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AMENDED AND RESTATED TERM LOAN AGREEMENT

Loan Agreement

AMENDED AND RESTATED TERM LOAN AGREEMENT | Document Parties: ESMARK INCORPORATED | ESSAR STEEL HOLDINGS LIMITED You are currently viewing:
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ESMARK INCORPORATED | ESSAR STEEL HOLDINGS LIMITED

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Title: AMENDED AND RESTATED TERM LOAN AGREEMENT
Governing Law: New York     Date: 5/8/2008
Law Firm: McGuireWoods;Shearman Sterling    

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Exhibit 10.2

EXECUTION COPY

 

 

 

$79,000,000

AMENDED AND RESTATED TERM LOAN AGREEMENT

among

WHEELING-PITTSBURGH CORPORATION,

WHEELING-PITTSBURGH STEEL CORPORATION,

as Borrower,

The Lenders from Time to Time Parties Hereto,

and

ESSAR STEEL HOLDINGS LIMITED,

as Administrative Agent

Dated as of May 5, 2008

 

 

 

 


TABLE OF CONTENTS

 

          Page
SECTION 1.    DEFINITIONS    1

1.1

   Defined Terms    1

1.2

   Other Definitional Provisions    19
SECTION 2.    AMOUNT AND TERMS OF COMMITMENTS    19

2.1

   Consolidation of Loans    19

2.2

   [Intentionally Reserved]    19

2.3

   Repayment of Loans    19

2.4

   [Intentionally Reserved]    19

2.5

   Optional Prepayments    20

2.6

   Mandatory Prepayments    20

2.7

   [Intentionally Reserved]    20

2.8

   [Intentionally Reserved]    20

2.9

   Interest Rates and Payment Dates    20

2.10

   Computation of Interest and Fees    21

2.11

   Inability to Determine Interest Rate    21

2.12

   Pro Rata Treatment and Payments    21

2.13

   Requirements of Law    22

2.14

   Taxes    23

2.15

   Indemnity    25

2.16

   Change of Lending Office    25
SECTION 3.    REPRESENTATIONS AND WARRANTIES    26

3.1

   Financial Condition    26

3.2

   No Change    27

3.3

   Existence; Compliance with Law    27

3.4

   Power; Authorization; Enforceable Obligations    27

3.5

   No Legal Bar    28

3.6

   Litigation    28

3.7

   No Default    28

3.8

   Ownership of Property; Liens    28

3.9

   Intellectual Property    28

 

-i-

 


TABLE OF CONTENTS

(continued)

 

          Page

3.10

   Taxes    29

3.11

   Federal Regulations    29

3.12

   Labor Matters    29

3.13

   ERISA    29

3.14

   Investment Company Act; Other Regulations    30

3.15

   Subsidiaries    30

3.16

   [Intentionally Reserved]    30

3.17

   Environmental Matters    30

3.18

   Accuracy of Information, etc    31

3.19

   Security Documents    32

3.20

   Solvency    32

3.21

   Regulation H    32

3.22

   Senior Indebtedness    32

3.23

   Insurance    33

3.24

   Deposit and Disbursement Accounts    33

3.25

   Government Contracts    33

3.26

   Customer and Trade Relations    33

3.27

   Bonding; Licenses    33

3.28

   Off Balance Sheet Transactions    33

3.29

   Inactive Subsidiaries    33
SECTION 4.    CONDITIONS PRECEDENT    33

4.1

   Conditions to Effectiveness    33
SECTION 5.    AFFIRMATIVE COVENANTS    35

5.1

   Financial Statements    35

5.2

   Certificates; Other Information    36

5.3

   [Intentionally Reserved]    37

5.4

   Payment of Obligations    38

5.5

   Maintenance of Existence; Compliance    38

5.6

   Maintenance of Property    38

5.7

   Insurance    38

 

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TABLE OF CONTENTS

(continued)

 

          Page

5.8

   Inspection of Property; Books and Records; Discussions    42

5.9

   Notices    42

5.10

   [Intentionally Reserved]    43

5.11

   Environmental Laws    43

5.12

   Additional Collateral, etc    44

5.13

   Further Assurances    45
SECTION 6.    NEGATIVE COVENANTS    46

6.1

   [Intentionally Reserved]    46

6.2

   Indebtedness    46

6.3

   Liens    47

6.4

   Fundamental Changes    48

6.5

   Disposition of Property    49

6.6

   Restricted Payments    49

6.7

   Capital Expenditures    49

6.8

   Investments    50

6.9

   Optional Payments and Modifications of Certain Agreements    51

6.10

   Transactions with Affiliates    52

6.11

   Sales and Leasebacks    52

6.12

   Swap Agreements    52

6.13

   Changes in Fiscal Periods    52

6.14

   Clauses Restricting Subsidiary Distributions    52

6.15

   Lines of Business    53

6.16

   [Intentionally Reserved]    53

6.17

   Restrictions on WP Steel Venture    53

6.18

   Excluded Foreign Subsidiaries    53

6.19

   Restriction on Facilitation of Indebtedness    53
SECTION 7.    EVENTS OF DEFAULT    53

7.1

   Events of Default    53

7.2

   Actions and Notices of the Administrative Agent    56
SECTION 8.    THE ADMINISTRATIVE AGENT    57

 

-iii-

 


TABLE OF CONTENTS

(continued)

 

          Page

8.1

   Appointment    57

8.2

   Delegation of Duties    57

8.3

   Exculpatory Provisions    57

8.4

   Reliance by Administrative Agent    57

8.5

   Notice of Default    58

8.6

   Non-Reliance on Administrative Agent and Other Lenders    58

8.7

   Indemnification    59

8.8

   Agent in Its Individual Capacity    59

8.9

   Successor Administrative Agent    59
SECTION 9.    MISCELLANEOUS    60

9.1

   Amendments and Waivers    60

9.2

   Notices    61

9.3

   No Waiver; Cumulative Remedies    62

9.4

   Survival of Representations and Warranties    62

9.5

   Payment of Expenses and Taxes    62

9.6

   Successors and Assigns; Participations and Assignments    63

9.7

   Adjustments; Set-off    65

9.8

   Counterparts    66

9.9

   Severability    66

9.10

   Integration    66

9.11

   GOVERNING LAW    66

9.12

   Submission To Jurisdiction; Waivers    66

9.13

   Acknowledgements    67

9.14

   Releases of Guarantees and Liens    67

9.15

   Confidentiality    68

9.16

   WAIVERS OF JURY TRIAL    68

 

-iv-

 


SCHEDULES:   
1.1A    Mortgaged Property
1.1E    Profit Sharing Note Terms
1.1F    Environmental Budget
3.4    Consents, Authorizations, Filings and Notices
3.8    Ownership of Property; Liens
3.10    Tax Claims
3.13    ERISA Matters
3.15    Subsidiaries
3.19(a)    UCC Filing Jurisdictions
3.19(b)-1    Mortgage Filing Jurisdictions
3.19(b)-2    Owned and Leased Real Property
3.23    Insurance
3.24    Deposit and Disbursement Accounts
3.25    Government Contracts
3.27    Bonding; Licenses
5.12(b)    Commercially Reasonable Efforts Leasehold Mortgages
6.2(d)    Existing Indebtedness
6.3(f)    Existing Liens
6.10    Affiliate Transactions
6.17    WP Steel Venture Activities
EXHIBITS:   
A    Form of Ratio and Compliance Certificate
B    Form of Closing Certificate
C    Form of Assignment and Assumption
D    Form of Exemption Certificate
E    Form of Perfection Certificate
F    Form of Affiliate Guarantor Consent

 

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AMENDED AND RESTATED TERM LOAN AGREEMENT (this “Agreement”), dated as of May 5, 2008, among Wheeling-Pittsburgh Corporation, a Delaware corporation (“Holdings”), Wheeling-Pittsburgh Steel Corporation, a Delaware corporation (the “Borrower”), ESSAR STEEL HOLDINGS LIMITED and any other lender from time to time party to this Agreement (the “Lenders”) and ESSAR STEEL HOLDINGS LIMITED, as administrative agent (in such capacity, the “Administrative Agent”).

WHEREAS, Holdings, Borrower, Lloyds TSB Bank plc, as documentation agent, Australia and New Zealand Banking Group Limited, as syndication agent, Royal Bank of Canada, as administrative agent (the “Prior Administrative Agent”), Emergency Steel Loan Guarantee Board, as federal guarantor, West Virginia Housing Development Fund, as state guarantor, and the lenders from time to time party thereto prior to the date hereof (the “Prior Lenders”), are parties to that certain Term Loan Agreement dated as of July 31, 2003 (as amended, supplemented or otherwise modified from time to time prior to the date hereof, the “Prior Loan Agreement”), pursuant to which the Prior Lenders agreed to make term loans to Borrower in the amount of two hundred fifty million dollars ($250,000,000) in the aggregate;

WHEREAS, effective as of the date hereof Essar Steel Holdings Limited has acquired the Loans from the Prior Lenders pursuant to the Essar Assignment (as defined below) and is the sole remaining Lender under the Prior Loan Agreement; and

WHEREAS, the Borrower, Holdings, the Prior Administrative Agent and the Lender have agreed to amend and restate the Prior Loan Agreement on the terms and conditions set forth herein;

NOW, THEREFORE, in consideration of the premises and the mutual covenants hereinafter contained, and for other good and valuable consideration, the parties hereto agree as follows:

SECTION 1. DEFINITIONS

1.1 Defined Terms. As used in this Agreement, the terms listed in this Section 1.1 shall have the respective meanings set forth in this Section 1.1.

“ABR”: for any day, a rate per annum (rounded upwards, if necessary, to the next  1 / 16 of 1%) equal to the greater of (a) the Prime Rate in effect on such day and (b) the Federal Funds Effective Rate in effect on such day plus  1 / 2 of 1%. For purposes hereof: “Prime Rate” shall mean, for any day, the rate of interest per annum determined from time to time by JPMorgan Chase Bank, N.A. as its prime commercial lending rate for United States dollar loans in the United States for such day (the Prime Rate not being intended to be the lowest rate of interest charged by JPMorgan Chase Bank, N.A. in connection with extensions of credit to debtors). Any change in the ABR due to a change in the Prime Rate or the Federal Funds Effective Rate shall be effective as of the opening of business on the effective day of such change in the Prime Rate or the Federal Funds Effective Rate, respectively.

