Document:

EX-10.26

 

Exhibit
10.26

EXECUTION VERSION

NOTE PURCHASE AGREEMENT

     This Note Purchase Agreement (this “Agreement”) is entered into as of the 15th day of March,
2007, by and between Wheeling-Pittsburgh Corporation, a Delaware corporation (the “Company”) and
each of the investors set forth on the signature pages hereto (each, an “Investor,” and
collectively, the “Investors”).

     WHEREAS, the Company is offering, in compliance with Rule 506 of Regulation D of the
Securities Act of 1933, as amended (the “Securities Act”), to certain accredited investors in a
private placement transaction, convertible notes in a series with an aggregate principal amount of
up to Fifty-Million Dollars ($50,000,000), substantially in the form attached hereto as Exhibit
A (the “Notes”).

     WHEREAS, on the terms and subject to the conditions set forth herein, each Investor desires to
purchase a Note in the face principal amount set forth opposite Investor’s name on Exhibit
B, which Notes shall be convertible into shares (subject to adjustment as set forth in the
Notes, the “Conversion Shares,” and together with the Notes, the “Securities”) of the Company’s
common stock, par value $0.001 per share (the “Common Stock”) pursuant to the terms of the Notes.

     WHEREAS, the Company desires to set forth the terms and conditions of and to provide for the
issuance of the Notes described herein and with respect to certain registration rights relating to
the shares of Common Stock issuable upon conversion of the Notes, pursuant to their terms.

     NOW, THEREFORE, for and in consideration of the mutual premises contained herein and for other
good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the
Company and the Investors hereby agree as follows:

1) ISSUANCE OF THE CONVERTIBLE NOTES. Subject to the terms and conditions set forth in this
Agreement, the Company hereby agrees to sell to each Investor, and each Investor hereby agrees to
purchase from the Company, the face principal amount of the Notes set forth opposite each
Investor’s name on Exhibit B (the “Purchase Price”). The Note delivered to an Investor
will be delivered in the form of a single Note registered in the name of the Investor (or in the
name of such nominee or in such other denominations as Investor may specify). The terms and
conditions of the Notes are incorporated herein by reference.

2) THE CLOSING. The purchase and sale of the Notes by the Company to the Investors and the
delivery of the Purchase Price to the Company (the “Closing”) will take place on the second
business day following the satisfaction of all conditions precedent set forth in Section 7 hereof
(or such other date as the Company and the Investors shall determine), at the offices of the
Company, 1134 Market Street, Wheeling, WV 26003. At the Closing, (a) each Investor shall pay or
tender to the Company the applicable Purchase Price in immediately available funds by wire transfer
to the Company in accordance with the wiring instructions provided by the Company; and (b) the
Company shall issue and deliver to each Investor the Note(s) acquired hereunder by such Investor.

 

 

3) REPRESENTATIONS AND WARRANTIES OF INVESTORS. Each Investor represents and warrants individually
and not jointly to the Company as of the date hereof as follows:

          a) Investor is an “accredited investor” as that term is defined in Rule 501 of Regulation D
promulgated under the Securities Act.

          b) The Notes are being acquired by Investor for investment purposes only, for Investor’s own
account and not with the view to any resale or distribution thereof, and Investor is not
participating, directly or indirectly, in an underwriting of such Notes, and will not take, or
cause to be taken, any action that would cause Investor to be deemed an “underwriter” of such Notes
as defined in Section 2(11) of the Securities Act.

          c) Investor acknowledges that Investor has been offered an opportunity to ask questions of,
and receive answers from, the Company concerning the Company and Investor’s proposed purchase of
the Notes, and that such Investor is satisfied with the Company’s response to any such requests.

          d) Investor has such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of an investment in the Notes, is able to bear such
risks, and has obtained, in Investor’s judgment, sufficient information from the Company to
evaluate the merits and risks of an investment in the Notes. Investor has evaluated the risks of
investing in the Company and has determined that the Notes are a suitable investment for Investor.

          e) Investor has full power and authority to enter into this Agreement and to perform its
obligations hereunder.

          f) All action on the part of Investor necessary for the authorization, execution and delivery
of this Agreement and for the performance of all obligations of Investor hereunder has been taken,
including with respect to all required corporate or organizational grant of authority with respect
to such Investors as are corporations or other forms of entity. This Agreement has been duly
executed and delivered by Investor and constitutes a valid and legally binding obligation of
Investor, enforceable in accordance with its respective terms, subject to (i) the laws of
bankruptcy and the laws affecting creditors’ rights generally and (ii) the availability of
equitable remedies.

          g) Investor is not relying on the Company with respect to tax and other investment advice in
connection with its decision to purchase the Notes. Investor acknowledges that it has been advised
by the Company to consult with its tax or financial consultants prior to entering into this
Agreement.

4) REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents and warrants to the
Investors as of the date hereof as follows:

          a) The Company is duly incorporated, validly existing and in good standing under the laws of
the jurisdiction of its incorporation. The Company is duly qualified as a foreign corporation to
do business and is in good standing in each jurisdiction in which its

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ownership or use of property or the nature of the business conducted by it makes such
qualification necessary, except where the failure to be so qualified or in good standing would not
have a material adverse effect on the business, operations, assets, financial condition or
prospects of the Company (a “Material Adverse Effect”). The Company has full power and authority:
(i) to own, lease, use and operate its properties; (ii) to carry on its business as presently
operated and conducted; and (iii) to enter into this Agreement and perform its obligations
hereunder, including the issuance, sale and delivery of the Notes.

          b) The execution and delivery of this Agreement and of the Notes by the Company and the
consummation by it of the transactions contemplated hereby (including without limitation, the
issuance of the Securities) have been duly authorized by the Company’s Board of Directors and no
further consent or authorization of the Company, its Board of Directors, or its stockholders is
required. All action on the part of the Company necessary for the authorization, execution and
delivery of this Agreement and for the performance of all obligations of the Company hereunder has
been taken. This Agreement and the Notes have been duly executed and delivered by the Company and
constitute valid and legally binding obligations of the Company, enforceable in accordance with
their respective terms, subject to (i) the laws of bankruptcy and the laws affecting creditors’
rights generally and (ii) the availability of equitable remedies.

