
including with respect to ERISA liability and taxes.
Moreover, the U.S. Bankruptcy Code permits the debtor in certain circumstances to continue to
retain and to use collateral owned as of the date of the bankruptcy filing (and the proceeds,
products, rents or profits of such collateral) even though the debtor is in default under the
applicable debt instruments provided that the secured creditor is given “adequate protection”. The
meaning of the term “adequate protection” may vary according to circumstances. In view of the lack
of a precise definition of the term “adequate protection” and the broad discretionary powers of a
bankruptcy court, we cannot predict how long payments under the Notes could be delayed following
commencement of a bankruptcy case, whether or when the trustee for the First Mortgage Bonds could
repossess or dispose of the First Mortgage Bonds Collateral or whether or to what extent holders
would be compensated for any delay in payment or loss of value of the First Mortgage Bonds
Collateral through the requirement of “adequate protection”.
Furthermore, in the event a bankruptcy court determines the value of the Collateral or the
First Mortgage Bonds Collateral is not sufficient to repay all amounts due on the Notes or the
First Mortgage Bonds, as applicable, and any other obligations secured by such collateral, the
holders of the Notes and such other obligations would hold secured claims to the extent of the
value of the collateral securing such claims and would hold unsecured claims with respect to any
shortfall. Applicable Federal bankruptcy laws do not permit the payment or accrual of
post-petition interest, costs and attorneys’ fees during a debtor’s bankruptcy case unless the
claims are oversecured or the debtor is solvent at the time of reorganization. In addition, if the
Company or any Pledgor becomes the subject of a bankruptcy case, the bankruptcy court, among other
things, may avoid certain pre-petition transfers
made by the entity that is the subject of the bankruptcy filing, including, without
limitation, transfers held to be preferences or fraudulent conveyances.
Additionally, the Indenture provides that the Trustee will, if requested by the Company, enter
into an intercreditor agreement (each such intercreditor agreement, being referred to as an
“Inventory Intercreditor Agreement”) on terms not less favorable to the holders of Notes than the
terms of the GECC Intercreditor Agreement, with any future lenders under any indebtedness that is
secured by a Permitted Inventory Collateral Lien. By purchasing a Note and without further action,
each Holder of a Note will be deemed to have consented to the terms of each Inventory Intercreditor
Agreement and will be deemed to have instructed the Trustee to take each action that it is required
to take pursuant to the terms of the Inventory Intercreditor Agreements. There can be no assurance
that the value of the Inventory Collateral will be sufficient to provide any proceeds to provide
payment on the Notes after payment in full of the obligations with any future lenders under any
indebtedness that is secured by a Permitted Inventory Collateral Lien. In addition, any future
Inventory Intercreditor Agreement could have the effect of delaying any sale of the First Mortgage
Bonds Collateral by the trustee for the First Mortgage Bonds following a foreclosure. See
“Description of Intercreditor Arrangements — Inventory Intercreditor Arrangements”.
The GECC Intercreditor Agreement, which was entered into in connection with the initial
offering of the Notes and subsequently terminated in 2005 provided, among other things, that for so
long as any obligations were outstanding under the GECC Credit Agreement, the Trustee would not
take any action to enforce its security interest in the Inventory Collateral and that any proceeds
of any enforcement action in respect of the Inventory Collateral would first be applied to repay
all obligations outstanding under the GECC Credit Agreement prior to being distributed to the
Trustee in respect of the Company’s Note Guarantee. Additionally, the Trustee agreed in the GECC
Intercreditor Agreement and through certain instructions provided to the trustee under the Mortgage
that the lender under the GECC Credit Agreement would have access and certain other rights with
respect to processing the Inventory Collateral and the other collateral for the GECC Credit
Agreement that are maintained at the Company’s Indiana Harbor East facility, which constitutes
substantially all of the First Mortgage Bonds Collateral.
Release of Liens on Collateral
The Liens on the Collateral will be released with respect to the Notes, in whole, upon (i)
payment in full of the principal of, accrued and unpaid interest and premium, if any, on the Notes
and payment in full of all other Obligations under the Indenture due and payable at or prior to the
time such principal, accrued and unpaid interest and premium, if any, are paid, (ii) satisfaction
and discharge of the Indenture or (iii) a legal defeasance or covenant defeasance as set forth
under the caption “— Defeasance”.
Additionally, following the Permitted Finco Collapse Transaction (including the transfer to
the Successor Issuer of all First Mortgage Bonds and Preferred Stock issued by the Company held by
the Finco Guarantors and the pledge by the Successor Issuer of such First Mortgage Bonds and
Preferred Stock as Collateral and the other actions required to be taken in connection with the
Collateral pursuant to a Permitted Finco Collapse Transaction, all of which occurred on December28, 2007), the assets of the entities that were Finco Guarantors immediately prior to such
Permitted Finco Collapse Transaction ceased to be Collateral and were released from the Lien of the
Pledge Agreement.
Additionally, the Indenture provides, and any future Inventory Intercreditor Agreement may
provide, that the Trustee will release its security interest in any part of the Inventory
Collateral in connection with any sale of the Collateral in which the first priority security
interest is also being released from such Inventory Collateral; provided, that if any such sale of
Inventory Collateral is an Asset Disposition, the Company will apply the Net Available Cash
therefrom as required by the covenant described under “— Certain Covenants — Limitation on Sales of
Assets and Subsidiary Stock”.
Additional Amounts
The Issuer and the Guarantors are required to make all payments under or with respect to the
Notes and the Note Guarantees free and clear of and without withholding or deduction for or on
account of any present or future tax, duty, levy, impost, assessment or other governmental charge
(including penalties, interest and other liabilities related thereto) (hereinafter “Taxes”) imposed
or levied by or on behalf of Canada, The Netherlands or any political
subdivision or any authority or agency therein or thereof having power to tax, or by any other
jurisdiction in which the Issuer or any Guarantor is organized or is otherwise resident or conducts
business for tax purposes or any jurisdiction from or through which payment is made by the Issuer
or any Guarantor or its agents (each, a “Relevant Taxing Jurisdiction”), unless the Issuer or any
Guarantor is required to withhold or deduct Taxes by law or by the interpretation or administration
thereof.
If the Issuer or any Guarantor is required to withhold or deduct any amount for or on account
of Taxes imposed by a Relevant Taxing Jurisdiction from any payment made under or with respect to
the Notes or any Note Guarantee, the Issuer or such Guarantor will be required to pay such
additional amounts (“Additional Amounts”) as may be necessary so that the net amount received by
holders of the Notes after such withholding or deduction (including any withholding or deduction
attributable to Additional Amounts payable hereunder) will not be less than the amount such holders
would have received if such Taxes had not been withheld or deducted; provided, however, that the
foregoing obligation to pay Additional Amounts does not apply to any Taxes to the extent such Taxes
would not have been so imposed:
(1)
but for the existence of any present or former connection between the relevant
holder (or the beneficial owner of such Notes) and the Relevant Taxing Jurisdiction
(other than the mere receipt of such payment or the mere acquisition, ownership,
holding or disposition of any Note);
(2)
but for the failure of the relevant holder (or the beneficial owner of such
Notes) to use its reasonable best efforts, to the extent such holder (or beneficial
owner) is legally entitled to do so, to comply upon written notice by the Issuer or a
Guarantor delivered 60 days prior to any payment date with a request to satisfy any
certification, identification or other reporting requirements, which shall include any
applicable forms or instructions, whether imposed by statute, treaty, regulation, or
administrative practice, concerning the nationality or residence of such holder or the
connection of such holder with the Relevant Taxing Jurisdiction;
(3)
if the payment could have been made without such deduction or withholding if
the relevant holder had presented the Note for payment within 60 days after the date on
which such payment became due and payable or the date on which payment thereof is duly
provided for, whichever is later (except to the extent that the holder would have been
entitled to Additional Amounts had the Note been presented on the last day of such
60-day period);
(4)
with respect to any payment of principal of (or premium, if any, on) or
interest on such Note to any holder who is a fiduciary or partnership or any person
other than the sole beneficial owner of such payment, to the extent that a beneficiary
with respect to such fiduciary, a member of such a partnership or the beneficial owner
of such payment would not have been entitled to the Additional Amounts had such
beneficiary, member or beneficial owner been the actual holder of such Note (but only
if there is no material cost or expense associated with transferring such Notes to such
beneficiary, partner or beneficial owner and no restriction on such transfer that is
outside the control of such beneficiary, partner or beneficial owner); or
(5)
with respect to any Canadian Taxes imposed on a payment of, in lieu of, on
account of, or in satisfaction of, interest (including deemed interest) made by the
Issuer or a Guarantor which is a resident of Canada, where the beneficiary of such
payment does not deal at arm’s length with the Issuer or such Guarantor, as the case
may be, for the purposes of the Income Tax Act (Canada).
The Issuer and the Guarantors will (i) make any required withholding or deduction and (ii)
remit the full amount deducted or withheld to the Relevant Taxing Jurisdiction in accordance with
applicable law. The Issuer and the Guarantors will make reasonable best efforts to obtain
certified copies of tax receipts evidencing the payment of any Taxes so deducted or withheld from
each Relevant Taxing Jurisdiction imposing such Taxes. The Issuer and the Guarantors will provide
to the Trustee, within a reasonable time after the date the payment of any Taxes so deducted or
withheld are due pursuant to applicable law, either a certified copy of tax receipts evidencing
such payment, or, if such tax receipts are not reasonably available to the Issuer or such
Guarantor, such other documentation that provides reasonable evidence of such payment by the Issuer
or such Guarantor.
The Issuer and the Guarantors, jointly and severally, will indemnify and hold harmless each
eligible holder of Notes and, upon written request of any eligible holder of Notes, reimburse such
holder for the amount of: (i) any Taxes levied or imposed on and paid by such holder as a result of
payments made under or with respect to the Notes held by such holder or any Note Guarantee; and
(ii) any Taxes levied or imposed with respect to any reimbursement under the foregoing clause (i)
or this clause (ii), so that the net amount received by such holder after such reimbursement will
not be less than the net amount such holder would have received if the Taxes giving rise to the
reimbursement described in clauses (i) and/or (ii) had not been imposed; provided, however, that
the indemnification obligation provided for in this paragraph shall not extend to Taxes imposed for
which the eligible holder of Notes would not have been eligible to receive payment of Additional
Amounts.
At least 30 days prior to each date on which any payment under or with respect to the Notes is
due and payable (unless such obligation to pay Additional Amounts arises shortly before or after
the 30th day prior to such date, in which case it shall be promptly thereafter), if the Issuer will
be obligated to pay Additional Amounts with respect to such payment, the Issuer will deliver to the
Trustee an officers’ certificate stating the fact that such Additional Amounts will be payable and
the amounts so payable and will set forth such other information necessary to enable the Trustee to
pay such Additional Amounts to holders of Notes on the payment date. Each such officers’
certificate shall be relied upon until receipt of a subsequent officers’ certificate addressing
such matters.
Whenever in the Indenture there is mentioned, in any context:
•
the payment of principal;
•
purchase prices in connection with a redemption of Notes;
•
interest; or
•
any other amount payable on or with respect to any of the Notes or the Note
Guarantees,
such reference shall be deemed to include payment of Additional Amounts or indemnification payments
as described hereunder to the extent that, in such context, Additional Amounts or indemnification
payments are, were or would be payable in respect thereof.
The Issuer will pay any present or future stamp, court or documentary taxes or any other
excise or property taxes, charges or similar levies that arise in any Relevant Taxing Jurisdiction
from the execution, delivery, enforcement or registration of the Notes, the Indenture, the Pledge
Agreement or any other document or instrument in relation thereto, or the receipt of any payments
with respect to the Notes, and the Issuer and the Guarantors, jointly and severally, will agree to
indemnify the holders for any such taxes paid by such holders.
The obligations described under this heading will survive any termination, defeasance or
discharge of the Indenture and will apply mutatis mutandis to any successor Person to the Issuer or
any Guarantor and to any jurisdiction in which the Issuer or any Guarantor is organized or is
otherwise resident or conducts business for tax purposes or any jurisdiction from or through which
payment is made by the Issuer or any Guarantors or their respective agents.
Redemption for Changes in Withholding Taxes
The Issuer will be entitled to redeem the Notes, at its option, at any time as a whole but not
in part, upon not less than 30 nor more than 60 days’ notice, at 100% of the principal amount
thereof, plus accrued and unpaid interest (if any) to the date of redemption (subject to the right
of holders of record on the relevant record date to receive interest due on the relevant interest
payment date), in the event the Issuer has become or would become obligated to pay, on the next
date on which any amount would be payable with respect to the Notes, any Additional Amounts or
indemnification payments as a result of:
•
a change in or an amendment to the laws (including any regulations promulgated
thereunder) of a Relevant Taxing Jurisdiction, which change or amendment is announced
after March 18, 2004; or
any change in or amendment to any official position regarding the application or
interpretation of such laws or regulations, which change or amendment is announced
after March 18, 2004,
and, in each case, the Issuer cannot avoid such obligation by taking reasonable measures available
to it.
Before the Issuer publishes or mails notice of redemption of the Notes as described above, the
Issuer will deliver to the Trustee an officers’ certificate to the effect that it cannot avoid its
obligation to pay Additional Amounts by taking reasonable measures available to it and an opinion
of independent legal counsel of recognized standing stating that the Issuer would be obligated to
pay Additional Amounts as a result of a change in tax laws or regulations or the application or
interpretation of such laws or regulations. No such notice of redemption may be given more than 60
days before or more than 270 days after the Issuer first becomes liable to pay any Additional
Amounts or indemnification payments as a result of a change or amendment described above.
Optional Redemption
Except as set forth below, and except as set forth above under “ — Redemption for Changes in
Withholding Taxes”, the Issuer will not be entitled to redeem the Notes prior to April 1, 2009.
On and after April 1, 2009, the Issuer will be entitled at its option to redeem all or a
portion of the Notes upon not less than 30 nor more than 60 days’ notice, at the redemption prices
(expressed in percentages of principal amount on the redemption date), plus accrued and unpaid
interest to the redemption date (subject to the right of holders of record on the relevant record
date to receive interest due on the relevant interest payment date), if redeemed during the
12-month period commencing on April 1 of the years set forth below:
Period
Redemption Price
2009
104.875
%
2010
103.250
%
2011
101.625
%
2012 and thereafter
100.000
%
Selection and Notice of Redemption
If the Issuer is redeeming less than all of the Notes of any series at any time, the Trustee
will select Notes of such series on a pro rata basis, by lot or by such other method as the Trustee
in its sole discretion shall deem to be fair and appropriate.
The Issuer will redeem Notes of $1,000 or less in whole and not in part. The Issuer will
cause notices of redemption to be mailed by first-class mail at least 30 but not more than 60 days
before the redemption date to each holder of Notes to be redeemed at its registered address.
If any Note is to be redeemed in part only, the notice of redemption that relates to that Note
will state the portion of the principal amount thereof to be redeemed. The Issuer will issue a new
Note in a principal amount equal to the unredeemed portion of the original Note in the name of the
holder thereof upon cancellation of the original Note. Notes called for redemption become due on
the date fixed for redemption. On and after the redemption date, unless the Issuer fails to redeem
the Notes, interest ceases to accrue on Notes called for redemption.
Mandatory Redemption
The Issuer is not required to make any mandatory redemption or sinking fund payments with
respect to the Notes.
Upon the occurrence of any of the following events (each, a “Change of Control”), the Issuer
will be required to offer to purchase each holder’s Notes at a purchase price in cash equal to 101%
of the principal amount thereof on the date of purchase plus accrued and unpaid interest, if any,
to the date of purchase (subject to the right of holders of record on the relevant record date to
receive interest due on the relevant interest payment date):
(1)
the Permitted Holders cease to own, or to have the power to direct the voting
of, at least 35% of the total voting power of the Voting Stock of Parent;
(2)
any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of
the Exchange Act), other than one or more Permitted Holders, is or becomes the
“beneficial owner” (as defined in Rule 13d-3 and 13d-5 under the Exchange Act, except
that for purposes of this clause (2) such person shall be deemed to have “beneficial
ownership” of all shares that any such person has the right to acquire, whether such
right is exercisable immediately or only after the passage of time), directly or
indirectly, of more than 35% of the total voting power of the Voting Stock of Parent;
provided, however, that the Permitted Holders own or have the right to direct the
voting of a lesser percentage of the total voting power of the Voting Stock of Parent
than such other person or group and do not have the right or ability by voting power,
contract or otherwise to elect or designate for election a majority of the Board of
Directors of Parent;
(3)
individuals who on the Issue Date constituted the Board of Directors of Parent
(together with any new directors whose election by such Board of Directors or whose
nomination for election by the shareholders of Parent was recommended or approved by a
vote of a majority of the directors of Parent then still in office who were either
directors on the Issue Date or whose election or nomination for election was previously
so recommended or approved by a majority of such directors who, at such time, had been
so recommended or approved) cease for any reason to constitute a majority of the Board
of Directors of Parent then in office;
(4)
the adoption of a plan relating to the liquidation or dissolution of the Issuer
(other than as part of a Permitted Finco Collapse Transaction), the Company or Parent;
(5)
the merger or consolidation of Parent with or into another Person or the merger
of another Person with or into Parent, or the sale of all or substantially all the
assets of Parent (determined on a consolidated basis) to another Person (other than, in
all such cases, a Person that is controlled by the Permitted Holders), other than a
transaction following which (A) in the case of a merger or consolidation transaction,
holders of securities that represented 100% of the Voting Stock of Parent immediately
prior to such transaction (or other securities into which such securities are converted
as part of such merger or consolidation transaction) own directly or indirectly at
least a majority of the voting power of the Voting Stock of the surviving Person in
such merger or consolidation transaction immediately after such transaction and in
substantially the same proportion as before the transaction and (B) in the case of a
sale of assets transaction, the transferee Person becomes a Subsidiary of the
transferor of such assets;
(6)
Parent ceases to own and have the power to direct the voting of, directly or
indirectly, a majority of the total voting power of the Voting Stock of each of the
Issuer and the Finco Guarantors; or
(7)
Parent (including any entity controlling Parent) ceases to own and have the
power to direct the voting of, directly or indirectly, a majority of the total voting
power of the Voting Stock of the Company.
Within 30 days following any Change of Control, the Issuer will mail a notice to each holder
with a copy to the Trustee (the “Change of Control Offer”) stating:
(1)
that a Change of Control has occurred and that the Issuer is making an offer to
purchase each holder’s Notes at a purchase price in cash equal to 101% of the principal
amount thereof on the date of purchase, plus accrued and unpaid interest, if any, to
the date of purchase (subject to the
right of holders of record on the relevant record date to receive interest on the
relevant interest payment date);
(2)
the circumstances and relevant facts regarding such Change of Control
(including information with respect to pro forma historical income, cash flow and
capitalization, in each case after giving effect to such Change of Control);
(3)
the purchase date (which shall be no earlier than 30 days nor later than 60
days from the date such notice is mailed); and
(4)
the instructions that a holder must follow in order to have its Notes
purchased.
The Issuer will not be required to make a Change of Control Offer following a Change of
Control if a third party makes the Change of Control Offer in the manner, at the times and
otherwise in compliance with the requirements set forth in the Indenture applicable to a Change of
Control Offer made by the Issuer and purchases all Notes validly tendered and not withdrawn under
such Change of Control Offer.
The Issuer will comply, to the extent applicable, with the requirements of Section 14(e) of
the Exchange Act and any other securities laws or regulations in connection with the repurchase of
Notes as a result of a Change of Control. To the extent that the provisions of any securities laws
or regulations conflict with the provisions of the covenant described hereunder, the Issuer will
comply with the applicable securities laws and regulations and shall not be deemed to have breached
its obligations under the covenant described hereunder by virtue of its compliance with such
securities laws or regulations.
The Change of Control Offer feature of the Notes may in certain circumstances make it more
difficult or discourage a sale or takeover of Parent and, thus, the removal of incumbent management
of Parent and the Company. The Change of Control Offer feature is a result of negotiations between
the Issuer, the Company, Parent and the initial purchasers of the Notes. Parent has no present
intention to engage in a transaction involving a Change of Control, although it is possible that
Parent could decide to do so in the future. Subject to the limitations discussed below, Parent
could, in the future, enter into certain transactions, including acquisitions, refinancings or
other recapitalizations, that would not constitute a Change of Control under the Indenture, but
that could increase the amount of indebtedness outstanding at such time of Parent or the Company or
otherwise affect Parent’s or the Company’s capital structure or credit ratings. Additionally, the
Indenture will not restrict Parent’s ability to incur indebtedness.
Future indebtedness that the Company or Parent may incur may contain prohibitions on the
occurrence of certain events that would constitute a Change of Control or require the repurchase of
such indebtedness upon a Change of Control. Moreover, the exercise by the holders of their right
to require the Issuer to repurchase the Notes could cause a default under such indebtedness, even
if the Change of Control itself does not, due to the financial effect of such repurchase on the
Company. Finally, the Issuer’s ability to pay cash to the holders of Notes following the
occurrence of a Change of Control will be limited by the Company’s ability to repay the First
Mortgage Bonds which will in turn be dependent upon the Company’s then existing financial
resources. There can be no assurance that sufficient funds will be available to the Company when
necessary to make any required repurchases.
The provisions under the Indenture relative to the Issuer’s obligation to make an offer to
repurchase the Notes as a result of a Change of Control may be waived or modified at any time prior
to the occurrence of a Change of Control with the written consent of the holders of a majority in
principal amount of the Notes.
Certain Covenants
The Indenture contains covenants including, among others, the following:
Limitation on Indebtedness
(a) The Company will not, and will not permit any Restricted Subsidiary to, Incur, directly or
indirectly, any Indebtedness; provided that the Company and the Company Guarantors will be entitled
to Incur
Indebtedness if, on the date of such Incurrence and after giving effect thereto on a pro forma
basis, no Default has occurred and is continuing and the Consolidated Coverage Ratio exceeds 2.0 to 1.
(b) Notwithstanding the foregoing paragraph (a), the Company and the Restricted Subsidiaries
will be entitled to Incur any or all of the following Indebtedness:
(1)
Indebtedness Incurred pursuant to the Credit Agreements
(including any Guarantees thereof); provided that, after giving effect to any
such Incurrence, the aggregate principal amount of all Indebtedness Incurred
under this clause (1) and then outstanding does not exceed the sum of (x) 65%
of the book value of the inventory of the Company and its Restricted
Subsidiaries (other than any inventory constituting Inventory and Related
Assets pledged, sold or otherwise transferred or encumbered in connection with
a Qualified Securitization Transaction); and (y) 85% of the book value of the
accounts receivable of the Company and its Restricted Subsidiaries (other than
any accounts receivable constituting Receivables and Related Assets pledged,
sold or otherwise transferred or encumbered in connection with a Qualified
Securitization Transaction);
(2)
Indebtedness owed to and held by the Company or a Wholly-Owned
Subsidiary; provided, that (A) any subsequent issuance or transfer of any
Capital Stock which results in any such Wholly-Owned Subsidiary ceasing to be a
Wholly-Owned Subsidiary or any subsequent transfer of such Indebtedness (other
than to the Company or a Wholly-Owned Subsidiary) shall be deemed, in each
case, to constitute the Incurrence of such Indebtedness by the obligor thereon
and (B) if the Company is the obligor on such Indebtedness (other than
customary Indebtedness to a Securitization Subsidiary or Indebtedness to a
Company Guarantor), such Indebtedness is expressly subordinated after a Default
to the prior payment in full in cash of all obligations with respect to the
Notes;
(3)
Indebtedness Incurred under the First Mortgage Bonds in an
aggregate principal amount of $800.0 million issued as Collateral for the
Notes;
(4)
Indebtedness outstanding on the Issue Date (but excluding
Indebtedness described in clause (1), (2) or (3) of this covenant);
(5)
Indebtedness of a Restricted Subsidiary Incurred and
outstanding on or prior to the date on which such Subsidiary was acquired by
the Company (other than Indebtedness Incurred in connection with, or to provide
all or any portion of the funds or credit support utilized to consummate, the
transaction or series of related transactions pursuant to which such Subsidiary
became a Subsidiary or was acquired by the Company); provided that on the date
of such acquisition and after giving pro forma effect thereto, the Company
would have been able to Incur at least $1.00 of additional Indebtedness
pursuant to paragraph (a) of this covenant;
(6)
Refinancing Indebtedness in respect of Indebtedness Incurred
pursuant to paragraph (a) or pursuant to clause (3), (4) or (5) above, this
clause (6) or clause (17) below; provided that, to the extent such Refinancing
Indebtedness directly or indirectly Refinances Indebtedness of a Subsidiary
Incurred pursuant to clause (5), such Refinancing Indebtedness shall be
Incurred only by such Subsidiary;
(7)
Hedging Obligations Incurred to protect the Company and its
Restricted Subsidiaries from fluctuations in interest rates, commodity prices
and exchange rates and not for speculative purposes;
(8)
Indebtedness Incurred by a Securitization Subsidiary in
connection with a Qualified Securitization Transaction; provided that in the
event such Securitization Subsidiary ceases to qualify as a Securitization
Subsidiary or such Indebtedness in any other manner falls outside this clause
(8), such Indebtedness will be deemed, in each case, to be
Incurred at such time by such Securitization Subsidiary other than in
reliance on this clause (8);
(9)
Indebtedness (including Capital Lease Obligations) of the
Company or any Restricted Subsidiary (including any Refinancing Indebtedness
with respect thereto) Incurred to finance the acquisition, construction or
improvement of any fixed or capital assets, including any Indebtedness assumed
in connection with the acquisition of any such assets, in an aggregate
principal amount which, when taken together with all other Indebtedness of the
Company or any Restricted Subsidiary Incurred pursuant to this clause (9) and
then outstanding, does not exceed $50.0 million;
(10)
Indebtedness of the Company or any Restricted Subsidiary
arising from customary agreements providing for indemnification, adjustment of
purchase price or similar obligations, in each case, Incurred or assumed in
connection with the disposition of any business, fixed or capital assets or a
Subsidiary;
(11)
any Guarantee by the Company or a Company Guarantor of any
Indebtedness of the Company or a Restricted Subsidiary (other than a
Securitization Subsidiary and other than Indebtedness of a Restricted
Subsidiary to which the proviso to clause (6) applies) that was permitted to be
Incurred by the Company or such Restricted Subsidiary under the terms of this
covenant at the time so Incurred;
(12)
Indebtedness of the Company or any Restricted Subsidiary
arising from the honoring by a bank or other financial institution of a check,
draft or similar instrument inadvertently (except in the case of daylight
overdrafts) drawn against insufficient funds in the ordinary course of
business, but only to the extent that such Indebtedness is satisfied within
five Business Days of Incurrence;
(13)
obligations of the Company or any Restricted Subsidiary in
respect of bid, performance, surety or appeal bonds and completion guarantees
provided in the ordinary course of business of the Company and its Restricted
Subsidiaries;
(14)
Indebtedness consisting of Note Guarantees of the Company and
the Company Guarantors;
(15)
Subordinated Obligations in an aggregate amount not exceeding
$100.0 million at any time outstanding; provided that the Stated Maturity of
such Subordinated Obligations is no earlier than the 91st day following the
Stated Maturity of the Notes;
(16)
Indebtedness of the Company and the Company Guarantors in an
aggregate principal amount not to exceed $50.0 million at any time outstanding;
and
(17)
Indebtedness of the Company or any Restricted Subsidiary
incurred during any Suspension Period.
(c) Notwithstanding the foregoing, the Company shall not permit the aggregate principal amount
of Bonds outstanding at any one time to exceed $900.0 million.
(d) For purposes of determining compliance with this covenant, (1) in the event that an item
of Indebtedness meets the criteria of more than one of the types of Indebtedness described above,
the Company, in its sole discretion, will classify such item of Indebtedness at the time of
Incurrence and only be required to include the amount and type of such Indebtedness in one of the
above clauses and (2) the Company will be entitled to divide and classify an item of Indebtedness
in more than one of the types of Indebtedness described above.
(e) For purposes of determining compliance with any U.S. dollar denominated restriction on the
Incurrence of Indebtedness where the Indebtedness Incurred is denominated in a different currency,
the amount of such Indebtedness will be the U.S. Dollar Equivalent determined on the date of the
Incurrence of such Indebtedness;
provided that if any such Indebtedness denominated in a different currency is subject to a
Currency Agreement with respect to U.S. dollars covering all principal, premium, if any, and
interest payable on such Indebtedness, the amount of such Indebtedness expressed in U.S. dollars
will be as provided in such Currency Agreement. The principal amount of any Refinancing
Indebtedness Incurred in the same currency as the Indebtedness being Refinanced will be the U.S.
Dollar Equivalent of the Indebtedness being Refinanced, except to the extent that (1) such U.S.
Dollar Equivalent was determined based on a Currency Agreement, in which case the Refinancing
Indebtedness will be determined in accordance with the preceding sentence, and (2) the principal
amount of the Refinancing Indebtedness exceeds the principal amount of the Indebtedness being
Refinanced, in which case the U.S. Dollar Equivalent of such excess will be determined on the date
such Refinancing Indebtedness is Incurred.
(f) At any time other than during a Suspension Period, the Company will not, and will not
permit any Company Guarantor to, directly or indirectly, incur any Indebtedness that is or purports
to be by its terms (or by the terms of any agreement governing such Indebtedness) subordinated to
any other Indebtedness of the Company or of such Company Guarantor, as the case may be, unless such
Indebtedness is also by its terms (or by the terms of any agreement governing such Indebtedness)
made expressly subordinate to the First Mortgage Bonds (in the case of the Company) and the Note
Guarantee of the Company or such Company Guarantor, as the case may be, to the same extent and in
the same manner as such Indebtedness is subordinated to such other Indebtedness of the Company or
such Company Guarantor, as the case may be.
Limitation on Restricted Payments
(a) The Company will not, and will not permit any Restricted Subsidiary, directly or
indirectly, to make a Restricted Payment if at the time the Company or such Restricted Subsidiary
makes such Restricted Payment:
(1)
a Default shall have occurred and be continuing (or would result therefrom);
(2)
the Company would not be permitted to Incur an additional $1.00
of Indebtedness pursuant to paragraph (a) of the covenant described under “ —
Limitation on Indebtedness”; or
(3)
the aggregate amount of such Restricted Payment and all other
Restricted Payments since the Issue Date would exceed the sum of (without
duplication):
(A)
50% of the Consolidated Net Income accrued
during the period (treated as one accounting period) from the beginning
of the first full fiscal quarter commencing after the Issue Date to the
end of the most recent fiscal quarter for which financial statements
have been made publicly available on or prior to the date of such
Restricted Payment (or, in case such Consolidated Net Income shall be a
deficit, minus 100% of such deficit); plus
(B)
100% of the aggregate Net Cash Proceeds
received by the Company from the issuance or sale of its Capital Stock
(other than Disqualified Stock) subsequent to the Issue Date (other
than an issuance or sale to a Subsidiary of the Company and other than
an issuance or sale to an employee stock ownership plan or to a trust
established by the Company or any of its Subsidiaries for the benefit
of their employees) and 100% of any cash capital contribution received
by the Company from its shareholders subsequent to the Issue Date; plus
(C)
the amount by which Indebtedness of the Company
issued after the Issue Date is reduced on the Company’s balance sheet
upon the conversion or exchange (other than by a Subsidiary of the
Company) subsequent to the Issue Date of any Indebtedness of the
Company into Capital Stock (other than Disqualified Stock) of the
Company (less the amount of any cash, or the fair value of any other
property, distributed by the Company upon such conversion or exchange);
plus
an amount equal to the sum of (x) the net
reduction in the Investments (other than Permitted Investments) made by
the Company or any Restricted Subsidiary in any Person after the Issue
Date resulting from repurchases, repayments or redemptions of such
Investments by such Person, proceeds realized on the sale of such
Investment and proceeds representing the return of capital, in each
case received by the Company or any Restricted Subsidiary, (y) the
amount of any Guarantee or similar arrangement that has terminated or
expired or by which it has been reduced to the extent that it was
treated as a Restricted Payment after the Issue Date, net of any
amounts paid by the Company or a Restricted Subsidiary in respect of
such Guarantee or similar arrangement, and (z) to the extent such
Person is an Unrestricted Subsidiary, the portion (proportionate to the
Company’s equity interest in such Subsidiary) of the fair market value
of the net assets of such Unrestricted Subsidiary at the time such
Unrestricted Subsidiary is designated a Restricted Subsidiary;
provided, however, that the amounts set forth in clauses (x), (y) and
(z) above shall not exceed, in the case of any such Person or
Unrestricted Subsidiary, the amount of Investments (excluding Permitted
Investments) previously made and treated as a Restricted Payment by the
Company or any Restricted Subsidiary in such Person or Unrestricted
Subsidiary as reduced pursuant to clause (b)(7) below; minus
(E)
an amount equal to the contributions required
to be made by the Company or any Restricted Subsidiary to the Ispat
Inland Inc. Pension Plan following the Issue Date pursuant to Section
III.A.4 of the July 9, 2003 amendment to the PBGC Agreement relating to
excess EBITDA contributions to the Ispat Inland Inc. Pension Plan.
(b)
The preceding provisions will not prohibit:
(1)
any Restricted Payment made out of the Net Cash Proceeds of the
substantially concurrent sale of, or made by exchange for, Capital Stock of the
Company (other than Disqualified Stock and other than Capital Stock issued or
sold to a Subsidiary of the Company or an employee stock ownership plan or to a
trust established by the Company or any of its Subsidiaries for the benefit of
their employees) or a substantially concurrent cash capital contribution
received by the Company from its shareholders; provided that (A) such
Restricted Payment shall be excluded in the calculation of the amount of
Restricted Payments under clause (3) of paragraph (a) above and (B) the Net
Cash Proceeds from such sale or such cash capital contribution (to the extent
so used for such Restricted Payment) shall be excluded from the calculation of
amounts under clause (3)(B) of paragraph (a) above;
(2)
any purchase, repurchase, redemption, defeasance or other
acquisition or retirement for value of Subordinated Obligations of the Company
or a Company Guarantor made by exchange for, or out of the proceeds of the
substantially concurrent sale of, Subordinated Obligations; provided that (A)
the Stated Maturity of the Subordinated Obligations being issued or exchanged
to purchase, redeem, defease, acquire or retire for value such existing
Subordinated Obligations shall be no earlier than the 91st day following the
Stated Maturity of the Notes and (B) such purchase, repurchase, redemption,
defeasance or other acquisition or retirement for value shall be excluded in
the calculation of the amount of Restricted Payments under clause (3) of
paragraph (a) above;
(3)
dividends paid within 60 days after the date of declaration
thereof if at such date of declaration such dividend would have complied with
this covenant; provided that at the time of payment of such dividend, no other
Default shall have occurred and be continuing (or result therefrom); provided,
further, that such dividend shall be included in the calculation of the amount
of Restricted Payments under clause (3) of paragraph (a) above;
so long as no Default has occurred and is continuing, the
repurchase or other acquisition of shares of Capital Stock of Parent or any of
its Subsidiaries from employees, former employees, directors or former
directors of the Company or any of its Subsidiaries (or permitted transferees
of such employees, former employees, directors or former directors), pursuant
to the terms of the agreements (including employment agreements) or plans (or
amendments thereto) approved by the Board of Directors of Parent under which
such individuals purchase or sell or are granted the option to purchase or
sell, shares of such Capital Stock; provided that the aggregate amount of such
repurchases and other acquisitions shall not exceed $1,000,000 in any calendar
year; provided, further, that such repurchases and other acquisitions shall be
excluded in the calculation of the amount of Restricted Payments under clause
(3) of paragraph (a) above;
(5)
Investments in the Existing Joint Ventures in an aggregate
amount not exceeding $15.0 million per twelve-month period since the Issue
Date; provided that to the extent Investments in the Existing Joint Ventures
actually made in any twelve-month period are less than the amount permitted to
be made (giving effect to all previous carryforwards on a cumulative basis),
the amount of the difference may be carried forward and used in a subsequent
twelve-month period; provided, further, that such Investments shall be excluded
in the calculation of the amount of Restricted Payments under clause (3) of
paragraph (a) above;
(6)
advances to the Existing Joint Ventures to fund working capital
requirements in the ordinary course of business in an aggregate principal
amount outstanding at any time not to exceed $10.0 million; provided that such
advances shall be excluded in the calculation of the amount of Restricted
Payments under clause (3) of paragraph (a) above;
(7)
Restricted Payments not exceeding $25.0 million in the
aggregate; provided that (A) at the time of such Restricted Payments, no
Default shall have occurred and be continuing (or result therefrom) and (B)
such Restricted Payments shall be included in the calculation of the amount of
Restricted Payments under clause (3) of paragraph (a) above; provided, further,
that any such Restricted Payment made after the Issue Date shall no longer be
included in such $25.0 million to the extent (A) in the case of a Restricted
Payment that is an Investment, (i) the Company or any Restricted Subsidiary (x)
has received a return of capital in respect thereof or (y) if such Investment
was a loan or advance, has received cash in repayment of such loan or advance
and (B) in the case of a Restricted Payment that is a Guarantee or similar
arrangement, such Guarantee or similar arrangement has terminated or expired
or, to the extent such Guarantee or similar arrangement has been reduced, net
of any amounts paid by the Company or a Restricted Subsidiary in respect of
such Guarantee or similar arrangement and (ii) the Company has elected to have
the amount received pursuant to the foregoing clause (i) increase the amount of
Restricted Payments available pursuant to this clause (b)(7) in lieu of
increasing the amount set forth in clause (a)(3)(D) above;
(8)
Restricted Payments made during any Suspension Period; provided
that such Restricted Payments shall be included in the calculation of the
amount of Restricted Payments under clause (3) of paragraph (a) above;
(9)
any Note Guarantee provided that such Note Guarantees shall be
excluded in the calculation of the amount of Restricted Payments under clause
(3) of paragraph (a) above;
(10)
in connection with any Permitted Finco Collapse Transaction,
the Restricted Payment, if any, deemed to be made pursuant to the last
paragraph of the Permitted Finco Collapse Transaction definition; provided that
such Restricted Payment shall be included in the calculation of the amount of
Restricted Payments under clause (3) of paragraph (a) above; and
Refinancing Indebtedness in respect of the Company’s Guarantee
of Indebtedness of I/N Kote outstanding on the Issue Date.