 

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“Administrative Agent”: Essar Steel Holdings Limited, in its capacity as the administrative agent for the Lenders under this Agreement and the other Loan Documents, together with any of its successors.

“Affiliate”: as to any Person, any other Person that, directly or indirectly, is in control of, is controlled by, or is under common control with, such Person. For purposes of this definition, “control” of a Person means the power, directly or indirectly, either to (a) vote 10% or more of the securities having ordinary voting power for the election of directors (or persons performing similar functions) of such Person or (b) direct or cause the direction of the management and policies of such Person, whether by contract or otherwise.

“Affiliate Guarantee Agreement”: collectively, the Affiliate Guarantee Agreement dated as of July 31, 2003 executed and delivered by Holdings, WP Steel Venture and each Subsidiary Guarantor, and the Affiliate Guarantee Agreement dated as of December 7, 2007 executed and delivered by Esmark.

“Aggregate Exposure Percentage”: with respect to any Lender at any time, the ratio (expressed as a percentage) of such Lender’s Loans at such time to the Loans of all Lenders at such time.

“Agreement”: as defined in the preamble hereto.

“Applicable Margin”: 0.50% per annum.

“Assignee”: as defined in Section 9.6(b).

“Assignment and Assumption”: an Assignment and Assumption, substantially in the form of Exhibit C.

“Bankruptcy Court”: the United States Bankruptcy Court for the Northern District of Ohio.

“Benefited Lender”: as defined in Section 9.7(a).

“Board”: the Board of Governors of the Federal Reserve System of the United States (or any successor).

“Borrower”: as defined in the preamble hereto.

“Borrowing Availability”: as defined under the Revolving Loan Agreement on the date hereof (as such definition and the terms used therein may be amended or otherwise modified from time to time, except that if any such amendment or other modification is not satisfactory to the Required Lenders, such definition, for purposes of this Agreement, shall be subject to such adjustments as the Administrative Agent may reasonably require in order for the calculation of the Borrowing Availability to be as consistent as practicable with the calculation thereof prior to such amendment or other modification); provided that after the Commitment Termination Date (subject to the satisfaction of the Required Lenders with the relevant defined terms and, in the absence of such satisfaction, subject to such adjustments as the Administrative Agent may reasonably require in order for the following calculation

 

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to be as consistent as practicable with the calculation of Borrowing Availability under the Revolving Loan Agreement prior to the Commitment Termination Date (with such adjustments thereto as may have been made as provided above)), “Borrowing Availability” shall mean, with respect to the revolving credit facility which replaces or refinances the Revolving Loan Agreement, an amount equal to the excess of (a) the lesser of (i) the total revolving commitment then in effect thereunder and (ii) the borrowing base, if any, then in effect, in each case after giving effect to reserves taken by the applicable agent under such replacement facility, over (b) an amount equal to the sum of (i) the aggregate principal amount of all revolving loans then outstanding thereunder, (ii) the aggregate then undrawn and unexpired amount of any letters of credit then outstanding thereunder, (iii) the aggregate amount of drawings under letters of credit thereunder that have not then been reimbursed by the Borrower and (iv) the aggregate principal amount of any swing line loans then outstanding thereunder.

“Business Day”: a day other than a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to close, provided, that with respect to notices and determinations in connection with, and payments of principal and interest on, Loans, such day is also a day for trading by and between banks in Dollar deposits in the applicable interbank eurodollar market.

“Capital Expenditures”: for any period, with respect to any Person, the aggregate of all expenditures by such Person and its Subsidiaries for the acquisition or leasing (pursuant to a capital lease) of fixed or capital assets or additions to equipment (including replacements, capitalized repairs and improvements during such period) that should be capitalized under GAAP on a consolidated balance sheet of such Person and its Subsidiaries.

“Capital Lease Obligations”: as to any Person, the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP and, for the purposes of this Agreement, the amount of such obligations at any time shall be the capitalized amount thereof at such time determined in accordance with GAAP.

“Capital Stock”: any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any and all equivalent ownership interests in a Person (other than a corporation) and any and all warrants, rights or options to purchase any of the foregoing.

“Cash Equivalents”: (a) marketable direct obligations issued by, or unconditionally guaranteed by, the United States Government or issued by any agency thereof and backed by the full faith and credit of the United States, in each case maturing within one year from the date of acquisition; (b) certificates of deposit, time deposits, eurodollar time deposits or overnight bank deposits having maturities of six months or less from the date of acquisition issued by any Lender or by any commercial bank organized under the laws of the United States or any state thereof having combined capital and surplus of not less than $500,000,000; (c) commercial paper of an issuer rated at least A-1 by Standard & Poor’s Ratings Services (“S&P”) or P-1 by Moody’s, or carrying an equivalent rating by a nationally recognized rating agency, if both of the two named rating agencies cease publishing ratings of commercial

 

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paper issuers generally, and maturing within six months from the date of acquisition; (d) repurchase obligations of any Lender or of any commercial bank satisfying the requirements of clause (b) of this definition, having a term of not more than 30 days, with respect to securities issued or fully guaranteed or insured by the United States government; (e) securities with maturities of one year or less from the date of acquisition issued or fully guaranteed by any state, commonwealth or territory of the United States, by any political subdivision or taxing authority of any such state, commonwealth or territory or by any foreign government and which are rated at least A by S&P or A by Moody’s; (f) securities with maturities of six months or less from the date of acquisition fully backed by irrevocable standby letters of credit issued by any Lender or any commercial bank satisfying the requirements of clause (b) of this definition; (g) money market mutual or similar funds that invest exclusively in assets satisfying the requirements of clauses (a) through (f) of this definition; or (h) money market funds that (i) comply with the criteria set forth in SEC Rule 2a-7 under the Investment Company Act of 1940, as amended, (ii) are rated AAA by S&P and Aaa by Moody’s and (iii) have portfolio assets of at least $5,000,000,000.

“Change of Control”: the occurrence of any of the following: (a) Esmark shall cease to own 100% of the Voting Interests in WPC or Esmark Steel Service Group, Inc. (“ESSG”); or (b) any Person or two or more Persons acting in concert other than Franklin Mutual Advisers LLC shall have acquired beneficial ownership (within the meaning of Rule 13d-3 of the Securities and Exchange Commission under the Securities Exchange Act of 1934), directly or indirectly, of Voting Interests of Esmark (or other securities convertible into such Voting Interests) representing 20% or more of the combined voting power of all Voting Interests of Esmark; or (c) any Person or two or more Persons acting in concert other than Franklin Mutual Advisers LLC shall have acquired by contract or otherwise, or shall have entered into a contract or arrangement that, upon consummation, will result in its or their acquisition of control over Voting Interests of Esmark (or other securities convertible into such Voting Interests) representing 20% or more of the combined voting power of all Voting Interests of Esmark; or (d) WPC shall cease to own 100% of the Equity Interests in Wheeling-Pittsburgh Steel Corporation; or (e) Esmark or any of its Subsidiaries Disposes of property in a single or series of Dispositions (other than Dispositions permitted under Section 6.5(a) through (d), inclusive) valued in the aggregate in excess of 5% of the total book value of the assets of Esmark and its subsidiaries; provided that the execution and delivery and consummation of the transaction contemplated by the Purchase Agreement shall not constitute a “Change of Control” hereunder.

“Closing Date”: August 1, 2003.

“Code”: the Internal Revenue Code of 1986, as amended from time to time.

“Coke Plant Joint Venture”: the joint venture known as Mountain State Carbon, LLC by and between the Borrower and SNA Carbon, LLC (“SNA”), a Delaware limited liability company and wholly-owned subsidiary of Severstal North America, Inc., a Delaware corporation, pursuant to the Amended and Restated Limited Liability Company Agreement of Mountain State Carbon, LLC dated as of September 29, 2005 between the Borrower and SNA (the “Mountain State Carbon LLC Agreement”).

 

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“Collateral”: all property of the Loan Parties, now owned or hereafter acquired, upon which a Lien is created by any Security Document.

“Collateral Agent”: Wilmington Trust Company in its capacity as Collateral Agent under the Security Documents or its successor appointed in accordance with the terms thereof.

“Commitment Termination Date”: as defined under the Revolving Loan Agreement.

“Commonly Controlled Entity”: an entity, whether or not incorporated, that after the effective date of the Plan of Reorganization is under common control with the Borrower within the meaning of Section 4001 of ERISA or is part of a group that includes the Borrower and that is treated as a single employer under Section 414 of the Code.