          c) The authorized capital stock of the Company consists of 80,000,000 shares of Common Stock
and 20,000,000 shares of preferred stock, par value $0.001 per share (“Preferred Stock”). At the
close of business on February 28, 2007, (i) 15,287,293 shares of Common Stock were issued and
outstanding (excluding shares of Common Stock held by the Company in its treasury), (ii) 6,666
shares of Common Stock were held by the Company in its treasury, (iii) 940,566 shares of the
Company’s Common Stock were reserved for issuance under the Company’s 2003 Management Stock
Incentive Plan (of which 19,221 shares were subject to outstanding stock options and 318,310 shares
were subject to outstanding stock unit awards), (iv) 16,469 shares of Common Stock were reserved
for distribution to creditors pending resolution of certain disputed claims, and (v) no shares of
Preferred Stock were issued or outstanding or held in the Company’s treasury. All outstanding
shares of Common Stock have been duly authorized and validly issued and are fully paid,
nonassessable and free of preemptive rights. There are no anti-dilution or price adjustment
provisions contained in any security issued and outstanding by the Company (or in any agreement
providing rights to security holders) that will be triggered by the issuance of the Securities.
Except as may be described in any documents which have been publicly filed by any of the Company’s
stockholders, to the Company’s knowledge, there are no agreements between the Company’s
stockholders with respect to the voting or transfer of the Company’s capital stock or with respect
to any other aspect of the Company’s affairs

          d) The Company has timely filed and furnished all required reports, schedules, forms,
prospectuses, and registration, proxy and other statements with the Securities and Exchange
Commission (“SEC”) since August 1, 2003 (collectively and together with all documents filed on a
voluntary basis on Form 8-K, and in each case including all exhibits and schedules thereto and
documents incorporated by reference therein, the “SEC Documents”). As of their respective
effective dates (in the case of SEC Documents that are registration statements filed pursuant to
the requirements of the Securities Act) and as of their respective SEC filing

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dates (in the case of all other SEC Documents), each SEC Document complied in all material
respects with the applicable requirements of the Securities Act or the Securities Exchange Act of
1934, as amended (the “Exchange Act”), and the rules and regulations thereunder, as applicable.
Except to the extent that information contained in any SEC Document has been revised or superseded
by a later-filed SEC Document or by information supplied to the Investors in writing by the
Company, none of the SEC Documents contains any untrue statement of a material fact or omits to
state any material fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not misleading.

          e) The Conversion Shares to be issued upon conversion of the Notes, when issued in compliance
with the provisions of this Agreement and the Notes, will be validly issued and will be free of any
liens or encumbrances, except as provided under applicable securities laws.

          f) The execution, delivery and performance of this Agreement and each of the documents
contemplated hereby, including the Notes, by the Company and the consummation by the Company of the
transactions contemplated hereby and thereby (including, without limitation, the issuance of
Securities) will not (i) conflict with or result in a violation of any provision of the certificate
of incorporation, as amended, of the Company or the bylaws, as amended, of the Company, (ii)
violate or conflict with, or result in a breach of any provision of, or constitute a default (or an
event which with notice or lapse of time or both could become a default) under, or give to others
any rights of termination, amendment, acceleration or cancellation of, any material agreement,
indenture, patent, patent license or instrument to which the Company is a party, or (iii) result in
a violation of any federal, state, local, municipal, foreign, international, multinational or other
law, rule, regulation, order, judgment, decree, ordinance, policy or directive, including those
entered, issued, made, rendered or required by any court, administrative or other governmental
body, agency, or authority, or any arbitrator (collectively, “Legal Requirements”) (including
federal and state securities laws and regulations (assuming the accuracy of the representations and
warranties of each Investor contained in Section 3(a) hereof) and regulations of any
self-regulatory organizations to which the Company or its securities are subject) applicable to the
Company or by which any property or asset of the Company is bound or affected (except for such
conflicts, defaults, terminations, amendments, accelerations, cancellations and violations as would
not, individually or in the aggregate, have a Material Adverse Effect). The Company is not in
violation of its certificate of incorporation, bylaws or other organizational documents and the
Company is not in default (and no event has occurred which with notice or lapse of time would
result in a default) under, and the Company has not taken any action or failed to take any action
that would give to others any rights of termination, amendment, acceleration or cancellation of,
any agreement or instrument to which the Company is a party or by which any property or assets of
the Company is bound or affected, except for possible defaults as would not, individually or in the
aggregate, have a Material Adverse Effect. Except with respect to any filings or notices related
to the issuance of the Conversion Shares to be filed with Nasdaq, if any, and as required under the
Securities Act and any applicable state securities laws, the Company is not required to obtain any
consent, authorization or order of, or make any filing or registration with, any court,
governmental agency, regulatory agency, self regulatory organization or stock market or any third
party in order for it to execute, deliver or perform any of its obligations under this Agreement or
the

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Notes. All consents, authorizations, orders, filings and registrations that the Company is
required to effect or obtain pursuant to the preceding sentence have been obtained or effected on
or prior to the date hereof.

          g) As of their respective dates, the financial statements of the Company included in the SEC
Documents complied as to form in all material respects with applicable accounting requirements and
the published rules and regulations of the SEC with respect thereto. Such financial statements
have been prepared in accordance with United States generally accepted accounting principles,
consistently applied, during the periods involved (except (i) as may be otherwise indicated in such
financial statements or the notes thereto, or (ii) in the case of unaudited interim statements, to
the extent they may not include footnotes, year end adjustments or may be condensed or summary
statements) and fairly present in all material respects the consolidated financial position of the
Company and its consolidated subsidiaries as of the dates thereof and the consolidated results of
their operations and cash flows for the periods then ended (subject, in the case of unaudited
statements, to normal year-end audit adjustments). Except as set forth in the financial statements
of the Company included in the SEC Documents, the Company has no liabilities, contingent or
otherwise, other than (i) liabilities incurred in the ordinary course of business subsequent to
December 31, 2006, and (ii) obligations under contracts and commitments incurred in the ordinary
course of business and not required under generally accepted accounting principles to be reflected
in such financial statements, which, individually or taken in the aggregate would not reasonably be
expected to have a Material Adverse Effect.