Limitation on Restrictions on Distributions from Restricted Subsidiaries
The Company will not, and will not permit any Restricted Subsidiary to, create or otherwise
cause or permit to exist or become effective any consensual encumbrance or restriction on the
ability of any Restricted Subsidiary to (a) pay dividends or make any other distributions on its
Capital Stock to the Company or a Restricted Subsidiary or pay any Indebtedness owed to the
Company, (b) make any loans or advances to the Company or (c) transfer any of its property or
assets to the Company, except:
(1)
with respect to clauses (a), (b) and (c),
(A)
any encumbrance or restriction pursuant to an
agreement in effect at or entered into on the Issue Date;
(B)
any encumbrance or restriction with respect to
a Restricted Subsidiary pursuant to an agreement relating to any
Indebtedness Incurred by such Restricted Subsidiary on or prior to the
date on which such Restricted Subsidiary was acquired by the Company
(other than Indebtedness Incurred as consideration in, or to provide
all or any portion of the funds or credit support utilized to
consummate, the transaction or series of related transactions pursuant
to which such Restricted Subsidiary became a Restricted Subsidiary or
was acquired by the Company) and outstanding on such date which
encumbrance or restriction does not relate to any Person other than
such Restricted Subsidiary;
(C)
any encumbrance or restriction pursuant to an
agreement effecting a Refinancing of Indebtedness Incurred pursuant to
an agreement referred to in clause (A), (B) or (G) of clause (1) of
this covenant or this clause (C) or contained in any amendment to an
agreement referred to in clause (A) or (B) of clause (1) of this
covenant or this clause (C); provided that the encumbrances and
restrictions with respect to such Restricted Subsidiary contained in
any such refinancing agreement or amendment are not less favorable in
any material respect to the holders of Notes than encumbrances and
restrictions with respect to such Restricted Subsidiary contained in
such predecessor agreements (as determined by the Company in its
reasonable judgment);
(D)
any encumbrance or restriction with respect to
a Securitization Subsidiary in connection with a Qualified
Securitization Transaction; provided that such encumbrances and
restrictions are customarily required by the institutional sponsor or
arranger of such Qualified Securitization Transaction in similar types
of documents relating to the purchase of similar receivables, other
rights to payment or inventory in connection with the financing
thereof;
(E)
any restriction with respect to a Restricted
Subsidiary imposed pursuant to an agreement entered into for the sale
or disposition of all or substantially all the Capital Stock or assets
of such Restricted Subsidiary pending the closing of such sale or
disposition;
(F)
customary provisions in joint venture
agreements relating solely to the securities, assets and revenues of
such joint venture; and
(G)
encumbrances or restrictions incurred or
entered into during any Suspension Period; and
any such encumbrance or restriction (i) consisting of customary nonassignment provisions in leases governing leasehold interests to the extent such provisions restrict the transfer of the lease or the property leased thereunder or (ii) that restricts in a customary manner the subletting, assignment or transfer of any property or asset that is subject to a lease, license or similar contract;
(B)
restrictions contained in security agreements
or mortgages securing Indebtedness of a Restricted Subsidiary to the
extent such restrictions restrict the transfer of the property subject
to such security agreements or mortgages; and
(C)
any encumbrance or restriction by virtue of any
transfer or agreement to transfer, option or right with respect to, or
Lien on, any property or assets of any Restricted Subsidiary not
otherwise prohibited by the Indenture.
Limitation on Sales of Assets and Subsidiary Stock
(a) At any time other than during a Suspension Period, the Company will not, and will not
permit any Restricted Subsidiary to, directly or indirectly, consummate any Asset Disposition
unless:
(1)
the Company or such Restricted Subsidiary receives
consideration at the time of such Asset Disposition at least equal to the fair
market value (including as to the value of all non-cash consideration), as
determined in good faith by the Board of Directors of the Company, of
the shares and assets subject to such Asset Disposition;
(2)
at least 75% of the consideration thereof received by the
Company or such Restricted Subsidiary is in the form of cash or cash
equivalents; and
(3)
an amount equal to 100% of the Net Available Cash from such
Asset Disposition is applied by the Company (or such Restricted Subsidiary, as
the case may be):
(A)
first, (i) to the extent that such Asset
Disposition is of assets other than Inventory Collateral, to the extent
the Company elects or is required, to repay Indebtedness under any
Credit Agreement and (ii) to the extent such Asset Disposition is of
Inventory Collateral, to the extent the Company elects or is required,
to repay Indebtedness secured by a Permitted Inventory Collateral Lien
on the Inventory Collateral ranking prior to the Lien securing the
Company’s Note Guarantee;
(B)
second, to the extent of the balance of such
Net Available Cash after application in accordance with clause (A), to
the extent the Company elects, to acquire Additional Assets within one
year (or enter into a binding commitment therefor within such one-year
period and acquire such Additional Assets within 6 months after such
one-year period) from the later of the date of such Asset Disposition
or the receipt of such Net Available Cash and to the extent the assets
disposed of constituted Inventory Collateral, such Additional Assets
shall be Inventory Collateral;
(C)
third, to the extent of the balance of such Net
Available Cash after application in accordance with clauses (A) and
(B), the Issuer will make an offer to the holders of the Notes (and (i)
except to the extent such Net Available Cash was from an Asset
Disposition of Inventory Collateral, the Company may make an offer to
holders of other Senior Indebtedness of the Company designated by the
Company and (ii) to the extent such Net Available Cash was from an
Asset Disposition of Inventory Collateral, the Company may make an
offer to holders of other Indebtedness with a Permitted Inventory
Collateral Lien ranking prior
to or pari passu with the Lien on the Inventory Collateral securing
the Company’s Note Guarantee) to purchase Notes (and, if applicable,
such other Indebtedness of the Company) pursuant to and subject to
the conditions contained in the Indenture; and
(D)
fourth, any balance of such Net Available Cash
after application in accordance with clauses (A), (B) and (C) above (or
to the extent any offer made in accordance with clause (C) above is not
accepted) may be used by the Company for its general corporate
purposes.
Notwithstanding the foregoing provisions of this covenant, the Issuer will not be required to
apply any Net Available Cash in accordance with clause (C) above until such time as the aggregate
Net Available Cash from all Asset Dispositions which is not applied in accordance with clauses (A)
and (B) exceeds $10.0 million. Pending application of Net Available Cash pursuant to this
covenant, such Net Available Cash may be invested in any manner not prohibited by the Indenture or
applied to temporarily reduce revolving credit indebtedness.
(b)
For the purposes of this covenant, the following are deemed to be cash or cash
equivalents:
(1)
the assumption of Indebtedness of the Company or any Restricted
Subsidiary and the release of the Company or such Restricted Subsidiary from
all liability on such Indebtedness in connection with such Asset Disposition;
and
(2)
securities received by the Company or any Restricted Subsidiary
from the transferee that are promptly converted by the Company or such
Restricted Subsidiary into cash.
(c) In the event of an Asset Disposition that requires or results in the purchase of Notes
(and, if applicable, other Indebtedness of the Company) pursuant to clause (a)(3)(C) above, the
Issuer will purchase Notes tendered pursuant to an offer by the Company for the Notes (and, if
applicable, the Company will purchase such other Indebtedness of the Company) at a purchase price
of 100% of their principal amount (or, subject to the text below relating to a lesser price, in the
event such other Indebtedness of the Company was issued with original issue discount, 100% of the
accreted value thereof) without premium, plus accrued but unpaid interest (or, in respect of such
other Indebtedness of the Company, such lesser price, if any, as may be provided for by the terms
of such Indebtedness) in accordance with the procedures (including prorating in the event of
oversubscription) set forth in the Indenture. If the aggregate purchase price of the securities
tendered exceeds the Net Available Cash allotted to their purchase, the Notes and, if applicable,
such other Indebtedness will be purchased on a pro rata basis but in round denominations, which in
the case of the Notes will be denominations of $1,000 principal amount or multiples thereof.
(d) The Issuer will comply, to the extent applicable, with the requirements of Section 14(e)
of the Exchange Act and any other securities laws or regulations in connection with the repurchase
of Notes pursuant to this covenant. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this covenant, the Issuer will comply with the applicable
securities laws and regulations and will not be deemed to have breached its obligations under the
covenant described above by virtue of its compliance with such securities laws or regulations.
Limitation on Affiliate Transactions
(a) The Company will not, and will not permit any Restricted Subsidiary to, enter into or
permit to exist any transaction (including the purchase, sale, lease or exchange of any property,
employee compensation arrangements or the rendering of any service) with, or for the benefit of,
any Affiliate of the Company (an “Affiliate Transaction”) unless:
(1)
the terms of the Affiliate Transaction are no less favorable to
the Company or such Restricted Subsidiary than those that could be obtained at
the time of the Affiliate Transaction in arm’s-length dealings with a Person
who is not an Affiliate;
if such Affiliate Transaction involves an amount in excess of
$5.0 million, the terms of the Affiliate Transaction are set forth in writing
and a majority of the Board of Directors of the Company has determined in good
faith that the criteria set forth in clause (1) are satisfied and has approved
the relevant Affiliate Transaction as evidenced by a resolution; and
(3)
if such Affiliate Transaction involves an amount in excess of
$25.0 million, the Board of Directors of the Company shall also have received a
written opinion from an Independent Qualified Party to the effect that such
Affiliate Transaction is fair, from a financial standpoint, to the Company and
its Restricted Subsidiaries or is not less favorable to the Company and its
Restricted Subsidiaries than could reasonably be expected to be obtained at the
time in an arm’s-length transaction with a Person who was not an Affiliate.
(b)
The provisions of the preceding paragraph (a) will not prohibit:
(1)
any Investment (other than a Permitted Investment) or other
Restricted Payment, in each case permitted to be made pursuant to the covenant
described under “ — Limitation on Restricted Payments”;
(2)
any issuance of securities, or other payments, awards or grants
in cash, securities or otherwise pursuant to, or the funding of, employment
arrangements, stock options and stock ownership plans approved by the Board of
Directors of Parent or the Company;
(3)
loans or advances to employees or directors in the ordinary
course of business of the Company or its Restricted Subsidiaries, but in any
event not to exceed $2.5 million in the aggregate outstanding at any one time;
(4)
indemnities made in the ordinary course of business to
employees or directors of the Company, its Subsidiaries, the Issuer and the
Finco Guarantors;
(5)
the payment of reasonable fees to directors of the Company and
its Restricted Subsidiaries who are not employees of the Company or its
Restricted Subsidiaries or Parent;
(6)
any transaction with a Restricted Subsidiary or joint venture
or similar entity (including, without limitation, the Existing Joint Ventures)
which would constitute an Affiliate Transaction solely because the Company or a
Restricted Subsidiary owns an equity interest in or otherwise controls such
Restricted Subsidiary or joint venture or similar entity (including, without
limitation, the Existing Joint Ventures);
(7)
the issuance or sale of any Capital Stock (other than
Disqualified Stock) of the Company;
(8)
the purchase and sale of raw materials, steel and steel-related
products and services with Affiliates conducted in the ordinary course of
business of the Company and its Restricted Subsidiaries, the terms of which are
no less favorable to the Company or any Restricted Subsidiary than those that
could be obtained at the time of such transaction in arm’s-length dealings with
a Person who is not an Affiliate;
(9)
the payment of reasonable management fees to Parent or its
Subsidiaries in an aggregate amount not to exceed $10.0 million in any fiscal
year;
(10)
sales or other transfers or dispositions of (x) Receivables and
Related Assets and (y) Inventory and Related Assets each in Qualified
Securitization Transactions, acquisitions of Permitted Investments in
connection with a Qualified Securitization Transaction and the entering into of
Standard Securitization Undertakings in connection with a Qualified
Securitization Transaction;
any transaction with the Issuer or, prior to a Permitted Finco
Collapse Transaction, any Finco Guarantor; and
(12)
any Affiliate Transaction entered into during any Suspension
Period.
Limitation on the Sale or Issuance of Capital Stock of Restricted Subsidiaries
At any time other than during a Suspension Period, the Company:
(1) will not, and will not permit any Restricted Subsidiary to, sell, lease, transfer or
otherwise dispose of any Capital Stock of any Restricted Subsidiary to any Person (other than the
Company or a Wholly-Owned Subsidiary), and
(2) will not permit any Restricted Subsidiary to issue any of its Capital Stock (other than,
if necessary, shares of its Capital Stock constituting directors’ or other legally required
qualifying shares) to any Person (other than to the Company or a Wholly-Owned Subsidiary),
unless:
(A)
immediately after giving effect to such issuance, sale or other
disposition, neither the Company nor any of its Subsidiaries owns any Capital
Stock of such Restricted Subsidiary; or
(B)
immediately after giving effect to such issuance, sale or other
disposition, such Restricted Subsidiary would no longer constitute a Restricted
Subsidiary and any Investment in such Person remaining after giving effect
thereto is treated as a new Investment by the Company and such Investment would
be permitted to be made under the covenant described under “ — Limitation on
Restricted Payments” if made on the date of such issuance, sale or other
disposition.
Limitation on Liens
The Company will not, and will not permit any Restricted Subsidiary to, directly or
indirectly, Incur or permit to exist any Lien on the First Mortgage Bonds Collateral (as defined
under “Description of the First Mortgage Bonds — First Mortgage Bonds Collateral”) other than
Permitted First Mortgage Bonds Collateral Liens.
The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or
indirectly, Incur or permit to exist any Lien on the Inventory Collateral other than Permitted
Inventory Collateral Liens.
The Company will not, and will not permit any of its Subsidiaries to, directly or indirectly,
Incur or permit to exist any Lien on the Capital Stock of any Subsidiary of the Company that
directly or indirectly owns any interest in I/N Kote or I/N Tek, other than Permitted Liens of the
types described in clauses (2) and (4) of the definition of “Permitted Liens”; provided that the
foregoing will not apply to the extent the Company or a Company Guarantor effectively provides that
the applicable Note Guarantees shall be secured equally and ratably with (or prior to) the
obligations so secured for so long as such obligations are so secured.
The Company will not, and will not permit any Restricted Subsidiary to, directly or
indirectly, Incur or permit to exist any Lien (the “Initial Lien”) of any nature whatsoever on any
of its properties (including Capital Stock of a Restricted Subsidiary), whether owned at the Issue
Date or thereafter acquired, other than Permitted Liens; provided that the foregoing will not apply
to the extent the Company or a Company Guarantor effectively provides that the applicable Note
Guarantees shall be secured equally and ratably with (or prior to) the obligations so secured for
so long as such obligations are so secured.
Any Lien created for the benefit of the holders of the Notes pursuant to the provisos in the
preceding two paragraphs shall provide by its terms that such Lien shall be automatically and
unconditionally released and discharged upon the release and discharge of the Initial Lien (or Lien
upon the applicable Capital Stock, as applicable).
The Company will not, and will not permit any Restricted Subsidiary to, enter into any
Sale/Leaseback Transaction with respect to any property unless:
(1) the Company or such Restricted Subsidiary would be entitled to (A) Incur Indebtedness in
an amount equal to the Attributable Debt with respect to such Sale/Leaseback Transaction pursuant
to the covenant described under “ — Limitation on Indebtedness” and (B) create a Lien on such
property securing such Attributable Debt pursuant to the covenant described under “ — Limitation on
Liens”;
(2) the net proceeds received by the Company or any Restricted Subsidiary in connection with
such Sale/Leaseback Transaction are at least equal to the fair market value (as determined by the
Board of Directors of the Company) of such property; and
(3) the Company applies the proceeds of such transaction in compliance with the covenant
described under “ — Limitation on Sale of Assets and Subsidiary Stock”.
Merger and Consolidation
The Company will not consolidate with or merge with or into, or convey, transfer or lease, in
one transaction or a series of transactions, directly or indirectly, all or substantially all its
assets to, any Person, unless:
(1) the resulting, surviving or transferee Person (the “Successor Company”) shall be a Person
organized and existing under the laws of the United States of America, any State thereof or the
District of Columbia and the Successor Company (if not the Company) shall expressly assume, by a
supplemental indenture, executed and delivered to the Trustee, in form satisfactory to the Trustee,
all the obligations of the Company under the Mortgage, the First Mortgage Bonds, the Company’s Note
Guarantee and the Indenture;
(2) immediately after giving pro forma effect to such transaction (and treating any
Indebtedness which becomes an obligation of the Successor Company or any Subsidiary as a result of
such transaction as having been Incurred by such Successor Company or such Subsidiary at the time
of such transaction), no Default shall have occurred and be continuing;
(3) at any time other than during a Suspension Period, immediately after giving pro forma
effect to such transaction, the Successor Company would be able to Incur an additional $1.00 of
Indebtedness pursuant to paragraph (a) of the covenant described under “ — Limitation on
Indebtedness”;
(4) at any time other than during a Suspension Period, immediately after giving pro forma
effect to such transaction, the Successor Company shall have Consolidated Net Worth in an amount
that is not less than the Consolidated Net Worth of the Company immediately prior to such
transaction;
(5) the Company shall have delivered to the Trustee an officers’ certificate and an Opinion of
Counsel, each stating that such consolidation, merger or transfer and such supplemental indenture
(if any) comply with the Indenture and the Mortgage and that all necessary actions have been taken
to preserve the priority and perfection of the Lien of the Mortgage on the First Mortgage Bonds
Collateral; and
(6) the Company shall have delivered to the Trustee an Opinion of Counsel to the effect that
the holders will not recognize income, gain or loss for Federal income tax purposes as a result of
such transaction and will be subject to Federal income tax on the same amounts, in the same manner
and at the same times as would have been the case if such transaction had not occurred;
provided that clauses (3) and (4) will not be applicable to (A) a Restricted Subsidiary
consolidating with, merging into or transferring all or part of its properties and assets to the
Company or (B) the Company merging with an Affiliate of the Company solely for the purpose and with
the sole effect of reincorporating the Company in another jurisdiction.
The Successor Company will be the successor to the Company and shall succeed to, and be
substituted for, and may exercise every right and power of, the Company under the Note Guarantee,
and the predecessor Company, except in the case of a lease, shall be released from the obligations
under its Note Guarantee and the Indenture.
The Company will not permit any Company Guarantor to consolidate with or merge with or into,
or convey, transfer or lease, in one transaction or a series of transactions, all or substantially
all of its assets to any Person unless:
(1) except in the case of a Company Guarantor that has been disposed of in its entirety to
another Person (other than to the Company or another Company Guarantor), whether through a merger,
consolidation or sale of Capital Stock or assets, if in connection therewith, at any time other
than during a Suspension Period, the Company provides an officer’s certificate to the Trustee to
the effect that the Company will comply with its obligations under the covenant described under “ —
Limitation on Sales of Assets and Subsidiary Stock” in respect of such disposition, the resulting,
surviving or transferee Person (if not such Subsidiary) shall be a Person organized and existing
under the laws of the jurisdiction under which such Subsidiary was organized or under the laws of
the United States of America, or any State thereof or the District of Columbia, and such Person
shall expressly assume, by supplemental indenture, in a form satisfactory to the Trustee, all the
obligations of such Subsidiary under its Note Guarantee and the Indenture;
(2) immediately after giving effect to such transaction or transactions on a pro forma basis
(and treating any Indebtedness which becomes an obligation of the resulting, surviving or
transferee Person as a result of such transaction as having been Incurred by such Person at the
time of such transaction), no Default shall have occurred and be continuing; and
(3) the Company delivers to the Trustee an officers’ certificate and an Opinion of Counsel,
each stating that such consolidation, merger or transfer and such supplemental indenture, if any,
comply with the Indenture.
Future Company Guarantors
The Indenture provides that (i) if the Company forms or acquires a domestic Restricted
Subsidiary which, or (ii) if any domestic Restricted Subsidiary of the Company on the Issue Date at
any time following the Issue Date, in each case, (x) Incurs Indebtedness other than Indebtedness
owed to or a Guarantee in favor of the Company or a Guarantor or (y) owns net assets (other than
intercompany receivables owing from the Company to a Restricted Subsidiary) with a fair market
value in excess of $5.0 million (as determined by the Board of Directors of the Company) (in each
case, other than a Securitization Subsidiary), the Company will cause such Subsidiary to execute a
supplemental indenture pursuant to which such Subsidiary shall guarantee the Notes pursuant to a
Note Guarantee.
Limitation on Amendment of Mortgage
The Indenture provides that the Company will not permit any amendment to be made to the
Mortgage, which requires the consent of holders of the Bonds, unless the holders of a majority in
aggregate principal amount of the Notes outstanding have consented thereto.
Limitation on Business Activities
At any time except during a Suspension Period, the Company will not, and will not permit any
Restricted Subsidiary to, enter into any line of business other than the businesses engaged in by
the Company and its Subsidiaries on the Issue Date as described in the Offering Memorandum and
businesses that are reasonably related thereto or reasonable extensions thereof.
Covenants of the Issuer Following a Permitted Finco Collapse Transaction
Following December 28, 2007, the date on which the Permitted Finco Collapse Transaction was
concluded, the Issuer will not engage in any business or activities other than performing its
obligations under the Indenture, the Pledge Agreement, the Purchase Agreement, the Registration
Rights Agreement (and any customary future purchase
agreement or registration rights agreement in connection with any offering of Additional
Notes), and the Notes, and activities reasonably incidental thereto.
Without limitation of the foregoing restrictions, following the consummation of a Permitted
Finco Collapse Transaction:
(a) the Issuer will not, directly or indirectly, Incur or suffer to exist any Indebtedness or
other liability other than:
(i)
pursuant to the Finco Subordinated Note;
(ii)
the Notes issued on the Issue Date (and Additional Notes to the
extent that the Company has issued a like principal amount of First Mortgage
Bonds to the Issuer which have been pledged to the Trustee for the benefit of
the holders of Notes), the Indenture, the Pledge Agreement, the Purchase
Agreement and the Registration Rights Agreement (and any customary future
purchase agreement or registration rights agreement relating to an offering of
Additional Notes);
(iii)
liabilities for taxes as a result of the operation of the
Issuer in accordance with the Indenture which are not yet due or which are
being contested in good faith by appropriate proceeding and for which adequate
reserves are being maintained;
(iv)
administrative expenses, including legal, SEC reporting and
accounting expenses;
(v)
other liabilities incidental to the performance of the Issuer’s
obligations under the Indenture, the Notes and the Pledge Agreement and the
other transactions contemplated hereby; and
(vi)
liabilities under any Inventory Intercreditor Agreement;
(b) the Issuer will not sell or otherwise dispose of any of the Collateral or merge into or
consolidate with any Person;
(c) the Issuer will not create or otherwise cause or permit to exist or become effective any
consensual encumbrance or restriction (other than pursuant to the Indenture and the Pledge
Agreement) on the ability of the Issuer to (i) make loans or advances to the Company or (ii)
transfer any of its property or assets to the Company;
(d) the Issuer will not take or knowingly or negligently omit to take, any action which action
or omission would have the result of materially and adversely impairing the security interest with
respect to the Collateral other than as expressly contemplated by the Indenture and the Pledge
Agreement; and
(e) the Issuer will not redeem, repurchase or pay any dividend or any other distribution on
any of its Capital Stock or make any Investment in any Person other than:
(i)
Investments consisting of loans of Excess Finco Proceeds to the
Company in exchange for a like aggregate principal amount of Company Notes;
(ii)
Investments in the First Mortgage Bonds which are outstanding
on the Issue Date and additional First Mortgage Bonds which are pledged as
Collateral for the Notes;
(iii)
Investments in the Capital Stock of the Company;
(iv)
Investments in Temporary Cash Investments; and
(v)
Investments in Bonds and Capital Stock of the Company
transferred to it in a Permitted Finco Collapse Transaction.
Parent will not consolidate with or merge with or into, or convey, transfer or lease, in one
transaction or a series of transactions, directly or indirectly, all or substantially all its
assets to, any Person, unless:
(1) the resulting, surviving or transferee Person (the “Successor Parent”) shall be a Person
organized and existing under the laws of any member nation of the European Union (as constituted on
the Issue Date) or Canada or the laws of any political subdivision thereof or the laws of the
United States of America, any State thereof or the District of Columbia and the Successor Parent
(if not Parent) shall expressly assume, by a supplemental indenture, executed and delivered to the
Trustee, in form satisfactory to the Trustee, all the obligations of Parent under its Note
Guarantee and the Indenture;
(2) immediately after giving pro forma effect to such transaction, no Default shall have
occurred and be continuing;
(3) Parent shall have delivered to the Trustee an officers’ certificate and an Opinion of
Counsel, each stating that such consolidation, merger or transfer and such supplemental indenture
(if any) comply with the Indenture;
(4) Parent shall have delivered to the Trustee an Opinion of Counsel to the effect that the
holders will not recognize income, gain or loss for U.S. Federal income tax purposes as a result of
such transaction and will be subject to U.S. Federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such transaction had not occurred; and
(5) Parent shall have delivered an Opinion of Counsel in the jurisdiction of organization of
Parent (if other than the United States) to the effect that the holders of the Notes (other than
holders that are resident in such jurisdiction or that have a permanent establishment in such
jurisdiction to which the Notes are attributable) will not recognize income, gain or loss for
income tax purposes of such jurisdiction as a result of such transaction and will be subject to
income tax in such jurisdiction on the same amounts, in the same manner and at the same times as
would have been the case if such transaction had not occurred.
The Successor Parent will be the successor to Parent and shall succeed to, and be substituted
for, and may exercise every right and power of, Parent under Parent’s Note Guarantee and the
Indenture, and the predecessor Parent, except in the case of a lease, shall be released from its
Note Guarantee and its other obligations under the Indenture.
SEC Reports
Notwithstanding that the Issuer and the Guarantors may not be subject to the reporting
requirements of Section 13 or 15(d) of the Exchange Act, the Issuer and the Guarantors will file
with the SEC and provide the Trustee and holders of Notes with such annual reports and such
information, documents and other reports as are specified in Sections 13 and 15(d) of the Exchange
Act and applicable to a U.S. corporation subject to such Sections, such information, documents and
other reports to be so filed and provided at the times specified for the filings of such
information, documents and reports under such Sections; provided, that in lieu of any annual report
and such information, documents and other reports required of U.S. corporations, Parent may file
and provide such annual report and such information, documents and other reports required of
foreign private issuers subject to the reporting requirements of Section 13 or 15(d) of the
Exchange Act and provided further that Parent continues to file on Form 6-K quarterly reports
containing information similar in substance to the quarterly reports it has historically filed.
(1) a default in the payment of interest or Additional Amounts on the Notes when due,
continued for 30 days;
(2) a default in the payment of principal of any Note when due at its Stated Maturity, upon
optional redemption, upon required purchase, upon declaration of acceleration or otherwise;
(3) (i) the failure by the Company or any Company Guarantor to comply with its obligations
under “ — Certain Covenants — Merger and Consolidation” or “ — Certain Covenants — Limitation on
Amendment of Mortgage” above; (ii) the failure of the Issuer to comply with its obligations under
clause (b) of “ — Covenants of the Issuer Following a Permitted Finco Collapse Transaction”; (iii)
the failure by the Issuer to comply with its obligations under clauses (c) or (d) of “ — Covenants
of the Issuer Following a Permitted Finco Collapse Transaction” which failure continues for 30
days; or (iv) the failure by Parent to comply with its obligations under “— Covenants of Parent”;
(4) (i) the failure by the Company or any Company Guarantor, as the case may be, to comply for
30 days after notice with any of its obligations in the covenants described above under “ — Change
of Control” (other than a failure to purchase Notes which shall be governed by clause (2) above) or
under “ — Certain Covenants” under “ — Limitation on Indebtedness”, “ — Limitation on Restricted
Payments”, “ — Limitation on Sales of Assets and Subsidiary Stock” (other than a failure to
purchase Notes which shall be governed by clause (2) above), and “ — Limitation on Liens” or (ii)
the failure by the Issuer to comply for 30 days after notice with any of its obligations in clause
(a) or (e) of “ — Covenants of the Issuer Following a Permitted Finco Collapse Transaction”;
(5) the failure by the Issuer or any Guarantor to comply for 60 days after notice with its
other agreements contained in the Indenture, the Mortgage or the Pledge Agreement;
(6) Indebtedness of Parent, the Company, any Company Guarantor or any Significant Subsidiary
is not paid within any applicable grace period after final maturity or is accelerated by the
holders thereof because of a default and the total amount of such Indebtedness unpaid or
accelerated exceeds $10.0 million, or in the case of Parent, $25.0 million (the “cross-acceleration
provision”);
(7) certain events of bankruptcy, insolvency or reorganization of the Issuer, any Guarantor or
any Significant Subsidiary (the “bankruptcy provisions”);
(8) any judgment or decree for the payment of money in excess of $10.0 million or, in the case
of Parent, $25.0 million is entered against Parent, the Company, any Company Guarantor or any
Significant Subsidiary, remains outstanding for a period of 60 consecutive days following such
judgment and is not discharged, waived or stayed within 10 days after notice (the “judgment default
provision”);
(9) any Note Guarantee ceases to be in full force and effect (other than in accordance with
the terms of such Note Guarantee and the Indenture) or any Guarantor denies or disaffirms its
obligations under its Note Guarantee;
(10) with respect to any Collateral, (A) any material Lien under the Collateral Documents, at
any time, ceases to be in full force and effect for any reason other than in accordance with the
terms of the Collateral Documents and the Indenture and other than the satisfaction in full of all
obligations under the Indenture and discharge of the Indenture, (B) any security interest created
thereunder or under the Indenture is declared invalid or unenforceable, (C) the Company or any
Pledgor asserts, in any pleading in any court of competent jurisdiction, that any such security
interest is invalid or unenforceable or (D) any Person commences a foreclosure proceeding in
respect of any material part of the Collateral;
(11) with respect to any material amount of First Mortgage Bonds Collateral, (A) the security
interest under the Mortgage, at any time, ceases to be in full force and effect for any reason
other than in accordance with its terms, (B) any security interest created thereunder is declared
invalid or unenforceable, (C) the Company asserts, in
any pleading in any court of competent jurisdiction, that any such security interest is
invalid or unenforceable or (D) any Person commences a foreclosure proceeding in respect thereof;
or
(12) the Parent Subordination Agreement shall cease to be in full force and effect or the
Company or any holder of Existing Shareholder Advances shall assert the invalidity of any provision
of the Parent Subordination Agreement.
However, a default under clauses (4), (5) and (8) will not constitute an Event of Default
until the Trustee or the holders of 25% in aggregate principal amount of the outstanding Notes
notify the Issuer of the default and the Issuer does not cure such default within the time
specified after receipt of such notice.
If an Event of Default occurs and is continuing, the Trustee or the holders of at least 25% in
principal amount of the outstanding Notes may declare the principal of and accrued but unpaid
interest on all the Notes to be due and payable. Upon such a declaration, such principal and
interest shall be due and payable immediately. If an Event of Default relating to certain events
of bankruptcy, insolvency or reorganization of the Issuer, any Finco Guarantor, Parent or the
Company occurs and is continuing, the principal of and interest on all the Notes will ipso facto
become and be immediately due and payable without any declaration or other act on the part of the
Trustee or any holders of the Notes. If an Event of Default exists solely by reason of an
acceleration of Indebtedness under clause (6), and such acceleration is rescinded by the holders of
such Indebtedness prior to the time the Notes have been accelerated, such Event of Default shall
cease to exist. Under certain circumstances, the holders of a majority in principal amount of the
outstanding Notes may rescind any such acceleration with respect to the Notes and its consequences.
Subject to the provisions of the Indenture relating to the duties of the Trustee, in case an
Event of Default occurs and is continuing, the Trustee will be under no obligation to exercise any
of the rights or powers under the Indenture at the request or direction of any of the holders of
the Notes unless such holders have offered to the Trustee reasonable indemnity or security against
any loss, liability or expense. Except to enforce the right to receive payment of principal,
premium (if any) or interest when due, no holder of a Note may pursue any remedy with respect to
the Indenture or the Notes unless:
(1) such holder has previously given the Trustee notice that an Event of Default is
continuing;
(2) holders of at least 25% in principal amount of the outstanding Notes have requested the
Trustee to pursue the remedy;
(3) such holders have offered the Trustee reasonable security or indemnity against any loss,
liability or expense;
(4) the Trustee has not complied with such request within 60 days after the receipt thereof
and the offer of security or indemnity; and
(5) holders of a majority in principal amount of the outstanding Notes have not given the
Trustee a direction inconsistent with such request within such 60-day period.
Subject to certain restrictions, the holders of a majority in principal amount of the
outstanding Notes are given the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or of exercising any trust or power conferred on
the Trustee. The Trustee, however, may refuse to follow any direction that conflicts with law or
the Indenture or that the Trustee determines is unduly prejudicial to the rights of any other
holder of a Note or that would involve the Trustee in personal liability.
If a Default occurs, is continuing and is known to the Trustee, the Trustee must mail to each
holder of the Notes notice of the Default within 90 days after it occurs. Except in the case of a
Default in the payment of principal of or interest on any Note, the Trustee may withhold notice if
and so long as a committee of its trust officers determines that withholding notice is not opposed
to the interest of the holders of the Notes. In addition, the Issuer is required to deliver to the
Trustee, within 120 days after the end of each fiscal year, a certificate indicating whether the
signers thereof know of any Default that occurred during the previous year. The Issuer is required
to
deliver to the Trustee, within 30 days after the occurrence thereof, written notice of any
event which would constitute certain Defaults, their status and what action the Issuer is taking or
proposes to take in respect thereof.
Amendments and Waivers
Subject to certain exceptions, the Indenture, the Collateral Documents, the Parent
Subordination Agreement, any Company Note, the Intercreditor Agreements and the Notes may be
amended with the consent of the holders of a majority in principal amount of the Notes then
outstanding (including consents obtained in connection with a tender offer or exchange for the
Notes) and any past default or compliance with any provisions may also be waived with the consent
of the holders of a majority in principal amount of the Notes then outstanding; provided that if
any such amendment or waiver directly and disproportionately affects one series of Notes, such
amendment or waiver shall require the consent of the holders of a majority in principal amount of
such series of Notes and if any such amendment only affects one series of Notes the holders of the
other series of Notes shall not be required to consent thereto. However, without the consent of
each holder of an outstanding Note affected thereby, an amendment may not, among other things:
(1) reduce the amount of Notes whose holders must consent to an amendment;
(2) reduce the rate of or extend the time for payment of interest on any Note;
(3) reduce the principal of or extend the Stated Maturity of any Note;
(4) reduce the amount payable upon the redemption of any Note or change the time at which any
Note may be redeemed as described under “ — Optional Redemption” or “ — Redemption for Changes in
Withholding Taxes”;
(5) make any Note payable in money other than that stated in the Note;
(6) impair the right of any holder of the Notes to receive payment of principal of and
interest on such holder’s Notes on or after the due dates therefor or to institute suit for the
enforcement of any payment on or with respect to such holder’s Notes;
(7) make any change in the amendment provisions which require each holder’s consent or in the
waiver provisions;
(8) make any change in the ranking or priority of any Note or any Note Guarantee that would
adversely affect the holders of Notes or release any Guarantor from its Note Guarantee except as
provided in the Indenture;
(9) except as specifically permitted by the Indenture or the Collateral Documents, make any
change in the provisions in the Indenture or the Collateral Documents dealing with the application
of proceeds from Collateral that would materially and adversely affect the holders of Notes or
release any Pledgor from the Pledge Agreement or release the Company from the Inventory Security
Agreement except as provided in the Indenture or the Collateral Documents;
(10) make any change in the provisions of the Indenture described under “ — Additional
Amounts” that adversely affects the rights of any Noteholder or amend the terms of the Notes or the
Indenture in a way that would result in the loss of an exemption from any of the Taxes described
thereunder; or
(11) make any change to the provisions described under “ — Change of Control” after a Change
of Control has occurred or any change to the provisions of “ — Limitation on Sales of Assets and
Subsidiary Stock” after the Issuer has become obligated to offer to purchase Notes.