“Consolidated EBITDA”: for any period, Consolidated Net Income for such period plus, without duplication and to the extent reflected as a charge in the statement of such Consolidated Net Income for such period, the sum of (a) income tax expense, (b) interest expense, amortization or writeoff of debt discount and debt issuance costs and commissions, discounts and other fees and charges associated with Indebtedness (including the Loans), (c) depreciation and amortization expense, (d) amortization of intangibles (including, but not limited to, goodwill) and organization costs, Proceeds from any Business Interruption Insurance claims, or other such claims made in 2005, shall not be included in the definition of Consolidated EBITDA, (e) non-cash deferred compensation (provided, that any cash payment made in future periods on account of such deferred compensation expense shall be deducted from Consolidated Net Income for such future periods), (f) any extraordinary unusual or nonrecurring expenses or losses, and losses on sales outside of the ordinary course of business, (g) non-cash charges in connection with buyout payments, VEBA Trust and profit sharing payments made to employees, (h) compensation paid in Capital Stock of Holdings or any of its Subsidiaries, (i) contributions by the Borrower to the VEBA Trust of Capital Stock of Holdings (including amounts contributed on the Closing Date), and (j) any non-cash charges in connection with other post-retirement employee benefits (OPEB), and minus, (a) to the extent included in the statement of such Consolidated Net Income for such period, the sum of (i) interest income, (ii) any extraordinary, unusual or non-recurring income or gains (including, whether or not otherwise includable as a separate item in the statement of such Consolidated Net Income for such period, gains on the sales of assets outside of the ordinary course of business) and (iii) any other non-cash income (it being understood that non-cash income representing equity in the earnings of a joint venture shall be calculated to be net of cash dividends received by Holdings and its Subsidiaries on account of ownership interests in such joint venture), (b) any cash payments made during such period in respect of items described in clause (e) above subsequent to the fiscal quarter in which the relevant non-cash expenses or losses were reflected as a charge in the statement of Consolidated Net Income, (c) cash pension expenses in excess of those included in the statement of Consolidated Net Income for such period and (d) cash expenses relating to other post-retirement employee benefits (OPEB) to the extent not included in the statement of Consolidated Net Income, all as determined on a consolidated basis. In connection with any Material Acquisition, Holdings shall provide the Administrative Agent with (i) a certificate of a responsible officer of the selling Person, in form and substance reasonably satisfactory to the Administrative Agent, certifying as to the Consolidated EBITDA attributable to the property being sold by such Person during each of the previous two fiscal years and any interim fiscal period and (ii) any other information reasonably requested by the Administrative Agent in connection with the Material Acquisition.

 

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“Consolidated Net Income”: for any period, the consolidated net income (or loss) of Holdings and its Subsidiaries, determined on a consolidated basis in accordance with GAAP; provided that there shall be excluded (a) the income (or deficit) of any Person accrued prior to the date it becomes a Subsidiary of Holdings or is merged into or consolidated with Holdings or any of its Subsidiaries, (b) the income (or deficit) of any Person (other than a Subsidiary of Holdings) in which Holdings or any of its Subsidiaries has an ownership interest, except to the extent that any such income is actually received by Holdings or such Subsidiary in the form of dividends or similar distributions and (c) the undistributed earnings of any Subsidiary of Holdings to the extent that the declaration or payment of dividends or similar distributions by such Subsidiary is not at the time permitted by the terms of any Contractual Obligation (other than under any Loan Document) or Requirement of Law applicable to such Subsidiary.

“Constitutive Documents”: as defined in Section 4.1(j).

“Consumers Mining”: Consumers Mining Company, a Pennsylvania corporation.

“Continuing Directors”: the directors of Holdings on the Effective Date and each other director, if, in each case, such other director’s nomination for election to the board of directors of Holdings is recommended by at least a majority of the then Continuing Directors.

“Contractual Obligation”: as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound.

“Conversion Exercise Notice”: as defined in Section 9.16(a).

“Convertible Promissory Notes”: those certain Senior Subordinated Unsecured Convertible Promissory Notes issued by Holdings in the aggregate principal amount of $50,000,000 pursuant to, and in substantially the form attached to, that certain Note Purchase Agreement dated as of March 15, 2007, between Holdings and each investor a party thereto.

“Current Asset Intercreditor Agreement”: the Intercreditor Agreement, dated as of July 31, 2003, among Holdings, the Borrower, certain of their Subsidiaries, the inventory and receivables security agent under the Revolving Loan Agreement and the Collateral Agent.

“Default”: any of the events specified in Section 7.1, whether or not any requirement for the giving of notice, the lapse of time, or both, has been satisfied.

“Disposition”: with respect to any property, any sale, lease, sale and leaseback, assignment, conveyance, transfer or other disposition thereof. The terms “Dispose” and “Disposed of” shall have correlative meanings.

“Dollars” and “$”: dollars in lawful currency of the United States.

 

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“Domestic Subsidiary”: any Subsidiary of Holdings organized under the laws of any jurisdiction within the United States.

“E2 Acquisition”: the acquisition and related transactions described in the Purchase and Sale Agreement, dated as of August 1, 2007, by and among Mittal Steel USA Inc., ISG Sparrows Point LLC, ISG Acquisition Inc., Mittal Steel USA—Venture Inc., ISG Technologies Inc., Mittal Steel USA - Railways Inc., Bethlehem Acquisition Co. and BIP Acquisition Sub, Inc.

“E2 Transaction Costs”: transaction costs paid or payable in connection with the E2 Acquisition.

“Effective Date”: May 5, 2008 or, if later, the first date on which all of the conditions precedent set forth in Section 4.1 have been satisfied or waived by the Administrative Agent.

“Environmental Indemnity Agreement”: the Environmental Indemnity, dated as of July 31, 2003, by Holdings and Borrower in favor of the Administrative Agent and the Lenders.

“Environmental Laws”: any and all laws, rules, orders, regulations, statutes, ordinances, codes, decrees, guidelines, agreements with or requirements of any Governmental Authority or other Requirements of Law (including principles of common law) regulating, relating to or imposing liability or standards of conduct concerning protection of the environment, natural resources or of human health or employee health and safety, as has been, is now or may at any time hereafter be, in effect.

“Environmental Permits”: any and all permits, licenses, approvals, registrations, notifications, exemptions, and any other authorization pursuant to any Environmental Law.

“Equity Interests”: with respect to any Person, shares of capital stock of (or other ownership or profit interests in) such Person, warrants, options or other rights for the purchase or other acquisition from such Person of shares of capital stock of (or other ownership or profit interests in) such Person, securities convertible into or exchangeable for shares of capital stock of (or other ownership or profit interests in) such Person or warrants, rights or options for the purchase or other acquisition from such Person of such shares (or such other interests), and other ownership or profit interests in such Person (including, without limitation, partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests are authorized or otherwise existing on any date of determination.

“ERISA”: the Employee Retirement Income Security Act of 1974, as amended from time to time.

“Esmark”: Esmark Incorporated, a Delaware corporation.

“Essar Assignment”: the Assignment and Assumption made by each of the Prior Lenders and the Prior Administrative Agent in favor of Essar Steel Holdings Limited, as assignee of the Loans hereunder, and effective as of the date hereof, which shall be in the form of Exhibit C hereto with such changes as Essar Steel Holdings Limited may reasonably require.

 

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“ESSG Term Loan Agreement”: the Term Loan Agreement dated as of the date hereof among Esmark Steel Service Group, Inc. as borrower, Esmark, the other loan parties party thereto, the lenders party thereto and Essar Steel Holdings Limited, as administrative agent.

“Eurodollar Rate”: with respect to each day during each Interest Period pertaining to a Loan, the rate per annum determined on the basis of the rate for deposits in Dollars for a period equal to such Interest Period commencing on the first day of such Interest Period appearing on Page 3750 of the Telerate screen as of 11:00 A.M., London time, two Business Days prior to the beginning of such Interest Period. In the event that such rate does not appear on Page 3750 of the Telerate screen (or otherwise on such screen), the “Eurodollar Rate” shall be determined by reference to such other comparable publicly available service for displaying eurodollar rates as may be selected by the Administrative Agent (including Page LIBO 01) or, in the absence of such availability, by reference to the rate at which JPMorgan Chase Bank, N.A. is offered Dollar deposits at or about 11:00 A.M., New York City time, two Business Days prior to the beginning of such Interest Period in the interbank eurodollar market where its eurodollar and foreign currency and exchange operations are then being conducted for delivery on the first day of such Interest Period for the number of days comprised therein.

“Event of Default”: any of the events specified in Section 7.1, provided that any requirement for the giving of notice, the lapse of time, or both, has been satisfied.

“Excluded Foreign Subsidiary”: any Foreign Subsidiary in respect of which either (a) the pledge of all of the Capital Stock of such Subsidiary as Collateral or (b) the guaranteeing by such Subsidiary of the Obligations, would, in the good faith judgment of the Borrower, result in adverse tax consequences to the Borrower.

“Existing Credit Policies”: the credit policies and procedures of the Borrower as in effect on the Effective Date.

“Federal Funds Effective Rate”: for any day, the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average of the quotations for the day of such transactions received by JPMorgan Chase Bank, N.A. from three federal funds brokers of recognized standing selected by it.

“Foreign Subsidiary”: any Subsidiary of Holdings that is not a Domestic Subsidiary.

“Funded Debt”: as to any Person, all Indebtedness of such Person that matures more than one year from the date of its creation or matures within one year from such date but is renewable or extendible, at the option of such Person, to a date more than one year from such date or arises under a revolving credit or similar agreement that obligates the lender or lenders to extend credit during a period of more than one year from such date, including all current maturities and current sinking fund payments in respect of such Indebtedness whether or not required to be paid within one year from the date of its creation and, in the case of the Borrower, Indebtedness in respect of the Loans.

 

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“Funding Office”: the office of the Administrative Agent specified in Section 9.2 or such other office as may be specified from time to time by the Administrative Agent as its funding office by written notice to the Borrower.

“GAAP”: generally accepted accounting principles in the United States as in effect from time to time, except that for purposes of Section 6.1, GAAP shall be determined on the basis of such principles in effect on the date hereof and consistent with those used in the preparation of the most recent audited financial statements referred to in Section 3.1(a).

“Governmental Authority”: any nation or government, any state or other political subdivision thereof, any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory, supervisory or administrative functions of or pertaining to government, any securities exchange and any self-regulatory organization (including the National Association of Insurance Commissioners).

“Group Members”: the collective reference to Holdings, the Borrower and their respective Subsidiaries.