          h) Except with respect to the transactions contemplated hereby and as set forth in the SEC
Documents filed since such date, since December 31, 2005 (i) the Company and each of its
subsidiaries has conducted its business only in the ordinary course, consistent with past practice,
and since that date, no changes have occurred which would reasonably be expected to have a Material
Adverse Effect; and (ii) the Company has not incurred any liabilities (contingent or otherwise)
other than (A) trade payables, accrued expenses and other liabilities incurred in the ordinary
course of business consistent with past practice and (B) liabilities not required to be reflected
on the Company’s financial statements pursuant to generally accepted accounting principles,
consistently applied or required to be disclosed in filings made with the SEC.

          i) There is no Action (as defined below) pending or, to the knowledge of the Company,
threatened against or affecting the Company or any of its subsidiaries that (i) adversely affects
or challenges the legality, validity or enforceability of this Agreement, or (ii) would, if there
were an unfavorable decision, have or reasonably be expected to have a Material Adverse Effect.
Neither the Company nor any of its subsidiaries, nor any director or officer thereof (in his or her
capacity as such), is or has been the subject of any Action involving a claim of violation of or
liability under federal or state securities laws or a claim of breach of fiduciary duty. There has
not been, and to the knowledge of the Company, there is not pending any investigation by the SEC
involving the Company or any current or former director or officer of the Company (in his or her
capacity as such). For purposes of this Agreement, “Action” shall mean any action, suit claim,
inquiry, notice of violation, proceeding (including any partial proceeding such as a deposition) or
investigation against or affecting the Company, any of its

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subsidiaries or any of their respective properties before or by any court, arbitrator,
governmental or administrative agency, regulatory authority (federal, state, county, local or
foreign), public board, stock market, stock exchange or trading facility.

          j) The Company and each of its subsidiaries is in possession of all franchises, grants,
authorizations, licenses, permits, easements, variances, exemptions, consents, certificates,
approvals and orders necessary to own, lease and operate its properties and to carry on its
business as it is now being conducted (collectively, “Permits”), and there is no Action pending or,
to the knowledge of the Company, threatened regarding suspension or cancellation of any of the
Permits. Neither the Company nor any of its subsidiaries is in conflict with, or in default or
violation of, any of the Permits, except for any such conflicts, defaults or violations which,
individually or in the aggregate, would not reasonably be expected to have a Material Adverse
Effect.

          k) Since December 31, 2005, no event has occurred or, to the knowledge of the Company,
circumstance exists that (with or without notice or lapse of time): (a) would reasonably be
expected to constitute or result in a violation by the Company or any of its subsidiaries, or a
failure on the part of the Company or its subsidiaries to comply with, any Legal Requirement; or
(b) would reasonably be expected to give rise to any obligation on the part of the Company or any
of its subsidiaries to undertake, or to bear all or any portion of the cost of, any remedial action
of any nature in connection with a failure to comply with any Legal Requirement, except in either
case that would not reasonably be expected to have a Material Adverse Effect. Neither the Company
nor any of its subsidiaries has received any notice or other communication from any regulatory
authority or any other person, nor does the Company have any knowledge regarding: (x) any actual,
alleged, possible or potential violation of, or failure to comply with, any Legal Requirement, or
(y) any actual, alleged, possible or potential obligation on the part of the Company or any of its
subsidiaries to undertake, or to bear all or any portion of the cost of, any remedial action of any
nature in connection with a failure to comply with any Legal Requirement, except in either case
that would not reasonably be expected to have a Material Adverse Effect.

          l) The Company is in compliance in all material respects with the provisions of the
Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated thereunder that are applicable
to it and has taken reasonable steps such that the Company expects to be in a position to comply
with the requirements of Section 404 of the Sarbanes-Oxley Act of 2002 and the rules and
regulations promulgated thereunder at such time as Section 404 becomes applicable to the Company.

          m) The Company is, and has reason to believe that for the foreseeable future it will continue
to be, in compliance with all applicable rules of the Nasdaq Global Market. The Company has not
received notice from Nasdaq that the Company is not in compliance with the rules or requirements
thereof. The issuance and sale of the Securities under this Agreement does not contravene the
rules and regulations of the Nasdaq Global Market, and no approval of the stockholders of the
Company is required for the Company to issue the Securities as contemplated by this Agreement

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          n) The Company understands and confirms that the Investors will rely on the representations
and covenants contained herein in effecting the transactions contemplated by this Agreement and the
Notes. All representations and warranties provided to the Investors furnished by or on behalf of
the Company, taken as a whole are true and correct and do not contain any untrue statement of
material fact or omit to state any material fact necessary in order to make the statements made
therein, in the light of the circumstances under which they were made, not misleading. No event or
circumstance has occurred or information exists with respect to the Company or its subsidiaries or
its or their businesses, properties, prospects, operations or financial conditions, which, under
applicable law, rule or regulation, requires public disclosure or announcement by the Company but
which has not been so publicly announced or disclosed.