Notwithstanding the preceding, without the consent of any holder of the Notes, the Issuer, the
Guarantors and the Trustee may amend the Indenture, Intercreditor Agreements, the Notes, the
Collateral Documents, the Parent Subordination Agreement or any Company Note:
(1) to cure any ambiguity, omission, defect or inconsistency;
(2) to provide for the assumption by a successor corporation of the obligations of Parent, the
Issuer, the Company or any Company Guarantor under the Indenture;
(3) to provide for uncertificated Notes in addition to or in place of certificated Notes
(provided that the uncertificated Notes are issued in registered form for purposes of Section
163(f) of the Code, or in a manner such that the uncertificated Notes are described in Section
163(f)(2)(B) of the Code);
(4) to add additional Note Guarantees or Collateral with respect to the Notes;
(5) to add to the covenants of the Issuer or any Guarantor for the benefit of the holders of
the Notes or to surrender any right or power conferred upon the Issuer or any Guarantor;
(6) to make any change that does not adversely affect the rights of any holder of the Notes;
(7) to comply with any requirement of the SEC in connection with the qualification of the
Indenture under the Trust Indenture Act;
(8) to enter into any Inventory Intercreditor Agreement and subordinate the Lien of the
Trustee under the Inventory Security Agreement to the Lien of any Person that holds a Lien on the
Inventory Collateral permitted by clause (1) of the definition “Permitted Inventory Collateral
Liens” on terms not less favorable to the holders of the Notes than the terms of the GECC
Intercreditor Agreement and, in connection therewith, to amend the Inventory Security Agreement to
provide such parties rights on terms no less favorable to the holders of Notes than the rights
provided in the Inventory Security Agreement to the agent and lenders under the GECC Credit
Agreement thereunder; or
(9) to enter into an intercreditor agreement (each such intercreditor agreement being referred
to, together with the Existing Receivables Intercreditor Agreement, as a “Receivables Intercreditor
Agreement”) with any party that has a security interest in Receivables and Related Assets which is
a Permitted Lien on terms no less favorable to the holders of Notes than the terms of the Existing
Receivables Intercreditor Agreement and, in connection therewith, to amend the Inventory Security
Agreement to provide such parties rights on terms no less favorable to the holders of Notes than
the rights provided to the counterparties of the Company in the Existing Receivables Intercreditor
Agreement.
The provisions under the Indenture relative to the Issuer’s obligation to make an offer to
repurchase the Notes as a result of a Change of Control, prior to the occurrence of a Change of
Control, or Asset Disposition, prior to the Issuer becoming obligated to make an offer to purchase
Notes, may be waived or modified with the written consent of the holders of a majority in principal
amount of the Notes.
The consent of the holders of the Notes is not necessary under the Indenture to approve the
particular form of any proposed amendment. It is sufficient if such consent approves the substance
of the proposed amendment.
After an amendment under the Indenture becomes effective, the Issuer will be required to mail
to holders of the Notes a notice briefly describing such amendment. However, the failure to give
such notice to all holders of the Notes, or any defect therein, will not impair or affect the
validity of the amendment.
Transfer
The Notes were issued in registered form and will be transferable only upon the surrender of
the Notes being transferred for registration of transfer. The Issuer may require payment of a sum
sufficient to cover any tax, assessment or other governmental charge payable in connection with
certain transfers and exchanges.
The Indenture and the Collateral Documents will be discharged and will cease to be of further
effect (except as to rights of registration of transfer or exchange of Notes, which shall survive
until all Notes have been canceled) as to all outstanding Notes when the Issuer has paid all sums
payable by it under the Indenture and either:
(1) all the Notes that have been authenticated and delivered (except lost, stolen or destroyed
Notes which have been replaced or paid and Notes for whose payment money has been deposited in
trust or segregated and held in trust by the Issuer and thereafter repaid to the Issuer or
discharged from this trust) have been delivered to the Trustee for cancellation, or
(2) (a) all Notes not delivered to the Trustee for cancellation otherwise have become due and
payable or have been called for redemption pursuant to the provisions described under “ — Optional
Redemption”, and the Issuer has irrevocably deposited or caused to be deposited with the Trustee
trust funds in trust in an amount of money sufficient to pay and discharge the entire Indebtedness
(including all principal and accrued interest) on the Notes not theretofore delivered to the
Trustee for cancellation, and (b) the Issuer has delivered irrevocable instructions to the Trustee
to apply the deposited money toward the payment of the Notes at maturity or on the date of
redemption, as the case may be.
Defeasance
At any time when no Floating Rate Notes are outstanding, the Issuer may terminate all its and
the Guarantors’ obligations under the Notes, the Note Guarantees, the Collateral Documents and the
Indenture (“legal defeasance”), except for certain obligations, including those respecting the
defeasance trust and obligations to register the transfer or exchange of the Notes, to replace
mutilated, destroyed, lost or stolen Notes and to maintain a registrar and paying agent in respect
of the Notes.
In addition at any time when no Floating Rate Notes are outstanding, the Issuer may terminate
its obligations (“covenant defeasance”) under “ — Change of Control” and under the covenants
described under “ — Certain Covenants” (other than the covenant described under “ — Merger and
Consolidation”), the operation of the cross-acceleration provision, the bankruptcy provisions
(other than with respect to Parent, the Company and the Issuer) and the judgment default provision
described under “ — Defaults” above and the limitations contained in the first paragraph and
clauses (3) and (4) of the second paragraph under “ — Certain Covenants — Merger and Consolidation”
above (the “defeased provisions”).
The Issuer may exercise its legal defeasance option notwithstanding its prior exercise of its
covenant defeasance option. If the Issuer exercises its legal defeasance option, payment of the
Notes and any Note Guarantee may not be accelerated because of an Event of Default with respect to
any defeased provision. If the Issuer exercises its legal defeasance option, the Guarantors will
be released from all of their obligations with respect to the Note Guarantees and the Pledge
Agreement and the Collateral shall be released from the Lien of the Pledge Agreement.
In order to exercise either of the defeasance options, the Issuer must irrevocably deposit in
trust (the “defeasance trust”) with the Trustee money or U.S. Government Obligations for the
payment of principal and interest on the Notes to redemption or maturity, as the case may be, and
must comply with certain other conditions, including delivery to the Trustee of (1) an opinion of
counsel to the effect that holders of the Notes will not recognize income, gain or loss for Federal
income tax purposes as a result of such deposit and defeasance and will be subject to Federal
income tax on the same amounts and in the same manner and at the same times as would have been the
case if such deposit and defeasance had not occurred (and, in the case of legal defeasance only,
such opinion of counsel must be based on a ruling of the Internal Revenue Service or other change
in applicable Federal income tax law) and (2) an opinion of counsel in the jurisdiction of
organization of the Issuer (if other than the United States) to the effect that holders of the
Notes will not recognize income, gain or loss for income tax purposes of such jurisdiction as a
result of such deposit and defeasance and will be subject to income tax of such jurisdiction on the
same amounts and in the same manner and at the same times as would have been the case if such
deposit and defeasance had not occurred.
The Indenture contains certain limitations on the rights of the Trustee, should it become a
creditor of the Issuer, to obtain payment of claims in certain cases, or to realize on certain
property received in respect of any such claim as security or otherwise. The Trustee will be
permitted to engage in other transactions; provided, however, if it acquires any conflicting
interest it must either eliminate such conflict within 90 days, apply to the SEC for permission to
continue or resign.
The holders of a majority in principal amount of the outstanding Notes will have the right to
direct the time, method and place of conducting any proceeding for exercising any remedy available
to the Trustee, subject to certain exceptions. If an Event of Default occurs (and is not cured),
the Trustee will be required, in the exercise of its power, to use the degree of care of a prudent
man in the conduct of his own affairs. Subject to such provisions, the Trustee will be under no
obligation to exercise any of their rights or powers under the Indenture or the Collateral
Documents at the request of any holder of Notes, unless such holder shall have offered to the
Trustee security and indemnity satisfactory to it against any loss, liability or expense and then
only to the extent required by the terms of the Indenture or the Collateral Documents.
No Personal Liability of Directors, Officers, Employees and Stockholders
No director, officer, employee, incorporator or stockholder of the Issuer or any Guarantor, in
its capacity as such, will have any liability for any obligations of the Issuer or any Guarantor
under the Notes, the Note Guarantees, the Intercreditor Agreements, the Collateral Documents, the
Finco Mirror Note or the Indenture or for any claim based on, in respect of, or by reason of such
obligations or their creation. Each holder of the Notes by accepting a Note waives and releases
all such liability. The waiver and release are part of the consideration for issuance of the
Notes. Such waiver and release may not be effective to waive liabilities under the U.S. federal
securities laws, and it is the view of the SEC that such a waiver is against public policy.
Enforceability of Judgments
Since most of Parent’s operating assets and the operating assets of Parent’s Subsidiaries are
situated outside the United States, any judgment obtained in the United States against Parent,
including judgments with respect to the payment of principal, interest, additional amounts,
redemption price and any purchase price with respect to the Notes, may not be collectible within
the United States.
We have been informed by our Luxembourg counsel, Bonn Schmitt Steichen, that the United States
and Luxembourg do not currently have a treaty providing for reciprocal recognition and enforcement
of judgments in civil and commercial matters. Therefore, a final judgment for the payment of money
rendered by any federal or state court in the United States based on civil liability, whether or
not predicated solely upon U.S. federal securities laws, would not be immediately enforceable in
Luxembourg. However, if the party in whose favor such judgment is rendered brings a new suit in a
competent court in Luxembourg, that party may submit to a Luxembourg court the final judgment that
has been rendered in the United States. If the Luxembourg court finds that the jurisdiction of the
federal or state court in the United States has been based on grounds that are internationally
acceptable and that the final judgment concerned results from proceedings compatible with
Luxembourg concepts of due process to the extent that the Luxembourg court is of the opinion that
reasonableness and fairness so require, the Luxembourg court would, in principle, under current
practice, recognize the final judgment that has been rendered in the United States and generally
grant the same claim without re-litigation on the merits, unless the consequences of the
recognition of such judgment contravene public policy in Luxembourg. It is not certain, however,
that these court practices also apply to default judgments.
We have been further advised by Bonn Schmitt Steichen that it would be difficult for an
investor to bring an original action in a Luxembourg court predicated upon the civil liability
provisions of the U.S. federal securities laws against ArcelorMittal’s directors and senior
management and non-U.S. experts named in Consent Solicitation Statement.
We have also been informed by our Nova Scotia counsel, Stewart McKelvey, that in such
counsel’s opinion, the laws of the Province of Nova Scotia (the “Province”) and the federal laws of
Canada applicable therein
permit an action to be brought in a court of competent jurisdiction in the Province on a final
and conclusive judgment in personam of a United States federal court or a court of the State of
New York sitting in the Borough of Manhattan in The City of New York (the “New York Court”),
respecting the enforcement of the Notes, the Pledge Agreement or the Indenture, that is not
impeachable as void or voidable under the laws of the State of New York and that is for a sum
certain in money if:
(a) that judgment was not obtained by fraud or in a manner contrary to “natural justice” and
the enforcement of that judgment would not be contrary to “public policy” as such terms are applied
by the courts of the Province;
(b) the New York Court did not act either without jurisdiction under the conflict of laws
rules of the laws of the Province; or without authority, under the laws in force in New York, to
adjudicate concerning the cause of action or subject matter that resulted in the judgment or
concerning the person of that judgment debtor;
(c) the defendant was duly served with the process of the New York Court or appeared to defend
such process;
(d) the judgment is not contrary to the final and conclusive judgment of another jurisdiction;
(e) the enforcement of that judgment does not constitute, directly or indirectly, the
enforcement of foreign revenue or penal laws;
(f) the enforcement of the judgment would not be contrary to any order made by the
Attorney-General of Canada under the Foreign Extraterritorial Measures Act (Canada) or the
Competition Tribunal under the Competition Act (Canada) in respect of certain judgments, laws, and
directives having effects on competition in Canada; and
(g) the action to enforce that judgment is taken within six years of the date of the judgment
of the New York Court as stipulated in the Limitations of Actions Act (Nova Scotia).
To the extent the Issuer’s assets are located outside the United States, interest, Additional
Amounts, redemption price and any purchase price with respect to the Notes, may not be collectible
within the United States.
Consent to Jurisdiction and Service
The Issuer and each Guarantor have appointed CT Corporation System, 111 Eighth Avenue, 13th
Floor, New York, New York10011 as its agent for actions relating to the Notes, the Indenture and
the Collateral Documents or brought under U.S. Federal or state securities laws brought in any
Federal or state court located in the Borough of Manhattan in The City of New York and will submit
to such jurisdiction.
Governing Law
The Indenture, the Notes, the Note Guarantees, the Parent Subordination Agreement and the
Collateral Documents will be governed by, and construed in accordance with, the laws of the State
of New York.
Certain Definitions
“Additional Assets” means:
(1) any property, plant, equipment or other assets used in a Related Business;
(2) the Capital Stock of a Person that becomes a Restricted Subsidiary as a result of the
acquisition of such Capital Stock by the Company or another Restricted Subsidiary; or
(3) Capital Stock constituting a minority interest in any Person that at such time is a
Restricted Subsidiary;
provided that any such Restricted Subsidiary described in clause (2) or (3) above is primarily
engaged in a Related Business.
“Affiliate” of any specified Person means:
(1) any other Person, directly or indirectly, controlling or controlled by; or
(2) under direct or indirect common control with such specified Person.
For the purposes of this definition, “control” when used with respect to any Person means the
power to direct the management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms “controlling” and
“controlled” have meanings correlative to the foregoing. For purposes of the covenants described
under “ — Certain Covenants — Limitation on Restricted Payments”, “ — Certain Covenants —
Limitation on Affiliate Transactions” and “ — Certain Covenants — Limitation on Sales of Assets and
Subsidiary Stock” only, “Affiliate” shall also mean any beneficial owner of Capital Stock
representing 10% or more of the total voting power of the Voting Stock (on a fully diluted basis)
of the Company or of rights or warrants to purchase such Capital Stock (whether or not currently
exercisable) and any Person who would be an Affiliate of any such beneficial owner pursuant to the
first sentence hereof.
“Asset Disposition” means any sale, lease, transfer or other disposition (or series of related
sales, leases, transfers or dispositions) by the Company or any Restricted Subsidiary, including
any disposition by means of a merger, consolidation or similar transaction (each referred to for
the purposes of this definition as a “disposition”), of:
(1) any shares of Capital Stock of a Restricted Subsidiary (other than directors’ qualifying
shares or shares required by applicable law to be held by a Person other than the Company or a
Restricted Subsidiary);
(2) all or substantially all the assets of any division or line of business of the Company or
any Restricted Subsidiary; or
(3) any other assets of the Company or any Restricted Subsidiary outside of the ordinary
course of business of the Company or such Restricted Subsidiary,
(other than, in the case of clauses (1), (2) and (3) above,
(A)
a disposition by a Restricted Subsidiary to the Company or by the Company or a
Restricted Subsidiary to a Wholly-Owned Subsidiary (other than to a Securitization
Subsidiary and other than a transfer of Inventory Collateral outside the ordinary
course of business unless the transferee makes adequate provision to preserve the
validity and priority of the Lien of the Trustee on such Inventory Collateral);
(B)
for purposes of the covenant described under “ — Certain Covenants — Limitation
on Sales of Assets and Subsidiary Stock” only, (x) a disposition that constitutes a
Restricted Payment permitted by the covenant described under “ — Certain Covenants —
Limitation on Restricted Payments” or a Permitted Investment and (y) a disposition of
all or substantially all the assets of the Company in accordance with the covenant
described under “ — Certain Covenants — Merger and Consolidation”;
(C)
a disposition of assets with a fair market value of less than $2.0 million;
(D)
the sale, transfer or other disposition of (i) Receivables and Related Assets
or (ii) Inventory and Related Assets (provided that if any such Inventory and Related
Assets constitute Inventory Collateral, the Lien of the Trustee is not released in such
transaction) pursuant to a Qualified Securitization Transaction;
(E)
grants of Liens permitted by “ — Certain Covenants — Limitation on Liens”; and
(F)
sales of (i) obsolete and not practically useable or (ii) worn-out equipment).
“Attributable Debt” in respect of a Sale/Leaseback Transaction means, as at the time of
determination, the present value (discounted at the interest rate borne by the Notes, compounded
annually) of the total obligations of the lessee for rental payments during the remaining term of
the lease included in such Sale/Leaseback Transaction (including any period for which such lease
has been extended); provided that if such Sale/Leaseback Transaction results in a Capital Lease
Obligation, the amount of Indebtedness represented thereby will be determined in accordance with
the definition of “Capital Lease Obligation”.
“Average Life” means, as of the date of determination, with respect to any Indebtedness, the
quotient obtained by dividing:
(1) the sum of the products of the numbers of years from the date of determination to the
dates of each successive scheduled principal payment of or redemption or similar payment with
respect to such Indebtedness multiplied by the amount of such payment by
(2) the sum of all such payments.
“Board of Directors” in respect of a Person means the Board of Directors of such Person or any
committee thereof duly authorized to act on behalf of such Board.
“Bonds” means the First Mortgage Bonds and other bonds issued under the Mortgage.
“Business Day” means each day which is not a Legal Holiday.
“Capital Lease Obligation” means an obligation that is required to be classified and accounted
for as a capital lease for financial reporting purposes in accordance with GAAP, and the amount of
indebtedness represented by such obligation shall be the capitalized amount of such obligation
determined in accordance with GAAP; and the Stated Maturity thereof shall be the date of the last
payment of rent or any other amount due under such lease prior to the first date upon which such
lease may be terminated by the lessee without payment of a penalty. For purposes of the covenant
described under “ — Certain Covenants — Limitation on Liens”, a Capital Lease Obligation will be
deemed to be secured by a Lien on the property being leased.
“Capital Stock” of any Person means any and all shares, interests, rights to purchase,
warrants, options, participations or other equivalents of or interests in (however designated)
equity of such Person, including any Preferred Stock, but excluding any debt securities convertible
into such equity.
“Code” means the Internal Revenue Code of 1986, as amended.
“Collateral Documents” means the Pledge Agreement, the Inventory Security Agreement and each
other deed of trust, pledge agreement, collateral assignment, security agreement, fiduciary
transfer or other instrument evidencing or creating any security interests in favor of the Trustee
for the benefit of holders of the Notes.
“Commodity Hedging Agreement” means agreements or arrangements relating to the future price of
any commodity.
“Company Note” means loans by the Issuer or a Finco Guarantor to the Company out of Excess
Finco Proceeds.
“Consolidated Coverage Ratio” as of any date of determination means the ratio of (x) the
aggregate amount of EBITDA for the period of the most recent four consecutive fiscal quarters for
which financial statements have been made publicly available on or prior to the date of such
determination to (y) Consolidated Interest Expense for such four fiscal quarters; provided that:
(1) if the Company or any Restricted Subsidiary has Incurred any Indebtedness since the
beginning of such period that remains outstanding or if the transaction giving rise to the need to
calculate the Consolidated Coverage Ratio is an Incurrence of Indebtedness, or both, EBITDA and
Consolidated Interest Expense for such period shall be calculated after giving effect on a pro
forma basis to such Indebtedness as if such Indebtedness had been Incurred on the first day of such
period;
(2) if the Company or any Restricted Subsidiary has repaid, repurchased, defeased or otherwise
discharged any Indebtedness since the beginning of such period or if any Indebtedness is to be
repaid, repurchased, defeased or otherwise discharged (in each case other than Indebtedness
Incurred under any Revolving Credit Facility unless such Indebtedness has been permanently repaid
and has not been replaced) on the date of the transaction giving rise to the need to calculate the
Consolidated Coverage Ratio, EBITDA and Consolidated Interest Expense for such period shall be
calculated on a pro forma basis as if such discharge had occurred on the first day of such period
and as if the Company or such Restricted Subsidiary has not earned the interest income actually
earned during such period in respect of cash or Temporary Cash Investments used to repay,
repurchase, defease or otherwise discharge such Indebtedness;
(3) if since the beginning of such period the Company or any Restricted Subsidiary shall have
made any Asset Disposition, EBITDA for such period shall be reduced by an amount equal to EBITDA
(if positive) directly attributable to the assets which are the subject of such Asset Disposition
for such period, or increased by an amount equal to EBITDA (if negative), directly attributable
thereto for such period and Consolidated Interest Expense for such period shall be reduced by an
amount equal to the Consolidated Interest Expense directly attributable to any Indebtedness of the
Company or any Restricted Subsidiary repaid, repurchased, defeased or otherwise discharged with
respect to the Company and its continuing Restricted Subsidiaries in connection with such Asset
Disposition for such period (or, if the Capital Stock of any Restricted Subsidiary is sold, the
Consolidated Interest Expense for such period directly attributable to the Indebtedness of such
Restricted Subsidiary to the extent the Company and its continuing Restricted Subsidiaries are no
longer liable for such Indebtedness after such sale);
(4) if since the beginning of such period the Company or any Restricted Subsidiary (by merger
or otherwise) shall have made an Investment in any Restricted Subsidiary (or any person which
becomes a Restricted Subsidiary) or an acquisition or improvement of assets, including any
acquisition of assets occurring in connection with a transaction requiring a calculation to be made
hereunder, which constitutes all or substantially all of an operating unit of a business, EBITDA
and Consolidated Interest Expense for such period shall be calculated after giving pro forma effect
thereto (including the Incurrence or retirement of any Indebtedness) as if such Investment or
acquisition occurred on the first day of such period; and
(5) if since the beginning of such period any Person (that subsequently became a Restricted
Subsidiary or was merged with or into the Company or any Restricted Subsidiary since the beginning
of such period) shall have made any Asset Disposition, any Investment or acquisition of assets that
would have required an adjustment pursuant to clause (3) or (4) above if made by the Company or a
Restricted Subsidiary during such period, EBITDA and Consolidated Interest Expense for such period
shall be calculated after giving pro forma effect thereto as if such Asset Disposition, Investment
or acquisition occurred on the first day of such period.
For purposes of this definition, whenever pro forma effect is to be given to a transaction,
the amount of income, earnings or cost savings relating thereto and the amount of Consolidated
Interest Expense associated with any Indebtedness Incurred in connection therewith, the pro forma
calculations shall be determined in good faith by a responsible financial or accounting officer of
the Company. If any Indebtedness bears a floating rate of interest and is being given pro forma
effect, the interest on such Indebtedness shall be calculated as if the rate in effect on the date
of determination had been the applicable rate for the entire period (taking into account any
Interest Rate Agreement applicable to such Indebtedness if such Interest Rate Agreement has a
remaining term in excess of 12 months).
“Consolidated Interest Expense” means, for any period, the total interest expense of the
Company and its consolidated Restricted Subsidiaries, plus, to the extent not included in such
total interest expense, and to the extent incurred by the Company or its Restricted Subsidiaries
(or in the case of clause (11), the Issuer and the Finco Guarantors), without duplication:
(1) interest expense attributable to capital leases and the interest expense attributable to
leases constituting part of a Sale/Leaseback Transaction;
(2) amortization of debt discount, premium and debt issuance cost;
(4) non-cash interest expense (other than interest accruing on loans or advances from
Affiliates outstanding on the Issue Date);
(5) commissions, discounts and other fees and charges owed with respect to letters of credit
and bankers’ acceptance financing;
(6) net payments pursuant to Hedging Obligations under Interest Rate Agreements;
(7) Preferred Stock dividends in respect of all Preferred Stock held by Persons other than the
Company or a Wholly-Owned Subsidiary (other than dividends payable solely in Capital Stock (other
than Disqualified Stock) of the issuer of such Preferred Stock);
(8) interest incurred in connection with Investments in discontinued operations;
(9) interest accruing on any Indebtedness of any other Person to the extent such Indebtedness
is Guaranteed by (or secured by the assets of) the Company or any Restricted Subsidiary;
(10) the cash contributions to any employee stock ownership plan or similar trust to the
extent such contributions are used by such plan or trust to pay interest or fees to any Person
(other than the Company) in connection with Indebtedness Incurred by such plan or trust; and
(11) (x) the amount of payments of interest, premium and Additional Amounts of the Issuer with
respect to the Notes and (y) all other consolidated expenses of the Issuer and the Finco Guarantors
(excluding any expenses paid to the Company or a Restricted Subsidiary);
provided that there shall be excluded from Consolidated Interest Expense (i) interest expense
and premium of the Company and its Restricted Subsidiaries that is paid to the Issuer or, prior to
a Permitted Finco Collapse Transaction, any Finco Guarantor, (ii) dividends on the Company’s
Capital Stock paid to the Issuer or, prior to a Permitted Finco Collapse Transaction, a Finco
Guarantor and (iii) debt issuance cost in connection with the Notes.
“Consolidated Net Income” means, for any period, the consolidated net income of the Company
and its consolidated Subsidiaries; provided that there shall be excluded from such Consolidated Net
Income, without duplication:
(1) any net income of any Person (other than the Company) if such Person is not a Restricted
Subsidiary, except that:
(A)
subject to the exclusion contained in clause (3) below, the
Company’s equity in the net income of any such Person for such period shall be
included in such Consolidated Net Income up to the aggregate amount of cash
actually distributed by such Person during such period to the Company or a
Restricted Subsidiary as a dividend or other distribution (subject, in the case
of a dividend or other distribution paid to a Restricted Subsidiary, to the
limitations contained in clause (2) below); and
(B)
the Company’s equity in a net loss of any such Person for such
period shall be included in determining such Consolidated Net Income;
(2) any net income of any Restricted Subsidiary if such Restricted Subsidiary is subject to
restrictions, directly or indirectly, on the payment of dividends or the making of distributions by
such Restricted Subsidiary, directly or indirectly, to the Company, except that:
(A)
subject to the exclusion contained in clause (3) below, the
Company’s equity in the net income of any such Restricted Subsidiary for such
period shall be included in such Consolidated Net Income up to the aggregate
amount of cash actually distributed by such Restricted Subsidiary during such
period to the Company or another Restricted Subsidiary as a dividend or other
distribution (subject, in the case of a dividend or other distribution paid to
another Restricted Subsidiary, to the limitation contained in this clause); and
the Company’s equity in a net loss of any such Restricted
Subsidiary for such period shall be included in determining such Consolidated
Net Income;
(3) any gain or loss realized upon the sale or other disposition of any assets of the Company,
its consolidated Subsidiaries or any other Person (including pursuant to any sale-and-leaseback
arrangement) which is not sold or otherwise disposed of in the ordinary course of business and any
gain or loss realized upon the sale or other disposition of any Capital Stock of any Person;
(4) extraordinary gains or losses;
(5) all other non-cash charges of the Company and its consolidated Restricted Subsidiaries
(excluding any such non-cash charge to the extent that it represents an accrual of or reserve for
cash expenditures in any future period);
(6) the cumulative effect of a change in accounting principles;
(7) interest expense payable by the Company and its Restricted Subsidiaries to the Issuer or,
prior to a Permitted Finco Collapse Transaction, any Finco Guarantor;
(8) interest income payable to the Company and its Restricted Subsidiaries by the Issuer or,
prior to a Permitted Finco Collapse Transaction, any Finco Guarantor; and
(9) amortization of debt discount, premium and debt issuance cost in connection with the sale
of the Notes;
provided, further, that Consolidated Net Income will be reduced by the sum of (i) the amount
of payments of interest, premium and Additional Amounts made by the Issuer with respect to the
Notes and (ii) all other consolidated expenses of the Issuer and the Finco Guarantors (excluding
any expenses paid to the Company or a Restricted Subsidiary and amortization of any debt discount,
premium and debt issuance cost in connection with the sale of the Notes).
Notwithstanding the foregoing, for the purposes of the covenant described under “ — Certain
Covenants — Limitation on Restricted Payments” only, there shall be excluded from Consolidated Net
Income any repurchases, repayments or redemptions of Investments, proceeds realized on the sale of
Investments or return of capital to the Company or a Restricted Subsidiary to the extent such
repurchases, repayments, redemptions, proceeds or returns increase the amount of Restricted
Payments permitted under such covenant pursuant to clause (a)(3)(D) thereof.
“Consolidated Net Worth” means the total of the amounts shown on the balance sheet of the
Company and its consolidated Subsidiaries, determined on a consolidated basis in accordance with
GAAP, as of the end of the most recent fiscal quarter of the Company for which financial statements
have been made publicly available on or prior to the taking of any action for the purpose of which
the determination is being made, as the sum of:
(1) the par or stated value of all outstanding Capital Stock of the Company plus
(2) paid-in capital or capital surplus relating to such Capital Stock plus
(3) any retained earnings or earned surplus less (A) any accumulated deficit and (B) any
amounts attributable to Disqualified Stock.
“Credit Agreements” mean any loan or credit agreement secured by Receivables and Related
Assets or Inventory and Related Assets among the Company and/or any Restricted Subsidiary and one
or more financial institutions, each as amended, extended, renewed, restated, supplemented or
otherwise modified (in whole or in part, and without limitation as to amount, terms, conditions,
covenants and other provisions) from time to time, and any agreement (and related document)
governing Indebtedness incurred to Refinance, in whole or in part, the borrowings and commitments
then outstanding or permitted to be outstanding under such Credit Agreement or a successor Credit
Agreement, whether by the same or any other lender or group of lenders.
“Currency Agreement” means in respect of a Person any foreign exchange contract, currency swap
agreement or other similar agreement.
“Default” means any event which is, or after notice or passage of time or both would be, an
Event of Default.
“Disqualified Stock” means, with respect to any Person, any Capital Stock which by its terms
(or by the terms of any security into which it is convertible or for which it is exchangeable at
the option of the holder) or upon the happening of any event:
(1) matures or is mandatorily redeemable pursuant to a sinking fund obligation or otherwise;
(2) is convertible or exchangeable at the option of the holder for Indebtedness or
Disqualified Stock; or
(3) is mandatorily redeemable or must be purchased upon the occurrence of certain events or
otherwise, in whole or in part;
in each case on or prior to the 91st day following the Stated Maturity of the Notes; provided,
however, that any Capital Stock that would not constitute Disqualified Stock but for provisions
thereof giving holders thereof the right to require such Person to purchase or redeem such Capital
Stock upon the occurrence of an “asset sale” or “change of control” occurring prior to the 91st day
following the Stated Maturity of the Notes shall not constitute Disqualified Stock if:
(1) the “asset sale” or “change of control” provisions applicable to such Capital Stock are
not more favorable to the holders of such Capital Stock than the terms applicable to the Notes and
described under “ — Certain Covenants — Limitation on Sales of Assets and Subsidiary Stock” and “ —
Change of Control”; and
(2) any such requirement only becomes operative after compliance with such terms applicable to
the Notes, including the purchase of any Notes tendered pursuant thereto.
The amount of any Disqualified Stock that does not have a fixed redemption, repayment or
repurchase price will be calculated in accordance with the terms of such Disqualified Stock as if
such Disqualified Stock were redeemed, repaid or repurchased on any date on which the amount of
such Disqualified Stock is to be determined pursuant to the Indenture; provided that if such
Disqualified Stock could not be required to be redeemed, repaid or repurchased at the time of such
determination, the redemption, repayment or repurchase price will be the book value of such
Disqualified Stock as reflected in the most recent financial statements of such Person.
“EBITDA” for any period means the sum of Consolidated Net Income, plus the following to the
extent deducted in calculating such Consolidated Net Income:
(1) all income tax expense of the Company and its consolidated Restricted Subsidiaries;
(2) Consolidated Interest Expense; and
(3) depreciation and amortization expense of the Company and its consolidated Restricted
Subsidiaries (excluding amortization expense attributable to a prepaid operating activity item that
was paid in cash in a prior period),
in each case for such period. Notwithstanding the foregoing, the provision for taxes based on
the income or profits of, and the depreciation and amortization and non-cash charges of, a
Restricted Subsidiary shall be added to Consolidated Net Income to compute EBITDA only to the
extent (and in the same proportion) that the net income of such Restricted Subsidiary was included
in calculating Consolidated Net Income and only if a corresponding amount would be permitted at the
date of determination to be dividended to the Company by such Restricted Subsidiary without prior
approval (that has not been obtained), pursuant to the terms of its charter and all agreements,
instruments, judgments, decrees, orders, statutes, rules and governmental regulations applicable to
such Restricted Subsidiary or its stockholders.
Except as described under “ — Certain Covenants — Limitation on Indebtedness”, whenever it is
necessary to determine whether the Company has complied with any covenant in the Indenture or a
Default has occurred and an amount is expressed in a currency other than U.S. Dollars, such amount
will be treated as the U.S. Dollar Equivalent determined as of the date such amount is initially
determined in such currency.
“Empire” means Empire Iron Mining Partnership, a partnership in which the Company owns a 21%
interest.
“Empire Agreement” means the Restated Empire Iron Mining Partnership Agreement dated as of
December 1, 1978, as amended to the Issue Date.
“Equity Offering” means an offering (whether public or private) of common stock of Parent or
the Company.
“Excess Finco Proceeds” means, at any time of determination, for any period, (i) all cash
payments received during such period by the Issuer or any Finco Guarantor in respect of the First
Mortgage Bonds and any Capital Stock of the Company held by the Issuer or any Finco Guarantor less
(ii) the sum of (w) all amounts paid on the Notes during such period, (x) all taxes paid or accrued
during such period, (y) all administrative costs and other expenses paid during such period and (z)
all Investments made in Company Notes prior to such time during such period.
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“Existing Joint Ventures” shall mean I/N Kote, I/N Tek, PCI and Empire; provided that for
purposes of “ — Certain Covenants”, any action permitted to be taken by the Company and its
Restricted Subsidiaries with reference to the Existing Joint Ventures may be taken by the Company
or a Restricted Subsidiary indirectly through an action with respect to an Unrestricted Subsidiary
that is an equity holder in an Existing Joint Venture.
“Existing Receivables Intercreditor Agreement” means the Intercreditor Agreement, dated as of
the Issue Date, by and among JPMorgan Chase Bank, BNY Midwest Trust Company, General Electric
Capital Corporation, the Company, Ispat Inland Administrative Services Company and the Trustee, as
the same may be amended in accordance with the terms of the Indenture.
“Existing Shareholder Advances” means the Company’s obligations under the $215.8 million
aggregate principal amount of Subordinated Obligations advanced to the Company by Parent and its
other Subsidiaries outstanding on the Issue Date.
“First Mortgage Bonds” means $422.5 million aggregate principal amount of Series Z First
Mortgage Bonds issued by the Company under the First Mortgage dated April 1, 1928, as amended and
supplemented, between the Company and The Bank of New York and Louis P. Young, as successor
trustees, and including any additional Series Y and Series Z First Mortgage Bonds issued by the
Company under the Mortgage as Collateral for Additional Notes.
“GAAP” means generally accepted accounting principles in the United States of America as in
effect as of the Issue Date, including those set forth in:
(1) the opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants;
(2) statements and pronouncements of the Financial Accounting Standards Board;
(3) such other statements by such other entity as approved by a significant segment of the
accounting profession; and
(4) the rules and regulations of the SEC governing the inclusion of financial statements
(including pro forma financial statements) in periodic reports required to be filed pursuant to
Section 13 of the Exchange Act, including opinions and pronouncements in staff accounting bulletins
and similar written statements from the accounting staff of the SEC.
“GECC Credit Agreement” means that certain Credit Agreement dated as April 30, 2003 among the
Company, as borrower, the other credit parties and lenders party thereto and General Electric
Capital Corporation, as Agent and Lender, and GECC Capital Markets Group, Inc., as Lead Arranger.
“GECC Intercreditor Agreement” means the agreement, dated as of the Issue Date, between the
trustee, the Company, certain subsidiaries of the Company, Ispat Inland Finance, LLC and General
Electric Capital Corporation.
“Guarantee” means any obligation, contingent or otherwise, of any Person directly or
indirectly guaranteeing any Indebtedness of any Person and any obligation, direct or indirect,
contingent or otherwise, of such Person:
(1) to purchase or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness of such Person (whether arising by virtue of partnership arrangements, or by
agreements to keep-well, to purchase assets, goods, securities or services, to take-or-pay or to
maintain financial statement conditions or otherwise); or
(2) entered into for the purpose of assuring in any other manner the obligee of such
Indebtedness of the payment thereof or to protect such obligee against loss in respect thereof (in
whole or in part);
provided, however, that the term “Guarantee” shall not include endorsements for collection or
deposit in the ordinary course of business. The term “Guarantee” used as a verb has a
corresponding meaning.
“Hedging Obligations” of any Person means the obligations of such Person pursuant to any
Interest Rate Agreement or Currency Agreement or Commodity Hedging Agreement.
“Holder” means the Person in whose name a Note is registered on the Registrar’s books.