“Guarantee Obligation”: as to any Person (the “guaranteeing person”), any obligation of (a) the guaranteeing person or (b) another Person (including any bank under any letter of credit) to induce the creation of which the guaranteeing person has issued a reimbursement, counterindemnity or similar obligation, in either case guaranteeing or in effect guaranteeing any Indebtedness, leases, dividends or other obligations (the “primary obligations”) of any other third Person (the “primary obligor”) in any manner, whether directly or indirectly, including any obligation of the guaranteeing person, whether or not contingent, (i) to purchase any such primary obligation or any property constituting direct or indirect security therefor, (ii) to advance or supply funds (1) for the purchase or payment of any such primary obligation or (2) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (iii) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation or (iv) otherwise to assure or hold harmless the owner of any such primary obligation against loss in respect thereof; provided, however, that the term Guarantee Obligation shall not include endorsements of instruments for deposit or collection in the ordinary course of business. The amount of any Guarantee Obligation of any guaranteeing person shall be deemed to be the lower of (a) an amount equal to the stated or determinable amount of the primary obligation in respect of which such Guarantee Obligation is made and (b) the maximum amount for which such guaranteeing person may be liable pursuant to the terms of the instrument embodying such Guarantee Obligation, unless such primary obligation and the maximum amount for which such guaranteeing person may be liable are not stated or determinable, in which case the amount of such Guarantee Obligation shall be such guaranteeing person’s maximum reasonably anticipated liability in respect thereof as determined by the Borrower in good faith.

“Holdings”: Wheeling-Pittsburgh Corporation, a Delaware corporation.

“Inactive Subsidiary”: a Subsidiary which (i) owns no assets, (ii) engages in no business and (iii) has no Indebtedness.

 

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“Indebtedness”: of any Person at any date, without duplication, (a) all indebtedness of such Person for borrowed money, (b) all obligations of such Person for the deferred purchase price of property or services (other than current trade payables incurred in the ordinary course of such Person’s business), (c) all obligations of such Person evidenced by notes, bonds, debentures or other similar instruments, (d) all indebtedness created or arising under any conditional sale or other title retention agreement with respect to property acquired by such Person (even though the rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such property), (e) all Capital Lease Obligations of such Person (other than the Power Service Agreement Accounting Lease), (f) all obligations of such Person, contingent or otherwise, as an account party or applicant under or in respect of acceptances, letters of credit, surety bonds or similar arrangements, (g) the liquidation value of all redeemable preferred Capital Stock of such Person, (h) all Guarantee Obligations of such Person in respect of obligations of the kind referred to in clauses (a) through (g) above, (i) all obligations of the kind referred to in clauses (a) through (h) above secured by (or for which the holder of such obligation has an existing right, contingent or otherwise, to be secured by) any Lien on property (including accounts and contract rights) owned by such Person, whether or not such Person has assumed or become liable for the payment of such obligation, and (j) for the purposes of Section 7.1(e) only, all obligations of such Person in respect of Swap Agreements. The Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person’s ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness expressly provide that such Person is not liable therefor.

“Insolvency”: with respect to any Multiple Employer Plan, the condition that such Plan is insolvent within the meaning of Section 4245 of ERISA.

“Insolvent”: pertaining to a condition of Insolvency.

“Intellectual Property”: the collective reference to all rights, priorities and privileges relating to intellectual property, whether arising under United States, multinational or foreign laws or otherwise, including copyrights, copyright licenses, patents, patent licenses, trademarks, trademark licenses, technology, know-how and processes, and all rights to sue at law or in equity for any infringement or other impairment thereof, including the right to receive all proceeds and damages therefrom.

“Interest Payment Date”: as to any Loan, the last day of the Interest Period for such Loan and the date of any repayment or prepayment made in respect thereof.

“Interest Period”: as to any Loan, (a) initially, the period commencing on the Effective Date and ending three months thereafter; and (b) thereafter, each period commencing on the last day of the immediately preceding Interest Period applicable to such Loan and ending three months thereafter; provided that, all of the foregoing provisions relating to Interest Periods are subject to the following:

(i) if any Interest Period would otherwise end on a day that is not a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless the result of such extension would be to carry such Interest Period into another calendar month in which event such Interest Period shall end on the immediately preceding Business Day; and

 

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(ii) any Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of a calendar month.

“Investments”: as defined in Section 6.8.

“Joint Ventures”: Ohio Coatings Company, an Ohio corporation, Feralloy-Wheeling Specialty Processing Co., a Delaware partnership, and the Coke Plant Joint Venture.

“Junction Note”: the 7% Note in the aggregate principal amount of $3,000,000 issued to Junction Industries, Inc.

“Junior Current Asset Security Agreement”: the Junior Current Asset Security Agreement dated July 31, 2003 executed and delivered by Holdings, the Borrower and each of their Domestic Subsidiaries in favor of the Collateral Agent for the benefit of the Administrative Agent, the Lenders and the other secured parties party thereto.

“JV Pledge Agreements”: the JV Pledge Agreements dated July 31, 2003 executed and delivered by the Borrower in favor of the Collateral Agent for the benefit of the Administrative Agent, the Lenders and the other secured parties party thereto with respect to the Borrower’s interests in each of the Joint Ventures.

“JV Supply Agreements”: collectively, (i) the Raw Materials Supply Agreement, dated as of March 25, 1994, between the Borrower and Ohio Coatings Company, (ii) the Amended and Restated Supply Agreement, dated as of March 29, 1993, between the Borrower and Wheeling-Nisshin, Inc. and (iii) the Processing Agreement, dated as of March 15, 1999, between the Borrower and Wheeling-Nisshin, Inc., and (iv) the Coke Supply Agreement, dated as of September 29, 2005, between the Borrower and Mountain State Carbon LLC.

“Lenders”: as defined in the preamble hereto.

“Lien”: any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge or other security interest or any preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including any conditional sale or other title retention agreement and any capital lease having substantially the same economic effect as any of the foregoing).

“Loans”: as defined in Section 2.1.

“Loan Documents”: this Agreement, the Security Documents, the Affiliate Guarantee Agreement, the Environmental Indemnity Agreement, the PPE Access Agreement and the Notes.

“Loan Parties”: each Group Member that is a party to a Loan Document.

 

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“Master Labor Agreement”: the Agreement, dated August 1, 2003, between Holdings, the Borrower and the United Steelworkers of America, AFL-CIO-CLC Production & Maintenance Office & Clerical Nurses Plant Protection.

“Material Acquisition”: any acquisition of property or series of related acquisitions of property that (a) constitutes assets comprising all or substantially all of an operating unit of a business or constitutes all or substantially all of the common stock of a Person and (b) involves the payment of consideration by Holdings and its Subsidiaries in excess of $1,000,000.

“Material Adverse Effect”: a material adverse effect on (a) the business, property, performance, prospects, operations, assets, liabilities or condition (financial or otherwise) of the Borrower and its Subsidiaries taken as a whole, (b) the validity or enforceability of this Agreement, any of the other Loan Documents, or any of the material rights or remedies of the Administrative Agent, the Collateral Agent or the Lenders hereunder or thereunder, or (c) the ability of the Borrower to repay the Obligations or of the Loan Parties to perform their obligations under the Loan Documents.

“Material Environmental Loss”: the collective reference to the items set forth in (a) and (b) below, to the extent arising out of any Environmental Law or with respect to any Materials of Environmental Concern that either (i) exceed $2,500,000 individually, or $5,000,000 in the aggregate, or (ii) would have a Material Adverse Effect: (a) any costs to any Group Member relating to investigative, removal, remedial or other response activities, compliance costs, compensatory damages, natural resource damages, punitive damages, fines, penalties and any associated engineering, legal and other professional fees (including without limitation, costs of defending or asserting any claim) in connection with any of the foregoing and (b) any other losses to any Group Member; provided that any costs expended for the environmental issues set forth on the Environmental Reserves Table and Capital Expenditure Table attached as Attachment B of the React Report up to the amounts set forth in such tables, and, to the extent not included in such amounts, any costs incurred in any fiscal year up to the budgeted amount set forth in Schedule 1.1F for such fiscal year, shall be excluded from the calculation of any Material Environmental Loss.

“Materials of Environmental Concern”: any gasoline or petroleum (including crude oil or any fraction thereof) or petroleum products, asbestos, polychlorinated biphenyls, urea-formaldehyde insulation, molds, pollutants, contaminants, radioactive substances, or other substances, whether or not defined as hazardous or toxic under any Environmental Law that is regulated pursuant to or could reasonably be expected to give rise to liability under any Environmental Law.

“Maturity Date”: the earlier of (i) the fifteenth day following the Merger (as defined in the Purchase Agreement) and (ii) June 1, 2009.

“Monessen Southwestern Railway”: Monessen Southwestern Railway, a Pennsylvania corporation.

“Moody’s”: Moody’s Investors Service, Inc.

 

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“Mortgaged Properties”: the real properties listed on Schedule 1.1A and any additional properties mortgaged pursuant to Section 5.12, as to which the Collateral Agent has been granted a Lien pursuant to the Mortgages.

“Mortgages”: each of the mortgages and deeds of trust in respect of the Mortgaged Properties made by any Loan Party prior to the date hereof in favor of, or for the benefit of, the Collateral Agent for the benefit of the Administrative Agent, the Lenders and the other secured parties party to the Security Agreement, and to the extent required to be entered into pursuant to Section 5.12 at any time after the date hereof, in form and substance reasonably acceptable to the Administrative Agent.

“Multiemployer Plan”: a Plan that is a multiemployer plan as defined in Section 4001(a)(3) of ERISA.

“Multiple Employer Plan”: a Single Employer Plan that (a) is maintained for employees of the Borrower or any Commonly Controlled Entity and at least one Person other than the Borrower and its Commonly Controlled Entities or (b) was so maintained and in respect of which the Borrower or any Commonly Controlled Entity could have liability under Section 4064 or 4069 of ERISA in the event such plan has been or were to be terminated.

“Nevada IRB Supplemental Indenture”: the Supplemental Indenture of Trust, dated as of August 1, 2003, by and between the Director of the State of Nevada Department of Business and Industry and Crestar Bank.

“Non-Excluded Taxes”: as defined in Section 2.14(a).

“Non-U.S. Lender”: as defined in Section 2.14(d).

“Noteholder Trustee”: The Bank of New York, National Association, as successor to Bank One N.A., in its separate capacity as trustee under each of the Series A Indenture and Series B Indenture, together with any successors and assigns.

“Notes”: the collective reference to any promissory notes evidencing the Loans.