5) RESTRICTED SECURITIES.

          a) Each Investor understands that the Securities have not been registered under the Securities
Act, by reason of a specific exemption from the registration provisions of the Securities Act which
depends upon, among other things, the bona fide nature of the investment intent and the accuracy of
each Investor’s representations as expressed herein. Each Investor understands that the Securities
are “restricted securities” under the Securities Act, inasmuch as they are being acquired from the
Company in a transaction not involving a public offering and that under such laws and applicable
regulations such Securities may be resold without registration under the Securities Act only in
certain limited circumstances and each Investor agrees not to transfer the Securities unless such
transfer is made: (i) pursuant to an effective registration statement under the Securities Act;
(ii) to the Company; (iii) outside the United States in accordance with Rule 904 of Regulation S
under the Securities Act and in compliance with local laws; or (iv) within the United States (A) in
accordance with the exemption from registration under the Securities Act provided by Rule 144
thereunder, if available, and in compliance with any applicable state securities laws, and each
Investor shall be required to furnish to the Company an opinion to such effect from counsel of
recognized standing reasonably satisfactory to the Company prior to such offer, sale or transfer or
(B) in a transaction that does not require registration under the Securities Act or applicable
state securities laws, and each Investor shall be required to furnish to the Company an opinion to
such effect from counsel of recognized standing reasonably satisfactory to the Company prior to
such offer, sale or transfer. Each Investor acknowledges that, the Company has no obligation to
register or qualify the Securities for resale except as set forth in Section 6 hereof and that the
Company is required to refuse to register any transfer not made in accordance with the provisions
of this Section 5. Each Investor further acknowledges that if an exemption from registration or
qualification is available, it may be conditioned on various requirements including, but not
limited to, the time and manner of sale, and on requirements relating to the Company which are
outside of such Investor’s control, and which the Company is under no obligation and may not be
able to satisfy. Each Investor also acknowledges that the documentation representing the
Securities shall bear restrictive legends as required under applicable federal and state securities
laws. The provisions of this Section 5 shall survive the Closing.

          b) Each Investor acknowledges that the Notes and any certificates evidencing the Conversion
Shares will bear a legend substantially as set forth below, in addition to any legends required by any state securities laws:

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“NEITHER THESE SECURITIES NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN
REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN
RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE
WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR
TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.

6) REGISTRATION RIGHTS. Contemporaneous with the execution and delivery of this Agreement, the
parties hereto are executing and delivering a Registration Rights Agreement, in the form attached
hereto as Exhibit C, pursuant to which the Company has agreed under certain circumstances
to register the resale of the Conversion Shares under the Securities Act and the rules and
regulations promulgated thereunder, and applicable state securities laws.

7) CLOSING CONDITIONS

	 	a)	 	Conditions of the Company’s Obligations at Closing. The obligations of the
Company under this Agreement with respect to the issuance of the Notes to any Investor are
subject to the fulfillment on or before the Closing of each of the following conditions
with respect to such Investor, unless waived by the Company.

          i) Each Investor shall have executed and delivered this Agreement, the Registration Rights
Agreement contemplated by Section 6, and tendered the Purchase Price for such Investor’s Note(s) to
the Company.

          ii) The representations and warranties of the Investors contained in Section 3 of this
Agreement shall be true and correct in all material respects (except with respect to the
representations contained in Section 3(a), which shall be true and correct in all respects) on and
as of the Closing with the same effect as though such representations and warranties had been made
as of the Closing.

          iii) The Company shall have obtained any necessary consent of the Senior Debt Holders, as
defined in the Note, with respect to the transactions contemplated by this Agreement and the Notes.

	 	b)	 	Conditions of the Investors’ Obligations at Closing. The obligations of each
Investor under this Agreement with respect to the purchase of the Notes are subject to the
fulfillment on or before the Closing of each of the following conditions, unless waived by
each Investor.

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          i) The Company shall have executed and delivered this Agreement, the Registration Rights
Agreement contemplated by Section 6, and the Notes to the Investors.

          ii) Any consents or approvals required to be secured by the Company for the consummation of
the transactions contemplated by this Agreement shall have been obtained and shall be reasonably
satisfactory to the Investors.

          iii) The representations and warranties of the Company contained in Section 4 of this
Agreement shall be true and correct in all material respects on and as of the Closing with the same
effect as though such representations and warranties had been made as of the Closing and the
Company shall have performed, satisfied and complied in all material respects with the covenants,
agreements and conditions required by this Agreement to be performed, satisfied or complied with by
the Company at or prior to the closing.

          iv) The Company’s independent registered public accounting firm shall have agreed to deliver
an unqualified opinion with respect to the conformity of the consolidated financial statements of
the Company at December 31, 2006 with generally accepted accounting principles in the United
States.

          v) There shall have been no material adverse change in the assets, liabilities (contingent or
otherwise), affairs, business, operations, prospects or condition (financial or otherwise) of the
Company prior to the Closing.

8) INDEMNIFICATION

	 	a)	 	The Company agrees to indemnify each Investor and its affiliates and hold each of them
harmless from and against any and all liabilities, losses, damages, costs and expenses of
any kind (including, without limitation, the reasonable fees and disbursements of such
Investor’s counsel in connection with any investigative, administrative or judicial
proceeding), that may be incurred by such Investor or such affiliates as a result of any
claims made against such Investor or such affiliates by any person that relate to or arise
out of (i) any breach by the Company of any of its representations, warranties or covenants
contained in this Agreement or in the Notes, or (ii) any litigation, investigation or
proceeding instituted by any person with respect to this Agreement or the Securities
(excluding, however, any such litigation, investigation or proceeding which arises solely
from the acts or omissions of such Investor or its affiliates).

	 	b)	 	Any person entitled to indemnification hereunder (“Indemnified Party”) will (i) give
prompt notice to the party required to provide the indemnification pursuant to this Section
8, of any third party claim, action or suit with respect to which it seeks indemnification
(the “Claim”) (but omission of such notice shall not relieve the Company from liability
hereunder except to the extent it is actually prejudiced by such failure to give notice),
specifying in reasonable detail the factual basis for the Claim, the amount thereof,
estimated in good faith, and the method of computation of the Claim, all with