“Incur” means issue, assume, Guarantee, incur or otherwise become liable for; provided,
however, that any Indebtedness or Capital Stock of a Person existing at the time such Person
becomes a Restricted Subsidiary (whether by merger, consolidation, acquisition or otherwise) shall
be deemed to be Incurred by such Person at the time it becomes a Restricted Subsidiary. The term
“Incurrence” when used as a noun shall have a correlative meaning. Solely for purposes of
determining compliance with “ — Certain Covenants — Limitation on Indebtedness”, (1) amortization
of debt discount or the accretion of principal with respect to a non-interest bearing or other
discount security and (2) the payment of regularly scheduled interest in the form of additional
Indebtedness of the same instrument or the payment of regularly scheduled dividends on Capital
Stock in the form of additional Capital Stock of the same class and with the same terms will not be
deemed to be the Incurrence of Indebtedness.
“Indebtedness” means, with respect to any Person on any date of determination (without
duplication):
(1) the principal in respect of (A) indebtedness of such Person for money borrowed and (B)
indebtedness evidenced by notes, debentures, bonds or other similar instruments for the payment of
which such Person is responsible or liable, including, in each case, any premium on such
indebtedness to the extent such premium has become due and payable;
(2) all Capital Lease Obligations of such Person and all Attributable Debt in respect of Sale/
Leaseback Transactions entered into by such Person;
(3) all obligations of such Person issued or assumed as the deferred purchase price of
property, all conditional sale obligations of such Person and all obligations of such Person under
any title retention agreement (but excluding trade accounts payable arising in the ordinary course
of business);
(4) all obligations of such Person for the reimbursement of any obligor on any letter of
credit, banker’s acceptance or similar credit transaction (other than obligations with respect to
letters of credit securing obligations (other than obligations described in clauses (1) through (3)
above) entered into in the ordinary course of business of such Person to the extent such letters of
credit are not drawn upon or, if and to the extent drawn upon, such drawing is reimbursed no later
than the tenth Business Day following payment on the letter of credit);
(5) the amount of all non-contingent obligations of such Person with respect to the
redemption, repayment or other repurchase of any Disqualified Stock of such Person or, with respect
to any Preferred Stock of
any Subsidiary of such Person, the principal amount of such Preferred Stock to be determined
in accordance with the Indenture (but excluding, in each case, any accrued dividends);
(6) all obligations of the type referred to in clauses (1) through (5) of other Persons and
all dividends of other Persons for the payment of which, in either case, such Person is responsible
or liable, directly or indirectly, as obligor, guarantor or otherwise, including by means of any
Guarantee;
(7) all obligations of the type referred to in clauses (1) through (6) of other Persons
secured by any Lien on any property or asset of such Person (whether or not such obligation is
assumed by such Person), the amount of such obligation being deemed to be the lesser of the value
of such property or assets and the amount of the obligation so secured;
(8) to the extent not otherwise included in this definition, net Hedging Obligations of such
Person;
provided, however, that Indebtedness shall not include the obligations of the general
partners, in their capacities as such, of the Existing Joint Ventures in respect of the
Indebtedness of such partnerships existing on the Issue Date and disclosed in the Offering
Memorandum.
Notwithstanding the foregoing, in connection with the purchase by the Company or any
Restricted Subsidiary of any business, the term “Indebtedness” will exclude post-closing payment
adjustments to which the seller may become entitled to the extent such payment is determined by a
final closing balance sheet or such payment depends on the performance of such business after the
closing; provided, however, that, at the time of closing, the amount of any such payment is not
determinable and, to the extent such payment thereafter becomes fixed and determined, the amount is
paid within 30 days thereafter.
The amount of Indebtedness of any Person at any date shall be the outstanding balance at such
date of all unconditional obligations as described above and the maximum liability, upon the
occurrence of the contingency giving rise to the obligation, of any contingent obligations at such
date; provided, however, that the principal amount of any noninterest bearing or other discount
security at any date will be the principal amount thereof that would be shown on a balance sheet of
such Person dated such date prepared in accordance with GAAP.
For purposes of calculating the amount outstanding of Indebtedness of a Securitization
Subsidiary that transfers any interest in accounts receivable or inventory to another Person, the
amount of unrecovered capital, purchase price or principal investment of such Person (if other than
the Company or a Restricted Subsidiary) in respect thereof excluding any amount representing yield
or interest earned on such capital, purchase price or investment, shall be deemed to be
Indebtedness.
“Independent Qualified Party” means an investment banking firm, accounting firm or appraisal
firm of national standing; provided that such firm is not an Affiliate of the Company.
“I/N Kote” shall mean I/N Kote L.P., a Delaware limited partnership in which a subsidiary of
the Company owns a 49% general partnership interest and a 1% limited partnership interest.
“I/N Tek” shall mean I/N Tek L.P., a Delaware limited partnership in which a subsidiary of the
Company owns a 59% general partnership interest and a 1% limited partnership interest.
“Intercreditor Agreements” means the Existing Receivables Intercreditor Agreement, any future
Inventory Intercreditor Agreement or Receivables Intercreditor Agreement and the USWA Mortgage.
“Interest Rate Agreement” means in respect of a Person any interest rate swap agreement,
interest rate cap agreement or other similar financial agreement or arrangement.
“Inventory and Related Assets” means any inventory (whether now existing or arising
thereafter) of the Company or any Restricted Subsidiary, and any assets related thereto, including
all collateral securing such inventory and other assets which are customarily transferred or in
respect of which security interests are customarily granted in connection with asset securitization
transactions involving inventory.
“Investment” in any Person means any direct or indirect advance, loan (other than advances to
customers in the ordinary course of business that are recorded as accounts receivable or advances
against supplies on the balance sheet of the lender) or other extension of credit (including by way
of Guarantee or similar arrangement) or capital contribution to (by means of any transfer of cash
or other property to others or any payment for property or services for the account or use of
others), or any purchase or acquisition of Capital Stock, Indebtedness or other similar instruments
issued by such Person. Except as otherwise provided for herein, the amount of an Investment shall
be its fair value at the time the Investment is made and without giving effect to subsequent
changes in value.
For purposes of the definition of “Unrestricted Subsidiary”, the definition of “Restricted
Payment” and the covenant described under “ — Certain Covenants — Limitation on Restricted
Payments”:
(1) “Investment” shall include the portion (proportionate to the Company’s equity interest in
such Subsidiary) of the fair market value of the net assets of any Subsidiary of the Company at the
time that such Subsidiary is designated an Unrestricted Subsidiary; provided, however, that upon a
redesignation of such Subsidiary as a Restricted Subsidiary, the Company shall be deemed to
continue to have a permanent “Investment” in an Unrestricted Subsidiary equal to an amount (if
positive) equal to (A) the Company’s “Investment” in such Subsidiary at the time of such
redesignation less (B) the portion (proportionate to the Company’s equity interest in such
Subsidiary) of the fair market value of the net assets of such Subsidiary at the time of such
redesignation; and
(2) any property transferred to or from an Unrestricted Subsidiary shall be valued at its fair
market value at the time of such transfer, in each case as determined in good faith by the Board of
Directors of the Company;
provided that Special Contributions (as defined in the Empire Agreement) shall not be deemed
to be Investments.
“Investment Grade” designates a rating of BBB — or higher by S&P or Baa3 or higher by Moody’s
or the equivalent of such ratings by S&P or Moody’s. In the event that the Issuer shall select any
other Rating Agency, the equivalent of such ratings by such Rating Agency shall be used.
“Ispat Inland Inc. Pension Plan” means the Ispat Inland Inc. Pension Plan, as restated
effective January 1, 1997, including all supplements thereto.
“Legal Holiday” means a Saturday, a Sunday or a day on which banking institutions are not
required to be open in the State of New York.
“Lien” means any mortgage, pledge, security interest, encumbrance, lien or charge of any kind
(including any conditional sale or other title retention agreement or lease in the nature thereof).
“Moody’s” means Moody’s Investors Service, Inc. and its successors.
“Mortgage” has the meaning given such term in the section entitled “Description of the First
Mortgage Bonds”.
“Net Available Cash” from an Asset Disposition means cash payments received therefrom
(including any cash payments received by way of deferred payment of principal pursuant to a note or
installment receivable or otherwise and proceeds from the sale or other disposition of any
securities received as consideration, but only as and when received, but excluding any other
consideration received in the form of assumption by the acquiring Person of Indebtedness or other
obligations relating to such properties or assets or received in any other noncash form), in each
case net of:
(1) all accounting, investment banking, legal, title and recording tax expenses, commissions
and other fees and expenses incurred, and all Federal, state, provincial, foreign and local taxes
required to be paid or be accrued as a liability under GAAP, as a consequence of such Asset
Disposition;
(2) except in the case of Inventory Collateral, all payments made on any Indebtedness which is
secured by any assets subject to such Asset Disposition, in accordance with the terms of any Lien
upon or other security agreement of any kind with respect to such assets, or which must by its
terms, or in order to obtain a necessary consent to such Asset Disposition, or by applicable law,
be repaid out of the proceeds from such Asset Disposition;
(3) all distributions and other payments required to be made to minority interest holders in
Restricted Subsidiaries as a result of such Asset Disposition; and
(4) the deduction of appropriate amounts provided by the seller as a reserve, in accordance
with GAAP, against any liabilities associated with the property or other assets disposed in such
Asset Disposition and retained by the Company or any Restricted Subsidiary after such Asset
Disposition;
provided that the term “Net Available Cash” shall not include the proceeds of any Asset Disposition
consummated during any Suspension Period.
“Net Cash Proceeds” with respect to any issuance or sale of Capital Stock, means the cash
proceeds of such issuance or sale net of attorneys’ fees, accountants’ fees, underwriters’ or
placement agents’ fees, discounts or commissions and brokerage, consultant and other fees actually
incurred in connection with such issuance or sale and net of taxes paid or payable as a result
thereof.
“Note Guarantee” means a Guarantee by each Guarantor of all Obligations of the Issuer under
the Notes and the Indenture on the terms set forth in the Indenture.
“Obligations” means with respect to any Indebtedness all obligations for principal, premium,
interest, penalties, fees, indemnifications, reimbursements and other amounts payable pursuant to
the documentation governing such Indebtedness.
“Offering Memorandum” means the offering memorandum dated March 18, 2004 pursuant to which the
unregistered Notes were originally offered.
“Parent Subordination Agreement” means the subordination agreement, dated as of the Issue
Date, between the Company, each holder of any of the Existing Shareholder Advances and the trustee.
“PBGC” means the Pension Benefit Guaranty Corporation.
“PBGC Agreement” means that certain agreement, dated March 14, 2000 (which agreement
supplemented an agreement dated July 14, 1998) among the Company, Parent, Ryerson Tull Inc. and the
PBGC, as amended under an agreement dated July 9, 2003, as amended, extended, renewed, restated,
supplemented or otherwise modified from time to time.
“PCI” means PCI Associates, a general partnership in which the Company owns a 50% interest.
“Permitted Finco Collapse Transaction” means as a transaction in which, unless otherwise
specified below, each of the following events occur:
(a) ArcelorMittal Partnership (formerly Ispat Inland, L.P.) transfers (including through a
series of transfers among Finco Guarantors) or causes to be transferred to the Issuer (x) any First
Mortgage Bonds held by any Finco Guarantor and (y) any Indebtedness owed by the Issuer to any Finco
Guarantor and the Finco Mirror Note is retired (and in connection therewith the rate of interest
payable by the Company on the First Mortgage Bonds will be reduced by 0.50%);
(b) ArcelorMittal Partnership transfers all of the Capital Stock of the Issuer to a newly
formed limited liability company (the “Successor Issuer”) organized and existing under the laws of
the United States of America, any State thereof or the District of Columbia which has no material
assets or liabilities and all of the Capital Stock of which is owned by Ispat Inland Holdings, Inc.
or any successor entity which owns directly a majority of the Voting Stock of the Company (the
“Company Parent”);
(c) any Finco Guarantor may, if it so elects, transfer (including through a series of
transfers among Finco Guarantors) or cause to be transferred to the Issuer, the Successor Issuer or
the Company Parent any Capital Stock of the Company that is owned by any Finco Guarantor in
exchange for Capital Stock of the Company Parent;
(d) the Issuer liquidates into the Successor Issuer;
(e) the Company Parent shall execute and deliver to the Trustee a supplement to the Pledge
Agreement, in form satisfactory to the Trustee, pursuant to which the Capital Stock of the
Successor Issuer shall be pledged to the Trustee as Collateral for the Successor Issuer’s
obligations under the Notes and the Indenture;
(f) the Successor Issuer shall expressly assume by supplemental indenture executed and
delivered to the Trustee, in form satisfactory to the Trustee, all obligations of the Issuer under
the Indenture;
(g) the Successor Issuer shall execute and deliver to the Trustee, in form satisfactory to the
Trustee, a supplement to the Pledge Agreement pursuant to which it shall expressly assume all
obligations of the Issuer under the Pledge Agreement and pledge to the Trustee the First Mortgage
Notes and any Indebtedness of the Company held by it as Collateral for its obligations under the
Notes and the Indenture;
(h) all filings and other actions necessary to preserve the perfection and priority of the
Lien of the Trustee on the Collateral shall be made and taken;
(i) the Company shall deliver to the Trustee an officers’ certificate and an Opinion of
Counsel, each stating that such transfer and such supplemental indenture and supplements to the
Pledge Agreement comply with the Indenture and the Pledge Agreement and that all necessary actions
have been taken to preserve the priority and perfection of the Lien of the Trustee on the
Collateral; and
(j) the Company shall deliver to the Trustee an Opinion of Counsel to the effect that the
holders will not recognize income, gain or loss for Federal income tax purposes as a result of such
transaction and will be subject to Federal income tax on the same amounts, in the same manner and
at the same times as would have been the case if such transaction had not occurred.
Upon compliance with each of the foregoing requirements, (i) the Successor Issuer shall be the
successor to the Issuer and shall succeed to, and be substituted for, and may exercise every right
and power of, the Issuer under the Indenture, the Notes and the Pledge Agreement and the
predecessor Issuer shall be released from its obligations under the Indenture, the Notes and the
Pledge Agreement and (ii) all remaining property or assets of any Finco Guarantor constituting a
portion of the Collateral shall be released from the Lien of the Pledge Agreement and each Finco
Guarantor shall be released from the Indenture, the Pledge Agreement and its Note Guarantee and all
references to a “Finco Guarantor” in the Indenture and the Pledge Agreement shall no longer be
deemed to refer to such entities.
For purposes of the covenant described under “ — Certain Covenants — Limitation on
Indebtedness”, any Indebtedness of the Company or any Restricted Subsidiaries that, immediately
following such Permitted Finco Collapse Transaction, is held by entities that were Finco Guarantors
immediately prior to such Permitted Finco Collapse Transaction shall be deemed to be an Incurrence
of Indebtedness by the Company or the applicable Restricted Subsidiary on such date.
For purposes of the covenant described under “ — Certain Covenants — Restricted Payments”, the
amount of cash and Temporary Cash Investments that, immediately following such Permitted Finco
Collapse Transaction, is held by entities that were Finco Guarantors immediately prior to such
Permitted Finco Collapse Transaction shall be deemed to be a Restricted Payment by the Company on
the date of such Permitted Finco Collapse Transaction.
“Permitted First Mortgage Bonds Collateral Liens” means Liens on First Mortgage Bonds
Collateral consisting of:
(1) Liens imposed by law, such as carriers’, warehousemen’s and mechanics’ Liens, in each case
for sums not yet due or being contested in good faith by appropriate proceedings or other Liens
arising out of judgments
or awards against such Person with respect to which such Person shall then be proceeding with
an appeal or other proceedings for review;
(2) Liens for taxes, assessments, governmental charges or claims not yet subject to penalties
for non-payment or which are being contested in good faith by appropriate proceedings;
(3) minor survey exceptions, minor encumbrances, easements or reservations of, or rights of
others for, licenses, rights-of-way, sewers, electric lines, telegraph and telephone lines and
other similar purposes, or zoning or other restrictions as to the use of real property or Liens
incidental to the conduct of the business of such Person or to the ownership of its properties
which were not Incurred in connection with Indebtedness and which do not in the aggregate
materially adversely affect the value of said properties or materially impair their use in the
operation of the business of such Person;
(4) Liens (i) created pursuant to the Subordinated Mortgage (the “USWA Mortgage”), dated as of
September 15, 1994, between Inland Steel Company (as predecessor to the Company) and the United
Steelworkers of America as in effect on the Issue Date and (ii) other Liens securing obligations of
up to $150.0 million of the Company and its Restricted Subsidiaries; provided that (x) such Liens
do not secure Indebtedness for money borrowed and (y) such Liens are subordinated to the Lien
securing the Bonds to at least the same extent as the USWA Mortgage; and
(5) Liens securing Bonds issued in compliance with “ — Certain Covenants — Limitation on
Indebtedness”.
“Permitted Holders” means (1) Mr. Lakshmi N. Mittal and his spouse or lineal descendants, (2)
any trust, corporation or partnership 100% in interest of the beneficiaries, stockholders or
partners of which consists of any Person described in clause (1) above or (3) any combination of
the foregoing.
“Permitted Inventory Collateral Liens” means:
(1) Liens (which may rank, at the Company’s option, prior to, on parity with or junior to the
Lien on the Inventory Collateral securing the Company’s Note Guarantee) on Inventory and Related
Assets (i) of a Securitization Subsidiary Incurred in a Qualified Receivables Transaction and/or
(ii) in a principal amount not to exceed the sum of (x) 65% of the book value of the inventory of
the Company and its Restricted Subsidiaries (other than any inventory constituting Inventory and
Related Assets pledged, sold or otherwise transferred or encumbered in connection with a Qualified
Securitization Transaction); and (y) 85% of the book value of the accounts receivable of the
Company and its Restricted Subsidiaries (other than any accounts receivable constituting
Receivables and Related Assets pledged, sold or otherwise transferred or encumbered in connection
with a Qualified Securitization Transaction);
(2) Liens securing the Company’s Note Guarantee;
(3) rights, if any, under the “physical property” and “springing lien” provisions set forth in
Article Six, Section 4 and Group 4 of the granting clauses, respectively, of the Mortgage which are
applicable to Bonds issued under (w) the twenty-fourth supplemental indenture to the Mortgage,
dated January 15, 1977, (x) the twenty-fifth supplemental indenture to the Mortgage, dated as of
February 1, 1977, (y) the thirty-second supplemental indenture to the Mortgage, dated as of June 1,1993 and (z) the thirty-third supplemental indenture to the Mortgage, dated as of June 1, 1995, and
not to any other Indebtedness;
(4) Liens arising out of consignments and similar arrangements in the ordinary course of
business;
(5) Liens imposed by law, such as carriers’, warehousemen’s and mechanics’ Liens, in each case
for sums not yet due or being contested in good faith by appropriate proceedings or other Liens
arising out of judgments or awards against such Person with respect to which such Person shall then
be proceeding with an appeal or other proceedings for review;
(6) Liens incidental to the conduct of the business of such Person or to the ownership of its
properties which were not Incurred in connection with Indebtedness and which do not in the
aggregate materially adversely
affect the value of such Inventory Collateral or materially impair their use in the operation
of the business of such Person; and
(7) Liens for taxes, assessments, governmental charges or claims not yet subject to penalties
for non-payment or which are being contested in good faith by appropriate proceedings.
“Permitted Investment” means an Investment by the Company or any Restricted Subsidiary in:
(1) the Company, a Restricted Subsidiary or a Person that will, upon the making of such
Investment, become a Restricted Subsidiary; provided, however, that the primary business of such
Restricted Subsidiary is a Related Business;
(2) another Person if as a result of such Investment such other Person is merged or
consolidated with or into, or transfers or conveys all or substantially all its assets to, the
Company or a Restricted Subsidiary; provided that such Person’s primary business is a Related
Business;
(3) cash and Temporary Cash Investments;
(4) receivables owing to the Company or any Restricted Subsidiary if created or acquired in
the ordinary course of business and payable or dischargeable in accordance with customary trade
terms; provided that such trade terms may include such concessionary trade terms as the Company or
any such Restricted Subsidiary deems reasonable under the circumstances;
(5) payroll, travel and similar advances to cover matters that are expected at the time of
such advances ultimately to be treated as expenses for accounting purposes and that are made in the
ordinary course of business;
(6) loans or advances to employees or directors in the ordinary course of business of the
Company or its Restricted Subsidiaries, but in any event not to exceed $2.5 million in the
aggregate outstanding at any one time;
(7) stock, obligations or securities received in settlement of debts created in the ordinary
course of business and owing to the Company or any Restricted Subsidiary or in satisfaction of
judgments;
(8) any Person to the extent such Investment represents the non-cash portion of the
consideration received for an Asset Disposition as permitted pursuant to the covenant described
under “ — Certain Covenants — Limitation on Sales of Assets and Subsidiary Stock”;
(9) any Person where such Investment was acquired by the Company or any of its Restricted
Subsidiaries (a) in exchange for any other Investment or accounts receivable or other rights to
payment held by the Company or any such Restricted Subsidiary in connection with or as a result of
a bankruptcy, workout, reorganization or recapitalization of the issuer of such other Investment or
accounts receivable or other rights to payment or (b) as a result of a foreclosure by the Company
or any of its Restricted Subsidiaries with respect to any secured Investment or other transfer of
title with respect to any secured Investment in default;
(10) any Securitization Subsidiary in connection with a Qualified Securitization Transaction;
provided that such Investment consists only of (i) Receivables and Related Assets or Inventory and
Related Assets or a promissory note or notes of the Securitization Subsidiary customary in
Qualified Securitization Transactions or (ii) Standard Securitization Undertakings;
(11) Currency Agreements, Commodity Hedging Agreements and Interest Rate Agreements entered
into in the ordinary course of business and not for speculative purposes; and
(12) Investments in the Issuer and, prior to a Permitted Finco Collapse Transaction, any Finco
Guarantor.
“Permitted Liens” means, with respect to any Person:
(1) pledges or deposits by such Person under worker’s compensation laws, unemployment
insurance laws or similar legislation or to support obligations to insurance companies in respect
of deductibles, co-insurance
claims or self-insured retention (and letter of credit obligations in respect thereof), or
good faith deposits in connection with bids, tenders, contracts (other than for the payment of
Indebtedness), warranty obligations or leases to which such Person is a party, or deposits to
secure public or statutory obligations of such Person or deposits of cash or cash equivalents to
secure surety or appeal bonds to which such Person is a party, or deposits as security for
contested taxes or import duties or for the payment of rent, in each case Incurred in the ordinary
course of business;
(2) Liens imposed by law, such as carriers’, warehousemen’s and mechanics’ Liens, in each case
for sums not yet due or being contested in good faith by appropriate proceedings or other Liens
arising out of judgments or awards against such Person with respect to which such Person shall then
be proceeding with an appeal or other proceedings for review;
(3) Liens arising solely by virtue of any statutory or common law provision relating to
banker’s Liens, rights of set-off or similar rights and remedies as to deposit accounts or other
funds maintained with a creditor depository institution; provided, however, that (A) such deposit
account is not a dedicated cash collateral account and is not subject to restrictions against
access by the Company in excess of those set forth by regulations promulgated by the Federal
Reserve Board and (B) such deposit account is not intended by the Company or any Restricted
Subsidiary to provide collateral to the depository institution;
(4) Liens for taxes, assessments, governmental charges or claims not yet subject to penalties
for non-payment or which are being contested in good faith by appropriate proceedings;
(5) Liens in favor of issuers of surety bonds or letters of credit and bankers’ acceptances
issued pursuant to the request of and for the account of such Person in the ordinary course of its
business; provided, however, that such letters of credit do not constitute Indebtedness;
(6) minor survey exceptions, minor encumbrances, easements or reservations of, or rights of
others for, licenses, rights-of-way, sewers, electric lines, telegraph and telephone lines and
other similar purposes, or zoning or other restrictions as to the use of real property or Liens
incidental to the conduct of the business of such Person or to the ownership of its properties
which were not Incurred in connection with Indebtedness and which do not in the aggregate
materially adversely affect the value of said properties or materially impair their use in the
operation of the business of such Person;
(7) Liens securing Indebtedness Incurred to finance the construction, purchase or lease of, or
repairs, improvements or additions to, property, plant or equipment of such Person; provided that
the Lien may not extend to any other property owned by such Person or any of its Restricted
Subsidiaries at the time the Lien is Incurred (other than assets and property affixed or
appurtenant thereto), and the Indebtedness (other than any interest thereon) secured by the Lien
may not be Incurred more than 180 days after the later of the acquisition, completion of
construction, repair, improvement, addition or commencement of full operation of the property
subject to the Lien;
(8) Liens on Inventory and Related Assets, mobile equipment, spare parts, stock of
Securitization Subsidiaries, Indebtedness owing from Securitization Subsidiaries, Receivables and
Related Assets (and proceeds thereof, including, without limitation, cash, investments and pledged
deposit accounts and lockboxes) to secure Indebtedness (i) of a Securitization Subsidiary Incurred
in a Qualified Receivables Transaction and/or (ii) in a principal amount not to exceed the sum of
(x) 65% of the book value of the inventory of the Company and its Restricted Subsidiaries (other
than any inventory constituting Inventory and Related Assets pledged, sold or otherwise transferred
or encumbered in connection with a Qualified Securitization Transaction); and (y) 85% of the book
value of the accounts receivable of the Company and its Restricted Subsidiaries (other than any
accounts receivable constituting Receivables and Related Assets pledged, sold or otherwise
transferred or encumbered in connection with a Qualified Securitization Transaction);
(9) Permitted First Mortgage Bonds Collateral Liens, Liens securing the Notes and the Note
Guarantees and, without duplication, Liens outstanding on the Issue Date;
(10) Liens on property or shares of Capital Stock of another Person at the time such other
Person becomes a Subsidiary of such Person; provided, however, that the Liens may not extend to any
other property owned by such Person or any of its Restricted Subsidiaries (other than assets and
property affixed or appurtenant thereto);
(11) Liens on property at the time such Person or any of its Subsidiaries acquires the
property, including any acquisition by means of a merger or consolidation with or into such Person
or a Subsidiary of such Person; provided, however, that the Liens may not extend to any other
property owned by such Person or any of its Restricted Subsidiaries (other than assets and property
affixed or appurtenant thereto);
(12) Liens securing Indebtedness or other obligations of a Subsidiary of such Person owing to
such Person or a wholly-owned Subsidiary of such Person;
(13) Liens securing Hedging Obligations entered into to protect against fluctuations in
interest rates in the ordinary course of business;
(14) Liens securing Hedging Obligations related to Currency Agreements or Commodity Hedging
Agreements entered into to protect against fluctuations in exchange rates and commodity prices in
the ordinary course of business;
(15) leases or subleases granted in the ordinary course of business;
(16) any interest or title of a lessor under any lease, whether or not characterized as an
operating lease or a capital lease;
(17) Liens arising out of consignments or similar arrangements for the sale of goods in the
ordinary course of business;
(18) additional Liens on property or assets (other than the First Mortgage Bonds Collateral)
securing obligations of the Company and its Restricted Subsidiaries not exceeding $15.0 million at
any time; and
(19) Liens to secure any Refinancing (or successive Refinancings) as a whole, or in part, of
any Indebtedness secured by any Lien referred to in the foregoing clause (7), (8), (9) (other than
Liens in respect of Indebtedness that is retired by the Company or any Restricted Subsidiary on the
Issue Date), (10) or (11) or Liens extending, renewing or replacing, in whole or in part, such
Liens; provided that:
(A)
such new Lien shall be limited to all or part of the same
property and assets that secured or, under the written agreements pursuant to
which the original Lien arose, could secure the original Lien (plus
improvements and accessions to, such property or proceeds or distributions
thereof);
(B)
the Indebtedness secured by such Lien at such time is not
increased to any amount greater than the sum of (x) the outstanding principal
amount or, if greater, committed amount of the Indebtedness described under
clause (7), (8), (9), (10) or (11) at the time the original Lien became a
Permitted Lien and (y) an amount necessary to pay any fees and expenses,
including premiums, related to such refinancing, refunding, extension, renewal
or replacement.
For purposes of this definition, the term “Indebtedness” shall be deemed to include interest
on such Indebtedness.
“Person” means any individual, corporation, partnership, limited liability company, joint
venture, association, joint-stock company, trust, unincorporated organization, government or any
agency or political subdivision thereof or any other entity.
“Preferred Stock”, as applied to the Capital Stock of any Person, means Capital Stock of any
class or classes (however designated) which is preferred as to the payment of dividends or
distributions, or as to the distribution of assets upon any voluntary or involuntary liquidation or
dissolution of such Person, over shares of Capital Stock of any other class of such Person.
“Principal” of a Note means the principal of the Note plus the premium, if any, payable on the
Note which is due or overdue or is to become due at the relevant time.
“Purchase Agreement” means the purchase agreement entered into among the Issuer, the
Guarantors and UBS Securities LLC.
“Qualified Securitization Transaction” means any transaction or series of transactions that
may be entered into by the Company or any Restricted Subsidiary pursuant to which the Company or
any Restricted Subsidiary may sell, convey or otherwise transfer to (a) a Securitization Subsidiary
(in the case of a transfer by the Company or any Restricted Subsidiary) and (b) any other Person
(in the case of a transfer by a Securitization Subsidiary), or may grant a security interest in
Receivables and Related Assets or Inventory and Related Assets.
“Rating Agencies” means:
(a) S&P;
(b) Moody’s; or
(c) if S&P or Moody’s or both shall not make a rating of the Notes publicly available, a
nationally recognized securities rating agency or agencies, as the case may be, selected by the
Issuer, which shall be substituted for S&P or Moody’s or both, as the case may be.
“Receivables and Related Assets” means any accounts receivable and other rights to payment
(whether now existing or arising thereafter) of the Company or any Restricted Subsidiary, and any
assets related thereto, including all collateral securing such accounts receivable and other rights
to payment, all contracts and contract rights and all Guarantees or other obligations in respect of
such accounts receivable and other rights to payment, proceeds of such accounts receivable and
other rights to payment and other assets which are customarily transferred or in respect of which
security interests are customarily granted in connection with asset securitization transactions
involving accounts receivable and other rights to payment.
“Refinance” means, in respect of any Indebtedness, to refinance, extend, renew, refund, repay,
prepay, redeem, defease or retire, or to issue other Indebtedness in exchange or replacement for,
such indebtedness. “Refinanced” and “Refinancing” shall have correlative meanings.
“Refinancing Indebtedness” means Indebtedness that Refinances any Indebtedness of the Company
or any Restricted Subsidiary existing on the Issue Date or Incurred in compliance with the
Indenture, including Indebtedness that Refinances Refinancing Indebtedness; provided, however,
that:
(1) such Refinancing Indebtedness has a Stated Maturity no earlier than the Stated Maturity of
the Indebtedness being Refinanced;
(2) such Refinancing Indebtedness has an Average Life at the time such Refinancing
Indebtedness is Incurred that is equal to or greater than the Average Life of the Indebtedness
being Refinanced; and
(3) such Refinancing Indebtedness has an aggregate principal amount (or if Incurred with
original issue discount, an aggregate issue price) that is equal to or less than the aggregate
principal amount (or if Incurred with original issue discount, the aggregate accreted value) then
outstanding or committed (plus fees and expenses, including any premium and defeasance costs) under
the Indebtedness being Refinanced;
provided further, however, that Refinancing Indebtedness shall not include (A) Indebtedness of
a Restricted Subsidiary that is not a Company Guarantor that Refinances Indebtedness of the Company
or a Company Guarantor or (B) Indebtedness of the Company or a Restricted Subsidiary that
Refinances Indebtedness of an Unrestricted Subsidiary.
“Registration Rights Agreement” means the Registration Rights Agreement dated the Issue Date,
among the Issuer, the Guarantors and UBS Securities LLC.
“Related Business” means any business in which the Company was engaged on the Issue Date and
any business related, ancillary or complementary to any business in which the Company was engaged
on the Issue Date, in each case as reasonably determined by the Board of Directors of the Company
in good faith.
“Restricted Payment” with respect to any Person means:
(1) the declaration or payment of any dividends or any other distributions of any sort in
respect of its Capital Stock (including any payment in connection with any merger or consolidation
involving such Person) or similar payment to the direct or indirect holders of its Capital Stock
(other than dividends or distributions payable solely in its Capital Stock (other than Disqualified
Stock) and dividends or distributions to a Finco Guarantor (prior to a Permitted Finco Collapse
Transaction), the Issuer, the Company or a Restricted Subsidiary, and other than pro rata dividends
or other distributions made by a Subsidiary that is not a Wholly-Owned Subsidiary to minority
stockholders (or owners of an equivalent interest in the case of a Subsidiary that is an entity
other than a corporation));
(2) the purchase, redemption or other acquisition or retirement for value of any Capital Stock
of the Company held by any Person or of any Capital Stock of a Restricted Subsidiary held by any
Affiliate of the Company (other than a Restricted Subsidiary), including the exercise of any option
to exchange any Capital Stock (other than into Capital Stock of the Company that is not
Disqualified Stock);
(3) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for
value, prior to scheduled maturity, scheduled repayment or scheduled sinking fund payment of any
Subordinated Obligations of such Person (other than the Refinancing of Subordinated Obligations
with Refinancing Indebtedness or the purchase, repurchase or other acquisition of Subordinated
Obligations purchased in anticipation of satisfying a sinking fund obligation, principal
installment or final maturity, in each case due within one year of the date of such purchase,
repurchase or other acquisition);
(4) the making of any Investment (other than a Permitted Investment) in any Person; or
(5) the purchase, repurchase, redemption, acquisition or retirement for value of the Existing
Shareholder Advances.
“Restricted Subsidiary” means any Subsidiary of the Company that is not an Unrestricted
Subsidiary.
“Revolving Credit Facility” means any revolving credit, overdraft or working capital facility
or financing arrangement.
“S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc.,
and its successors.
“Sale/Leaseback Transaction” means an arrangement relating to property owned by the Company or
a Restricted Subsidiary on the Issue Date or thereafter acquired by the Company or a Restricted
Subsidiary whereby the Company or a Restricted Subsidiary transfers such property to a Person and
the Company or a Restricted Subsidiary leases it from such Person.
“SEC” means the Securities and Exchange Commission.
“Securities Act” means the Securities Act of 1933, as amended.
“Securitization Subsidiary” means Ispat Inland Administrative Service Company (so long as it
is a Wholly-Owned Subsidiary) and any other Wholly-Owned Subsidiary (or a wholly-owned Subsidiary
of another Person in which the Company or any Subsidiary of the Company makes an Investment) to
which the Company or any Subsidiary of the Company transfers Receivables and Related Assets or
Inventory and Related Assets and that engages in no activities other than in connection with
financing of accounts receivable or inventory, as the case may be, and that is designated by the
Board of Directors of the Company (as provided below) as a Securitization Subsidiary and
(1) no portion of the Indebtedness or any other Obligations (contingent or otherwise) of which
(A)
is Guaranteed by the Company or any Restricted Subsidiary
(excluding Guarantees of Obligations (other than the principal of, and interest
on, Indebtedness) pursuant to Standard Securitization Undertakings),
is recourse to or obligates the Company or any Restricted
Subsidiary (other than such Securitization Subsidiary) in any way other than
pursuant to Standard Securitization Undertakings, and
(C)
subjects any property or asset of the Company or any Restricted
Subsidiary (other than such Securitization Subsidiary), directly or indirectly,
contingently or otherwise, to the satisfaction thereof, other than pursuant to
Standard Securitization Undertakings,
(2) with which neither the Company nor any Restricted Subsidiary (other than such
Securitization Subsidiary) has any material contract, agreement, arrangement or understanding other
than on terms no less favorable to the Company or such Restricted Subsidiary than those that might
be obtained at the time from Persons that are not Affiliates of the Company, other than fees
payable in the ordinary course of business in connection with servicing accounts receivable of such
entity, and
(3) to which neither the Company nor any Restricted Subsidiary (other than such Securitization
Subsidiary) has any obligation to a third party to maintain or preserve such entity’s financial
condition or to cause such entity to achieve certain levels of operating results.
Any designation of a Subsidiary as a Securitization Subsidiary shall be evidenced to the
trustee by filing with the trustee a certified copy of the resolution of the Board of Directors of
the Company giving effect to the designation and an officers’ certificate certifying that the
designation complied with the preceding conditions and was permitted by the Indenture.
“Senior Indebtedness” means with respect to any Person:
(1) Indebtedness of such Person, whether outstanding on the Issue Date or thereafter Incurred;
and
(2) Accrued and unpaid interest (including interest accruing on or after the filing of any
petition in bankruptcy or for reorganization relating to such Person whether or not post-filing
interest is allowed in such proceeding) in respect of (A) Indebtedness of such Person for money
borrowed and (B) indebtedness evidenced by notes, debentures, bonds or other similar instruments
for the payment of which such Person is responsible or liable unless, in the case of clauses (1)
and (2), in the instrument creating or evidencing the same or pursuant to which the same is
outstanding, it is provided that such obligations are subordinate in right of payment to the Notes
or the Note Guarantee of such Person, as the case may be; provided that Senior Indebtedness shall
not include:
(1) any obligation of such Person to any Subsidiary of such Person;
(2) any liability for Federal, state, local or other taxes owed or owing by such Person;
(3) any accounts payable or other liability to trade creditors arising in the ordinary course
of business (including guarantees thereof or instruments evidencing such liabilities);
(4) any Indebtedness of such Person (and any accrued and unpaid interest in respect thereof)
which is subordinate or junior in any respect to any other Indebtedness or other obligation of such
Person; or
(5) that portion of any Indebtedness which at the time of Incurrence is Incurred in violation
of the Indenture.