“Obligations”: the unpaid principal of and interest on (including interest accruing after the maturity of the Loans and interest accruing after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to the Borrower, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding) the Loans and all other obligations and liabilities of the Borrower to the Administrative Agent, the Collateral Agent or any Lender, whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, which may arise under, out of, or in connection with, this Agreement, any other Loan Document or any other document made, delivered or given in connection herewith or therewith, whether on account of principal, interest, fees, indemnities, costs, expenses (including all fees, charges and disbursements of counsel to the Administrative Agent, the Collateral Agent or any Lender that are required to be paid by the Borrower pursuant hereto) or otherwise.

 

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“Ohio Note”: the 3% Note due 2005 in the original aggregate principal amount of $6,985,000 issued to the State of Ohio.

“Ohio Pump House”: the Borrower’s pump house facility located in Steubenville, Ohio.

“Other ERISA Event”: (a) the application for a minimum funding waiver with respect to a Plan; (b) the cessation of operations at a facility of the Borrower or any Commonly Controlled Entity in the circumstances described in Section 4062(e) of ERISA; (c) the conditions for imposition of a lien under Section 303(k) of ERISA shall have been met with respect to any Plan; (d) a determination that any Plan is in “at risk” status (within the meaning of Section 303 of ERISA); (e) the institution by the PBGC of proceedings to terminate a Plan pursuant to Section 4042 of ERISA, or the occurrence of any event or condition described in Section 4042 of ERISA that constitutes grounds for the termination of, or the appointment of a trustee to administer, such Plan; or (f) the withdrawal by the Borrower or any Commonly Controlled Entity from a Multiple Employer Plan during a plan year for which it was a substantial employer, as defined in Section 4001(a)(2) of ERISA.

“Other Taxes”: any and all present or future stamp or documentary Taxes or any other excise or property Taxes or other similar Taxes arising from any payment made hereunder or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement or any other Loan Document.

“Participant”: as defined in Section 9.6(c).

“PBGC”: the Pension Benefit Guaranty Corporation established pursuant to Subtitle A of Title IV of ERISA (or any successor).

“Person”: an individual, partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture, Governmental Authority or other entity of whatever nature.

“Plan”: at a particular time after the effective date of the Plan of Reorganization, (i) any employee benefit plan that is covered by ERISA and is maintained for employees of the Borrower or a Commonly Controlled Entity is (or, if such plan were terminated at such time, the Borrower or a Commonly Controlled Entity could have liability under Section 4069 of ERISA) or (ii) any Multiple Employer Plan.

“Plan of Reorganization”: the Plan of Reorganization of the Borrower approved by the Bankruptcy Court on June 18, 2003.

“Plan of Reorganization Indebtedness”: the collective reference to the Series A Notes, the Series B Notes, the WHX Subordinated Note, the Junction Note, the Ohio Note, the West Virginia Note and the obligations of the Borrower with respect to the Nevada IRB Supplemental Indenture and Virginia IRB Supplemental Indenture.

“Power Service Accounting Lease”: the Second Amended and Restated Energy Services Agreement dated July 31, 2003 between Mingo Junction Energy Center, LLC and Wheeling-Pittsburgh Steel Corporation.

 

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“PPE Access Agreement”: the PPE Collateral Access Agreement dated as of July, 31, 2003, among Holdings, the Borrower, WP Steel Venture, the Collateral Agent and the other parties party to the Security Agreement.

“Prepayment Premium”: with respect to any principal amount prepaid, an amount equal to interest on such principal amount calculated for the period from the Effective Date to the date of prepayment of such principal amount at a rate equal to 6% per annum calculated on the basis of a 360-day year for the actual days elapsed. Such amount shall be in addition to interest paid or payable with respect to such principal amount under Section 2.9.

“Profit Sharing Notes”: the 6% profit sharing notes due 2011 to be issued after the Effective Date to the United Steelworkers of America in payment of obligations incurred from time to time by Holdings and the Borrower under the Master Labor Agreement and having the terms set forth in Schedule 1.1E and such other terms as are reasonably acceptable to the Administrative Agent.

“Projections”: as defined in Section 5.2(c).

“Purchase Agreement”: the Agreement and Plan of Merger to be entered into by and between Esmark and the company designated therein as the purchaser, relating to a tender offer for all of the shares of capital stock of Esmark.

“Ratio and Compliance Certificate”: a certificate duly executed by a Responsible Officer substantially in the form of Exhibit A.

“React Report”: the Phase I Environmental Site Assessment: Wheeling-Pittsburgh Steel Corporation prepared for the Administrative Agent by React Environmental Services, Inc. and dated June 18, 2003.

“Recovery Event”: any settlement of or payment in respect of any property or casualty insurance claim or any condemnation proceeding relating to any asset of any Group Member.

“Register”: as defined in Section 9.6(b).

“Regulation U”: Regulation U of the Board as in effect from time to time.

“Reorganization”: with respect to any Multiple Employer Plan, the condition that such plan is in reorganization within the meaning of Section 4241 of ERISA.

“Reportable Event”: any of the events set forth in Section 4043(c) of ERISA, other than those events as to which the thirty day notice period is waived under subsections .27, .28, .29, .30, .31, .32, .34 or .35 of PBGC Reg. Section 4043.

“Required Lenders”: at any time, the holders of more than 50% of the aggregate unpaid principal amount of the Loans outstanding at such time.

“Requirement of Law”: as to any Person, the certificate of incorporation and by-laws or other organizational or governing documents of such Person, and any law, treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.

 

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“Responsible Officer”: the chief executive officer, president, chief financial officer or treasurer; provided that (i) with respect to the information and reports required pursuant to Section 5.1(b) and paragraphs (b), (c) and (i) of Section 5.2, Responsible Officer shall mean the chief financial officer and (ii) with respect to the report required by Section 5.2(g), Responsible Officer shall mean the Vice President with responsibility for environmental matters.

“Restricted Payments”: as defined in Section 6.6.

“Revolving Loan Agreement”: the Amended and Restated Revolving Loan Agreement dated as of July 8, 2005 among Holdings, the Borrower, the banks and other financial institutions from time to time party thereto, General Electric Capital Corporation, as administrative agent, General Electric Capital Corporation, as inventory and receivables security agent and documentation agent for the lenders, and the other agents named therein.

“SEC”: the Securities and Exchange Commission, any successor thereto and any analogous Governmental Authority.

“Security Agreement”: the Security Agreement dated July 31, 2003 executed and delivered by Holdings, the Borrower and each of their Domestic Subsidiaries in favor of the Collateral Agent for the benefit of the Administrative Agent, the Lenders and the other secured parties party thereto.

“Security Documents”: the collective reference to the Security Agreement, the Junior Current Asset Security Agreement, each JV Pledge Agreement, the Mortgages and all other security documents hereafter delivered to the Administrative Agent granting a Lien on any property of any Person to secure the obligations and liabilities of any Loan Party under any Loan Document.

“Senior Current Asset Security Agreement”: the Senior Current Asset Security Agreement, dated as of July 31, 2003, by and among Holdings, Borrower, certain of their Subsidiaries and General Electric Capital Corporation, as inventory and receivables security agent for the benefit of the lenders party to the Revolving Loan Agreement.

“Series A Indenture”: the Indenture, dated as of August 1, 2003, among the Borrower, the guarantors named therein and the Noteholder Trustee, governing the terms of the Series A Notes.

“Series A Notes”: the senior notes due 2011 in the initial aggregate principal amount of $40,000,000.

“Series B Indenture”: the Indenture, dated as of August 1, 2003, among the Borrower, the guarantors named therein and the Noteholder Trustee, governing the terms of the Series B Notes.

“Series B Notes”: the senior notes due 2010 in the initial aggregate principal amount of $20,000,000.

 

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“Single Employer Plan”: any Plan that is covered by Title IV of ERISA, but that is not a Multiemployer Plan.

“Solvent”: when used with respect to any Person, means that, as of any date of determination, (a) the amount of the “present fair saleable value” of the assets of such Person will, as of such date, exceed the amount of all “liabilities of such Person, contingent or otherwise”, as of such date, as such quoted terms are determined in accordance with applicable federal and state laws governing determinations of the insolvency of debtors, (b) the present fair saleable value of the assets of such Person will, as of such date, be greater than the amount that will be required to pay the liabilities of such Person on its debts as such debts become absolute and matured, (c) such Person will not have, as of such date, an unreasonably small amount of capital with which to conduct its business if operated in the ordinary course as of such date, and (d) such Person will be able to pay its debts as they mature. For purposes of this definition, (i) “debt” means liability on a “claim”, and (ii) “claim” means any (x) right to payment, whether or not such a right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured or unsecured or (y) right to an equitable remedy for breach of performance if such breach gives rise to a right to payment, whether or not such right to an equitable remedy is reduced to judgment, fixed, contingent, matured or unmatured, disputed, undisputed, secured or unsecured.

“Subsidiary”: with respect to any Person, (a) any corporation of which an aggregate of more than 50% of the outstanding Capital Stock having ordinary voting power to elect a majority of the board of directors of such corporation (irrespective of whether, at the time, Capital Stock of any other class or classes of such corporation shall have or might have voting power by reason of the happening of any contingency) is at the time, directly or indirectly, owned legally or beneficially by such Person or one or more Subsidiaries of such Person, or with respect to which any such Person has the right to vote or designate the vote of more than 50% of such Capital Stock whether by proxy, agreement, operation of law or otherwise, and (b) any partnership or limited liability company in which such Person and/or one or more Subsidiaries of such Person shall have an interest (whether in the form of voting or participation in profits or capital contribution) of more than 50% or of which any such Person is a general partner or may exercise the powers of a general partner. Unless the context otherwise requires, each reference to a Subsidiary shall be a reference to a Subsidiary of the Borrower. For purposes hereof, the Coke Plant Joint Venture shall not be treated as a Subsidiary of the Borrower until such time as Borrower and/or one or more Subsidiaries of Borrower shall have affirmatively exercised any rights, including any rights under the operating agreement of the Coke Plant Joint Venture, which would cause any of them to possess the power to elect more than 50% of the managers of the Coke Plant Joint Venture; provided, however, that for purposes of Sections 3.10, 3.13, 3.14 and 5.11 and for purposes of the definition of “Group Member”, the Coke Plant Joint Venture shall be treated as a Subsidiary of the Borrower at such time as Borrower and/or one or more Subsidiaries of Borrower shall have the present power to make such election, regardless of whether or not such power has been affirmatively exercised.