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	 	 	 	reasonable particularity and containing a reference to the provisions of this Agreement in
respect of which such indemnification is sought with respect to the Claim, and (ii) unless
in such Indemnified Party’s reasonable judgment a conflict of interest may exist between
such Indemnified Party and the Company with respect to such claim, permit the Company to
assume the defense of the Claim with counsel reasonably satisfactory to the Indemnified
Party. The Indemnified Party shall cooperate fully with the Company with respect to the
defense of the Claim and, if the Company elects to assume control of the defense of the
Claim, the Indemnified Party shall have the right to participate in the defense of the Claim
at its own expense. If the Company does not elect to assume control or otherwise
participate in the defense of the Claim, then the Indemnified Party may defend through
counsel of its own choosing. If such defense is not assumed by the Company, the Company
will not be subject to any liability under this Agreement or otherwise for any settlement
made without its consent (but such consent will not be unreasonably withheld or delayed). If
the Company elects not to or is not entitled to assume the defense of a Claim, it will not
be obligated to pay the fees and expenses of more than one counsel for all Indemnified
Parties with respect to the Claim, unless an actual conflict of interest exists between such
Indemnified Party and any other of such Indemnified Parties with respect to the Claim, in
which event the Company will be obligated to pay the fees and expenses of such additional
counsel or counsels

9) NO INTEGRATION. The Company shall not make any offers or sales of any security (other than the
Securities) under circumstances that would require registration of the Securities being offered or
sold hereunder under the Securities Act (except as provided in the Registration Rights Agreement)
or cause the offering of the Securities to be integrated with any other offering of securities by
the Company in such a manner as would require the Company to seek the approval of its stockholders
for the issuance of the Securities under any stockholder approval provision applicable to the
Company or its securities.

10) NOTICE. Any notices or other communications in connection herewith shall be sufficiently given
if sent by registered or certified mail, postage prepaid, or by facsimile transmission, and:

(a) if to the Company, at

Wheeling-Pittsburgh Corporation

1134 Market Street

Wheeling, WV 26003

Attention: Chief Financial Officer

Facsimile: (304) 234-2261

with a copy (which shall not constitute notice) to counsel to the Company as the Company shall notify the Investors from time to time.

(b) if to an Investor, at the address on such Investor’s signature page hereto,

or at such other address as an Investor or the Company shall designate to the other by notice in writing.

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11) ASSIGNABILITY. Neither party may assign or transfer any of its rights or obligations under this
Agreement without the prior written consent of the other party; provided, however,
that: (a) any Investor may assign its rights hereunder to its affiliates (as such term is defined
in Rule 144 of the Securities Act) or (b) any Investor may assign a right to purchase a portion of
the amount of the Note subscribed to hereunder, (up to fifty percent (50%) of the face principal
amount subscribed to by Investor) to another accredited institutional investor; provided
further that any such assignee must first deliver to the Company a written instrument
confirming that such assignee shall be bound by the terms and conditions of this Agreement.

12) SUCCESSORS AND ASSIGNS. The terms and conditions of this Agreement shall inure to the benefit
of and be binding upon the respective successors and assigns of the parties. Nothing in this
Agreement, express or implied, is intended to confer upon any party, other than the parties hereto
or their respective successors and assigns, any rights, remedies, obligations or liabilities under
or by reason of this Agreement, except as expressly provided in this Agreement.

13) MODIFICATION. Neither this Agreement nor any provision hereof shall be modified, discharged or
terminated except by an instrument in writing signed by (a) the Company and (b) Investors (or their
permitted assignees or transferees) holding Notes (or having subscribed therefor) representing at
least 75% of the aggregate principal amount of all Notes or Conversion Shares then outstanding (or
subscribed for).

14) ENTIRE AGREEMENT. This Agreement and the documents referred to herein (including, without
limitation, the Notes) constitute the entire agreement among the parties with respect to the
subject matter hereof and thereof and no party shall be liable or bound to any other party in any
manner by any warranties, representations, covenants or agreements except as specifically set forth
herein or therein.

15) APPLICABLE LAW. This Agreement shall be governed by and construed in accordance with the laws
of the state of Delaware applicable to agreements made and to be performed entirely within such
state, without regard to the principles of conflict of laws, and, to the extent it involves any
United States statute, in accordance with the laws of the United States.

16) FINDERS’ FEES. Each party represents that it neither is nor will be obligated for any finders’
fees or commissions in connection with this Agreement or the transactions contemplated hereby.
Each Investor agrees to indemnify and to hold harmless the Company from any liability for any
commission or compensation in the nature of finders’ fees (and the costs and expenses (including
legal, travel and out-of-pocket expenses) of defending against such liability or asserted
liability) for which such Investor or any of its officers, directors, employees, or representatives
is responsible. The Company agrees to indemnify and hold harmless each Investor from any liability
for any commission or compensation in the nature of a finders’ fee (and the costs and expenses
(including legal, travel and out-of-pocket expenses) of defending against such liability or
asserted liability) for which the Company or any of its officers, employees or representatives is
responsible, in accordance with the provisions of Section 8.

11

 

17) SEVERABILITY. If one or more provisions of this Agreement are held to be unenforceable under
applicable law, such provision shall be excluded from this Agreement and the balance of the
Agreement shall be interpreted as if such provision were so excluded and shall be enforceable in
accordance with its terms.

18) FEES AND EXPENSES. Except as otherwise expressly provided for in this Agreement, the Company,
on the one hand, and each Investor, on the other hand, shall each pay all of its own expenses
incurred in connection with the transactions contemplated by this Agreement, including any and all
legal, accounting, investment banking and consulting fees and expenses incurred in negotiating,
executing and delivering this Agreement and the other agreements, exhibits, schedules, documents
and instruments contemplated by this Agreement, provided that at the Closing, the Company shall
reimburse Tontine Partners, L.P. for all reasonable expenses incurred by them in connection with
the negotiation, preparation, execution, delivery and performance of this Agreement and the form of
Note and its due diligence review of the Company, including, without limitation, reasonable
attorneys’ fees and expenses, and out-of-pocket travel costs and expenses, but not to exceed
$40,000 without the prior written consent of the Company.

19) COUNTERPARTS. This Agreement may be executed in two (2) or more original or facsimile
counterparts all of which together shall constitute one and the same instrument.

20) DESCRIPTIVE HEADINGS. The descriptive headings of this Agreement are inserted for convenience
of reference only and do not constitute a part of and shall not be utilized in interpreting this
Agreement.