“Significant Subsidiary” means any Restricted Subsidiary that would be a “Significant
Subsidiary” of the Company within the meaning of Rule 1-02 under Regulation S-X promulgated by the
SEC.
“Standard Securitization Undertakings” means representations, warranties, covenants and
indemnities entered into by the Company or any Restricted Subsidiary that are reasonably customary
in accounts receivable or inventory securitization transaction and other limited recourse
arrangements that are customary for such securitizations and do not impair the characterization of
the relevant securitization as a true sale under applicable law.
“Stated Maturity” means, with respect to any security, the date specified in such security as
the fixed date on which the final payment of principal of such security is due and payable,
including pursuant to any mandatory redemption provision (but excluding any provision providing for
the repurchase of such security at the option of the holder thereof upon the happening of any
contingency unless such contingency has occurred).
“Subordinated Obligation” means with respect to a Person, any Indebtedness of such Person
(whether outstanding on the Issue Date or thereafter Incurred) which is subordinate or junior in
right of payment to the Notes or a Note Guarantee of such Person, as the case may be, pursuant to a
written agreement to that effect.
“Subsidiary” means, with respect to any Person, any corporation, association, partnership or
other business entity of which more than 50% of the total voting power of shares of Voting Stock is
at the time owned or controlled, directly or indirectly, by:
(1) such Person;
(2) such Person and one or more Subsidiaries of such Person; or
(3) one or more Subsidiaries of such Person.
I/N Tek shall not be deemed to be a Subsidiary for purposes of the Indenture.
“Suspension Period” means any period in which the Notes are rated Investment Grade by both
Rating Agencies and no Default or Event of Default has occurred and is continuing under the
Indenture.
“Temporary Cash Investments” means any of the following:
(1) any investment in direct obligations of, or obligations guaranteed by, the United States
of America or any agency thereof;
(2) investments in time deposit accounts, certificates of deposit and money market deposits
maturing within 360 days of the date of acquisition thereof issued by a bank or trust company which
is organized under the laws of the United States of America, any state thereof or any foreign
country recognized by the United States of America, and which bank or trust company has capital,
surplus and undivided profits aggregating in excess of $50.0 million (or the foreign currency
equivalent thereof) and has outstanding debt which is rated “A” (or such similar equivalent rating)
or higher by at least one nationally recognized statistical rating organization (as defined in Rule
436 under the Securities Act) or any money-market fund sponsored by a registered broker dealer or
mutual fund distributor;
(3) repurchase obligations with a term of not more than 60 days for underlying securities of
the types described in clause (1) above entered into with a bank meeting the qualifications
described in clause (2) above;
(4) investments in commercial paper, maturing not more than nine months after the date of
acquisition, issued by a corporation (other than an Affiliate of the Company) organized and in
existence under the laws of the United States of America or any foreign country recognized by the
United States of America with a rating at the time as of which any investment therein is made of
“P-1” (or higher) according to Moody’s or “A-1” (or higher) according to S&P; and
(5) investments in securities with maturities of twelve months or less from the date of
acquisition issued or fully guaranteed by any state, commonwealth or territory of the United States
of America or by any political subdivision or taxing authority thereof, and rated at least “A” by
S&P or “A2” by Moody’s.
“Unrestricted Subsidiary” means, on the Issue Date, Ispat Inland Empire Inc., III Kote, Inc.,
III/PCI, Inc. and III Tek, Inc., and any other:
(1) Subsidiary of the Company that at the time of determination shall be designated an
Unrestricted Subsidiary by the Board of Directors of the Company in the manner provided below; and
The Board of Directors of the Company may designate any Subsidiary of the Company (including
any newly acquired or newly formed Subsidiary) to be an Unrestricted Subsidiary unless such
Subsidiary or any of its Subsidiaries owns any Capital Stock or Indebtedness of, or holds any Lien
(other than Permitted Liens that do not secure Indebtedness for borrowed money) on any property of,
the Company or any other Subsidiary of the Company that is not a Subsidiary of the Subsidiary to be
so designated; provided, however, that either (A) the Subsidiary to be so designated has total
assets of $1,000 or less or (B) if such Subsidiary has assets greater than $1,000, such designation
would be permitted under the covenant described under “ — Certain Covenants — Limitation on
Restricted Payments” (and in the case of any designation during a Suspension Period, the Company
could have made such designation if no Suspension Period had been in effect since the Issue Date).
The Board of Directors of the Company may designate any Unrestricted Subsidiary to be a
Restricted Subsidiary; provided that immediately after giving effect to such designation (A) the
Company could Incur $1.00 of additional Indebtedness under paragraph (a) of the covenant described
under “ — Certain Covenants — Limitation on Indebtedness” and (B) no Default shall have occurred
and be continuing. Any such designation by such Board of Directors shall be evidenced to the
trustee by promptly filing with the Trustee a copy of the resolution of such Board of Directors
giving effect to such designation and an officers’ certificate certifying that such designation
complied with the foregoing provisions.
“U.S. Dollar Equivalent” means with respect to any monetary amount in a currency other than
U.S. dollars, at any time for determination thereof, the amount of U.S. dollars obtained by
converting such foreign currency involved in such computation into U.S. dollars at the spot rate
for the purchase of U.S. dollars with the applicable foreign currency as published in The Wall
Street Journal in the “Exchange Rates” column under the heading “Currency Trading” on the date two
Business Days prior to such determination.
Except as described under “ — Certain Covenants — Limitation on Indebtedness”, whenever it is
necessary to determine whether the Company has complied with any covenant in the Indenture or a
Default has occurred and an amount is expressed in a currency other than U.S. dollars, such amount
will be treated as the U.S. Dollar Equivalent determined as of the date such amount is initially
determined in such currency.
“U.S. Government Obligations” means direct obligations (or certificates representing an
ownership interest in such obligations) of the United States of America (including any agency or
instrumentality thereof) for the payment of which the full faith and credit of the United States of
America is pledged and which are not callable at the issuer’s option.
“USWA Mortgage” has the meaning set forth in the definition of Permitted First Mortgage Bonds
Collateral Liens.
“Voting Stock” of a Person means all classes of Capital Stock or other interests (including
partnership interests) of such Person then outstanding and normally entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers or trustees thereof.
“Wholly-Owned Subsidiary” means a Restricted Subsidiary all the Capital Stock of which (other
than directors’ qualifying shares or shares required by applicable law to be held by a Person other
than the Company or a Restricted Subsidiary) is owned by the Company or one or more Wholly-Owned
Subsidiaries.
Book-Entry, Delivery and Form of Securities
Except as set forth in the next paragraph, the Notes were initially issued in the form of one
or more Global Notes (the “Global Notes”). The Global Notes were deposited with, or on behalf of,
The Depository Trust Company (“DTC”) and registered in the name of Cede & Co., as nominee of DTC
(such nominee being referred to herein as the “Global Note Holder”).
Notes that are issued as described below under “ — Certificated Notes” will be issued in the
form of registered definitive certificates (the “Certificated Notes”). Such Certificated Notes
may, unless the Global Notes have been previously exchanged for Certificated Notes, be exchanged
for an interest in the Global Notes representing the principal amount of Notes being transferred.
DTC is a limited-purpose trust company that was created to hold securities for its
participating organizations (collectively, the “Participants” or the “DTC’s Participants”) and to
facilitate the clearance and settlement of transactions in such securities between Participants
through electronic book-entry changes in accounts of its Participants. DTC’s Participants include
securities brokers and dealers, banks and trust companies, clearing corporations and certain other
organizations. Access to DTC’s system is also available to other entities such as banks, brokers,
dealers and trust companies (collectively, the “Indirect Participants” or the “DTC’s Indirect
Participants”) that clear through or maintain a custodial relationship with a Participant, either
directly or indirectly. Persons who are not Participants may beneficially own securities held by
or on behalf of DTC only through DTC’s Participants or DTC’s Indirect Participants.
So long as the Global Note Holder is the registered owner of any Notes, the Global Note Holder
will be considered the sole holder under the Indenture of any Notes evidenced by the Global Notes.
Beneficial owners of Notes evidenced by the Global Notes will not be considered the owners or
holders thereof under the Indenture for any purpose, including with respect to the giving of any
directions, instructions or approvals to the Trustee thereunder. Neither the Issuer nor the
Trustee will have any responsibility or liability for any aspect of the records of DTC or for
maintaining, supervising or reviewing any records of DTC relating to the Notes.
Payments in respect of the principal of, premium, if any, and interest on Notes registered in
the name of the Global Note Holder on the applicable record date will be payable by the Trustee to
or at the direction of the Global Note Holder in its capacity as the registered holder under the
Indenture. Under the terms of the Indenture, the Issuer and the Trustee may treat the persons in
whose names Notes, including the Global Notes, are registered as the owners thereof for the purpose
of receiving such payments. Consequently, neither the Issuer nor the Trustee has or will have any
responsibility or liability for the payment of such amounts to beneficial owners of Notes. We
believe, however, that it is currently the policy of DTC to immediately credit the accounts of the
relevant Participants with such payments, in amounts proportionate to their respective holdings of
beneficial interests in the relevant security as shown on the records of DTC. Payments by DTC’s
Participants and DTC’s Indirect Participants to the beneficial owners of Notes will be governed by
standing instructions and customary practice and will be the responsibility of DTC’s Participants
or DTC’s Indirect Participants.
Certificated Notes
Subject to certain conditions, any person having a beneficial interest in the Global Notes
may, upon request to the Trustee, exchange such beneficial interest for Notes in the form of
Certificated Notes. Upon any such issuance, the Trustee is required to register such Certificated
Notes in the name of, and cause the same to be delivered to, such person or persons (or the nominee
of any thereof). In addition, if (i) the Issuer notifies the Trustee in writing that DTC is no
longer willing or able to act as a depositary and the Issuer is unable to locate a qualified
successor within 90 days or (ii) the Issuer, at its option, notifies the Trustee in writing that it
elects to cause the issuance of Notes in the form of Certificated Notes under the Indenture, then,
upon surrender by the Global Note Holder of its Global Note(s), Notes in such form will be issued
to each person that the Global Note Holder and DTC identify as being the beneficial owner of the
related Notes.
Neither the Issuer nor the Trustee will be liable for any delay by the Global Note Holder or
DTC in identifying the beneficial owners of Notes and the Issuer and the Trustee may conclusively
rely on, and will be protected in relying on, instructions from the Global Note Holder or DTC for
all purposes.
Same-Day Settlement and Payment
The Indenture requires that payments in respect of the Notes represented by the Global Notes
(including principal, premium, if any, and interest) be made by wire transfer of immediately
available funds to the accounts specified by the Global Note Holder. With respect to Certificated
Notes, the Issuer will make all payments of principal, premium, if any, and interest by wire
transfer of immediately available funds to the accounts specified by the holders thereof or, if no
such account is specified, by mailing a check to each such holder’s registered address. Secondary
trading in long-term notes and debentures of corporate issuers is generally settled in
clearinghouse or next-day funds. In contrast, Notes represented by the Global Notes are eligible
to trade in the PORTAL market and to trade in DTC’s Same-Day Funds Settlement System, and any
permitted secondary market trading activity in such
Notes will, therefore, be required by DTC to be settled in immediately available funds. We
expect that secondary trading in the Certificated Notes will also be settled in immediately
available funds.
The First Mortgage Bonds were issued under the First Mortgage dated April 1, 1928, between the
Company and First Trust and Savings Bank and Melvin A. Traylor, as Trustees (The Bank of New York
(the “Corporate Trustee”) and Louis P. Young, being the successor Trustees), as amended and
supplemented by various supplemental indentures (and as supplemented from time to time following
the date hereof, collectively, the “Mortgage”), including the Thirty-Eighth Supplemental Indenture
dated as of March 25, 2004, with respect to the First Mortgage Bonds (herein called the
“Supplement”). We urge you to read the Mortgage because it and not this description defines the
rights of the Trustee and the holders of Notes with respect to the First Mortgage Bonds.
Capitalized terms used but not otherwise defined in this Section have the meanings given to them in
“Description of the Notes”.
Principal, Maturity and Interest
The First Mortgage Bonds were issued to ArcelorMittal Finance LLC (formerly Ispat Inland
Finance, LLC) in an original principal amount of $800.0 million consisting of Series Y Bonds in an
aggregate principal amount of $150.0 million and Series Z Bonds in an aggregate principal amount of
$650.0 million. The First Mortgage Bonds were issued only in fully registered form in
denominations of $1,000 and integral multiples thereof. The Company will be permitted to issue an
aggregate principal amount of up to $100.0 million of additional First Mortgage Bonds consisting of
additional Series Y Bonds and/or Series Z Bonds (collectively “Additional First Mortgage Bonds”)
securing all of the Notes in a transaction that complies with the covenant described under “—
Description of the Notes — Certain Covenants — Limitation on Indebtedness”. Any Additional First
Mortgage Bonds will be treated as part of the same series of First Mortgage Bonds as the Series Y
Bonds and the Series Z Bonds, as applicable, originally issued on the Issue Date for all purposes
under the Mortgage.
In December 2004, the Company redeemed $227.5 million in aggregate principal amount of the
Series Z First Mortgage Bonds from ArcelorMittal Finance LLC, which in turn used the proceeds to
redeem $227.5 million in aggregate principal amount of the Notes, at a redemption price equal to
109.75% of the outstanding principal amount redeemed, plus accrued and unpaid interest.
On April 1, 2006, the Company redeemed all $150.0 million of the Series Y First Mortgage Bonds
from ArcelorMittal Finance LLC, which in turn used the proceeds to redeem all $150.0 million in
outstanding principal amount of Floating Rate Notes at a redemption price equal to 103% of the
outstanding principal amount, plus accrued interest to, but excluding, April 1, 2006.
As of the date of this Consent Solicitation Statement, there were $422,500,000 in aggregate
principal amount of Notes and Series Z First Mortgage Bonds outstanding.
Series Z Bonds
The Series Z Bonds bear interest at a rate per annum equal to the sum of the rate of interest
then applicable to the Notes in accordance with the terms of the Indenture (including any
Additional Interest payable on such Notes and including, any increase in the applicable rate of
interest on the Notes following any Default whether or not the Issuer would be obligated to pay
such interest on the Notes). Interest on the Series Z Bonds is payable semi-annually in arrears on
April 1 and October 1 of each year, commencing on October 1, 2004, to the holder of record of the
Series Z Bonds on the immediately preceding March 15 and September 15.
In addition to the interest payable above, an amount will be payable upon each interest
payment date for the Series Z Bonds equal to the product of (i) a fraction, the numerator of which
is the aggregate principal amount of Series Z Bonds outstanding on such date and the denominator of
which is the aggregate principal amount of First Mortgage Bonds outstanding on such date,
multiplied by (ii) the aggregate amount of fees, expenses and other charges due under the terms of
the Indenture on such date (including with respect to the Trustee for the Notes).
To the extent that the Issuer purchases or repays any Notes on any date, the Company will be
required to repay a like aggregate principal amount of the corresponding series of First Mortgage
Bonds on such Date; provided that the entire aggregate principal amount of the Series Z Bonds will
be repaid at or prior to the Stated Maturity of the Notes. To the extent that the Issuer is
required to pay any premium or interest on the Notes to be purchased or
repaid on any date, the Company will be required to pay a like amount of premium or interest
on the principal of the corresponding series of First Mortgage Notes to be repaid by it on such
date.
Redemption
The Supplement provides that, except as provided above under “— Principal, Maturity and
Interest”, no First Mortgage Bonds may be redeemed, retired or prepaid for so long as any Notes are
outstanding.
First Mortgage Bonds Collateral
The Mortgage constitutes a direct first mortgage lien on the interest of the Company in the
properties specifically described in the Mortgage and not heretofore released from the lien hereof
(the “First Mortgage Bonds Collateral”), subject, however, to questions of survey, the lien of
current taxes and assessments and various restrictions, reservations, covenants, easements, rights
of way and other title defects or objections which do not, in the opinion of the Company, lessen
the value to the Company of such properties for the purposes for which they are used or intended to
be used.
The principal properties of the Company that are now subject to the lien of the Mortgage
consist of substantially all of the Company’s Indiana Harbor East plant and certain miscellaneous
parcels of land in East Chicago, Indiana. As of December 31, 2007, the net book value of the
property, plant and fixtures of the Indiana Harbor East facility subject to the lien of the
Mortgage was approximately $1.5 billion. Book value is not necessarily indicative of appraised or
market value, and no appraisal has been obtained with respect to the property. The amount of
property and business interruption insurance on the property subject to the lien of the Mortgage
has a total limit of $500.0 million and a fixed deductible of $10.0 million per occurrence. There
is no title insurance in effect with respect to this property.
Various other properties of the Company (including the plants and other properties of its
subsidiaries and of I/N Tek and I/N Kote) are not now subject to the lien of the Mortgage. The
Mortgage prohibits the creation of any lien (except purchase money obligations and liens upon
property existing at the time of acquisition thereof) on any such unmortgaged property (i) of the
Company, or (ii) of any Subsidiary designated in Group Five of the Granting Clauses of the Mortgage
or a majority or more of the stock of which is owned by the Company and pledged under or made
subject to the lien of the Mortgage and designated by the Company to be a “subsidiary”, unless such
property is first subjected to the prior lien of the Mortgage. No Subsidiary of the Company is
presently designated in Group Five of the Granting Clauses, nor is the stock of any Subsidiary of
the Company pledged under or subject to the lien of the Mortgage. The Mortgage provides that
holders of not less than 76% in aggregate principal amount of the outstanding Bonds may direct the
Trustees with respect to the exercise of remedies under the Mortgage.
No appraisal of the First Mortgage Bonds Collateral has been prepared by or on behalf of the
Issuer or the Guarantors in connection with the Solicitation. The value of the First Mortgage
Bonds Collateral in the event of a liquidation will depend upon market and economic conditions, the
availability of buyers and similar factors. By its nature, the First Mortgage Bonds Collateral
will be illiquid and may have no readily ascertainable market value. There also can be no
assurance that the First Mortgage Bonds Collateral will be saleable and, even if the First Mortgage
Bonds Collateral is saleable, the timing of its liquidation is uncertain.
Certain Covenants of the Company
The following covenants are set forth in the Mortgage.
Maintenance of Mortgaged Properties
The Company will (i) maintain its plants, which are subject to the lien of the Mortgage and
deemed by the Board of Directors of the Company to be useful for the conduct of its business, in
good repair and will make all needful and proper renewals and replacements thereof, and (ii)
maintain in proper repair all fixed equipment subject to the lien of the Mortgage and replace the
same when worn out or abandoned, to the extent deemed by the Board of Directors of the Company to
be required in the conduct of its business.
The Supplement provides that no amendment requiring the consent of holders of First Mortgage
Bonds may be made to the Mortgage without the consent of the holders of a majority in aggregate
principal amount of the Notes then outstanding.
Mortgage Events of Default
The following are events of default under the Mortgage (each, a “Mortgage Event of Default”):
(i) default in the payment of principal on any of the Bonds, when due; (ii) default, continuing for
90 days, in the payment of any installment of interest on any of the Bonds, when due; (iii)
default, continuing for 90 days, in the delivery of any Bonds or the payment on any installment
required by any sinking fund; (iv) default, continuing for 90 days, in the payment of any interest
installment, when due, on any Bond secured by a direct prior lien on any real estate on which the
Mortgage is a direct charge: (v) default in the payment of the principal on any bond secured by
direct prior lien on any real estate on which the Mortgage is a direct charge; (vi) default,
continuing for six months after written notice thereof to the Company by the Corporate Trustee, in
any other covenant of or condition required to be performed by the Company; and (vii) certain
events of bankruptcy.
The Trustees are required, within 90 days of the occurrence of a default, to give to the
holders of the Bonds notice of any Mortgage Event of Default known to them to be subsisting
(without regard to any applicable period of grace); but, except in the case of a default in the
payment, when due, of the principal of or interest on any of the Bonds or of any sinking fund
installment, the Trustees shall be protected in withholding such notice if the Corporate Trustee
determines in good faith that the withholding of such notice is in the interests of the holders of
the Bonds.
If a Mortgage Event of Default shall occur and be continuing, the holders of a majority in
aggregate principal amount of the Bonds then outstanding may require the Trustees, upon their being
reasonably indemnified and secured by one or more of the holders of the Bonds, to take action to
protect and enforce their rights and the rights of the holders of the Bonds and to exercise any
powers of entry or sale granted under the Mortgage, or to institute judicial proceedings, as the
Trustees, being advised by counsel, shall deem most expedient in the interests of the holders of
the Bonds.
Release and Substitution of Property
The Mortgage permits the release from the lien thereof of property which the Company shall not
deem necessary or advantageous to retain in connection with its business, upon the deposit with the
Corporate Trustee of cash equal to the fair value of such property. The Mortgage also permits
releases of certain other property under specified conditions, which in general require the
substitution therefor of property of equivalent fair value.
Guarantee
The
following is a summary of the guarantee of the First Mortgage Bonds
ArcelorMittal and substantially all of the domestic subsidiaries of the Company expect
to provide in connection with a Permitted Finco Reconstitution
Transaction. The
following summary is qualified by reference to the full provisions of the Form of Fortieth Supplemental Indenture (the “Fortieth Supplemental Indenture”) to the
First Mortgage, and the form of guarantee (the
“Guarantee”), both of which have been filed as exhibits to the registration statement of which this Consent Solicitation
Statement forms a part.
ArcelorMittal
will agree, jointly and severally with the other guarantors party to the
Guarantee, to unconditionally guarantee to each holder of a First Mortgage
Bond and the trustee and its successors and assigns:
•
the prompt and full payment when due, whether at maturity, by acceleration,
redemption or otherwise, of the principal of, premium, if any, and interest on
(including interest on any overdue principal and interest to the extent lawful) the
First Mortgage Bonds; and
•
the performance of all other obligations of ArcelorMittal USA to the holders of the
First Mortgage Bonds or the trustee under the Guarantee, the
First Mortgage or the First Mortgage Bonds.
The
Guarantee will be a general unsecured obligation of
ArcelorMittal and the other guarantors, and will rank equal in right of payment with any existing and future senior unsecured
indebtedness of ArcelorMittal and the guarantors and will be senior in right of payment to any existing or future
subordinated indebtedness of ArcelorMittal and the guarantors.
Corporate Trustee
The Corporate Trustee is a depositary of funds of the Company and furnishes other banking
services to the Company in the normal course of business. In addition, the banking corporation of
which the Corporate Trustee is a part participates as a commercial lender from time to time in
various lending arrangements to the Company or its subsidiaries.
No Personal Liability of Directors, Officers, Employees and Stockholders
The Mortgage provides that the Bonds (including the First Mortgage Bonds) are solely
obligations of the Company and that holders of the Bonds shall have no recourse for payment of
principal of, interest on, or claims based on the Bonds against any officer, director, employee or
stockholder of the Company, whether past, present, or future, or of any successor corporation,
either directly or indirectly through the Company or any successor corporation. The Mortgage also
provides that holders of the Bonds expressly release and waive all personal liability of, and all
rights and claims against, every such officer, director, employee or stockholder as a condition of
and as part of the consideration for the issue of the Bonds. Such waiver and release may not be
effective to waive liabilities under the U.S. federal securities law, and it is the view of the SEC
that such a waiver is against public policy.
Capitalized terms used but not otherwise defined in this Section have the meanings given to
them in “Description of the Notes”.
USWA Subordinated Mortgage on the Indiana Harbor East Facility
On September 15, 1994, Ispat Inland Inc. (now ArcelorMittal USA Inc.) granted the United
Steelworkers of America, or USWA, a subordinated mortgage on the Indiana Harbor East facility as
collateral security for the payment of those post-retirement medical and life insurance benefits to
retired employees which are not funded under the applicable Company welfare plan and trust. The
USWA subordinated mortgage is subject and subordinated in all respects to the mortgage securing the
First Mortgage Bonds. To the extent any property is released from the lien of the mortgage of the
First Mortgage Bonds, such property will be automatically released from the lien of the USWA
subordinated mortgage.
The USWA subordinated mortgage permits the trustee under the indenture governing the First
Mortgage Bonds to take all actions thereunder without the consent or notice to the USWA (including
increasing the amount, interest rate and maturity of bonds issued under the indenture governing the
First Mortgage Bonds) and provides that upon an event of default under the indenture governing the
First Mortgage Bonds, the USWA may not take any enforcement action under the subordinated mortgage
except to join in any such action as is then being asserted by the trustee under the indenture
governing the First Mortgage Bonds.
Inventory Intercreditor Arrangements
The Indenture provides that the Trustee will, if requested by the Company, enter into an
intercreditor agreement (each such intercreditor agreement, an “Inventory Intercreditor
Agreement”), on terms not less favorable to the holders of Notes than the terms of the GECC
Intercreditor Agreement, with any future lenders under any indebtedness that is secured by a
Permitted Inventory Collateral Lien. By purchasing a Note and without further action, each Holder
of a Note will be deemed to have consented to the terms of each Inventory Intercreditor Agreement
and will be deemed to have instructed the Trustee to take each action that it is required to take
pursuant to the terms of the Inventory Intercreditor Agreements.
The GECC Intercreditor Agreement, which was entered into in connection with the initial
offering of the Notes and subsequently terminated in 2005, provided that the lien on the inventory
collateral granted to the Trustee for the benefit of the holders of Notes was junior to the lien
granted to General Electric Capital Corporation (“GECC”) under the inventory revolving credit
facility and that, for so long as any obligations are owed to GECC in respect of the inventory
revolving credit facility, the Trustee for the Notes would not take any action to enforce its
security interest in the inventory collateral. Additionally, the GECC Intercreditor Agreement
provided that any proceeds of any enforcement action in respect of the inventory collateral would
first be applied to repay all obligations outstanding under the revolving inventory facility prior
to being distributed to the Trustee. The Trustee also agreed to release its lien on the inventory
collateral in connection with any sale upon foreclosure by GECC in which GECC’s lien on the
collateral was released and waive the right to raise certain claims in any bankruptcy proceeding in
order to facilitate the ability of GECC to direct the disposition of the inventory collateral.
Additionally, in connection with the lien granted to GECC in the inventory collateral and
certain other collateral which does not secure the Notes, the Company agreed with GECC to cause the
trustee under the First Mortgage Bonds, in the case of an event of default under the Mortgage, to
permit GECC, its agents or designees to use any and all property, plant or equipment of the Company
located at the Indiana Harbor East facility (other than the continuous caster equipment previously
mortgaged to the PBGC) (the “PPE Collateral”) during a 150-day liquidation period following such
event of default (subject to extension by mutual agreement) and, during such liquidation period, to
take possession of and fully process the inventory collateral and certain related assets at such
location in any manner necessary or desirable for GECC to realize the full value of its collateral
in connection with any sale or other disposition thereof. The terms of the GECC Intercreditor
Agreement confirmed this access arrangement. GECC also confirmed in the GECC Intercreditor
Agreement that it otherwise had no rights to, security interest in or lien on the PPE Collateral.
The following is a summary of certain U.S. federal income tax consequences of the Proposed
Amendments and payment of the Consent Payment that may be relevant to a beneficial owner of Notes
as of the Record Date. The summary is based on laws, regulations, rulings and decisions now in
effect, all of which are subject to change, possibly with retroactive effect. The discussion does
not deal with classes of beneficial owners subject to special tax rules, and does not describe any
tax consequences arising out of the laws of any state, local or foreign jurisdiction. We have not
sought any ruling from the Internal Revenue Service (the “IRS”) with respect to the statements made
and the conclusions reached in this discussion, and there can be no assurance that the IRS will
agree with such statements and conclusions. Accordingly, each Holder should consult its own tax
advisor with regard to the Proposed Amendments, the payment of the Consent Payment and the
application of U.S. federal income tax laws, as well as the laws of any state, local or foreign
taxing jurisdictions, to its particular situation.
For purposes of this discussion, the term “U.S. Holder” means a beneficial owner of the Notes
who or which is, for U.S. federal income tax purposes:
•
an individual who is a citizen or resident of the United States;
•
a corporation created or organized under the laws of the United States or any state
or political subdivision thereof;
•
an estate the income of which is subject to U.S. federal income taxation regardless
of its source; or
•
a trust that (a) is subject to the primary supervision of a U.S. court and which
has one or more U.S. persons who have the authority to control all substantial
decisions of the trust, or (b) has a valid election in effect under applicable
Treasury Regulations to be treated as a United States person.
For purposes of this discussion, a “Non-U.S. Holder” means a beneficial owner of the Notes who
or which is not a U.S. Holder or an entity treated as a domestic or foreign partnership.
Special rules, not discussed in this Consent Solicitation Statement, may apply to persons
holding Notes through entities treated as partnerships for U.S. federal income tax purposes, and
those persons should consult their own tax advisors in that regard.
Tax Consequences for Consenting U.S. Holders
Deemed Exchange. The tax treatment of a U.S. Holder will depend upon whether the adoption of
the Proposed Amendments and the receipt of the Consent Payment result in a deemed exchange of the
Notes for new Notes for U.S. federal income tax purposes. If neither the Proposed Amendments nor
the Consent Payment results in a deemed exchange with respect to the Notes, a U.S. Holder will not
recognize any gain or loss for U.S. federal income tax purposes, and such holder will continue to
have the same tax basis and holding period in the Notes.
Tax regulations specifically address whether or not the modifications to the terms of a debt
instrument will result in a deemed exchange of that debt instrument for U.S. federal income tax
purposes. Generally, the modification of the terms of a debt instrument will be treated as a
deemed exchange of an old debt instrument for a new debt instrument if such modification is a
significant modification. The regulations provide specific rules regarding whether changing
obligors, changes in yield and deletion or alteration of accounting or financial covenants of or
with respect to a debt instrument will be a significant modification. The regulations provide that
a change in obligor is a modification, but such change is not a significant modification if the new
obligor acquires substantially all of the assets of the original obligor. In addition, a change in
the yield of a debt instrument is a significant modification under the regulations if the yield of
the modified instrument (determined by taking into account any payments made to the holder as
consideration of the modification) varies from the yield on the unmodified instrument (determined
as of the date of the modification) by more than the greater of 25 basis points or five percent of
the annual yield of the unmodified instrument. The regulations provide that a modification of a
debt instrument that adds, deletes or alters customary accounting or financial covenants is not a
significant modification.
In connection with a Permitted Finco Reconstitution Transaction, ArcelorMittal Financial
Services LLC will transfer substantially all of its assets to ArcelorMittal USA Partnership. Both
entities are treated as corporations for U.S. federal income tax purposes. The Proposed Amendments
provide that ArcelorMittal USA Partnership becomes the new obligor on the Notes and therefore, the
change in obligors will not be treated as a significant modification under the regulations.
Moreover, even though the Proposed Amendments will change the yield of the Notes, this change will
be smaller than that which would be treated as a significant modification under the regulations.
Accordingly, the adoption of the Proposed Amendments and receipt of the Consent Payment should not
cause a deemed exchange under the regulations. As a result, a U.S. Holder should recognize income
only to the extent of the Consent Payment received.
Even if the adoption of the Proposed Amendments and receipt of the Consent Payment resulted in
a deemed exchange with respect to the Notes, such deemed exchange would constitute a tax-free
exchange for U.S. federal income tax purposes. For the deemed exchange to qualify as tax-free, the
Notes and the new Notes must constitute “securities” for U.S. federal income tax purposes. In
general, a debt instrument will be treated as a security if it represents a participating,
continuing interest in the issuer, rather than a mere right to a cash payment. As a result, the
term of the debt instrument is usually regarded as a significant factor in determining whether it
is a security. Pursuant to applicable judicial authorities and IRS rulings, a debt instrument with
a maturity of ten years or more is generally treated as a security. The treatment of debt
instruments with maturities between five and ten years depends on the relevant facts and
circumstances. Based on case law and IRS rulings, we intend to take the position that the Notes
and the new Notes are both securities. Under this treatment, a U.S. Holder would not recognize
loss and would recognize gain only to the extent of the Consent Payment received.
Consent Payment. The tax consequences of a U.S. Holder’s receipt of the Consent Payment are
unclear. We intend to treat the Consent Payment for U.S. federal income tax purposes as a fee paid
to a U.S. Holder in consideration of such holder’s consent to the Proposed Amendments.
Alternatively, the Consent Payment might be treated as a payment of additional interest on the
Notes. In either case, a U.S. Holder would recognize ordinary income in the amount of the Consent
Payment received, without any reduction by any portion of a U.S. Holder’s tax basis in the Notes.
Tax Considerations for Non-Consenting U.S. Holders
Because, as described above, we intend to take the position that the adoption of the Proposed
Amendments and the receipt of the Consent Payment should not constitute a significant modification,
we intend to take the position that a non-consenting U.S. Holder who does not receive a Consent
Payment would not be deemed to participate in any deemed exchange and would not recognize any
income, gain or loss in connection with the Solicitation. As noted above, however, there can be no
assurance that deemed exchange treatment would not apply.
Backup Withholding
A U.S. Holder may be subject to backup withholding on the Consent Payment, if paid, unless
such U.S. Holder (i) is a corporation or comes within certain other exempt categories and
demonstrates this fact, or (ii) provides a correct taxpayer identification number, certifies as to
no loss of exemption from backup withholding and otherwise complies with applicable requirements of
the backup withholding rules. The amount of any backup withholding from the Consent Payment, if
paid, will be allowed as a credit against such U.S. Holder’s U.S. federal income tax liability and
may entitle such U.S. Holder to a refund, provided that the required information is furnished to
the IRS.
Tax Consequences for Consenting Non-U.S. Holders
Consent Payment. Although it is not entirely clear that withholding of U.S. federal income
tax is applicable to the payment of the Consent Payment to a Non-U.S. Holder, we intend to withhold
such tax from any Consent Payment paid to a Non-U.S. Holder at a rate of 30%, unless the Non-U.S.
Holder provides to the applicable withholding Agent a properly executed (a) IRS Form W-8BEN (or a
permissible substitute) claiming an exemption from (or reduction in) withholding under the benefit
of an applicable income tax treaty or (b) IRS Form W-8ECI stating that the Consent Payment is not
subject to withholding tax because it is effectively connected with the Non-U.S. Holder’s conduct
of a trade or business in the United States. Non-U.S. Holders should consult their tax advisors
regarding the availability of a refund of any tax withheld.
Legal matters relating to U.S. law and the validity of the Notes and the guarantees will be
passed upon for the Issuer by Mayer Brown LLP. Legal matters relating to Luxembourg law will be
passed upon for ArcelorMittal by Bonn Schmitt Steichen. Certain matters of Nova Scotia and federal
Canadian law will be passed upon for the Issuer by Stewart McKelvey.
EXPERTS
The consolidated financial statements of ArcelorMittal (successor entity of Mittal N.V.) and
subsidiaries for 2007, and management’s report on the effectiveness of internal control over
financial reporting as of December 31, 2007, incorporated by reference herein, have been audited by
Deloitte S.A. as stated in their reports incorporated by reference herein.
The
consolidated financial statements of Mittal N.V. (predecessor entity
of ArcelorMittal), for 2005 and 2006 and the
retrospective adjustments to the 2006 financial statements, except for the consolidated financial
statements of Arcelor S.A. and subsidiaries (“Arcelor S.A.”) (except for Dofasco, Inc., Belgo
Siderurgia S.A., Companhia Siderúrgica Tubarão S.A., Sol Coqueria Tubarão S.A., Acindar Industria
Argentina de Aceros S.A., Arcelor España S.A., Arcelor Largos Perfiles, and Laminados Velasco S.L.,
consolidated subsidiaries of Arcelor S.A., whose consolidated financial statements for the period
from August 1, 2006 to December 31, 2006, were audited by Deloitte Accountants B.V.), incorporated
by reference herein, have been audited by Deloitte Accountants B.V. as stated in their report
incorporated by reference herein.
The financial statements of Arcelor S.A., prepared on the basis of IFRS (consolidated with
those of ArcelorMittal, but not separately incorporated by reference herein), as of December 31,2006, and for the five months ended December 31, 2006, have been audited by KPMG Audit
S.à.r.l., as stated in their report which is incorporated by reference herein (which report
expresses a qualified opinion because the omission of comparative financial information is not in
conformity with IFRS and contains an explanatory paragraph stating that the consolidated financial
statements are based on historical values of Arcelor S.A.’s assets and liabilities prior to its
acquisition by Mittal N.V. and, accordingly, do not include the purchase price adjustments to such
amounts reflected in the consolidated financial statements of Mittal N.V. as a result of such
acquisition).