“Subsidiary Guarantor”: each Subsidiary of Holdings other than the Borrower or any Inactive Subsidiary.

 

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“Swap Agreement”: any agreement with respect to any swap, forward, future or derivative transaction or option or similar agreement involving, or settled by reference to, one or more rates, currencies, commodities, equity or debt instruments or securities, or economic, financial or pricing indices or measures of economic, financial or pricing risk or value or any similar transaction or any combination of these transactions; provided that no phantom stock or similar plan providing for payments only on account of services provided by current or former directors, officers, employees or consultants of the Borrower or any of its Subsidiaries shall be a “Swap Agreement”.

“Tranche A Loans”: as defined in the Prior Loan Agreement.

“Tranche B Loans”: as defined in the Prior Loan Agreement.

“Tranche C Loans”: as defined in the Prior Loan Agreement.

“Transferee”: any Assignee or Participant.

“United States”: the United States of America.

“VEBA Trust”: the “USWA-Wheeling-Pittsburgh Steel Corporation Retiree Welfare Benefits Plan Trust”, established by Borrower pursuant to its collective bargaining agreement with the United Steelworkers of America, AFL-CIO-CLC, for the purpose of funding welfare benefits for retired employees of Borrower.

“Virginia IRB Supplemental Indenture”: the Supplemental Indenture of Trust, dated as of August 1, 2003, by and between the Industrial Development Authority of Greensville County, Virginia and First Union National Bank.

“Voting Interests”: shares of capital stock issued by a corporation, or equivalent Equity Interests in any other Person, the holders of which are ordinarily, in the absence of contingencies, entitled to vote for the election of directors (or persons performing similar functions) of such Person, even if the right so to vote has been suspended by the happening of such a contingency.

“West Virginia Note”: the Note due 2008 in the aggregate principal amount of $6,539,473.68 issued to the State of West Virginia Economic Development Agency.

“West Virginia Coke Production Plant”: the Borrower’s coke-producing facility located in Follansbee, West Virginia.

“Wholly Owned Subsidiary”: as to any Person, any other Person all of the Capital Stock of which (other than directors’ qualifying shares required by law) is owned by such Person directly and/or through other Wholly Owned Subsidiaries.

“Wholly Owned Subsidiary Guarantor”: any Subsidiary Guarantor that is a Wholly Owned Subsidiary of the Borrower.

“WHX”: WHX Corporation, a Delaware corporation.

 

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“WHX Subordinated Note”: the subordinated note due 2011 in the aggregate principal amount of $10,000,000 initially issued to WHX Corporation.

“WP Coal”: WP Coal Company, a West Virginia corporation.

“WP Steel Venture”: WP Steel Venture Corporation, a Delaware corporation.

1.2 Other Definitional Provisions. (a) Unless otherwise specified therein, all terms defined in this Agreement shall have the defined meanings when used in the other Loan Documents or any certificate or other document made or delivered pursuant hereto or thereto.

(b) As used herein and in the other Loan Documents, and any certificate or other document made or delivered pursuant hereto or thereto, (i) accounting terms relating to any Group Member not defined in Section 1.1 and accounting terms partly defined in Section 1.1, to the extent not defined, shall have the respective meanings given to them under GAAP, (ii) the words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”, (iii) the word “incur” shall be construed to mean incur, create, issue, assume, become liable in respect of or suffer to exist (and the words “incurred” and “incurrence” shall have correlative meanings), (iv) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, Capital Stock, securities, revenues, accounts, leasehold interests and contract rights, and (v) references to agreements or other Contractual Obligations shall, unless otherwise specified, be deemed to refer to such agreements or Contractual Obligations as amended, supplemented, restated or otherwise modified from time to time.

(c) The words “hereof”, “herein” and “hereunder” and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and Section, Schedule and Exhibit references are to this Agreement unless otherwise specified.

(d) The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms.

SECTION 2. AMOUNT AND TERMS OF COMMITMENTS

2.1 Consolidation of Loans; New Loans. The outstanding principal amounts of the Tranche A Loans, Tranche B Loans and Tranche C Loans under the Prior Loan Agreement are hereby consolidated into a single borrowing, the aggregate principal amount of which on the Effective Date is $79,000,000 (the “Loans”), and the Borrower and Holdings acknowledge and agree that such amount is the outstanding principal amount of the Loans hereunder.

2.2 [Intentionally Reserved]

2.3 Repayment of Loans. On the Maturity Date, the Borrower shall repay to the Lenders the entire unpaid principal amount of the Loans.

2.4 [Intentionally Reserved]

 

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2.5 Optional Prepayments. The Borrower may at any time and from time to time prepay the Loans, in whole or in part, together with the Prepayment Premium upon irrevocable notice delivered to the Administrative Agent no later than 2:00 P.M., New York City time, three Business Days prior thereto, which notice shall specify the date and amount of prepayment; provided, that if a Loan is prepaid on any day other than the last day of the Interest Period applicable thereto, the Borrower shall also pay any amounts owing pursuant to Section 2.15. If any such notice is given, the amount specified in such notice shall be due and payable on the date specified therein, together with accrued interest and the Prepayment Premium to such date on the amount prepaid. Partial prepayments of Loans shall be in an aggregate principal amount of $1,000,000 or a whole multiple thereof.

2.6 Mandatory Prepayments. (a) If a Change of Control shall occur, the aggregate outstanding amount of the Loans shall be repaid in full on the date of such Change of Control, together with the amounts set forth in Section 2.6(b); provided that if the Administrative Agent shall have provided the Borrower and Esmark with a Conversion Exercise Notice prior to the date of such payment pursuant to Section 9.16(a) hereof, then the aggregate amount of principal, interest and any other amounts outstanding hereunder payable with respect to such Change of Control under this Section 2.6(a) shall be reduced by an amount up to the Conversion Amount (as defined in Section 9.16(a)) as specified in such Conversion Exercise Notice. If Esmark fails to issue common stock to the Administrative Agent as and when required under Section 9.16(a), then the amount specified in such Conversion Exercise Notice shall be immediately due and payable to the Administrative Agent by the Borrower.

(b) Amounts to be applied in connection with prepayments made pursuant to this Section 2.6 shall be applied in accordance with Section 2.12. Each prepayment of the Loans under Section 2.6 shall be accompanied by accrued interest and the Prepayment Premium to the date of such prepayment on the amount prepaid; provided, that if a Loan is prepaid on any day other than the last day of the Interest Period applicable thereto, the Borrower shall also pay any amounts owing pursuant to Section 2.15.

2.7 [Intentionally Reserved]

2.8 [Intentionally Reserved]

2.9 Interest Rates and Payment Dates. (a) After the Effective Date, each Loan shall bear interest for each day during each Interest Period with respect thereto at a rate per annum equal to the Eurodollar Rate plus the Applicable Margin.

(b) Interest shall be payable in arrears on each Interest Payment Date.

(c) If all or a portion of the principal amount of any Loan shall not be paid when due (whether at the stated maturity, by acceleration or otherwise) such overdue amount shall bear interest at the rate determined in accordance with paragraphs (a) and (b) above until such principal amount is paid in full. If all or a portion of any interest payable on any Loan or any other amount payable hereunder shall not be paid when due (whether at the stated maturity, or acceleration or otherwise), such overdue amount shall bear interest at a rate per annum equal to the amount specified in paragraph (a) above plus 2%.

 

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2.10 Computation of Interest and Fees. (a) Interest and fees payable pursuant hereto shall be calculated on the basis of a 360-day year for the actual days elapsed. The Administrative Agent shall as soon as practicable notify the Borrower of each determination of a Eurodollar Rate.

(b) Each determination of an interest rate by the Administrative Agent pursuant to any provision of this Agreement shall be conclusive and binding on the Borrower and the Lenders in the absence of manifest error. The Administrative Agent shall, at the request of the Borrower, deliver to the Borrower a statement showing the quotations used by the Administrative Agent in determining any interest rate pursuant to Section 2.9(a).

2.11 Inability to Determine Interest Rate. If prior to the first day of any Interest Period:

(a) the Administrative Agent shall have determined (which determination shall be conclusive and binding upon the Borrower) that, by reason of circumstances affecting the relevant market, adequate and reasonable means do not exist for ascertaining the Eurodollar Rate for such Interest Period, or

(b) the Administrative Agent shall have received notice from the Required Lenders that the Eurodollar Rate determined or to be determined for such Interest Period will not adequately and fairly reflect the cost to such Lenders (as conclusively certified by such Lenders) of making or maintaining their affected Loans during such Interest Period,

then the Administrative Agent shall give telecopy or telephonic notice thereof to the Borrower as soon as practicable thereafter. If such notice is given (x) on the first day of such Interest Period the Loans shall bear interest at a rate per annum equal to ABR plus 3%.

2.12 Pro Rata Treatment and Payments.

(a) Amounts repaid or prepaid on account of the Loans may not be reborrowed.

(b) All payments (including prepayments) to be made by the Borrower hereunder, whether on account of principal, interest, fees or otherwise, shall be made without setoff or counterclaim and shall be made prior to 2:00 p.m., New York City time, on the due date thereof to the Administrative Agent, for the account of the Lenders, at the Funding Office, in Dollars and in immediately available funds. The Administrative Agent shall distribute such payments to the Lenders promptly upon receipt in like funds as received. If any payment hereunder (other than payments on the Loans) becomes due and payable on a day other than a Business Day, such payment shall be extended to the next succeeding Business Day. If any payment on a Loan becomes due and payable on a day other than a Business Day, the maturity thereof shall be extended to the next succeeding Business Day unless the result of such extension would be to extend such payment into another calendar month, in which event such payment shall be made on the immediately preceding Business Day. In the case of any extension of any payment of principal pursuant to the preceding two sentences, interest thereon shall be payable at the then applicable rate during such extension.