21) DELAYS OR OMISSIONS. Each and all of the various rights, powers and remedies of the parties
shall be considered cumulative with and in addition to any other rights, powers and remedies which
such parties may have at law or in equity in the event of the breach of any of the terms of this
Agreement. No failure to exercise or delay in the exercise of any right, power or remedy accruing
to Investor upon any breach or default of the Company under this Agreement shall impair any such
right, power or remedy of Investor nor shall it be construed to be a waiver of any such breach or
default, or an acquiescence therein, or of or in any similar breach or default thereafter
occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other
breach or default theretofore or thereafter occurring.

22) PUBLICITY. The Company and the Investors shall have the right to review a reasonable period of
time before issuing any press releases or any other public statements with respect to the
transactions contemplated hereby; provided, however, that the Company shall be entitled, without
the prior approval of the Investors, to make any press release with respect to such transactions as
is required by applicable law and regulations (although the Investors shall be consulted by the
Company in connection with any such press release prior to its release and shall be provided with a
copy thereof and be given an opportunity to comment thereon). Notwithstanding the foregoing, the
Company shall file with the SEC a Form 8-K disclosing the transactions herein within four (4)
business days of the Closing Date and attach the relevant agreements and instruments to either such
Form 8-K or the Company’s Annual Report on Form 10-K for the year ended December 31, 2006, and the
Investors may make such filings as may be required under Section 13 and Section 16 of the Exchange Act.

12

 

23) FURTHER ASSURANCES. Each party shall do and perform, or cause to be done and performed, all
such further acts and things, and shall execute and deliver all such other agreements,
certificates, instruments and documents, as the other party may reasonably request in order to
carry out the intent and accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.

[Remainder of this page is intentionally left blank.]

13

 

The undersigned have duly executed this Agreement as of the date first written above.

	 	 	 	 	 
	 	WHEELING-PITTSBURGH CORPORATION

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

 

 

	 	 	 	 	 

[Investor Signature Page]

	 	 	 	 	 
	 	Investor Name:

 	 
	 	 	 
	 	 	 	 
	 	 	 	 
	 

	 	 	 	 	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	

	 	 	 
	 	 	Address:  	
 	 
	 	 	 
	 	 	 	
 	 
	 	 	 
	 	 	 	
 	 
	 	 	 
	 	 	Tax ID:EX-10.27

 

Exhibit
10.27

NEITHER THESE SECURITIES NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE
CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR
THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
BORROWER.

THE INDEBTEDNESS REPRESENTED BY THIS INSTRUMENT IS SUBORDINATED TO THE PAYMENT
OF SENIOR INDEBTEDNESS IN ACCORDANCE WITH AND TO THE EXTENT PROVIDED HEREIN.

Wheeling-Pittsburgh Corporation

SENIOR SUBORDINATED UNSECURED CONVERTIBLE PROMISSORY NOTE

March __, 2007

	 	 	 
	$               

	 	Wheeling, West Virginia

     FOR VALUE RECEIVED, Wheeling-Pittsburgh Corporation, a Delaware
corporation (“Borrower”), hereby unconditionally promises to pay to the order of
                          or any transferee of this Note (the “Holder”,
in lawful money of the United States of America, the principal sum of $          ,
together with interest thereon, payable on the dates and in the manner set forth
below.

     This Note is one of $50.0 million in aggregate principal amount of
Senior Subordinated Unsecured Convertible Promissory Notes (each a “Note” and
collectively the “Notes”) issued pursuant to the Securities Purchase Agreement
of even date herewith among the Borrower and the original purchasers of the
Notes (the “Purchase Agreement”), and is subject to the provisions set forth
therein. Certain capitalized terms used herein are defined in Section 14 below.

     1. Principal. The principal amount of this Note shall mature and be due and payable on November 15, 2008
(the “Maturity Date"), unless otherwise paid or converted under the terms that follow.

     2. Interest. Interest shall accrue on the unpaid principal amount of this
Note on a daily basis from the Original Issue Date until the date of payment (or
conversion) at the Applicable Interest Rate per annum, calculated on the basis
of a 360-day year; provided, however, that during the continuance of an Event of
Default, notwithstanding anything else to the contrary contained in this Note,
interest on the unpaid principal amount of this Note and, to the extent
permitted by applicable law, on any accrued and unpaid interest shall accrue at
the rate of two percent (2%) per annum in addition to the Applicable Interest
Rate then in effect.

     Accrued interest shall be payable in cash, quarterly in arrears on April 1, July
1, October 1 and January 1 of each year, beginning April 1, 2007 (each an
“Interest Payment Date” except that, if any such date is not a Trading Day, the
Interest Payment Date shall be the next succeeding Trading Day. In connection
with an adjustment to the Applicable Interest Rate from and after the Reset
Date, in which interest shall have been recalculated back to the Original Issue
Date, such additional interest shall be due and payable on and as of the Reset
Date.

     3. Place, Manner and Application of Payments. All amounts payable hereunder
shall be payable to the Holder in immediately available funds at its address set
forth below or such other address as the Holder specifies to

 

 

Borrower in
writing. All payments on this Note shall be applied first to accrued interest,
and thereafter to the outstanding principal balance hereof. The principal amount
under this Note may not be pre-paid without the prior written consent of the
Holder prior to the Reset Date. From and after the Reset Date, the Borrower
shall have the right to prepay the principal amount of this Note in whole or in
part; provided that (a) any such prepayment shall be subject to the Holder’s
right to convert the Note pursuant to Section 5(b)(i) below; (b) such prepayment
may not be made until at least ten (10) business days after the Holder has
confirmed, in writing, its receipt of written notice from Borrower of the
intended prepayment, which written confirmation from the Holder must specify
that the Holder is not electing to exercise its conversion rights pursuant to
Section 5(b)(i) below; (c) any such prepayment shall be accompanied by payment
of all accrued and unpaid interest through the date of prepayment and (d) any
such prepayment shall not contravene any of the provisions of Section 6 hereof..

     4. No Security. This Note is an unsecured obligation of the Borrower and no collateral accompanies the
obligations hereunder.