Such financial statements of ArcelorMittal and its consolidated subsidiaries are incorporated
by reference herein in reliance upon the respective reports of such firms given upon their
authority as experts in accounting and auditing. All of the foregoing firms are independent
registered public accounting firms.
SERVICE OF PROCESS AND ENFORCEABILITY OF CIVIL LIABILITIES
ArcelorMittal is a corporation organized under the laws of Luxembourg. The majority of
ArcelorMittal’s assets are located outside the United States, and a majority of ArcelorMittal’s
directors and officers reside outside the United States.
As a result, U.S. investors may find it difficult:
•
to effect service of process within the United States upon ArcelorMittal and the
directors and officers of ArcelorMittal located outside the United States;
•
to enforce in U.S. courts or outside the United States judgments obtained against
the directors and officers of ArcelorMittal in U.S. courts; and
•
to enforce in U.S. courts judgments obtained against the directors and officers of
ArcelorMittal in courts in jurisdictions outside the United States.
ArcelorMittal’s Luxembourg counsel, Bonn Schmitt Steichen, has advised ArcelorMittal’s that
there is doubt as to the enforceability in Luxembourg in original actions or actions for
enforcement of judgments of U.S. courts of civil liabilities predicated solely upon U.S. federal
securities laws.
ArcelorMittal has been further advised by Bonn Schmitt Steichen that the United States and
Luxembourg do not currently have a treaty providing for reciprocal recognition and enforcement of
judgments in civil and commercial matters. Therefore, a final judgment for the payment of money
rendered by any federal or state court in the United States based on civil liability, whether or
not predicated solely upon U.S. federal securities laws, would not be immediately enforceable in
Luxembourg. However, if the party in whose favor such judgment is rendered brings a new suit in a
competent court in Luxembourg, that party may submit to a Luxembourg court the final judgment that
has been rendered in the United States. If the Luxembourg court finds that the jurisdiction of the
federal or state court in the United States has been based on grounds that are internationally
acceptable and that the final judgment concerned results from proceedings compatible with
Luxembourg concepts of due process to the extent that the Luxembourg court is of the opinion that
reasonableness and fairness so require, the Luxembourg court would, in principle, under current
practice, recognize the final judgment that has been rendered in the United States and generally
grant the same claim without re-litigation on the merits, unless the consequences of the
recognition of such judgment contravene public policy in Luxembourg. It is not certain, however,
that these court practices also apply to default judgments.
ArcelorMittal has been further advised by Bonn Schmitt Steichen that it would be difficult for
an investor to bring an original action in a Luxembourg court predicated upon the civil liability
provisions of the U.S. federal securities laws against ArcelorMittal’s directors and senior
management and non-U.S. experts named in Consent Solicitation Statement.
We have also been informed by our Nova Scotia counsel, Stewart McKelvey, that in such
counsel’s opinion, the laws of the Province of Nova Scotia and the federal laws of Canada
applicable therein permit an action to be brought in a court of competent jurisdiction in the
Province of Nova Scotia on a final and conclusive judgment in personam of a United States federal
court or a court of the State of New York sitting in the Borough of Manhattan in The City of New
York, respecting the enforcement of the Notes, the Pledge Agreement or the Indenture, that is not
impeachable as void or voidable under the laws of the State of New York and that is for a sum
certain in money if:
•
that judgment was not obtained by fraud or in a manner contrary to “natural justice”
and the enforcement of that judgment would not be contrary to “public policy” as such
terms are applied by the courts of the Province of Nova Scotia;
•
the New York court did not act either without jurisdiction under the conflict of
laws rules of the laws of the Province of Nova Scotia, or without authority, under the
laws in force in New York, to adjudicate concerning the cause of action or subject
matter that resulted in the judgment or concerning the person of that judgment debtor;
•
the defendant was duly served with the process of the New York court or appeared to
defend such process;
•
the judgment is not contrary to the final and conclusive judgment of another
jurisdiction;
•
the enforcement of that judgment does not constitute, directly or indirectly, the
enforcement of foreign revenue or penal laws;
•
the enforcement of the judgment would not be contrary to any order made by the
Attorney General of Canada under the Foreign Extraterritorial Measures Act (Canada) or
the Competition Tribunal under the Competition Act (Canada) in respect of certain
judgments, laws, and directives having effects on competition in Canada; and
•
the action to enforce that judgment is taken within six years of the date of the
judgment of the New York court as stipulated in the Limitations of Actions Act (Nova
Scotia).
ArcelorMittal files annual reports on Form 20-F with, and furnishes other information under
cover of a Report on Form 6-K to, the SEC under the Exchange Act. Prior to September 3, 2007, the
effective date of the first-step merger, ArcelorMittal filed with, or furnished to, the SEC
documents under the name of Mittal Steel Company N.V., its legal predecessor. Prior to December17, 2004, Mittal N.V. filed with, or furnished to, the SEC documents under its former name Ispat
International N.V. You may read and copy this information, or obtain copies of this information by
mail, at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. You may
obtain information on the operation of the Public Reference Room by calling the SEC at
1-800-SEC-0330. The SEC maintains an Internet website that contains reports and other information
about issuers, like ArcelorMittal, who file electronically with the SEC. The address of that site
is http://www.sec.gov.
As a foreign private issuer, ArcelorMittal is exempt from the rules under the Exchange Act
prescribing the furnishing and content of proxy statements and will not be required to file proxy
statements with the SEC. ArcelorMittal’s officers, directors and principal shareholders are also
exempt from the reporting and “short-swing” profit recovery provisions contained in Section 16 of
the Exchange Act.
The Issuer, ArcelorMittal and each of the other guarantors of the Notes have filed a
registration statement on Form S-4 or Form F-4, as applicable, to register with the SEC the Notes,
in the case of the Issuer, and guarantees of the Notes, in the case of ArcelorMittal and the other
guarantors, in each case after giving effect to the Proposed Amendments. This Consent Solicitation
Statement forms a part of that registration statement. As allowed by the SEC’s rules, this Consent
Solicitation Statement does not contain all of the information you can find in the registration
statement and its exhibits. As a result, statements in this Consent Solicitation Statement
concerning the contents of any contract, agreement or other document are not necessarily complete.
If any contract, agreement or other document is filed as an exhibit to the registration statement,
you should read the exhibit for a more complete understanding of the document or matter involved.
For further information, you should refer to the registration statement.
ArcelorMittal’s shares are listed and traded on the NYSE (symbol “MT”), are admitted to
trading on the Luxembourg Stock Exchange’s regulated market and listed on the Official List of the
Luxembourg Stock Exchange (symbol “MTL”), and are admitted to listing and trading on Euronext
Amsterdam by NYSE Euronext (symbol “MT”), Euronext Brussels by NYSE Euronext (symbol “MTBL”),
Euronext Paris by NYSE Euronext (symbol “MTP”) and the stock exchanges of Madrid, Barcelona, Bilbao
and Valencia (symbol “MTS”). Each exchange has its own requirements for the provision of periodic
reports, proxy statements and other information. You are free to inspect any such information by
contacting the relevant stock exchange, including, the NYSE at the offices of the NYSE, 20 Broad
Street, New York, New York, 10005.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows us to “incorporate by reference” information into this Consent Solicitation
Statement. This means that we can disclose important information to you by referring you to another
document filed separately with the SEC. The information incorporated by reference is considered to
be part of this Consent Solicitation Statement, except for any information that is superseded by
information contained directly in this Consent Solicitation Statement or in subsequent filings
deemed incorporated by reference into this Consent Solicitation Statement.
This Consent Solicitation Statement incorporates by reference the documents set forth below
that ArcelorMittal has previously filed with or furnished to the SEC. These documents contain
important information about ArcelorMittal and its results of operations and financial condition:
All documents filed by ArcelorMittal pursuant to Section 13(a) or 15(d) of the Exchange Act
from the date of this Consent Solicitation Statement to the date the Solicitation is terminated
shall be deemed to be incorporated by reference into this Consent Solicitation Statement.
ArcelorMittal also incorporates by reference, to the extent expressly stated therein, certain
Current Reports on Form 6-K furnished by ArcelorMittal during the same period as of the date of the
furnishing of such documents. Any statement contained in this Consent Solicitation Statement or in
a document incorporated or deemed to be incorporated by reference in this Consent Solicitation
Statement shall be deemed to be modified or superseded for purposes of this Consent Solicitation
Statement to the extent that a statement contained in this Consent Solicitation Statement or in any
other subsequently filed document that also is or is deemed to be incorporated by reference in this
Consent Solicitation Statement modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded, to be a part of
this Consent Solicitation Statement from the date of filing of such modification or superseding.
You can obtain any of the documents that ArcelorMittal has filed with the SEC through
ArcelorMittal, or from the SEC through the SEC’s website at http://www.sec.gov. These documents
are available from ArcelorMittal without charge, excluding any exhibits to those documents, unless
the exhibit is specifically incorporated by reference as an exhibit in this Consent Solicitation
Statement. You may request a copy of such documents by contacting:
ArcelorMittal
19, Avenue de la Liberté
L-2930 Luxembourg
Grand Duchy of Luxembourg
+352 4792-1
Attention: Investor Relations
In order for you to receive timely delivery of the documents prior to the expiration of the
Solicitation, ArcelorMittal should receive your request no later than [___], 2008.
We are not incorporating the contents of the websites of the SEC, ArcelorMittal or any other
person into this Consent Solicitation Statement. We are providing the information about how you
can obtain documents that are incorporated by reference into this Consent Solicitation Statement at
these websites only for your convenience. See “Incorporation of Certain Documents by Reference”.
NINTH SUPPLEMENTAL INDENTURE dated as of , 2008 (this “Supplemental Indenture”)
among ARCELORMITTAL FINANCIAL SERVICES LLC, a Delaware limited liability company (as successor
issuer to Ispat Inland ULC, a Nova Scotia unlimited company), as issuer (the “Issuer”),
ARCELORMITTAL USA PARTNERSHIP, a Delaware partnership, as successor issuer (the “Successor
Issuer”), the Guarantors and LASALLE BANK NATIONAL ASSOCIATION, as Trustee (the
“Trustee”).
RECITALS
WHEREAS, the Issuer, the Guarantors and the Trustee have entered into an Indenture dated as of
March 25, 2004, as supplemented (as so supplemented, the “Indenture”);
WHEREAS, pursuant to Section 8.02 of the Indenture, the Issuer and the Guarantors, when
authorized by a Board Resolution, and the Trustee, when an Officers’ Certificate is provided
stating that such amendment or supplement complies with the provisions of Section 8.02, may amend
or supplement the Indenture with the consent of the Holders of at least a majority in aggregate
principal amount of all series of the Notes outstanding;
WHEREAS, ArcelorMittal Financial Services LLC became the successor issuer to Ispat Inland ULC,
the original issuer of the Notes, pursuant to a Permitted Finco Collapse Transaction documented
under the Eighth Supplemental Indenture dated as of December 28, 2007 among the Issuer, the
Guarantors and the Trustee, and the Issuer wishes to have its obligations assumed by a successor
issuer and to have its obligations guaranteed by certain additional affiliates;
WHEREAS, the Issuer has solicited the consent of the Holders of the outstanding Notes to
certain amendments to the Indenture (the “Consent Solicitation”) pursuant to the Consent
Solicitation Statement dated , 2008 (the “Consent Solicitation Statement”);
WHEREAS, the Issuer has received and delivered to the Trustee written consents of the Holders
of not less than a majority in outstanding principal amount of the Notes (other than Notes that are
disregarded in accordance with the terms of the Indenture) to the amendments to the Indenture set
forth in this Supplemental Indenture;
WHEREAS, the Issuer, the Guarantors, the Successor Issuer and Trustee wish to enter into this
Supplemental Indenture, the Issuer having obtained the requisite consent of the Holders.
NOW, THEREFORE, each party agrees as follows for the benefit of the other parties and for the
equal and ratable benefit of the Holders of the Notes, as follows:
ARTICLE 1
CONSENT SOLICITATION COMPLETION EVENT
When used in this Supplemental Indenture, “Consent Solicitation Completion Event”
means such time as the Issuer shall have paid, or caused to have been paid, in full to each Holder
the Consent
Payment (as defined in the Consent Solicitation Statement) with respect to which such Holder has
validly delivered (and not validly revoked) its consent prior to the expiration of the Consent
Solicitation.
ARTICLE 2
AMENDMENTS TO THE INDENTURE AND THE
INVENTORY SECURITY AGREEMENT
SECTION 2.1 (a) Upon the occurrence of the Consent Solicitation Completion Event, and without
any further action by any party hereto, the following definition in Section 1.01 of the Indenture
is hereby amended and restated to read in its entirety as follows:
“Finco Guarantors” means, after a Permitted Finco Reconstitution Transaction
has occurred and prior to the occurrence of a Permitted Finco Collapse Transaction
thereafter, each New Finco Guarantor referred to in the definition of “Permitted Finco
Reconstitution Transaction”.
(b) Upon the occurrence of the Consent Solicitation Completion Event, and without any further
action by any party hereto, the definition of “Permitted Finco Collapse Transaction” in Section
1.01 of the Indenture is hereby amended (i) by deleting clauses (a) through (c) of such definition
and inserting the following in lieu thereof:
(a) the Finco Guarantors transfer or cause to be transferred (including through a
series of transfers among Finco Guarantors) to the Issuer (x) any Capital Stock held by any
Finco Guarantor and (y) the First Mortgage Bonds owned by the Finco Guarantors (and in
connection therewith the rate of interest payable by the Company on the First Mortgage Bonds
will be reduced by an amount less than or equal to 5% of the unmodified yield of the First
Mortgage Bonds immediately prior to such reduction, provided that after giving
effect thereto the per annum rate of interest payable by the Company on the First Mortgage
Bonds shall not be less than the per annum interest rate on the Notes);
(b) the holders of Capital Stock of the Issuer transfer to a newly formed limited
liability company (for purposes of this definition, the “Successor Issuer”)
organized and existing under the laws of the United States of America, any State thereof or
the District of Columbia which has no material assets or liabilities and all of the Capital
Stock of which is owned by ArcelorMittal Holdings Inc. (“AM Holdings”) or any Person
(other than the Company) that is in the same consolidated group as AM Holdings and the
Company for U.S. tax purposes (the “AM Holdings Group Member”) either (x) all of the
Capital Stock of the Issuer or (y) all of the assets and liabilities of the Issuer;
(c) any Finco Guarantor may, if it so elects, transfer (including through a series of
transfers among Finco Guarantors) or cause to be transferred to the Issuer, the Successor
Issuer, AM Holdings or the AM Holdings Group Member, any Capital Stock of the Company that
is owned by any such Finco Guarantor in exchange for Capital Stock of AM Holdings or the AM
Holdings Group Member;
(ii) by deleting the words “the Company Parent” where they appear in clause (e) of such definition
and inserting the words “AM Holdings or the applicable AM Holdings Group Member” in lieu thereof,
and
(iii) by deleting the word “Indebtedness” where it appears in clause (g) of such definition and
inserting the words “Capital Stock” in lieu thereof.
(c) Upon the occurrence of the Consent Solicitation Completion Event, and without any further
action by any party hereto, the definition of “Qualified Securitization Transaction” in Section
1.01 of the Indenture is hereby amended by inserting the words “the Company, any Restricted
Subsidiary or” immediately before the words “ a Securitization Subsidiary” where they appear in
clause (b) of such definition.
SECTION 2.2 Upon the occurrence of the Consent Solicitation Completion Event, and without any
further action by any party hereto, the following definition is hereby added to Section 1.01 of the
Indenture in its proper alphabetical position:
“Permitted Finco Reconstitution Transaction” means a transaction at any time
after the occurrence of a Permitted Finco Collapse Transaction (pursuant to the definition
thereof as in effect at any time) when no Default has occurred and is continuing in which
each of the following events occur:
(a) AM Holdings or the applicable AM Holdings Group Member transfers all of the Capital
Stock of the Issuer to a newly formed partnership organized and existing under the laws of
the State of Delaware (for purposes of this definition, the “Successor Issuer”)
which, immediately after giving effect to such transfer, has no other material assets or
liabilities and which is owned, directly or indirectly, by Mittal Canada Holdings Inc.;
(b) the Issuer merges with and into the Successor Issuer, with the Successor Issuer
being the survivor of such merger;
(c) the Successor Issuer causes to be formed (i) a new unlimited company organized and
existing under the laws of Nova Scotia (“New Finco Guarantor #1”) which has no
material assets or liabilities and all of the Capital Stock of which is owned by the
Successor Issuer and (ii) a new limited liability company organized and existing under the
laws of the United States of America, any State thereof or the District of Columbia
(“New Finco Guarantor #2” and, together with New Finco Guarantor #1, the “New
Finco Guarantors”), which has no material assets or liabilities and all of the Capital
Stock of which is owned by New Finco Guarantor #1;
(d) the Successor Issuer transfers (including through a series of transfers among the
Issuer, the Successor Issuer and the New Finco Guarantors) or causes to be transferred to
New Finco Guarantor #2 (x) any First Mortgage Bonds held by the Successor Issuer (and, in
connection therewith, (i) the rate of interest payable by the Company on the First Mortgage
Bonds will be increased by an amount equal to 1.00% per annum and (ii) the interest rate
payable on the First Mortgage Bonds will be amended to provide that, in the event that any
portion of the First Mortgage Bonds is prepaid prior to April 1, 2014, an amount equal to
the sum of the loan finance fees of the Issuer from the 2004 refinancing of the predecessor
issuer, Ispat Inland ULC, which are allocable to the portion of the First Mortgage Bonds so
prepaid plus the amount of transaction costs incurred in respect of any Permitted
Finco Collapse Transaction (as defined in the Indenture as in effect on December 31, 2007)
or Permitted Finco Reconstitution Transaction occurring on or prior to such date and which,
at the time of repayment, are unrecovered (i.e., unamortized), as shown on the books and
records of the Issuer, will be payable by the Company to the holders of the First Mortgage
Bonds) and (y) any
Capital Stock owned by the Successor Issuer (other than Capital Stock issued by New
Finco Guarantor #1);
(e) the Successor Issuer, the Issuer and the New Finco Guarantors shall execute and
deliver to the Trustee, in form satisfactory to the Trustee, a supplement to this Indenture
whereby (x) the Successor Issuer shall expressly assume by supplemental indenture all
obligations of the Issuer under this Indenture and the Notes and (y) each New Finco
Guarantor shall guarantee all obligations of the Successor Issuer under this Indenture;
(f) the owners of all of the Capital Stock of the Successor Issuer shall execute and
deliver to the Trustee a supplement to the Pledge Agreement, in form satisfactory to the
Trustee, pursuant to which the Capital Stock of the Successor Issuer shall be pledged to the
Trustee as Collateral for the Successor Issuer’s obligations under the Notes and this
Indenture;
(g) the Successor Issuer shall execute and deliver to the Trustee a supplement to the
Pledge Agreement, in form satisfactory to the Trustee, pursuant to which the Capital Stock
of New Finco Guarantor #1 shall be pledged to the Trustee as Collateral for the Successor
Issuer’s obligations under the Notes and this Indenture;
(h) New Finco Guarantor #1 shall execute and deliver to the Trustee a supplement to the
Pledge Agreement, in form satisfactory to the Trustee, pursuant to which the Capital Stock
of New Finco Guarantor #2 shall be pledged to the Trustee as Collateral for the Successor
Issuer’s obligations under the Notes and this Indenture;
(i) New Finco Guarantor #2 shall execute and deliver to the Trustee a supplement to the
Pledge Agreement, in form satisfactory to the Trustee, pursuant to which (x) any First
Mortgage Bonds held by New Finco Guarantor #2 and (y) any Capital Stock owned by New Finco
Guarantor #2 shall be pledged to the Trustee as Collateral for the Successor Issuer’s
obligations under the Notes and this Indenture;
(j) all filings and other actions necessary to preserve the perfection and priority of
the Lien of the Trustee on the Collateral shall be made and taken; and
(k) the Company shall deliver to the Trustee an officers’ certificate and an Opinion of
Counsel, each stating that the merger of the Issuer with and into the Successor Issuer and
such supplemental indenture and supplements to the Pledge Agreement comply with this
Indenture and the Pledge Agreement and that all necessary actions have been taken to
preserve the priority and perfection of the Lien of the Trustee on the Collateral.
Upon compliance with each of the foregoing requirements, (i) the Successor Issuer shall
be the successor to the Issuer and shall succeed to, and be substituted for, and may
exercise every right and power of, the Issuer under this Indenture, the Notes and the Pledge
Agreement, (ii) all references in this Indenture to “prior to a Permitted Finco Collapse
Transaction” shall be understood to apply until a Permitted Finco Collapse Transaction is
effected following the occurrence of a Permitted Finco Reconstitution Transaction, (iii)
each New Finco Guarantor shall be a “Finco Guarantor” for all purposes under this Indenture
and the Notes, (iv) all property or assets of AM Holdings or the applicable AM Holdings
Group Member constituting a portion of the Collateral shall be released from the Lien of the
Pledge Agreement and (v) Section 4.20 shall cease to apply (unless and until another
Permitted Finco Collapse
Transaction shall occur) and Section 4.19 shall apply (unless and until another
Permitted Finco Collapse Transaction shall occur).
SECTION 2.3 Upon the occurrence of the Consent Solicitation Completion Event, and without any
further action by any party hereto, Section 4.13 of the Indenture is hereby amended by inserting
the words “or a Permitted Finco Reconstitution Transaction” immediately after the words “a
Permitted Finco Collapse Transaction” where they appear in such section.
SECTION 2.4 Upon the occurrence of the Consent Solicitation Completion Event, and without any
further action by any party hereto, Section 4.19 of the Indenture is hereby amended (i) by deleting
the word “Prior” at the beginning of the first sentence of such section and inserting the following
in lieu thereof “After a Permitted Finco Reconstitution Transaction has occurred but prior”, (ii)
deleting the lead-in to the second paragraph of such definition and replacing it with the following
in lieu thereof “Without limitation of the foregoing restrictions, after a Permitted Finco
Reconstitution Transaction has occurred but prior to the consummation of a Permitted Finco Collapse
Transaction thereafter:”, (iii) deleting the words “Ispat Inland Finance, LLC’s” where they appear
in clause (a)(iv) of such definition, (iv) deleting the words “the ability of Ispat Inland, L.P. to
make payments on the Finco Mirror Note in accordance with its terms” where they appear in clause
(c) of such definition and (v) deleting clauses (d) and (e) of such definition and inserting the
following in lieu thereof:
(d) each Finco Guarantor will maintain funds legally available in order to cause an
amount of cash to be received by the Issuer sufficient for the Issuer to make payments on
the Notes, in each case, on each date on which any payment is required to be made with
respect to any Note;
(e) [intentionally left blank];
SECTION 2.5 Upon the occurrence of the Consent Solicitation Completion Event, and without any
further action by any party hereto, Section 4.20 of the Indenture is hereby amended by inserting
the following language at the end thereof:
Notwithstanding the foregoing, the Issuer shall be permitted to engage in a Permitted
Finco Reconstitution Transaction.
SECTION 2.6 Upon the occurrence of the Consent Solicitation Completion Event, and without any
further action by any party hereto, Section 2 of the Inventory Security Agreement is hereby amended
by deleting the proviso at the end of Section 2 thereof and inserting in lieu of such proviso the
following:
provided that, notwithstanding the foregoing, the Collateral shall not extend to any
Receivables and Related Assets other than any right to payment in respect of Inventory which
is not an Account or Chattel Paper.
ARTICLE 3
ASSUMPTION
On the date a Permitted Finco Reconstitution Transaction which involves the Successor Issuer
occurs, the Successor Issuer hereby expressly assumes on such date all obligations of the Issuer
under
the Indenture and the Notes, and, from and after such date, the term “Issuer,” as used in the
Indenture and the Collateral Documents, shall mean and refer to the Successor Issuer.
ARTICLE 4
GUARANTEES
On the date a Permitted Finco Reconstitution Transaction which involves each party identified
on the signature pages hereof as a New Finco Guarantor (the “New Finco Guarantors”) occurs,
each New Finco Guarantor hereby jointly and severally unconditionally guarantees, pursuant to
Article Ten of the Indenture (to the same extent as if such New Finco Guarantor had been an
original Guarantor pursuant to such Article Ten), to each Holder of a Note authenticated and
delivered by the Trustee and to the Trustee and its successors, the due and punctual payment in
full when due of the principal of, premium, if any, interest, if any, with respect to the Notes and
all other obligations of the Issuer or any Guarantor to the Holders or the Trustee under the Notes
and the Indenture and that all other obligations under the Indenture or the Notes shall be promptly
paid in full or performed, all in accordance with the terms thereof.
ARTICLE 5
CONSENT TO FORTIETH SUPPLEMENTAL INDENTURE TO FIRST MORTGAGE INDENTURE:
DELIVERY OF REPLACEMENT FIRST MORTGAGE BONDS
SECTION
5.1 The Trustee has reviewed (i) the Fortieth Supplemental Indenture (the
“First
Mortgage Supplemental Indenture”) to the First Mortgage Indenture dated April 1, 1928
(as amended, restated, supplemented or otherwise modified immediately prior to the
execution and delivery of the First Mortgage Supplemental
Indenture, the “First
Mortgage Indenture”) made by ArcelorMittal USA Inc. in
favor of [___________] and
The Bank of New York, as successor trustees thereunder (in such capacity, the
“Successor Trustees”), including the amended form of the Series Z First Mortgage Bond
contained in the First Mortgage Supplemental Indenture, and
(ii) the Guarantee made by the guarantors party thereto in favor
of the Successor Trustees (the “Guarantee”). The Trustee hereby consents to
(x) the amendments to the First Mortgage Indenture contained in the First Mortgage
Supplemental Indenture, including the amended form of the Series Z First Mortgage
Bonds contained therein, and (y) the execution and delivery of
the Guarantee by each of the parties thereto.
SECTION 5.2 Upon request of the Issuer, the Trustee will deliver all Series Z First
Mortgage Bonds in its possession (the “Original First
Mortgage Bonds”) to the Issuer.
The Issuer will promptly thereafter surrender such Original First Mortgage Bonds to the
Successor Trustees. The Issuer shall, promptly after its receipt of the replacement Series
Z First Mortgage Bonds issued pursuant to Article 2, Section 2 of the Amended Series Z
First Mortgage Bonds (the “Amended First Mortgage Bonds”), deliver such Amended First
Mortgage Bonds to the Trustee, which Amended First Mortgage Bonds are to be held
as collateral pursuant to the Supplement to Pledge Agreement by and
between the Issuer and
the Trustee as in effect on the date thereof.
ARTICLE 6
MISCELLANEOUS
SECTION
6.1 This Supplemental Indenture is executed and shall be construed as an indenture
supplemental to the Indenture with respect to the Notes and, as provided in the Indenture, this
Supplemental Indenture forms a part thereof with respect to the Notes. Except as herein modified,
the Indenture is in all respects ratified and confirmed with respect to the Notes and all the
terms, provisions and conditions thereof shall be and remain in full force and effect with respect
to the Notes and every Holder of Notes shall be bound hereby. Except as expressly otherwise
defined, the use of the terms and expressions herein is in accordance with the definitions, uses
and constructions contained in the Indenture.
SECTION
6.2 If and to the extent that any provision of this Supplemental Indenture limits,
qualifies or conflicts with any other provision hereof or of the Indenture that is required to be
included in the Indenture by any of the provisions of the TIA, such required provision shall
control.
SECTION
6.3 Unless otherwise indicated, capitalized terms used herein without definition shall
have the meanings specified therefor in Section 1.01 of the Indenture and, in the case of
references herein to the term “Permitted Finco Reconstitution Transaction”, as such Section 1.01 is
amended hereby. For the avoidance of doubt, the amended definition of “Permitted Finco Collapse
Transaction” effected hereby shall not relate to the Permitted Finco Collapse Transaction
memorialized by the Eighth Supplemental Indenture.
SECTION
6.4 Each provision of this Supplemental Indenture shall be considered separable and if
for any reason any provision which is not essential to the effectuation of the basic purpose of
this Supplemental Indenture shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
SECTION
6.5 This Supplemental Indenture shall be governed by and construed in accordance with
the laws of the State of New York, as applied to contracts made and performed within the State of
New York, without giving effect to the principles of conflicts of law to the extent that the
application of laws of another jurisdiction would be required thereby.
SECTION
6.6 This Supplemental Indenture may be executed in any number of counterparts, each of
which shall be an original but such counterparts shall together constitute but one and the same
instrument.
SECTION
6.7 This Supplemental Indenture shall become effective as of the date first above
written.
SECTION
6.8 Upon the consummation of the Permitted Finco Reconstitution Transaction, the
Trustee is hereby authorized and directed to accept in substitution for the First Mortgage Bonds
currently held as collateral under the Pledge Agreement First Mortgage Bonds in amended form
reflecting the adjustments to the interest rate contemplated by the definition of Permitted Finco
Reconstitution Transaction.
You may request assistance concerning the Solicitation by contacting the Solicitation Agent at
the address or telephone number set forth below. You may request assistance in completing and
delivering the Consent Letters or for additional copies of this Consent Solicitation Statement, the
Consent Letters or other related documents by contacting the Information Agent at the address and
telephone number set forth below. You may also contact your broker, dealer, commercial bank, trust
company or other nominee for assistance concerning the Solicitation.
The Solicitation Agent for the Solicitation is:
Citigroup Global Markets Inc.
390 Greenwich St., 4th Floor New York, New York10013
Attention: Liability Management Group
Telephone (toll free): +1 800 558 3745
Telephone (collect): +1 212 723 6106
The Tabulation Agent for the Solicitation is:
Global Bondholder Services Corporation
65 Broadway, Suite 723, New York, New York10006
Facsimile (for eligible institutions only): +1 212 430 3775
Telephone (to confirm receipt of facsimile): +1 212 430 3774
The Information Agent for the Solicitation is:
Global Bondholder Services Corporation
65 Broadway, Suite 723, New York, New York10006
Attention: Corporate Actions
Telephone (banks and brokers): +1 212 430 3774
Telephone (toll free): +1 866 873 5600
Item 20. Indemnification of Directors and Officers
Registrant Organized Under the Laws of Luxembourg
ArcelorMittal
The articles of association of ArcelorMittal provide that ArcelorMittal will, to the extent
permitted by law, indemnify every director or member of the Group Management Board, as well as
every former director or member of the Group Management Board, the fees, costs and expenses
reasonably incurred by him or her in the defense or resolution (including a settlement) of all
legal actions or proceedings, whether civil, criminal or administrative, he or she has been
involved in his or her role as former or current director or member of the Group Management Board
of ArcelorMittal.
The right to indemnification does not exist in the case of gross negligence, fraud, fraudulent
inducement, dishonesty or for a criminal offense or if it is ultimately determined that the
director or member of the Group Management Board has not acted honestly and in good faith and with
the reasonable belief that he or she was acting in the best interests of ArcelorMittal.
Registrants Organized Under the Laws of Delaware
(a) Delaware corporations. The Delaware General Corporation Law (Section 145) gives
Delaware corporations broad powers to indemnify any person who was or is a party or is threatened
to be made a party to any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative by reason of the fact that the person is or was a
director, officer, employee or agent of the registrant, or is or was serving at the request of the
registrant as a director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys’ fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by such person in connection with
such action, suit or proceeding, so long as such person acted in good faith and in a manner such
person reasonably believed to be in or not opposed to the best interests of the registrant. For
actions or suits by or in the right of the registrant, no indemnification is permitted in respect
of any claim, issue or matter as to which such person is adjudged to be liable to the registrant,
unless, and only to the extent that, the Delaware Court of Chancery or the court in which such
action or suit was brought determines upon application that, despite the adjudication of liability
but in view of all the circumstances of the case, such person is fairly and reasonably entitled to
indemnify for such expenses which the Court of Chancery or such other court deems proper.
Section 145 also authorizes the registrant to buy directors’ and officers’ liability insurance
and gives a director, officer, employee or agent of the registrant who has been successful on the
merits or otherwise in defense of any action, suit or proceeding of a type referred to in the
preceding paragraph the right to be indemnified against expenses (including attorneys’ fees)
actually and reasonably incurred by such person in connection therewith. Any indemnification
(unless ordered by a court) will be made by the registrant only as authorized in the specific case
upon a determination that indemnification of the director, officer, employee or agent is proper in
the circumstances because the person has met the applicable standard of conduct set forth above.
Such determination shall be made (1) by a majority vote of the directors who are not parties to
such action, suit or proceeding, even though less than a quorum, or (2) if there are no such
directors, or if such directors so direct, by independent legal counsel in a written opinion, or
(3) by the stockholders. Such indemnification is not exclusive of any other rights to which those
indemnified may be entitled under any by-laws, agreement, vote of stockholders or otherwise.
(b) Delaware limited partnerships. Section 17-108 of the Delaware Revised Uniform
Limited Partnership Act empowers a Delaware limited partnership to indemnify and hold harmless any
partner or other person from and against all claims and demands whatsoever, subject to such
standards and restrictions, if any, as are set forth in its partnership agreement.
(c) Delaware partnerships. Section 15-110 of the Delaware Revised Uniform Partnership
Act empowers a Delaware partnership to indemnify and hold harmless any partner or other person from
and against all claims and demands whatsoever, subject to such standards and restrictions, if any,
as are set forth in its partnership agreement.
(d) Delaware limited liability companies. Section 18-108 of the Delaware Limited
Liability Company Act provides that, subject to the standards and restrictions, if any, as are
described in its limited liability company agreement, a limited liability company may, and shall
have the power to, indemnify and hold harmless any member or manager or other person from and
against any and all claims and demands whatsoever.
(e) The By-laws and the Fifth Amended and Restated Certificate of Incorporation (the
“Charter”) of ArcelorMittal USA Inc. provide as follows:
(i) To the full extent permitted by the General Corporation Law or any other
applicable law currently or hereafter in effect, no director will be personally
liable to the corporation or its stockholders for or with respect to any acts or
omissions in the performance of his or her duties as a director. If the General
Corporation Law is amended hereafter to authorize the further elimination or
limitation of the liability of directors, then the liability of a director shall be
eliminated or limited to the fullest extent authorized by the General Corporation
Law, as so amended. Any repeal or modification of Article VI of the Charter or
Article IX of the By-Laws will not adversely affect any right or protection of a
director existing prior to such repeal or modification.
(ii) Each person who was or is made a party or is threatened to be made a party to or
is otherwise involved in any action, suit or proceeding, whether civil, criminal,
administrative or investigative (a “Proceeding”), by reason of the fact that such
person is or was a director, officer, employee or agent of the corporation or is or
was serving at the request of the corporation as a director, officer, employee or
agent of another company or of a partnership, joint venture, trust or other
enterprise, including service with respect to an employee benefit plan (an
“Indemnitee”), whether the basis of such Proceeding is alleged action in an official
capacity as a director, officer, employee or agent or in any other capacity while
serving as a director, officer, employee or agent, shall be indemnified and held
harmless by the corporation to the fullest extent permitted or required by the
General Corporation Law, as the same exists or may hereafter be amended (but, in the
case of any such amendment, only to the extent that such amendment permits the
corporation to provide broader indemnification rights than such law permitted the
corporation to provide prior to such amendment), against all expense, liability and
loss (including attorneys’ fees, judgments, fines, ERISA excise taxes or penalties
and amounts paid in settlement) reasonably incurred or suffered by such Indemnitee in
connection therewith; provided, however, that, except as provided in paragraph (iv)
below with respect to Proceedings to enforce rights to indemnification, the
corporation shall indemnify any such Indemnitee in connection with a Proceeding (or
part thereof) initiated by such Indemnitee only if such Proceeding (or part thereof)
was authorized by the Board of Directors of the corporation.
(iii) The right to indemnification conferred in paragraph (ii) above includes the
right to be paid by the corporation the expenses (including, without limitation,
attorneys’ fees and expenses) incurred in defending any such Proceeding in advance of
its final disposition (an “Advancement of Expenses”); provided, however, that, if the
General Corporation Law so requires, an Advancement of Expenses incurred by an
Indemnitee in his or her capacity as a director, officer, employee or agent (and not
in any other capacity in which service was or is rendered by such Indemnitee,
including, without limitation, service to an employee benefit plan) shall be made
only upon delivery to the corporation of an undertaking (an “Undertaking”), by or on
behalf of such Indemnitee, to repay all amounts so advanced if it shall ultimately be
determined by final judicial decision from which there is no further right to appeal
(a “Final Adjudication”) that such Indemnitee is not entitled to be indemnified for
such expenses under this paragraph (iii) or otherwise. The rights to indemnification
and to the Advancement of Expenses described in paragraph (ii) above and in this
paragraph (iii) are contract rights and such rights shall continue as to an
Indemnitee who has ceased to be a director, officer, employee or agent and shall
inure to the benefit of the Indemnitee’s heirs, executors and administrators.