 

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2.13 Requirements of Law. (a) If the adoption of or any change in any Requirement of Law or in the interpretation or application thereof or compliance by any Lender with any request or directive (whether or not having the force of law) from any central bank or other Governmental Authority made subsequent to the date hereof:

(i) shall subject any Lender to any Tax of any kind whatsoever with respect to this Agreement or any Loan made by it, or change the basis of taxation of payments to such Lender in respect thereof (except for Non-Excluded Taxes covered by Section 2.14 and changes in the rate of Tax on the overall net income of such Lender);

(ii) shall impose, modify or hold applicable any reserve, special deposit, compulsory loan or similar requirement against assets held by, deposits or other liabilities in or for the account of, advances, loans or other extensions of credit by, or any other acquisition of funds by, any office of such Lender that is not otherwise included in the determination of the Eurodollar Rate; or

(iii) shall impose on such Lender any other condition; and the result of any of the foregoing is to increase the cost to such Lender, by an amount that such Lender deems to be material, of making, converting into, continuing or maintaining Loans, or to reduce any amount receivable hereunder in respect thereof, then, in any such case, the Borrower shall promptly pay such Lender, upon its demand, any additional amounts necessary to compensate such Lender for such increased cost or reduced amount receivable. If any Lender becomes entitled to claim any additional amounts pursuant to this paragraph, it shall promptly notify the Borrower (with a copy to the Administrative Agent) of the event by reason of which it has become so entitled.

(b) If any Lender shall have determined that the adoption of or any change in any Requirement of Law regarding capital adequacy or in the interpretation or application thereof or compliance by such Lender or any corporation controlling such Lender with any request or directive regarding capital adequacy (whether or not having the force of law) from any Governmental Authority made subsequent to the date hereof shall have the effect of reducing the rate of return on such Lender’s or such corporation’s capital as a consequence of its obligations hereunder to a level below that which such Lender or such corporation could have achieved but for such adoption, change or compliance (taking into consideration such Lender’s or such corporation’s policies with respect to capital adequacy) by an amount deemed by such Lender to be material, then from time to time, after submission by such Lender to the Borrower (with a copy to the Administrative Agent) of a written request therefor, the Borrower shall pay to such Lender such additional amount or amounts as will compensate such Lender or such corporation for such reduction.

(c) A certificate as to any additional amounts payable pursuant to this Section submitted by any Lender to the Borrower (with a copy to the Administrative Agent) shall be conclusive in the absence of manifest error. Notwithstanding anything to the contrary in this Section 2.13, the Borrower shall not be required to compensate a Lender pursuant to this Section 2.13 for any amounts incurred more than six months prior to the date that such Lender notifies the Borrower of such Lender’s intention to claim compensation therefor; provided that, if the circumstances giving rise to such claim have a retroactive effect, then such six-month period shall be extended to include the period of such retroactive effect. The obligations of the Borrower pursuant to this Section shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder.

 

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(d) Notwithstanding anything to the contrary contained herein, if the introduction of or any change in any law or regulation (or any change in the interpretation thereof) shall make it unlawful, or any central bank or other Governmental Authority shall assert that it is unlawful, for any Lender to agree to make or to make or to continue to fund or maintain any Loan, then on notice thereof and demand therefor by such Lender to Borrower made through the Administrative Agent, (i) the obligation of such Lender to agree to make or to make or to continue to fund or maintain Loans shall terminate and (ii) Borrower shall pay or convert in full all outstanding Loans owing to such Lender at the end of the applicable Interest Period (provided that if such Lender reasonably believes that it would be unlawful or that any central bank or other Governmental Authority would assert that it is unlawful to maintain such outstanding Loans, Borrower shall forthwith prepay in full all outstanding Loans owing to such Lender, together with interest accrued thereon).

2.14 Taxes. (a) All payments made by the Borrower under this Agreement shall be made free and clear of, and without deduction or withholding for or on account of, any present or future income, stamp or other taxes, levies, imposts, duties, charges, fees, deductions or withholdings (“Taxes”), now or hereafter imposed, levied, collected, withheld or assessed by any Governmental Authority, excluding net income taxes and franchise taxes (imposed in lieu of net income taxes) imposed on the Administrative Agent or any Lender as a result of a present or former connection between the Administrative Agent or such Lender and the jurisdiction of the Governmental Authority imposing such tax or any political subdivision or taxing authority thereof or therein (other than any such connection arising solely from the Administrative Agent or such Lender having executed, delivered or performed its obligations or received a payment under, or enforced, this Agreement, any other Loan Document or the Purchase Agreement, or having taken any other actions in connection with such documents or the transactions contemplated therein). If any such non-excluded taxes, levies, imposts, duties, charges, fees, deductions or withholdings (“Non-Excluded Taxes”) or Other Taxes are required to be withheld from any amounts payable to the Administrative Agent or any Lender hereunder, the amounts so payable to the Administrative Agent or such Lender shall be increased to the extent necessary to yield to the Administrative Agent or such Lender (after payment of all Non-Excluded Taxes and Other Taxes) interest or any such other amounts payable hereunder at the rates or in the amounts specified in this Agreement, provided, however, that the Borrower shall not be required to increase any such amounts payable to any Lender with respect to any Non-Excluded Taxes (i) that are attributable to such Lender’s failure to comply with the requirements of paragraph (d) of this Section or (ii) that are United States withholding taxes imposed on amounts payable to such Lender at the time such Lender becomes a party to this Agreement, except to the extent that such Lender’s assignor (if any) was entitled, at the time of assignment, to receive additional amounts from the Borrower with respect to such Non-Excluded Taxes pursuant to this paragraph.

(b) The Borrower shall timely pay any Non-Excluded Taxes or Other Taxes to the relevant Governmental Authority in accordance with applicable law.

 

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(c) Whenever any Non-Excluded Taxes or Other Taxes are payable by the Borrower, as promptly as possible thereafter the Borrower shall send to the Administrative Agent for its own account or for the account of the relevant Lender, as the case may be, a certified copy of an original official receipt received by the Borrower (or other documentary evidence reasonably satisfactory to the Administrative Agent) showing payment thereof. The Borrower shall indemnify the Administrative Agent and the Lenders for such Non-Excluded Taxes or Other Taxes (to the extent paid by the Administrative Agent or the Lenders) and any incremental Taxes, interest or penalties that are due and payable by the Administrative Agent or any Lender as a result of any failure to pay any Non-Excluded Taxes or Other Taxes when due to the appropriate taxing authority or failure to remit to the Administrative Agent the required receipts or other required documentary evidence. Such indemnification shall be made within 30 days from the date the Administrative Agent or such Lender makes written demand therefor.

(d) Each Lender (or Transferee) that is a “U.S. Person” as defined in Section 7701(a)(30) of the Code shall deliver to the Borrower and the Administrative Agent (or, in the case of a Participant, to the Lender from which the related participation shall have been purchased) two copies of U.S. Internal Revenue Service Form W-9 (i) on or before the date on which it becomes a party to this Agreement (or, in the case of any Participant, on or before the date such Participant purchases the related participation) and (ii) upon the reasonable request of the Borrower. Each Lender (or Transferee) that is not a “U.S. Person” as defined in Section 7701(a)(30) of the Code (a “Non-U.S. Lender”) shall deliver to the Borrower and the Administrative Agent (or, in the case of a Participant, to the Lender from which the related participation shall have been purchased) two copies of either U.S. Internal Revenue Service Form W-8BEN or Form W-8ECI, or, in the case of a Non-U.S. Lender claiming exemption from U.S. federal withholding tax under Section 871(h) or 881(c) of the Code with respect to payments of “portfolio interest”, a statement substantially in the form of Exhibit D and a Form W-8BEN, or any subsequent versions thereof or successors thereto, properly completed and duly executed by such Non-U.S. Lender claiming exemption from, or reduction of, U.S. federal withholding tax on payments by the Borrower under this Agreement and the other Loan Documents. Such forms shall be delivered by each Non-U.S. Lender on or before the date it becomes a party to this Agreement (or, in the case of any Participant, on or before the date such Participant purchases the related participation). In addition, each Non-U.S. Lender shall deliver such forms promptly upon the reasonable request of the Borrower as a result of the obsolescence or invalidity of any form previously delivered by such Non-U.S. Lender. Notwithstanding any other provision of this paragraph, a Non-U.S. Lender shall not be required to deliver any form pursuant to this paragraph that such Non-U.S. Lender is not legally able to deliver. In accordance with applicable Treasury regulations, the Borrower may rely on the accuracy of the forms provided by a Non-U.S. Lender under this Section 2.14(d) absent actual knowledge or reason to know otherwise.

(e) [Intentionally Reserved]

(f) If the Administrative Agent or any Lender determines, in its sole discretion, that it has received a refund of any Non-Excluded Taxes or Other Taxes as to which it has been indemnified by the Borrower or with respect to which the Borrower has paid additional amounts pursuant to this Section 2.14, it shall pay over such refund to the Borrower (but only to the extent of indemnity payments made, or additional amounts paid, by the Borrower under this Section 2.14 with respect to the Non-Excluded

 

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Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket expenses of the Administrative Agent or such Lender and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund); provided, that the Borrower, upon the request of the Administrative Agent or such Lender, agrees to repay the amount paid over to the Borrower (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Administrative Agent or such Lender in the event the Administrative Agent or such Lender is required to repay such refund to such Governmental Authority. This paragraph shall not be construed to require the Administrative Agent or any Lender to make available its tax returns (or any other information relating to its taxes which it deems confidential) to the Borrower or any other Person.

(g) The agreements in this Section shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder.