     5. Conversion. The Holder of this Note shall have the following rights with respect to conversion of
this Note into shares of Borrower’s Common Stock, no par value per share (the “Common Stock”):

     (a) Automatic Conversion prior to the Reset Date. Notwithstanding
anything herein to the contrary but subject to the final sentence of
this Section 5(a) and to Section 5(e), upon the occurrence of a Change
of Control Transaction prior to the Reset Date, without any action on
the part of the Holder hereof, just prior to the consummation of such
Change of Control Transaction, all of the outstanding principal and
accrued but unpaid interest under this Note shall immediately convert
pursuant to this Section 5(a) into the number of shares of Common Stock
obtained by dividing such outstanding principal and interest by the
Applicable Conversion Price then in effect, such that the Holder shall
be entitled to the consideration paid (if any) to holders of Common
Stock in connection with such Change of Control Transaction.
Notwithstanding the foregoing, this Note shall not be automatically
convertible pursuant to this Section 5(a) unless the consideration
payable with respect to the Borrower’s Common Stock in connection with
such Change of Control Transaction equals or exceeds the Applicable
Conversion Price (subject to the last sentence of the definition of
“Change of Control Transaction” in Section 14 hereof).

     (b) Conversion from and after the Reset Date.

     (i) Conversion at the Election of Holder. To the extent that the principal amount
under this Note shall not have been repaid, or converted pursuant to
Section 5(a), as of the Reset Date, commencing on the Reset Date and
thereafter through the Maturity Date, all of the outstanding principal
and accrued but unpaid interest under this Note shall immediately
convert pursuant to this Section 5(b)(i), in whole but not in part, at
any time at the election of the Holder, into the number of shares of
Common Stock obtained by dividing such outstanding principal and
interest by the Applicable Conversion Price then in effect.

     (A) The Borrower shall be given notice of the intent
of the Holder of this Note to convert this Note under Section 5(b)(i) by
way of the form of conversion notice attached hereto as Annex A (a
“Conversion Notice”). The calculations and entries set forth in the
Conversion Notice shall control in the absence of manifest or
mathematical error.

     (ii) Automatic Conversion following the Reset Date in a Change of Control
Transaction. Subject to the final sentence of this Section 5(b)(ii), to
the extent that the principal amount under this Note shall not have been
repaid, or converted pursuant to Section 5(a) or Section 5(b)(i), upon
the occurrence of a Change of Control Transaction from and after the
Reset Date, without any action on the part of the Holder hereof, just
prior to the consummation of such Change of Control Transaction, all of
the outstanding principal and accrued but unpaid interest under this
Note shall immediately convert pursuant to this Section 5(b)(ii) into
the number of shares of Common Stock obtained by dividing such
outstanding principal and interest by the Applicable Conversion Price
then in effect, such that the Holder shall be entitled to the
consideration paid (if any) to holders of Common Stock in connection
with such Change of Control Transaction. Notwithstanding the foregoing,
this Note shall not be automatically convertible pursuant to this
Section 5(b)(ii) unless the consideration payable with respect to the
Borrower’s Common Stock in connection with such Change of Control
Transaction equals or exceeds the Applicable Conversion Price (subject
to the last sentence of the definition of “Change of Control
Transaction” in Section 14 hereof).

 

 

     (c) Procedures with respect to conversions. Not less than ten (10)
Trading Days prior to the anticipated occurrence of any Change of
Control Transaction, Borrower shall deliver to the Holder a notice (the
“Change of Control Notice”), setting forth the material terms of such
transaction and Borrower’s calculation of the number of Conversion
Shares issuable to the Holder (including interest to be converted
calculated through such Conversion Date) in connection with such Change
of Control Transaction. Required Holders may waive on behalf of all
holders of Notes such period by which the Change of Control Notice must
be delivered prior to the Change of Control Transaction. The
calculations and entries set forth in the Change of Control Notice shall
control in the absence of manifest or mathematical error. Upon
consummation of the Change of Control Transaction referenced in the
Change of Control Notice, Borrower (or its successor) shall deliver to
the Holder a subsequent notice so indicating and containing or
accompanied by such information as shall be reasonably necessary to the
Holder to receive the consideration, if any, that holders of Common
Stock received in such transaction (the “Second Change of Control
Notice”).

     (i) The “Conversion Date,” for a conversion under Section 5(a) or 5(b)(ii) above,
shall be the same date and just prior to the consummation of the Change
of Control Transaction, and for a conversion under Section 5(b)(i)
above, shall be the date specified in the Conversion Notice delivered by
the Holder with respect to a conversion of the Note under such section.
As of the applicable Conversion Date and at such time as the conversion
has been effected as required by this Note, this Note shall be
cancelled, shall no longer accrue interest hereunder and shall be deemed
of no further force or effect (other than with respect to the Holder’s
rights to receive Conversion Shares in accordance with Section 5(d), the
Holder’s rights to payment of an remaining principal amount and accrued
interest, if any, under Section 5(e), and the Holder’s rights with
respect to a default by Borrower under this Note as set forth in Section
14).

     (d) Delivery of Conversion Shares, Adjustments.

     (i) Delivery of Conversion Shares. Not later than five Trading
Days after the Conversion Date (or the date on which the Second
Change of Control Notice was delivered for a conversion under
Sections 5(a) or 5(b)(ii))(the “Note Delivery Date”), the Holder
shall deliver this Note to Borrower (or its successor) for
cancellation and not later than three Trading Days after the Note
Delivery Date, Borrower (or its successor) shall deliver to the
Holder, or to such nominee as the Borrower shall be directed
thereby, a certificate representing the number of Conversion Shares
being issued upon the conversion of this Note (a “New Certificate”);
provided, however, that in the event of conversion pursuant to
Section 5(a) or 5(b)(ii), the Holder shall be entitled to receive,
in addition to or in lieu of such New Certificate, the consideration
paid (if any) to holders of Common Stock in connection with such
Change of Control Transaction, with such payment to be made in
accordance with the payment and/or exchange procedures applicable to
the holders of Borrower’s Common Stock in connection with such
Change of Control Transaction..