(iv) If a claim under paragraphs (ii) and (iii) above is not paid in full by the
corporation within 60 calendar days after a written claim has been received by the
corporation, except in the case of a claim for an Advancement of Expenses, in which
case the applicable period shall be 20 calendar days, the Indemnitee may at any time
thereafter bring suit against the corporation to recover the unpaid amount of the
claim. If successful in whole or in part in any such suit, or in a suit brought by
the corporation to recover an Advancement of Expenses pursuant to the terms of an
Undertaking, the Indemnitee shall be entitled to be paid also the expense of
prosecuting or defending such suit. In (i) any suit brought by the Indemnitee to
enforce a right to indemnification hereunder (but not in a suit brought by the
Indemnitee to enforce a right to an Advancement of Expenses) it shall be a defense
that, and (ii) any suit brought by the corporation to recover an Advancement of
Expenses pursuant to the terms of an Undertaking, the corporation shall be entitled
to recover such expenses upon a Final Adjudication that, the Indemnitee has not met
any applicable standard for indemnification set forth in the General Corporation Law.
Neither the failure of the corporation (including its Board of Directors, independent
legal counsel or stockholders) to have made a determination prior to the commencement
of such suit that indemnification of the Indemnitee is proper in the circumstances
because the Indemnitee has met the applicable standard of conduct set forth in the
General Corporation Law, nor an actual determination by the corporation (including
its Board of Directors, independent legal counsel or stockholders) that the
Indemnitee has not met such applicable standard of conduct, shall create a
presumption that the Indemnitee has not met the applicable standard of conduct or, in
the case of such a suit brought by the Indemnitee, be a defense to such suit. In any
suit brought by the Indemnitee to enforce a right to indemnification or to an
Advancement of Expenses, or brought by the corporation to recover an Advancement of
Expenses pursuant to the terms of an Undertaking, the burden of proving that the
Indemnitee is not entitled to be indemnified, or to such Advancement of Expenses,
under the Charter, By-laws or otherwise shall be on the corporation.
(v) The rights to indemnification and to the Advancement of Expenses conferred in
Article VI of the Charter and Article IX of the By-laws shall not be exclusive of any
other right which any person may have or hereafter acquire under any statute, the
Charter, the By-laws, agreement, vote of stockholders or disinterested directors or
otherwise. The By-laws of the corporation may contain such other provisions
concerning indemnification, including provisions specifying reasonable procedures
relating to and conditions to the receipt by indemnities of indemnification, provided
that such provisions are not inconsistent with the provisions of Article VI of the
Charter.
(vi) The corporation may maintain insurance, at its expense, to protect itself and
any person who is or was a director, officer, employee or agent of the corporation or
another corporation, partnership, joint venture, trust or other enterprise against
any expense, liability or loss, whether or not the corporation would have the power
to indemnify such person against such expense, liability or loss under the General
Corporation Law.
(f) The Certificate of Incorporation of Burnham Trucking Company, Inc. is silent as to
indemnification. The By-laws of Burnham Trucking Company provide that, in addition to, and not
exclusive of, all other rights to which a director or officer may be entitled, the corporation
shall indemnify each of its directors and officers, whether or not then in office (and their
executors, administrators and heirs), against all reasonable expenses actually and necessarily
incurred by him in connection with the defense of any litigation to which he may have been made a
party because he/she is or was a director or officer of the corporation. A director or officer
shall have no right to reimbursement, however, in relation to matters as to which they have been
adjudged liable to the corporation for negligence or misconduct in the performance of their duties.
The right to indemnify for expenses shall also apply to the expenses of suits which are
compromised or settled if the court having jurisdiction of the matter shall approve such
settlement.
(g) The Certificate of Incorporation of ArcelorMittal USA Incoal Inc. is silent as to
indemnification. The By-laws of ArcelorMittal USA Incoal Inc. provide:
(i) The corporation shall indemnify each director and each officer who was or is a
party or is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the
corporation) by reason of the fact that he is or was a director or officer of the
corporation, or is or was serving at the request of the corporation as a director or
officer of another corporation, partnership, joint venture, trust or other
enterprise, against expenses (including attorneys’ fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by him in connection with
such action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the corporation,
and, with respect to any criminal action or proceeding, had no reasonable cause to
believe his conduct was unlawful. The termination of any action, suit or proceeding
by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that the person did not act in
good faith and in a manner which he reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.
(ii) The corporation shall indemnify each director and each officer who was or is a
party or is threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the corporation to procure a judgment in its
favor by reason of the fact that he is or was a director or officer of the
corporation, or is or was serving at the request of the corporation as a director or
officer of another corporation, partnership, joint venture, trust or other enterprise
against expenses (including attorneys’ fees) actually and reasonably incurred by him
in connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the corporation and except that no indemnification shall be made in
respect of any claim, issue or matter as to which such director or officer shall have
been adjudged to be liable for negligence or misconduct in the performance of his
duty to the corporation unless and only to the extent that the Court of Chancery of
the State of Delaware or the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but in view of
all the circumstances of the case, such director or officer is fairly and reasonably
entitled to indemnity for such expenses which the Court of Chancery or such other
court shall deem proper.
(iii) To the extent that a person who is or was a director, officer, employee or
agent of the corporation, or of any other corporation, partnership, joint venture,
trust or other enterprise with which he is or was serving in such capacity at the
request of the corporation, has been successful on the merits or otherwise in defense
of any action, suit or proceeding referred to in paragraphs (i) and (ii) above, or in
defense of any claim, issue or matter therein, he shall be indemnified against
expenses (including attorneys’ fees) actually and reasonably incurred by him in
connection therewith.
(iv) Any indemnification under paragraphs (i) and (ii) above (unless ordered by a
court) shall be made by the corporation only as authorized in the specific case upon
a determination that indemnification of the director or officer is proper in the
circumstances because he has met the applicable standard of conduct set forth in
paragraphs (i) and (ii) above. Such determination shall be made (1) by the board of
directors by a majority vote of a quorum consisting of directors who were not parties
to such action, suit or proceeding, or (2) if such a quorum is not obtainable, or,
even if obtainable but a quorum of disinterested directors so directs, by independent
legal counsel in a written opinion, or (3) by the stockholders.
(v) Expenses incurred in defending a civil, criminal, administrative or investigative
action, suit or proceeding, or threat thereof, may be paid by the corporation to a
director or officer in advance of the final disposition of such action, suit or
proceeding as authorized by the board of directors in the specific case upon receipt
of an undertaking by or on behalf of the director or officer to repay such amount
unless it shall ultimately be determined that he shall be indemnified by the
corporation.
(vi) The indemnification provided by the By-laws shall not be deemed exclusive of any
other rights to which a director or officer seeking indemnification may be entitled
under any statute, provision in the corporation’s certificate of incorporation,
by-law, agreement, vote of stockholders or disinterested directors or otherwise, both
as to action in his official capacity and as to action in
another capacity while holding such office, and shall continue as to a person who has
ceased to be a director or officer and shall inure to the benefit of the heirs,
executors and administrators of such a person.
(vii) The corporation shall have power to purchase and maintain insurance on behalf
of any person who is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a director,
officer, employee or agent of another corporation, partnership, joint venture, trust
or other enterprise against any liability asserted against him and incurred by him in
any such capacity, or arising out of his status as such, whether or not the
corporation would have the power to indemnify him against such liability under the
provisions of this Article.
(viii) For the purposes of paragraphs (i) through (vii) above, references to “the
corporation” include all constituent corporations absorbed in a consolidation or
merger as well as the resulting or surviving corporation so that any person who is or
was a director, officer, employee or agent of such a constituent corporation or is or
was serving at the request of such constituent corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or other
enterprise shall stand in the same position under the provisions of paragraphs (i)
through (vii) above with respect to the resulting or surviving corporation as he
would if he had served the resulting or surviving corporation in the same capacity.
(h) The Certificate of Incorporation and By-laws of ArcelorMittal Minorca Mine Inc. are silent
as to indemnification.
(j) The Certificate of Incorporation and By-laws of ArcelorMittal Service Inc. are silent as
to indemnification.
(k) The By-laws and the Certificates of Incorporation of ArcelorMittal Cleveland Inc.,
ArcelorMittal Hennepin Inc., ArcelorMittal Warren Inc. and ArcelorMittal Tow Path Valley Business
Park Development Company provide as follows:
(i) The corporation shall, to the fullest extent permitted by Section 145 of the
General Corporation Law of the State of Delaware, as the same may be amended and
supplemented, or by any successor thereto, indemnify any and all persons whom it
shall have power to indemnify under said section from and against any and all of the
expenses, liabilities or other matters referred to in or covered by said section.
The corporation shall advance expenses to the fullest extent permitted by said
section. Such right to indemnification and advancement of expenses shall continue as
to a person who has ceased to be a director, officer, employee or agent and shall
inure to the benefit of the heirs, executors and administrators of such a person.
The indemnification and advancement of expenses provided for herein shall not be
deemed exclusive of any other rights to which those seeking indemnification or
advancement of expenses may be entitled under any By-Law, agreement, vote of
stockholders or disinterested directors or otherwise.
(ii) Any person who was or is a party or threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of the
corporation) by reason of the fact that he or she is or was a director, officer,
employee or agent of the corporation or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise (including employee benefit
plans) (hereinafter an “indemnitee”), shall be indemnified and held harmless by the
corporation to the fullest extent authorized by the General Corporation Law, as the
same exists or may hereafter be amended (but, in the case of any such amendment, only
to the extent that such amendment permits the corporation to provide broader
indemnification than permitted prior thereto), against expenses (including attorneys’
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by such indemnitee in connection with such action, suit or proceeding, if
the indemnitee acted in good faith and in a manner he or she reasonably believed to
be in or not opposed to the best interests of the corporation, and with respect to
any criminal action or proceeding, had no
reasonable cause to believe such conduct was unlawful. The termination of the
proceeding, whether by judgment, order, settlement, conviction or upon a plea of nolo
contendere or its equivalent, shall not, of itself, create a presumption that the
person did not act in good faith and in a manner which he or she reasonably believed
to be in or not opposed to the best interests of the corporation and, with respect to
any criminal action or proceeding, had reasonable cause to believe such conduct was
unlawful.
(iii) Any person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the right of the corporation
to procure a judgment in its favor by reason of the fact that he or she is or was a
director, officer, employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise (including
employee benefit plans) shall be indemnified and held harmless by the corporation to
the fullest extent authorized by the General Corporation Law, as the same exists or
may hereafter be amended (but, in the case of any such amendment, only to the extent
that such amendment permits the corporation to provide broader indemnification than
permitted prior thereto), against expenses (including attorneys’ fees) actually and
reasonably incurred by him or her in connection with the defense or settlement of
such action or suit if he or she acted in good faith and in a manner he or she
reasonably believed to be in or not opposed to the best interests of the corporation
and except that no indemnification shall be made in respect of any claim, issue or
matter as to which such person shall have been adjudged to be liable to the
corporation unless and only to the extent that the court in which such suit or action
was brought, shall determine, upon application, that, despite the adjudication of
liability but in view of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses which such court shall deem
proper.
(iv) All reasonable expenses incurred by or on behalf of the indemnitee in connection
with any suit, action or proceeding, may be advanced to the indemnitee by the
corporation.
(v) The rights to indemnification and to advancement of expenses conferred in
paragraphs (ii) through (iv) shall not be exclusive of any other right which any
person may have or hereafter acquire under any statute, the certificate of
incorporation, a By-Law of the corporation, agreement, vote of stockholders or
disinterested directors or otherwise.
(vi) The indemnification and advancement of expenses provided by paragraphs (ii)
through (iv) shall continue as to a person who has ceased to be a director, officer,
employee or agent and shall inure to the benefit of the heirs, executors and
administrators of such person.
(l) The By-laws and the Certificates of Incorporation of ArcelorMittal Weirton Inc.,
ArcelorMittal Riverdale Inc., Mittal Steel — Venture Inc., ArcelorMittal Georgetown Inc., Mittal
Steel USA — Railways Inc., ArcelorMittal Hibbing Inc., ISG Acquisition Inc. and ArcelorMittal Real
Estate Inc. provide as follows:
(i) The corporation shall, to the fullest extent legally permissible under the
provisions of the Delaware General Corporation Law, as the same may be amended and
supplemented, indemnify and hold harmless any and all persons whom it shall have
power to indemnify under said provisions from and against any and all liabilities
(including expenses) imposed upon or reasonably incurred by him in connection with
any action, suit or other proceeding in which he may be involved or with which he may
be threatened, or other matters referred to in or covered by said provisions both as
to action in his official capacity and as to action in another capacity while holding
such office, and shall continue as to a person who has ceased to be a director or
officer of the corporation. Such indemnification provided shall not be deemed
exclusive of any other rights to which those indemnified may be entitled under any
Bylaw, agreement or resolution adopted by the stockholders entitled to vote thereon
after notice.
(ii) Any person who was or is a party or threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigate (other than an action by or in the right of the
corporation) by reason of the fact that he or she is or was a director, officer,
employee or agent of the corporation or is or was serving at the
request of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise (including
employee benefit plans) (hereinafter an “indemnitee”), shall be indemnified and held
harmless by the corporation to the fullest extent authorized by the Delaware General
Corporation Law, as the same exists or may hereafter be amended (but, in the case of
any such amendment, only to the extent that such amendment permits the corporation to
provide broader indemnification than permitted prior thereto), against expenses
(including attorneys’ fees), judgments, fines and amounts paid in settlement actually
and reasonably incurred by such indemnitee in connection with such action, suit or
proceeding, if the indemnitees acted in good faith and in a manner he or she
reasonably believed to be in or not opposed to the best interests of the corporation,
and with respect to any criminal action or proceeding, had no reasonable cause to
believe such conduct was unlawful. The termination of the proceeding, whether by
judgment, order, settlement, conviction or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that the person did not act in
good faith and in a manner which he or she reasonably believed to be in or not
opposed to the best interests of the corporation and, with respect to any criminal
action or proceeding, had reasonable cause to believe such conduct was unlawful.
(iii) Any person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the right of the corporation
to procure a judgment in its favor by reason of the fact that he or she is or was a
director, officer, employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise (including
employee benefit plans) shall be indemnified and held harmless by the corporation to
the fullest extent authorized by the Delaware General Corporation Law, as the same
exists or may hereafter be amended (but, in the case of any such amendment, only to
the extent that such amendment permits the corporation to provide broader
indemnification than permitted prior thereto), against expenses (including attorneys’
fees) actually and reasonably incurred by him or her in connection with the defense
or settlement of such action or suit if he or she acted in good faith and in a manner
he or she reasonably believed to be in or not opposed to the best interests of the
corporation and except that no indemnification shall be made in respect of any claim,
issue or matter as to which such person shall have been adjudged to be liable to the
corporation unless and only to the extent that the court in which such suit or action
was brought, shall determine, upon application, that, despite the adjudication of
liability but in view of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses which such court shall deem
proper.
(iv) All reasonable expenses incurred by or on behalf of the indemnitee in connection
with any suit, action or proceeding, may be advanced to the indemnitee by the
corporation.
(v) The rights to indemnification and to advancement of expenses conferred in
paragraphs (ii) through (iv) shall not be exclusive of any other right which any
person may have or hereafter acquire under any statute, the certificate of
incorporation, a By-Law of the corporation, agreement, vote of stockholders or
disinterested directors or otherwise.
(vi) The indemnification and advancement of expenses provided by paragraphs (ii)
through (iv) shall continue as to a person who has ceased to be a director, officer,
employee or agent and shall inure to the benefit of the heirs, executors and
administrators of such person.
(m) The Certificates of Formation of ArcelorMittal Plate LLC, ISG Sparrows Point LLC,
ArcelorMittal Steelton LLC, ArcelorMittal Lackawanna LLC, ArcelorMittal Burns Harbor LLC and
ArcelorMittal Columbus LLC are silent as to indemnification. Each of the Amended and Restated
Limited Liability Company Agreements of the foregoing entities provides the respective Board of
Managers with the authority to:
(i) make any determination to indemnify any person in connection with litigation
occurring in the ordinary course of business if the company is also a defendant but
only so long as the individual being indemnified is also represented by the counsel
that represents the company; and
(ii) commence, defend or settle litigation pertaining to the company, its business or
assets, except that unless indemnification is authorized under the other provisions
of the Amended and Restated Limited Liability Company Agreement the company will not
bear the expenses of any litigation brought against any member or manager acting in
that capacity, any officer or employee of the company, or any other person acting on
behalf of the company unless approved by the members.
(n) The Certificate of Formation of ArcelorMittal Indiana Harbor LLC is silent as to
indemnification. The Limited Liability Company Agreement of the foregoing entity provides as
follows:
(i) The company shall indemnify the members, the members of the board of managers and
any officer or employee of the company, and may so indemnify any agent of the
company, who was or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (including, without limitation, an action by or in
the right of the company) by reason of any action or omission in their respective
capacities against any liabilities, expenses (including, without limitation,
attorneys’ fees and expenses and any other costs and expenses incurred in connection
with defending such action, suit or proceeding), judgments, fines and amounts paid in
settlement actually and reasonably incurred by the person in connection with such
action, suit or proceeding, if the person acted in good faith and in a manner
reasonably believed to be in or not opposed to the best interests of the company,
and, with respect to any criminal action or proceeding, had no reasonable cause to
believe its, his or her conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction, or upon a plea of nolo
contendere or its equivalent, shall not, of itself, create a presumption (a) that the
person did not act in good faith and in a manner which it, he or she reasonably
believed to be in or not opposed to the best interests of the company, and (b) with
respect to any criminal action or proceeding, that the person had reasonable cause to
believe its, his or her conduct was unlawful. Expenses (including, without
limitation, attorneys’ fees and expenses) incurred by a person seeking
indemnification shall be paid in advance of the final disposition of such action,
suit or proceeding upon receipt of an undertaking from the person to repay such
amount if it shall ultimately be determined that the person is not entitled to
indemnification.
(ii) The indemnity provided for by clause (i) above shall be in accordance with and
to the full extent now or hereafter permitted by law, provided that, in no event
shall any subsequent change in law have the effect of reducing or diminishing the
indemnification provided above.
(iii) For purposes of clauses (i) and (ii), above, the word “person” shall include
the members, the members of the board of managers and any officer, employee or agent
of the company.
(o) The Certificate of Formation of ArcelorMittal Financial Services LLC is silent as to
indemnification. The Limited Liability Company Agreement of the foregoing entity provides as
follows:
(i) The management committee of the company has the specific right and power to
indemnify any member or manager or former member or manager, and make any other
indemnification that is authorized by the limited liability company agreement in
accordance with the Delaware Limited Liability Company Act.
(ii) Unless otherwise provided in paragraph (v) below, the company, its receiver, or
its trustee (in the case of its receiver or trustee, to the extent of company
property) shall indemnify, save harmless, and pay all judgments and claims against
any manager relating to any liability or damage incurred by reason of any act
performed or omitted to be performed by any manager in connection with the company’s
business, including reasonable attorneys’ fees incurred by the manager in connection
with the defense of any action based on any such act or omission, which attorneys’
fees may be paid as incurred.
(iii) Unless otherwise provided in paragraph (v) below, in the event of any action by
a member against any manager, including a company derivative suit, the company shall
indemnify,
save harmless, and pay all expenses of such manager, including reasonable attorneys’
fees incurred in the defense of such action.
(iv) Unless otherwise provided in paragraph (v) below, the company shall indemnify,
save harmless, and pay all expenses, costs, or liabilities of any manager, if for the
benefit of the company and in accordance with the limited liability company agreement
said manager makes any deposit or makes any other similar payment or assumes any
obligation in connection with any property proposed to be acquired by the company and
suffers any financial loss as the result of such action.
(v) Notwithstanding the provisions of paragraphs (ii), (iii) and (iv) above, such
paragraphs shall be enforced only to the maximum extent permitted by law and no
manager shall be indemnified from any liability for the fraud, intentional
misconduct, gross negligence, or a knowing violation of the law, which was material
to the cause of action.
(vi) The obligations of the company set forth in this clause (o) are expressly
intended to create third-party beneficiary rights of each of the managers and any
member is authorized, on behalf of the company, to give written confirmation to any
manager of the existence and extent of the company’s obligations to such manager
hereunder.
(p) The Statement of Partnership Existence and the Agreement of Partnership of ArcelorMittal
USA Partnership are silent as to indemnification.
(q) The Certificate of Formation of ArcelorMittal Finance LLC is silent as to indemnification.
The Limited Liability Company Agreement of the foregoing entity provides as follows:
(i) Unless otherwise provided in paragraph (iv) below, the company, its receiver, or
its trustee (in the case of its receiver or trustee, to the extent of company
property) shall indemnify, save harmless, and pay all judgments and claims against
any manager relating to any liability or damage incurred by reason of any act
performed or omitted to be performed by any manager in connection with the company’s
business, including reasonable attorneys’ fees incurred by the manager in connection
with the defense of any action based on any such act or omission, which attorneys’
fees may be paid as incurred.
(ii) Unless otherwise provided in paragraph (iv) below, in the event of any action by
a member against any manager, including a company derivative suit, the company shall
indemnify, save harmless, and pay all expenses of such manager, including reasonable
attorneys’ fees incurred in the defense of such action.
(iii) Unless otherwise provided in paragraph (iv) below, the company shall indemnify,
save harmless, and pay all expenses, costs, or liabilities of any manager, if for the
benefit of the company and in accordance with this clause (q) said manager makes any
deposit or makes any other similar payment or assumes any obligation in connection
with any property proposed to be acquired by the company and suffers any financial
loss as the result of such action.
(iv) Notwithstanding the provisions of paragraphs (i), (ii), and (iii) above, such
paragraphs shall be enforced only to the maximum extent permitted by law and no
manager shall be indemnified from any liability for the fraud, intentional
misconduct, gross negligence, or a knowing violation of the law, which was material
to the cause of action.
(v) The obligations of the company set forth in this clause (q) are expressly
intended to create third-party beneficiary rights of each of the managers and any
member is authorized, on behalf of the company, to give written confirmation to any
manager of the existence and extent of the company’s obligations to such manager
hereunder.
(a) Minnesota corporations. Unless prohibited by the articles of incorporation or
bylaws of a corporation, Section 302A.521, subd. 2, of the Minnesota Business Corporation Act (the
“MBCA”) requires Minnesota corporations to indemnify a person made or threatened to be made a party
to a proceeding by reason of the former or present official capacity of the person with respect to
such corporation against judgments, penalties, fines, including, without limitation, excise taxes
assessed against the person with respect to an employee benefit plan, settlements and reasonable
expenses, including attorneys’ fees and disbursements, incurred by the person in connection with
the proceeding (collectively “Losses”) if, with respect to the same acts or omissions, such person:
(1) has not been indemnified by another organization or employee benefit plan for the same Losses;
(2) acted in good faith; (3) received no improper personal benefit, and statutory procedures have
been followed in the case of any conflict of interest by a director; (4) in the case of a criminal
proceeding, had no reasonable cause to believe the conduct was unlawful; and (5) in the case of
acts or omissions occurring in the person’s official capacity as director, officer, member of a
committee of the board or employee, reasonably believed that the conduct was in the best interests
of the corporation, or in the case of acts or omissions occurring in a director’s, officer’s or
employee’s capacity as a director, officer, partner, trustee, employee or agent of another
organization or employee benefit plan, reasonably believed that the conduct was not opposed to the
best interests of the corporation. In addition, unless prohibited by the articles of incorporation
or bylaws of a corporation, Section 302A.521, subd. 3, of the MBCA requires payment or
reimbursement by the corporation, upon written request, of reasonable expenses (including
attorneys’ fees) incurred by a person in advance of the final disposition of a proceeding, (x) upon
receipt by the corporation of a written affirmation by the person of a good faith belief that the
requirements for indemnification set forth above have been met as well as a written undertaking by
the person to repay all amounts so paid or reimbursed by the corporation, if it is ultimately
determined that the criteria for indemnification have not been satisfied, and (y) after a
determination that the facts then known to those making the determination would not preclude
indemnification under this section.
(b) The Articles of Incorporation of Hibbing Taconite Holding Inc. is silent as to
indemnification. The By-laws of Hibbing Taconite Holding Inc. provide as follows:
(i) Any person who was or is a party or threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigate (other than an action by or in the right of the
corporation) by reason of the fact that he or she is or was a director, officer,
employee or agent of the corporation or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise (including employee benefit
plans) (hereinafter an “indemnitee”), shall be indemnified and held harmless by the
corporation to the fullest extent authorized by the Business Corporation Act, as the
same exists or may hereafter be amended (but, in the case of any such amendment, only
to the extent that such amendment permits the corporation to provide broader
indemnification than permitted prior thereto), against expenses (including attorneys’
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by such indemnitee in connection with such action, suit or proceeding, if
the indemnitees acted in good faith and in a manner he or she reasonably believed to
be in or not opposed to the best interests of the corporation, and with respect to
any criminal action or proceeding, had no reasonable cause to believe such conduct
was unlawful. The termination of the proceeding, whether by judgment, order,
settlement, conviction or upon a plea of nolo contendere or its equivalent, shall
not, of itself, create a presumption that the person did not act in good faith and in
a manner which he or she reasonably believed to be in or not opposed to the best
interests of the corporation and, with respect to any criminal action or proceeding,
had reasonable cause to believe such conduct was unlawful.
(ii) Any person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the right of the corporation
to procure a judgment in its favor by reason of the fact that he or she is or was a
director, officer, employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise (including
employee benefit plans) shall be indemnified and held harmless by the corporation to
the fullest
extent authorized by the Business Corporation Act, as the same exists or may
hereafter be amended (but, in the case of any such amendment, only to the extent that
such amendment permits the corporation to provide broader indemnification than
permitted prior thereto), against expenses (including attorneys’ fees) actually and
reasonably incurred by him or her in connection with the defense or settlement of
such action or suit if he or she acted in good faith and in a manner he or she
reasonably believed to be in or not opposed to the best interests of the corporation
and except that no indemnification shall be made in respect of any claim, issue or
matter as to which such person shall have been adjudged to be liable to the
corporation unless and only to the extent that the court in which such suit or action
was brought, shall determine, upon application, that, despite the adjudication of
liability but in view of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses which such court shall deem
proper.
(iii) All reasonable expenses incurred by or on behalf of the indemnitee in
connection with any suit, action or proceeding, may be advanced to the indemnitee by
the corporation.
(iv) The rights to indemnification and to advancement of expenses conferred in these
paragraphs (i) through (iii) shall not be exclusive of any other right which any
person may have or hereafter acquire under any statute, the Articles of
Incorporation, a By-Law of the corporation, agreement, vote of shareholders or
disinterested directors or otherwise.
(v) The indemnification and advancement of expenses provided by these paragraphs (i)
through (iii) shall continue as to a person who has ceased to be a director, officer,
employee or agent and shall inure to the benefit of the heirs, executors and
administrators of such person.
Registrants Organized Under the Laws of Nova Scotia
3222193 Nova Scotia Company
Applicable Laws of Nova Scotia
Under applicable Nova Scotia law, 3222193 Nova Scotia Company is permitted to indemnify its
officers and directors on terms acceptable to its shareholders subject only to the general common
law restrictions based on public policy and restrictions residing under specific legislation of
relevant jurisdictions.
Articles of Association
Section 160 of the articles of association of 3222193 Nova Scotia Company provides that every
current or former director or officer of 3222193 Nova Scotia Company, or person who acts or acted
at such company’s request, in the absence of dishonesty on such person’s part, shall be indemnified
by 3222193 Nova Scotia Company against all costs, losses and expenses, including an amount paid to
settle an action or claim or satisfy a judgment, that such director, officer or person may incur or
become liable to pay in respect of any (i) claim made against such person or (ii) civil, criminal
or administrative action or proceeding to which such person is made a party by reason of being or
having been a director or officer of 3222193 Nova Scotia Company or such body corporate,
partnership or other association, whether 3222193 Nova Scotia Company is a claimant or party to
such action or proceeding or otherwise.
Item 21. Exhibits and Financial Statement Schedules
(a) Exhibits.
A list of the exhibits filed with, or incorporated by reference into, this registration
statement is in the Exhibit Index that immediately precedes such exhibits and is incorporated
herein by reference.
All schedules for which provision is made in the applicable accounting regulations of the
Securities and Exchange Commission have been omitted because they are not required, are
inapplicable or the required information has already been provided elsewhere in this registration
statement.
Item 22. Undertakings
(a)
Each of the undersigned registrants hereby undertakes:
(1)
To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i)
To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii)
To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than 20 percent change in the
maximum aggregate offering price set forth in the “Calculation of Registration
Fee” table in the effective registration statement; and
(iii)
To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
(2)
That, for the purpose of determining any liability under the Securities Act of
1933, each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering thereof.
(3)
To remove from registration by means of a post-effective amendment any of the
securities being registered which remain unsold at the termination of the offering.
(4)
To file a post-effective amendment to the registration statement to include any
financial statements required by Item 8.A of Form 20-F at the start of any delayed
offering or throughout a continuous offering.
(b) Each of the undersigned registrants hereby undertakes that, for purposes of determining any
liability under the Securities Act of 1933, each filing of the registrant’s annual report pursuant
to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 (and, where applicable,
each filing of an employee benefit plan’s annual report pursuant to section 15(d) of the Securities
Exchange Act of 1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona fide offering
thereof.
(c) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be
permitted to directors, officers and controlling persons of the registrant pursuant to the
foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy as expressed in
the Act and is, therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred or paid by a
director, officer or controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person in connection with
the securities being registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of such issue.
(d) Each of the undersigned registrants hereby undertake: (i) to respond to requests for
information that is incorporated by reference into the prospectus pursuant to Items 4, 10(b), 11,
or 13 of this Form, within one business day of receipt of such request, and to send the
incorporated documents by first class mail or other equally prompt means; and (ii) to arrange or
provide for a facility in the U.S. for the purpose of responding to such requests. The undertaking
in subparagraph (i) includes information contained in documents filed subsequent to the effective
date of the registration statement through the date of responding to the request.
(e) Each of the undersigned registrants hereby undertake to supply by means of a post-effective
amendment all information concerning a transaction, and the company being acquired involved
therein, that was not the subject of and included in the registration statement when it became
effective.
Pursuant to the requirements of the Securities Act of 1933, as amended, ArcelorMittal
Financial Services LLC, the registrant, has duly caused this registration statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of Chicago, State of
Illinois, on April 15, 2008.
Know all men by these presents, that each of ArcelorMittal Financial Services LLC and the
undersigned managers of ArcelorMittal Financial Services LLC hereby constitutes and appoints Marc
R. Jeske and Thomas A. McCue, and each of them, his true and lawful attorneys-in-fact and agents,
for him and in his name, place and stead, in any and all capacities, with full power to act alone,
to sign any and all amendments to this registration statement (including any post-effective
amendment), and to file each such amendment to this registration statement, with all exhibits
thereto, and any and all documents in connection therewith, with the Securities and Exchange
Commission, hereby granting unto said attorneys-in-fact and agents, and each of them, full power
and authority to do and perform any and all acts and things requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this registration
statement has been signed by the following persons in the capacities
indicated on April 15, 2008.
Pursuant to the requirements of the Securities Act of 1933, as amended, ArcelorMittal, the
registrant, has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in Luxembourg, Grand Duchy of
Luxembourg, on April 15,2008.
ARCELORMITTAL
By:
/s/
E. S. De Vries
Name:
E. S. De Vries
Title:
Treasurer
ARCELORMITTAL
By:
/s/
Simon Evans
Name:
Simon Evans
Title:
General Counsel
POWER OF ATTORNEY
Know all men by these presents, that each of ArcelorMittal and the undersigned directors and
officers of ArcelorMittal hereby constitutes and appoints Marc R. Jeske and Thomas A. McCue, and
each of them, his true and lawful attorneys-in-fact and agents, for him and in his name, place and
stead, in any and all capacities, with full power to act alone, to sign any and all amendments to
this registration statement (including any post-effective amendment), and to file each such
amendment to this registration statement, with all exhibits thereto, and any and all documents in
connection therewith, with the Securities and Exchange Commission, hereby granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do and perform any and
all acts and things requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and confirming all that
said attorneys-in-fact and agents, or any of them, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this registration
statement has been signed by the following persons in the capacities
indicated on April 15, 2008.
Pursuant to the requirements of the Securities Act of 1933, as amended, ArcelorMittal USA
Inc., the registrant, has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Chicago, State
of Illinois, on April 15,2008.
Know all men by these presents, that each of ArcelorMittal USA Inc. and the undersigned
directors and officers of ArcelorMittal USA Inc. hereby constitutes and appoints Marc R. Jeske and
Thomas A. McCue, and each of them, his true and lawful attorneys-in-fact and agents, for him and in
his name, place and stead, in any and all capacities, with full power to act alone, to sign any and
all amendments to this registration statement (including any post-effective amendment), and to file
each such amendment to this registration statement, with all exhibits thereto, and any and all
documents in connection therewith, with the Securities and Exchange Commission, hereby granting
unto said attorneys-in-fact and agents, and each of them, full power and authority to do and
perform any and all acts and things requisite and necessary to be done in and about the premises,
as fully to all intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, may lawfully do or cause to
be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this registration
statement has been signed by the following persons in the capacities
indicated on April 15, 2008.
Pursuant to the requirements of the Securities Act of 1933, as amended, Burnham Trucking
Company, Inc., the registrant, has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Chicago, State of Illinois, on
April 15, 2008.
Know all men by these presents, that each of Burnham Trucking Company, Inc. and the
undersigned directors and officers of Burnham Trucking Company, Inc. hereby constitutes and
appoints Marc R. Jeske and Thomas A. McCue, and each of them, his true and lawful attorneys-in-fact
and agents, for him and in his name, place and stead, in any and all capacities, with full power to
act alone, to sign any and all amendments to this registration statement (including any
post-effective amendment), and to file each such amendment to this registration statement, with all
exhibits thereto, and any and all documents in connection therewith, with the Securities and
Exchange Commission, hereby granting unto said attorneys-in-fact and agents, and each of them, full
power and authority to do and perform any and all acts and things requisite and necessary to be
done in and about the premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them,
may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this registration
statement has been signed by the following persons in the capacities
indicated on April 15, 2008.
Pursuant to the requirements of the Securities Act of 1933, as amended, ArcelorMittal USA
Incoal Inc., the registrant, has duly caused this registration statement to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of Chicago, State of Illinois, on April 15, 2008.
Know all men by these presents, that each of ArcelorMittal USA Incoal Inc. and the undersigned
directors and officers of ArcelorMittal USA Incoal Inc. hereby constitutes and appoints Marc R.
Jeske and Thomas A. McCue, and each of them, his true and lawful attorneys-in-fact and agents, for
him and in his name, place and stead, in any and all capacities, with full power to act alone, to
sign any and all amendments to this registration statement (including any post-effective
amendment), and to file each such amendment to this registration statement, with all exhibits
thereto, and any and all documents in connection therewith, with the Securities and Exchange
Commission, hereby granting unto said attorneys-in-fact and agents, and each of them, full power
and authority to do and perform any and all acts and things requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this registration
statement has been signed by the following persons in the capacities
indicated on April 15, 2008.
Pursuant to the requirements of the Securities Act of 1933, as amended, ArcelorMittal Minorca
Mine Inc., the registrant, has duly caused this registration statement to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of Chicago, State of Illinois, on April 15, 2008.
Know all men by these presents, that each of ArcelorMittal Minorca Mine Inc. and the
undersigned directors and officers of ArcelorMittal Minorca Mine Inc. hereby constitutes and
appoints Marc R. Jeske and Thomas A. McCue, and each of them, his true and lawful attorneys-in-fact
and agents, for him and in his name, place and stead, in any and all capacities, with full power to
act alone, to sign any and all amendments to this registration statement (including any
post-effective amendment), and to file each such amendment to this registration statement, with all
exhibits thereto, and any and all documents in connection therewith, with the Securities and
Exchange Commission, hereby granting unto said attorneys-in-fact and agents, and each of them, full
power and authority to do and perform any and all acts and things requisite and necessary to be
done in and about the premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them,
may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this registration
statement has been signed by the following persons in the capacities
indicated on April 15, 2008.
Pursuant to the requirements of the Securities Act of 1933, as amended, ArcelorMittal Service
Inc., the registrant, has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Chicago, State
of Illinois, on April 15,2008.
Know all men by these presents, that each of ArcelorMittal Service Inc. and the undersigned
directors and officers of ArcelorMittal Service Inc. hereby constitutes and appoints Marc R. Jeske
and Thomas A. McCue, and each of them, his true and lawful attorneys-in-fact and agents, for him
and in his name, place and stead, in any and all capacities, with full power to act alone, to sign
any and all amendments to this registration statement (including any post-effective amendment), and
to file each such amendment to this registration statement, with all exhibits thereto, and any and
all documents in connection therewith, with the Securities and Exchange Commission, hereby granting
unto said attorneys-in-fact and agents, and each of them, full power and authority to do and
perform any and all acts and things requisite and necessary to be done in and about the premises,
as fully to all intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, may lawfully do or cause to
be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this registration
statement has been signed by the following persons in the capacities
indicated on April 15, 2008.
Pursuant to the requirements of the Securities Act of 1933, as amended, ArcelorMittal
Cleveland Inc., the registrant, has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Chicago, State of Illinois, on
April 15, 2008.