2.15 Indemnity. The Borrower agrees to indemnify each Lender for, and to hold each Lender harmless from, any loss or expense that such Lender may sustain or incur as a consequence of (a) default by the Borrower in making a borrowing of, conversion into or continuation of Loans after the Borrower has given a notice requesting the same in accordance with the provisions of this Agreement, (b) default by the Borrower in making any prepayment of or conversion from Loans after the Borrower has given a notice thereof in accordance with the provisions of this Agreement or (c) the making of a prepayment of Loans on a day that is not the last day of an Interest Period with respect thereto. Such indemnification may include an amount equal to the excess, if any, of (i) the amount of interest that would have accrued on the amount so prepaid, or not so borrowed, converted or continued, for the period from the date of such prepayment or of such failure to borrow, convert or continue to the last day of such Interest Period (or, in the case of a failure to borrow, convert or continue, the Interest Period that would have commenced on the date of such failure) in each case at the applicable rate of interest for such Loans provided for herein (excluding, however, the Applicable Margin included therein, if any), over (ii) the amount of interest (as reasonably determined by such Lender) that would have accrued to such Lender on such amount by placing such amount on deposit for a comparable period with leading banks in the interbank eurodollar market. A certificate as to any amounts payable pursuant to this Section submitted to the Borrower by any Lender shall be conclusive in the absence of manifest error. This covenant shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder.

2.16 Change of Lending Office. Each Lender agrees that, upon the occurrence of any event giving rise to the operation of Section 2.13 or 2.14(a) with respect to such Lender, it will, if requested by the Borrower, use reasonable efforts (subject to overall policy considerations of such Lender) to designate another lending office for any Loans affected by such event with the object of avoiding the consequences of such event; provided that such designation is made on terms that, in the sole judgment of such Lender, cause such Lender and its lending office(s) to suffer no economic, legal, regulatory or other disadvantage, and provided, further, that nothing in this Section shall affect or postpone any of the obligations of the Borrower or the rights of any Lender pursuant to Section 2.13 or 2.14(a).

 

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SECTION 3. REPRESENTATIONS AND WARRANTIES

To induce the Administrative Agent and the Lenders to enter into this Agreement and perform their obligations hereunder, Holdings and the Borrower hereby jointly and severally represent and warrant to the Administrative Agent and each Lender, as of the Effective Date unless otherwise specified, that:

3.1 Financial Condition. (a) The unaudited consolidated balance sheet of Holdings as at December 31, 2007, and the related unaudited consolidated statements of income and cash flows for the twelve-month period ended on such date, present fairly the consolidated financial condition of Holdings as at such date, and the consolidated results of its operations and its consolidated cash flows for the twelve-month period then ended (subject to normal year-end audit adjustments). All such financial statements, including the related schedules and notes thereto, have been prepared in accordance with GAAP applied consistently throughout the periods involved (except as disclosed therein). No Group Member has any material Guarantee Obligations, contingent liabilities and liabilities for taxes, or any long-term leases or unusual forward or long-term commitments, including any interest rate or foreign currency swap or exchange transaction or other obligation in respect of derivatives, in each case that would be required to be disclosed in accordance with GAAP, that are not reflected in the most recent financial statements referred to in this paragraph. During the period from December 31, 2007 to and including the date hereof there has been no Disposition by any Group Member of any material part of its business or property except the sale of Wheeling Nisshin, Inc.

(b) In the case of each Joint Venture, to the best of the Borrower’s knowledge (it being understood that the Borrower has made no independent investigation thereof) the audited consolidated balance sheets of such Joint Venture as at December 31, 2007, and the related consolidated statements of income and of cash flows for the fiscal years ended on such dates, reported on by and accompanied by an unqualified report from an independent certified public accountant, present fairly the consolidated financial condition of such Joint Venture as at such date, and the consolidated results of its operations and its consolidated cash flows for the respective fiscal years then ended. To the best of the Borrower’s knowledge (it being understood that the Borrower has made no independent investigation thereof), the unaudited consolidated balance sheet of such Joint Venture as at March 31, 2008, and the related unaudited consolidated statements of income and cash flows for the three-month period ended on such date, present fairly the consolidated financial condition of such Joint Venture as at such date, and the consolidated results of its operations and its consolidated cash flows for the three-month period then ended (subject to normal year end audit adjustments). To the best of the Borrower’s knowledge (it being understood that the Borrower has made no independent investigation thereof) all such financial statements, including the related schedules and notes thereto, have been prepared in accordance with GAAP applied consistently throughout the periods involved (except as approved by the aforementioned firm of accountants and disclosed therein). To the best of the Borrower’s knowledge (it being understood that the Borrower has made no independent investigation thereof), as of the Effective Date, no Joint Venture has any material Guarantee Obligations, contingent liabilities and liabilities for taxes, or any long term leases or unusual forward or long term commitments, including any interest rate or foreign currency swap or exchange transaction or other obligation in respect of derivatives, in each case that would be required to be disclosed in accordance with GAAP and that are not reflected in the most recent financial statements referred to in this paragraph. To the best of the Borrower’s knowledge (it being understood that the Borrower has made no independent investigation thereof), during the period from December 31, 2007 to and including the date hereof there has been no Disposition by a Joint Venture of any material part of its business or property.

 

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(c) Holdings and its Subsidiaries maintain, in accordance with sound business practices and applicable law and rules and regulations issued by any Governmental Authority (i) a system of accounting, which includes maintenance of proper books and records, that permits preparation of financial statements in conformity with GAAP and provides reasonable assurances that (A) transactions are executed in accordance with management’s general or specific authorization; (B) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain accountability for assets; (C) access to assets is permitted only in accordance with management’s general or specific authorization; and (D) the recorded accountability for material assets is compared with the existing material assets at reasonable intervals and appropriate action is taken with respect to any differences; and (ii) effective disclosure controls and procedures designed to ensure that material information relating to Holdings and its Subsidiaries is made known to Responsible Officers of Holdings in a timely manner.

3.2 No Change. Other than events separately disclosed to the Administrative Agent in writing prior to the Effective Date, there has been no development or event that has had or could reasonably be expected to have a Material Adverse Effect since December 31, 2007. As of the Effective Date, there has been no development or event that has had a material adverse effect on the aggregate value of the “Collateral” as such term is defined in the Security Agreement or in the aggregate value of the “Collateral” as such term is defined in the JV Pledge Agreements (but in any case excluding “Collateral” as defined in the Junior Current Asset Collateral Agreement).

3.3 Existence; Compliance with Law. Each Group Member (a) is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, (b) has the power and authority, and the legal right, to own and operate its property, to lease the property it operates as lessee and to conduct the business in which it is currently engaged, (c) is duly qualified as a foreign corporation and in good standing under the laws of each jurisdiction where its ownership, lease or operation of property or the conduct of its business requires such qualification except to the extent that the failure to be so qualified could not, in the aggregate, reasonably be expected to have a Material Adverse Effect, (d) is in compliance with all Requirements of Law except to the extent that the failure to comply therewith could not, in the aggregate, reasonably be expected to have a Material Adverse Effect and (e) possesses all necessary certificates, franchises, licenses, permits, rights and concessions and consents which are material to the conduct of its business and operations as currently conducted.

3.4 Power; Authorization; Enforceable Obligations. Each Loan Party has the power and authority, and the legal right, to make, deliver and perform the Loan Documents to which it is a party and, in the case of the Borrower, to obtain extensions of credit hereunder. Each Loan Party has taken all necessary organizational action to authorize the execution, delivery and performance of the Loan Documents to which it is a party and, in the case of the Borrower, to authorize the extensions of credit on the terms and conditions of this Agreement. No consent or authorization of, filing with, notice to or other act by or in respect of, any Governmental

 

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Authority or any other Person is required in connection with the Plan of Reorganization and the extensions of credit hereunder or with the execution, delivery, performance, validity or enforceability of this Agreement or any of the Loan Documents, except (i) consents, authorizations, filings and notices described in Schedule 3.4, which consents, authorizations, filings and notices have been obtained or made and are in full force and effect and (ii) the filings referred to in Section 3.19. Each Loan Document has been duly executed and delivered on behalf of each Loan Party party thereto. This Agreement constitutes, and each other Loan Document upon execution will constitute, a legal, valid and binding obligation of each Loan Party party thereto, enforceable against each such Loan Party in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law).

3.5 No Legal Bar. (a) The execution, delivery and performance of this Agreement and the other Loan Documents, the borrowings hereunder and the use of the proceeds thereof will not violate any Requirement of Law or any Contractual Obligation of any Group Member and will not result in, or require, the creation or imposition of any Lien on any of their respective properties or revenues pursuant to any Requirement of Law or any such Contractual Obligation (other than the imposition of the Liens created by the Security Documents and the Senior Current Asset Security Agreement).

(b) No Group Member is a party to or is otherwise subject to any agreements or instruments or any charter or other internal restrictions which, individually or in the aggregate, could reasonably be expected to impair the ability of the Group Members, taken as a whole, to perform their payment or other material obligation under the Loan Documents.

3.6 Litigation. No litigation, investigation or proceeding of or before any arbitrator or Governmental Authority is pending or, to the knowledge of Holdings or the Borrower, threatened by or against any Group Member or against any of their respective properties or revenues (a) with respect to any of the Loan Documents or any of the transactions contemplated hereby or thereby, or (b) that could reasonably be expected to have a Material Adverse Effect. No Group Member is subject to any final judgments, writs, injunctions or decrees of any Governmental Authority, compliance with which could be reasonably expected to have a Material Adverse Effect, or is in default with respect to any such judgment, writ, injunction or decree, which default could be reasonably expected to have a Material Adverse Effect.

3.7 No Default. No Group Member is in default under or with respect to any of its material Contractual Obligations. No Default or Event of Default has occurred and is continuing.

3.8 Ownership of Property; Liens. Except as provided in Schedule 3.8, each Group Member has title in fee simple to, or a valid leasehold interest in, all its real property, and good title to, or a valid leasehold interest in, all its other property, and none of such property is subject to any Lien except as permitted by Section 6.3.

3.9 Intellectual Property. Each Group Member owns, or is licensed to use, all Intellectual Property reasonably necessary for the conduct of its business as currently conducted. No material claim has been asserted and is pending by any Person challenging or

 

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questioning the use of any Intellectual Property or the validity or effectiveness of any Intellectual Property, nor does Holdings or the Borrower know of any valid basis for any such claim. The use of In


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