Know all men by these presents, that each of ArcelorMittal Cleveland Inc. and the undersigned
directors and officers of ArcelorMittal Cleveland Inc. hereby constitutes and appoints Marc R.
Jeske and Thomas A. McCue and each of them, his true and lawful attorneys-in-fact and agents, for
him and in his name, place and stead, in any and all capacities, with full power to act alone, to
sign any and all amendments to this registration statement (including any post-effective
amendment), and to file each such amendment to this registration statement, with all exhibits
thereto, and any and all documents in connection therewith, with the Securities and Exchange
Commission, hereby granting unto said attorneys-in-fact and agents, and each of them, full power
and authority to do and perform any and all acts and things requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this registration
statement has been signed by the following persons in the capacities
indicated on April 15, 2008.
Pursuant to the requirements of the Securities Act of 1933, as amended, ArcelorMittal Weirton
Inc., the registrant, has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Chicago, State
of Illinois, on April 15,2008.
Know all men by these presents, that each of ArcelorMittal Weirton Inc. and the undersigned
directors and officers of ArcelorMittal Weirton Inc. hereby constitutes and appoints Marc R. Jeske
and Thomas A. McCue, and each of them, his true and lawful attorneys-in-fact and agents, for him
and in his name, place and stead, in any and all capacities, with full power to act alone, to sign
any and all amendments to this registration statement (including any post-effective amendment), and
to file each such amendment to this registration statement, with all exhibits thereto, and any and
all documents in connection therewith, with the Securities and Exchange Commission, hereby granting
unto said attorneys-in-fact and agents, and each of them, full power and authority to do and
perform any and all acts and things requisite and necessary to be done in and about the premises,
as fully to all intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, may lawfully do or cause to
be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this registration
statement has been signed by the following persons in the capacities
indicated on April 15, 2008.
Pursuant to the requirements of the Securities Act of 1933, as amended, ArcelorMittal Hennepin
Inc., the registrant, has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Chicago, State
of Illinois, on April 15,2008.
Know all men by these presents, that each of ArcelorMittal Hennepin Inc. and the undersigned
directors and officers of ArcelorMittal Hennepin Inc. hereby constitutes and appoints Marc R. Jeske
and Thomas A. McCue, and each of them, his true and lawful attorneys-in-fact and agents, for him
and in his name, place and stead, in any and all capacities, with full power to act alone, to sign
any and all amendments to this registration statement (including any post-effective amendment), and
to file each such amendment to this registration statement, with all exhibits thereto, and any and
all documents in connection therewith, with the Securities and Exchange Commission, hereby granting
unto said attorneys-in-fact and agents, and each of them, full power and authority to do and
perform any and all acts and things requisite and necessary to be done in and about the premises,
as fully to all intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, may lawfully do or cause to
be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this registration
statement has been signed by the following persons in the capacities
indicated on April 15, 2008.
Pursuant to the requirements of the Securities Act of 1933, as amended, ArcelorMittal Indiana
Harbor LLC, the registrant, has duly caused this registration statement to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of Chicago, State of Illinois, on April 15, 2008.
Know all men by these presents, that each of ArcelorMittal Indiana Harbor LLC and the
undersigned managers and officers of ArcelorMittal Indiana Harbor LLC hereby constitutes and
appoints Marc R. Jeske and Thomas A. McCue, and each of them, his true and lawful attorneys-in-fact
and agents, for him and in his name, place and stead, in any and all capacities, with full power to
act alone, to sign any and all amendments to this registration statement (including any
post-effective amendment), and to file each such amendment to this registration statement, with all
exhibits thereto, and any and all documents in connection therewith, with the Securities and
Exchange Commission, hereby granting unto said attorneys-in-fact and agents, and each of them, full
power and authority to do and perform any and all acts and things requisite and necessary to be
done in and about the premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them,
may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this registration
statement has been signed by the following persons in the capacities
indicated on April 15, 2008.
Pursuant to the requirements of the Securities Act of 1933, as amended, ArcelorMittal Warren
Inc., the registrant, has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Chicago, State
of Illinois, on April 15,2008.
Know all men by these presents, that each of ArcelorMittal Warren Inc. and the undersigned
directors and officers of ArcelorMittal Warren Inc. hereby constitutes and appoints Marc R. Jeske
and Thomas A. McCue, and each of them, his true and lawful attorneys-in-fact and agents, for him
and in his name, place and stead, in any and all capacities, with full power to act alone, to sign
any and all amendments to this registration statement (including any post-effective amendment), and
to file each such amendment to this registration statement, with all exhibits thereto, and any and
all documents in connection therewith, with the Securities and Exchange Commission, hereby granting
unto said attorneys-in-fact and agents, and each of them, full power and authority to do and
perform any and all acts and things requisite and necessary to be done in and about the premises,
as fully to all intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, may lawfully do or cause to
be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this registration
statement has been signed by the following persons in the capacities
indicated on April 15, 2008.
Pursuant to the requirements of the Securities Act of 1933, as amended, ArcelorMittal
Riverdale Inc., the registrant, has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Chicago, State of Illinois, on
April 15, 2008.
Know all men by these presents, that each of ArcelorMittal Riverdale Inc. and the undersigned
directors and officers of ArcelorMittal Riverdale Inc. hereby constitutes and appoints Marc R.
Jeske and Thomas A. McCue, and each of them, his true and lawful attorneys-in-fact and agents, for
him and in his name, place and stead, in any and all capacities, with full power to act alone, to
sign any and all amendments to this registration statement (including any post-effective
amendment), and to file each such amendment to this registration statement, with all exhibits
thereto, and any and all documents in connection therewith, with the Securities and Exchange
Commission, hereby granting unto said attorneys-in-fact and agents, and each of them, full power
and authority to do and perform any and all acts and things requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this registration
statement has been signed by the following persons in the capacities
indicated on April 15, 2008.
Pursuant to the requirements of the Securities Act of 1933, as amended, Mittal Steel USA –
Venture Inc., the registrant, has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Chicago, State of Illinois, on
April 15, 2008.
Know all men by these presents, that each of Mittal Steel USA – Venture Inc. and the
undersigned directors and officers of Mittal Steel USA – Venture Inc. hereby constitutes and
appoints Marc R. Jeske and Thomas A. McCue, and each of them, his true and lawful attorneys-in-fact
and agents, for him and in his name, place and stead, in any and all capacities, with full power to
act alone, to sign any and all amendments to this registration statement (including any
post-effective amendment), and to file each such amendment to this registration statement, with all
exhibits thereto, and any and all documents in connection therewith, with the Securities and
Exchange Commission, hereby granting unto said attorneys-in-fact and agents, and each of them, full
power and authority to do and perform any and all acts and things requisite and necessary to be
done in and about the premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them,
may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this registration
statement has been signed by the following persons in the capacities
indicated on April 15, 2008.
Pursuant to the requirements of the Securities Act of 1933, as amended, ArcelorMittal Plate
LLC, the registrant, has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Chicago, State
of Illinois, on April 15,2008.
Know all men by these presents, that each of ArcelorMittal Plate LLC and the undersigned
managers and officers of ArcelorMittal Plate LLC hereby constitutes and appoints Marc R. Jeske and
Thomas A. McCue, and each of them, his true and lawful attorneys-in-fact and agents, for him and in
his name, place and stead, in any and all capacities, with full power to act alone, to sign any and
all amendments to this registration statement (including any post-effective amendment), and to file
each such amendment to this registration statement, with all exhibits thereto, and any and all
documents in connection therewith, with the Securities and Exchange Commission, hereby granting
unto said attorneys-in-fact and agents, and each of them, full power and authority to do and
perform any and all acts and things requisite and necessary to be done in and about the premises,
as fully to all intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, may lawfully do or cause to
be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this registration
statement has been signed by the following persons in the capacities
indicated on April 15, 2008.
Pursuant to the requirements of the Securities Act of 1933, as amended, ISG Sparrows Point
LLC, the registrant, has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Chicago, State
of Illinois, on April 15,2008.
Know all men by these presents, that each of ISG Sparrows Point LLC and the undersigned
managers and officers of ISG Sparrows Point LLC hereby constitutes and appoints Marc R. Jeske and
Thomas A. McCue, and each of them, his true and lawful attorneys-in-fact and agents, for him and in
his name, place and stead, in any and all capacities, with full power to act alone, to sign any and
all amendments to this registration statement (including any post-effective amendment), and to file
each such amendment to this registration statement, with all exhibits thereto, and any and all
documents in connection therewith, with the Securities and Exchange Commission, hereby granting
unto said attorneys-in-fact and agents, and each of them, full power and authority to do and
perform any and all acts and things requisite and necessary to be done in and about the premises,
as fully to all intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, may lawfully do or cause to
be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this registration
statement has been signed by the following persons in the capacities
indicated on April 15, 2008.
Pursuant to the requirements of the Securities Act of 1933, as amended, ArcelorMittal Steelton
LLC, the registrant, has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Chicago, State
of Illinois, on April 15,2008.
Know all men by these presents, that each of ArcelorMittal Steelton LLC and the undersigned
managers and officers of ArcelorMittal Steelton LLC hereby constitutes and appoints Marc R. Jeske
and Thomas A. McCue, and each of them, his true and lawful attorneys-in-fact and agents, for him
and in his name, place and stead, in any and all capacities, with full power to act alone, to sign
any and all amendments to this registration statement (including any post-effective amendment), and
to file each such amendment to this registration statement, with all exhibits thereto, and any and
all documents in connection therewith, with the Securities and Exchange Commission, hereby granting
unto said attorneys-in-fact and agents, and each of them, full power and authority to do and
perform any and all acts and things requisite and necessary to be done in and about the premises,
as fully to all intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, may lawfully do or cause to
be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this registration
statement has been signed by the following persons in the capacities
indicated on April 15, 2008.
Pursuant to the requirements of the Securities Act of 1933, as amended, ArcelorMittal
Lackawanna LLC, the registrant, has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Chicago, State of Illinois, on
April 15, 2008.
Know all men by these presents, that each of ArcelorMittal Lackawanna LLC and the undersigned
managers and officers of ArcelorMittal Lackawanna LLC hereby constitutes and appoints Marc R. Jeske
and Thomas A. McCue, and each of them, his true and lawful attorneys-in-fact and agents, for him
and in his name, place and stead, in any and all capacities, with full power to act alone, to sign
any and all amendments to this registration statement (including any post-effective amendment), and
to file each such amendment to this registration statement, with all exhibits thereto, and any and
all documents in connection therewith, with the Securities and Exchange Commission, hereby granting
unto said attorneys-in-fact and agents, and each of them, full power and authority to do and
perform any and all acts and things requisite and necessary to be done in and about the premises,
as fully to all intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, may lawfully do or cause to
be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this registration
statement has been signed by the following persons in the capacities
indicated on April 15, 2008.
Pursuant to the requirements of the Securities Act of 1933, as amended, ArcelorMittal Burns
Harbor LLC, the registrant, has duly caused this registration statement to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of Chicago, State of Illinois, on April 15, 2008.
Know all men by these presents, that each of ArcelorMittal Burns Harbor LLC and the
undersigned managers and officers of ArcelorMittal Burns Harbor LLC hereby constitutes and appoints
Marc R. Jeske and Thomas A. McCue, and each of them, his true and lawful attorneys-in-fact and
agents, for him and in his name, place and stead, in any and all capacities, with full power to act
alone, to sign any and all amendments to this registration statement (including any post-effective
amendment), and to file each such amendment to this registration statement, with all exhibits
thereto, and any and all documents in connection therewith, with the Securities and Exchange
Commission, hereby granting unto said attorneys-in-fact and agents, and each of them, full power
and authority to do and perform any and all acts and things requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this registration
statement has been signed by the following persons in the capacities
indicated on April 15, 2008.
Pursuant to the requirements of the Securities Act of 1933, as amended, ArcelorMittal Columbus
LLC, the registrant, has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Chicago, State
of Illinois, on April 15,2008.
Know all men by these presents, that each of ArcelorMittal Columbus LLC and the undersigned
managers and officers of ArcelorMittal Columbus LLC hereby constitutes and appoints Marc R. Jeske
and Thomas A. McCue, and each of them, his true and lawful attorneys-in-fact and agents, for him
and in his name, place and stead, in any and all capacities, with full power to act alone, to sign
any and all amendments to this registration statement (including any post-effective amendment), and
to file each such amendment to this registration statement, with all exhibits thereto, and any and
all documents in connection therewith, with the Securities and Exchange Commission, hereby granting
unto said attorneys-in-fact and agents, and each of them, full power and authority to do and
perform any and all acts and things requisite and necessary to be done in and about the premises,
as fully to all intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, may lawfully do or cause to
be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this registration
statement has been signed by the following persons in the capacities
indicated on April 15, 2008.
Pursuant to the requirements of the Securities Act of 1933, as amended, ArcelorMittal
Georgetown Inc., the registrant, has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Chicago, State of Illinois, on
April 15, 2008.
Know all men by these presents, that each of ArcelorMittal Georgetown Inc. and the undersigned
directors and officers of ArcelorMittal Georgetown Inc. hereby constitutes and appoints Marc R.
Jeske and Thomas A. McCue, and each of them, his true and lawful attorneys-in-fact and agents, for
him and in his name, place and stead, in any and all capacities, with full power to act alone, to
sign any and all amendments to this registration statement (including any post-effective
amendment), and to file each such amendment to this registration statement, with all exhibits
thereto, and any and all documents in connection therewith, with the Securities and Exchange
Commission, hereby granting unto said attorneys-in-fact and agents, and each of them, full power
and authority to do and perform any and all acts and things requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this registration
statement has been signed by the following persons in the capacities
indicated on April 15, 2008.
Pursuant to the requirements of the Securities Act of 1933, as amended, Mittal Steel USA –
Railways Inc., the registrant, has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Chicago, State of Illinois, on
April 15, 2008.
Know all men by these presents, that each of Mittal Steel USA – Railways Inc. and the
undersigned directors and officers of Mittal Steel USA – Railways Inc. hereby constitutes and
appoints Marc R. Jeske and Thomas A. McCue, and each of them, his true and lawful attorneys-in-fact
and agents, for him and in his name, place and stead, in any and all capacities, with full power to
act alone, to sign any and all amendments to this registration statement (including any
post-effective amendment), and to file each such amendment to this registration statement, with all
exhibits thereto, and any and all documents in connection therewith, with the Securities and
Exchange Commission, hereby granting unto said attorneys-in-fact and agents, and each of them, full
power and authority to do and perform any and all acts and things requisite and necessary to be
done in and about the premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them,
may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this registration
statement has been signed by the following persons in the capacities
indicated on April 15, 2008.
Pursuant to the requirements of the Securities Act of 1933, as amended, ArcelorMittal Hibbing
Inc., the registrant, has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Chicago, State
of Illinois, on April 15,2008.
Know all men by these presents, that each of ArcelorMittal Hibbing Inc. and the undersigned
directors and officers of ArcelorMittal Hibbing Inc. hereby constitutes and appoints Marc R. Jeske
and Thomas A. McCue, and each of them, his true and lawful attorneys-in-fact and agents, for him
and in his name, place and stead, in any and all capacities, with full power to act alone, to sign
any and all amendments to this registration statement (including any post-effective amendment), and
to file each such amendment to this registration statement, with all exhibits thereto, and any and
all documents in connection therewith, with the Securities and Exchange Commission, hereby granting
unto said attorneys-in-fact and agents, and each of them, full power and authority to do and
perform any and all acts and things requisite and necessary to be done in and about the premises,
as fully to all intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, may lawfully do or cause to
be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this registration
statement has been signed by the following persons in the capacities
indicated on April 15, 2008.
Pursuant to the requirements of the Securities Act of 1933, as amended, Hibbing Taconite
Holding Inc., the registrant, has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Chicago, State of Illinois, on
April 15, 2008.
Know all men by these presents, that each of Hibbing Taconite Holding Inc. and the undersigned
directors and officers of Hibbing Taconite Holding Inc. hereby constitutes and appoints Marc R.
Jeske and Thomas A. McCue, and each of them, his true and lawful attorneys-in-fact and agents, for
him and in his name, place and stead, in any and all capacities, with full power to act alone, to
sign any and all amendments to this registration statement (including any post-effective
amendment), and to file each such amendment to this registration statement, with all exhibits
thereto, and any and all documents in connection therewith, with the Securities and Exchange
Commission, hereby granting unto said attorneys-in-fact and agents, and each of them, full power
and authority to do and perform any and all acts and things requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this registration
statement has been signed by the following persons in the capacities
indicated on April 15, 2008.
Pursuant to the requirements of the Securities Act of 1933, as amended, ISG Acquisition Inc.,
the registrant, has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Chicago, State
of Illinois, on April 15,2008.
Know all men by these presents, that each of ISG Acquisition Inc. and the undersigned
directors and officers of ISG Acquisition Inc. hereby constitutes and appoints Marc R. Jeske and
Thomas A. McCue, and each of them, his true and lawful attorneys-in-fact and agents, for him and in
his name, place and stead, in any and all capacities, with full power to act alone, to sign any and
all amendments to this registration statement (including any post-effective amendment), and to file
each such amendment to this registration statement, with all exhibits thereto, and any and all
documents in connection therewith, with the Securities and Exchange Commission, hereby granting
unto said attorneys-in-fact and agents, and each of them, full power and authority to do and
perform any and all acts and things requisite and necessary to be done in and about the premises,
as fully to all intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, may lawfully do or cause to
be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this registration
statement has been signed by the following persons in the capacities
indicated on April 15, 2008.
Pursuant to the requirements of the Securities Act of 1933, as amended, ArcelorMittal Real
Estate Inc., the registrant, has duly caused this registration statement to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of Chicago, State of Illinois, on April 15, 2008.
Know all men by these presents, that each of ArcelorMittal Real Estate Inc. and the
undersigned directors and officers of ArcelorMittal Real Estate Inc. hereby constitutes and
appoints Marc R. Jeske and Thomas A. McCue, and each of them, his true and lawful attorneys-in-fact
and agents, for him and in his name, place and stead, in any and all capacities, with full power to
act alone, to sign any and all amendments to this registration statement (including any
post-effective amendment), and to file each such amendment to this registration statement, with all
exhibits thereto, and any and all documents in connection therewith, with the Securities and
Exchange Commission, hereby granting unto said attorneys-in-fact and agents, and each of them, full
power and authority to do and perform any and all acts and things requisite and necessary to be
done in and about the premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them,
may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this registration
statement has been signed by the following persons in the capacities
indicated on April 15, 2008.
Pursuant to the requirements of the Securities Act of 1933, as amended, ArcelorMittal Tow Path
Valley Business Park Development Company, the registrant, has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of
Chicago, State of Illinois, on April 15, 2008.
ARCELORMITTAL TOW PATH VALLEY
BUSINESS PARK DEVELOPMENT
COMPANY
Know all men by these presents, that each of ArcelorMittal Tow Path Valley Business Park
Development Company and the undersigned directors and officers of ArcelorMittal Tow Path Valley
Business Park Development Company hereby constitutes and appoints Marc R. Jeske and Thomas A.
McCue, and each of them, his true and lawful attorneys-in-fact and agents, for him and in his name,
place and stead, in any and all capacities, with full power to act alone, to sign any and all
amendments to this registration statement (including any post-effective amendment), and to file
each such amendment to this registration statement, with all exhibits thereto, and any and all
documents in connection therewith, with the Securities and Exchange Commission, hereby granting
unto said attorneys-in-fact and agents, and each of them, full power and authority to do and
perform any and all acts and things requisite and necessary to be done in and about the premises,
as fully to all intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, may lawfully do or cause to
be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this registration
statement has been signed by the following persons in the capacities
indicated on April 15, 2008.
Pursuant to the requirements of the Securities Act of 1933, as amended, ArcelorMittal USA
Partnership, the registrant, has duly caused this registration statement to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of
Contrecoeur, Province of Québec (Canada), on April 15, 2008.
Know all men by these presents, that each of ArcelorMittal USA Partnership and the undersigned
directors and general partners of ArcelorMittal USA Partnership hereby constitutes and appoints
Marc R. Jeske and Thomas A. McCue, and each of them, his true and lawful attorneys-in-fact and
agents, for him and in his name, place and stead, in any and all capacities, with full power to act
alone, to sign any and all amendments to this registration statement (including any post-effective
amendment), and to file each such amendment to this registration statement, with all exhibits
thereto, and any and all documents in connection therewith, with the Securities and Exchange
Commission, hereby granting unto said attorneys-in-fact and agents, and each of them, full power
and authority to do and perform any and all acts and things requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this registration
statement has been signed by the following persons in the capacities
indicated on April 15, 2008.
Pursuant to the requirements of the Securities Act of 1933, as amended, 3222193 Nova Scotia
Company, the registrant, has duly caused this registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Chicago, State of Illinois, on April 15, 2008.
Know all men by these presents, that each of 3222193 Nova Scotia Company and the undersigned
directors and officers of 3222193 Nova Scotia Company hereby constitutes and appoints Marc R. Jeske
and Thomas A. McCue, and each of them, his true and lawful attorneys-in-fact and agents, for him
and in his name, place and stead, in any and all capacities, with full power to act alone, to sign
any and all amendments to this registration statement (including any post-effective amendment), and
to file each such amendment to this registration statement, with all exhibits thereto, and any and
all documents in connection therewith, with the Securities and Exchange Commission, hereby granting
unto said attorneys-in-fact and agents, and each of them, full power and authority to do and
perform any and all acts and things requisite and necessary to be done in and about the premises,
as fully to all intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, may lawfully do or cause to
be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this registration
statement has been signed by the following persons in the capacities
indicated on April 15, 2008.
Pursuant to the requirements of the Securities Act of 1933, as amended, ArcelorMittal Finance
LLC, the registrant, has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Chicago, State
of Illinois, on April 15,2008.
Know all men by these presents, that each of ArcelorMittal Finance LLC and the undersigned
managers of ArcelorMittal Finance LLC hereby constitutes and appoints Marc R. Jeske and Thomas A.
McCue, and each of them, his true and lawful attorneys-in-fact and agents, for him and in his name,
place and stead, in any and all capacities, with full power to act alone, to sign any and all
amendments to this registration statement (including any post-effective amendment), and to file
each such amendment to this registration statement, with all exhibits thereto, and any and all
documents in connection therewith, with the Securities and Exchange Commission, hereby granting
unto said attorneys-in-fact and agents, and each of them, full power and authority to do and
perform any and all acts and things requisite and necessary to be done in and about the premises,
as fully to all intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, may lawfully do or cause to
be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this registration
statement has been signed by the following persons in the capacities
indicated on April 15, 2008.
Merger Agreement between Arcelor and ArcelorMittal, dated September 25, 2007 (incorporated by
reference from ArcelorMittal’s Registration Statement on Form F-4 (File No. 333-146371)).
2.2
Merger proposal and explanatory memorandum between ArcelorMittal and Arcelor, dated September25, 2007 (incorporated by reference from ArcelorMittal’s Registration Statement on Form F-4
(File No. 333-146371)).
Merger Agreement between ArcelorMittal and Mittal Steel Company N.V., dated May 2, 2007
(included as Annex A to the proxy statement/prospectus forming a part of ArcelorMittal’s
registration statement on Form F-4 (Reg. No. 333- 144169) filed with the Commission on June29, 2007, and incorporated by reference herein).
3.1
Amended and Restated Articles of Association of ArcelorMittal dated November 5, 2007, and
published in the Mémorial C (Official Gazette) on November 13, 2007 (incorporated by
reference from ArcelorMittal’s Annual Report on Form 20-F for the year ended December 31,2007).
3.2
Certificate of Formation of ArcelorMittal Financial Services LLC.
3.3
Limited Liability Company Agreement, dated December 18, 2007, of ArcelorMittal
Financial Services LLC.
3.4
Fifth Amended and Restated Certificate of Incorporation of ArcelorMittal USA Inc.
(incorporated by reference from ArcelorMittal USA Inc.’s Annual Report on Form 10-K for the
year ended December 31, 2005).
3.5
Certificate of the Designation for the Series A 8% Preferred Stock, $0.01 par value per
share, of ArcelorMittal USA Inc. (incorporated by reference from ArcelorMittal USA Inc.’s
Annual Report on Form 10-K for the year ended December 31, 2005).
Certificate of Incorporation of Burnham Trucking Company, Inc. (incorporated by reference
from Ispat Inland ULC’s Registration Statement on Form F-4 (File No. 333-116128)).
3.8
By-laws, as amended, of Burnham Trucking Company, Inc. (incorporated by reference from Ispat
Inland ULC’s Registration Statement on Form F-4 (File No. 333-116128)).
3.9
Certificate of Incorporation, as amended, of ArcelorMittal USA Incoal Inc. (f/k/a Fort Wayne
Woodview Manor Corporation).
3.10
By-laws of ArcelorMittal USA Incoal Inc. (f/k/a Fort Wayne Woodview Manor Corporation).
3.11
Certificate of Incorporation, as
amended, of ArcelorMittal Minorca Mine Inc. (f/k/a Inland Steel Mining
Company).
3.12
By-Laws of ArcelorMittal Minorca Mine Inc. (f/k/a Inland Steel Mining Company).
3.13
Certificate of Incorporation, as
amended, of ArcelorMittal Service Inc. (f/k/a Inland Steel Service Corp.).
3.14
By-Laws of ArcelorMittal Service Inc. (f/k/a Inland Steel Service Corp.).
3.15
Certificate of Incorporation, as
amended, of ArcelorMittal Cleveland Inc. (f/k/a ISG Cleveland East Inc.).
3.16
By-Laws of ArcelorMittal Cleveland Inc. (f/k/a ISG Cleveland East Inc.).
3.17
Certificate of Incorporation, as
amended, of ArcelorMittal Weirton Inc. (f/k/a ISG Weirton Inc.).
Certificate of Incorporation, as amended, of ArcelorMittal Real Estate Inc. (f/k/a ISG Real Estate Inc.).
3.52
By-Laws of ArcelorMittal Real Estate Inc. (f/k/a ISG Real Estate Inc.).
3.53
Certificate of Incorporation, as amended, of ArcelorMittal Tow Path Valley Business Park Development
Company (f/k/a Tow Path Valley Business Park Development Company).
3.54
By-Laws of ArcelorMittal Tow Path Valley Business Park Development Company (f/k/a Tow Path
Valley Business Park Development Company).
3.55
Certificate of Formation of ArcelorMittal Finance LLC.
3.56
Limited Liability Company Agreement, dated March 18, 2008, of ArcelorMittal Finance
LLC.
3.57
Memorandum of Association and Articles of Association of 3222193 Nova Scotia Company.
3.58
Statement of Partnership Existence of ArcelorMittal USA Partnership.
3.59
Agreement of Partnership, dated
March 18, 2008, of ArcelorMittal USA Partnership.
4.1
Copy of First Mortgage Indenture, dated April 1, 1928, between Ispat Inland Inc. (the “Steel
Company”) and First Trust and Savings Bank and Melvin A. Traylor, as Trustees, and of
supplemental indentures thereto, to and including the Thirty-Ninth Supplemental Indenture,
incorporated by reference from the following Exhibits: (i) Exhibits B-1(a), B-1(b),
B-1(c),B-1(d) and B-1(e), filed with Steel Company’s Registration Statement on Form A-2 (No.
2-1855); (ii) Exhibits D-1(f) and D-1(g), filed with Steel Company’s Registration Statement
on Form E-1 (No. 2-2182); (iii) Exhibit B-1(h), filed with Steel Company’s Current Report on
Form 8-K dated January 18, 1937; (iv) Exhibit B-1(i), filed with Steel Company’s Current
Report on Form 8-K, dated February 8, 1937; (v) Exhibits B-1(j) and B-1(k), filed with Steel
Company’s Current Report on Form 8-K for the month of April, 1940; (vi) Exhibit B-2, filed
with Steel Company’s Registration Statement on Form A-2 (No. 2-4357); (vii) Exhibit B-1(l),
filed with Steel Company’s Current Report on Form 8-K for the month of January, 1945; (viii)
Exhibit 1, filed with Steel Company’s Current Report on Form 8-K for the month of November,
1946; (ix) Exhibit 1, filed with Steel Company’s Current Report on Form 8-K for the months of
July and August, 1948; (x) Exhibits B and C, filed with Steel Company’s Current Report on
Form 8-K for the month of March, 1952; (xi) Exhibit A, filed with Steel Company’s Current
Report on Form 8-K for the month of July, 1956; (xii) Exhibit A, filed with Steel Company’s
Current Report on Form 8-K for the month of July, 1957; (xiii) Exhibit B, filed with Steel
Company’s Current Report on Form 8-K for the month of January, 1959; (xiv) the Exhibit filed
with Steel Company’s Current Report on Form 8-K for the month of December, 1967; (xv) the
Exhibit filed with Steel Company’s Current Report on Form 8-K for the month of April, 1969;
(xvi) the Exhibit filed with Steel Company’s Current Report on Form 8-K for the month of
July, 1970; (xvii) the Exhibit filed with the amendment on Form 8 to Steel Company’s Current
Report on Form 8-K for the month of April, 1974; (xviii) Exhibit B, filed with Steel
Company’s Current Report on Form 8-K for the month of September, 1975; (xix) Exhibit B, filed
with Steel Company’s Current Report on Form 8-K for the month of January, 1977; (xx) Exhibit
C, filed with Steel Company’s Current Report on Form 8-K for the month of February, 1977;
(xxi) Exhibit B, filed with Steel Company’s Quarterly Report on Form 10-Q for the quarter
ended June 30, 1978; (xxii) Exhibit B, filed with Steel Company’s Quarterly Report on Form
10-Q for the quarter ended June 30, 1980; (xxiii) Exhibit 4-D, filed with Steel Company’s
Annual Report on Form 10-K for the fiscal year ended December 31, 1980; (xxiv) Exhibit 4-D,
filed with Steel Company’s Annual Report on Form 10-K for the fiscal year ended December 31,
1982; (xxv) Exhibit 4-E, filed with Steel Company’s Annual Report on Form 10-K for the fiscal
year ended December 31, 1983; (xxvi) Exhibit 4(i) filed with the Steel Company’s Registration
Statement on Form S-2 (No. 33-43393); (xxvii) Exhibit 4 filed with Steel Company’s Current
Report on Form 8-K dated June 23, 1993; (xxviii) Exhibit 4.C filed with Steel Company’s
Quarterly Report on
Form 10-Q for the quarter ended June 30, 1995; (xxix) Exhibit 4.C filed
with Steel Company’s Quarterly Report on Form 10-Q for the quarter Ended September 30, 1995;
(xxx) Exhibit 4.C filed with Steel Company’s Quarterly Report on Form 10-Q for the quarter
ended June 30, 1996; (xxxi) Exhibit 4.C. filed with the registrant’s Annual Report on Form
10-K for the year ended December 31, 1998, (xxxii) Exhibit 4.5 to the registrant’s
registration statement on Form S-4
(File No. 333-116128), (xxxiii) Exhibit 4.6 to the
registrant’s registration statement on Form S-4 (File No. 333-116128) and (xxxiv) Exhibit
99.3 to the registrant’s Current Report on Form 8-K filed on January 6, 2006.
4.2
Copy of consolidated reprint of First Mortgage Indenture, dated April 1, 1928, between Ispat
Inland Inc. and First Trust and Savings Bank and Melvin A. Traylor, as Trustees, as Amended
and supplemented by all supplemental indentures thereto, to and including the Thirteenth
Supplemental Indenture (incorporated by reference from the Registration Statement on Form
S-1 (File No. 2-9443)).
4.3
Form of Fortieth Supplemental
Indenture from ArcelorMittal USA to The Bank of New York and
[_________] as Trustees under the First Mortgage from Ispat Inland Inc. to First Trust and Savings
Bank and Melvin A. Traylor, as Trustees, dated April 1, 1928.
4.4
Form of Guarantee from the
Guarantors named therein to the holders of Bonds (as defined therein)
and The Bank of New York and [_________] as successor Trustees
under the First Mortgage from ArcelorMittal USA, to First Trust and
Savings Banks and Melvin A. Traylor, as Trustees, dated April 1, 1928.
4.5
Indenture, dated as of March 25, 2004, among Ispat Inland ULC, the Guarantors (as defined
therein) and LaSalle Bank National Association, as Trustee (incorporated by reference from
the Registration Statement on Form S-4 (File No. 333-116128)).
4.6
Supplemental Indenture, dated as of September 16, 2004, among Ispat Inland ULC, the
Guarantors (as defined therein) and LaSalle Bank National Association, as Trustee.
4.7
Second Supplemental Indenture, dated as of March 14, 2005, among Ispat Inland ULC, the
Guarantors (as defined therein) and LaSalle Bank National Association, as Trustee.
4.8
Third Supplemental Indenture, dated as of December 31, 2005, among Ispat Inland ULC, the
Guarantors (as defined therein), Mittal Steel USA ISG Inc. and LaSalle Bank National
Association, as Trustee (incorporated by reference from ArcelorMittal USA Inc.’s Current
Report on Form 8-K filed January 6, 2006).
4.9
Fourth Supplemental Indenture, dated as of December 31, 2005, among Ispat Inland ULC, the
Guarantors (as defined therein), Mittal Steel USA ISG Inc. and LaSalle Bank National
Association, as Trustee (incorporated by reference from ArcelorMittal USA Inc.’s Current
Report on Form 8-K filed January 6, 2006).
4.10
Fifth Supplemental Indenture, dated as of December 31, 2006, among Ispat Inland ULC, the
Guarantors (as defined therein) and LaSalle Bank National Association, as Trustee.
4.11
Sixth Supplemental Indenture, dated as of September 3, 2007, among Ispat Inland ULC, the
Guarantors (as defined therein) and LaSalle Bank National Association, as Trustee.
4.12
Seventh Supplemental Indenture, dated as of November 13, 2007, among Ispat Inland ULC, the
Guarantors (as defined therein) and LaSalle Bank National Association, as Trustee.
4.13
Eighth Supplemental Indenture, dated as of December 28, 2007, among ArcelorMittal Financial
Services LLC, the Guarantors (as defined therein) and LaSalle Bank National Association, as
Trustee.
4.14
Form of Ninth Supplemental Indenture among ArcelorMittal Financial Services LLC,
ArcelorMittal USA Partnership, the Guarantors named therein and LaSalle Bank National Association, as Trustee (incorporated by reference from Exhibit A to the Consent Solicitation
Statement, which forms a part of this registration statement).
4.15
Security Agreement, dated as of March 25, 2004, among Ispat Inland Inc. and LaSalle Bank
National Association, as Trustee.
Note: Certain instruments with respect to long-term debt of ArcelorMittal have not been filed
as Exhibits to this Registration Statement since the total amount of securities authorized
under any such instrument does not exceed 10 percent of the total assets of ArcelorMittal and
its subsidiaries on a consolidated basis. The Issuer agrees to furnish a copy of each such
instrument upon request of the SEC.
5.1
Opinion of Mayer Brown LLP
5.2
Opinion of Stewart McKelvey
5.3
Opinion of Bonn Schmitt Steichen
10.1
ArcelorMittal Global Stock Option Plan, effective September 15, 1999 (filed as Exhibit 4.1 to
Mittal Steel Company N.V.’s annual report on Form 20-F for the year ended December 31, 2000
Memorandum of Understanding dated June 25, 2006 among Arcelor, Mittal Steel Company N.V. and
Mr. and Mrs. Lakshmi N. Mittal (filed as Exhibit 99.1 to Mittal Steel Company N.V.’s report
on Form 6-K (File No. 001-14666) filed with the Commission on June 29, 2006, and incorporated
by reference herein).
10.4
Agreement dated November 30, 2006 among ArcelorMittal (formerly known as Mittal Steel Company
N.V.), the Arrangers named therein, the Original Lenders named therein and the Facility Agent
named therein (filed as Exhibit 10.2 to Mittal Steel Company N.V.’s annual report on Form
20-F for the year ended December 31, 2006 (File No. 001-14666), and incorporated by reference
herein).
Novation Agreement dated December 10, 2007 among ArcelorMittal, ArcelorMittal Finance and the
Facility Agent named therein (filed as Exhibit 4.5 to ArcelorMittal’s annual report on Form
20-F for the year ended December 31, 2007 (File No. 333-146371), and incorporated by
reference herein).
10.7
Share Purchase Agreement by and between Carlo Tassara International S.A. and ArcelorMittal
dated February 19, 2008 for the Purchase of 18 million shares (filed as Exhibit 4.8 to
ArcelorMittal’s annual report on Form 20-F for the year ended December 31, 2007 (File No.
333-146371), and incorporated by reference herein).
10.8
Share Purchase Agreement by and between Carlo Tassara International S.A. and ArcelorMittal
dated February 19, 2008 for the Purchase of 7 million shares (filed as Exhibit 4.9 to
ArcelorMittal’s annual report on Form 20-F for the year ended December 31, 2007 (File No.
333-146371), and incorporated by reference herein).
12
Calculation of Ratio of Earnings to Fixed Charges.