     (ii) Surrender of Notes. Surrender of this Note shall be made by
sending it to the Borrower by overnight mail and the date of
surrender shall be deemed to be the day on which this Note is placed
in overnight mail by the Holder. By accepting this Note, the Holder
agrees to take all reasonable actions required by it to surrender
this Note in accordance with the Note’s terms upon any conversion
hereunder. Borrower agrees that upon a conversion of this Note for
capital stock of the Borrower (or Borrower’s successor in connection
with a Change of Control Transaction) the Holder shall be the
beneficial owner of such shares of capital stock (and/or other
securities if the shares are linked or coupled with other
securities), as of the Conversion Date with respect to rights
provided to holders of such securities under Borrower’s (or
Borrower’s successor in connection with a Change of Control
Transaction) certificate of incorporation and by-laws (or other
governing documents), as then in effect.

     (iii) Stock Splits, etc. In case Borrower shall, after the
Original Issue Date (i) subdivide or split its outstanding shares of
Common Stock into a greater number of shares or issue additional
            shares of Common Stock for no consideration as a stock dividend,
(ii) combine its outstanding shares of Common Stock into a smaller
number of shares of Common Stock, or (iii) issue any shares of its
capital stock in a reclassification of the Common Stock, then the
number of Conversion Shares receivable upon conversion

 

 

of this Note
immediately prior thereto shall be adjusted so that the Holder shall
be entitled to receive the kind and number of Conversion Shares or
other securities of Borrower which it would have owned or have been
entitled to receive had this Note been converted in advance thereof.
Upon each such adjustment of the kind and number of Conversion
Shares or other securities of Borrower which are receivable
hereunder, the Holder shall thereafter be entitled to receive the
number of Conversion Shares or other securities resulting from such
adjustment at an Applicable Conversion Price obtained by multiplying
the Conversion Price in effect immediately prior to such adjustment
by the number of Conversion Shares receivable upon conversion of
$1,000 of Notes pursuant hereto immediately prior to such adjustment
and dividing such product by the number of Conversion Shares or
other securities of Borrower that are receivable upon conversion of
$1,000 of Notes pursuant hereto immediately after such adjustment
(as if the Note were convertible at the Applicable Conversion Price
at the time of such adjustment), and such adjustment(s) shall be
made with respect to the Maximum Conversion Price and Minimum
Conversion Price from and after an adjustment to the Applicable
Conversion Price under Section 14 resulting from the non-occurrence
of a Change of Control Transaction prior to the Reset Date, provided
that no such adjustment shall be made to such previously adjusted
Applicable Conversion Price. An adjustment made pursuant to this
paragraph shall become effective immediately after the effective
date of such event, retroactive to the record date, if any, for such
event.

     (iv) Reorganization, Reclassification, Merger, Consolidation or
Disposition of Assets; Offerings of Property to Common Stock
Holders. Subject to the automatic conversion provisions of Sections
5(a) and 5(b)(ii), in case the Borrower shall reorganize its
capital, reclassify its capital stock, consolidate or merge with or
into another entity (where the Borrower is not the surviving
corporation or where there is a change in or distribution with
respect to the Common Stock of the Borrower), or sell, transfer or
otherwise dispose of its property, assets or business to another
entity and, pursuant to the terms of such reorganization,
reclassification, merger, consolidation or disposition of assets,
shares of common stock of the successor or acquiring entity, or any
cash, shares of stock or other securities or property of any nature
whatsoever (including warrants or other subscription or purchase
rights) in addition to or in lieu of common stock of the successor
or acquiring entity (“Other Property”), are to be received by or
distributed to the holders of Common Stock of the Borrower, then the
Holder shall have the right thereafter to receive, upon conversion
of this Note, the number of shares of common stock of the successor
or acquiring entity, or Common Stock of the Borrower if it is the
surviving corporation, and Other Property receivable upon or as a
result of such reorganization, reclassification, merger,
consolidation or disposition of assets by a Holder of the number of
shares of Common Stock for which the Note is convertible immediately
prior to such event. In case of any such reorganization,
reclassification, merger, consolidation or disposition of assets,
the successor or acquiring entity (if other than the Borrower) shall
expressly assume the due and punctual observance and performance of
each and every covenant and condition of this Note and the Purchase
Agreement to be performed and observed by the Borrower and all the
obligations and liabilities hereunder, subject to such modifications
as may be deemed appropriate (as determined in good faith by
resolution of the Board of Directors of the Borrower) in order to
provide for adjustments of Conversion Shares for which this Note is
convertible which shall be as nearly equivalent as practicable to
the adjustments provided for in this Section 5(d)(iv). For purposes
of this Section 5(d)(iv), “common stock of the successor or
acquiring entity” shall include equity of such entity of any class
which is not preferred as to dividends or assets over any other
class of equity of such entity and which is not subject to
redemption and shall also include any evidences of indebtedness,
shares of stock or other securities which are convertible into or
exchangeable for any such equity, either immediately or upon the
arrival of a specified date or the happening of a specified event
and any warrants or other rights to subscribe for or purchase any
such equity. The foregoing provisions of this Section 5(d)(iv) shall
similarly apply to successive reorganizations, reclassifications,
mergers, consolidations or disposition of assets. If an event occurs
of the type contemplated by Section 5(d)(iii) or this Section
5(d)(iv) that is not expressly provided for by such provisions, then
the Borrower’s board of directors shall make an appropriate
adjustment in the Applicable Conversion Price so as to protect the
rights of the Holder of this Note.

     (v) Distributions. If Borrower, at any time while the Notes are
outstanding, shall distribute to all holders of Common Stock
evidences of its indebtedness, assets or rights or warrants to
subscribe for or purchase any security, then in each such case the
Holder hereof shall be entitled, upon conversion of this

 

 

Note
pursuant to its terms, to receive such portion of such assets,
evidence of indebtedness, rights or warrants so distributed as the
Holder would have been entitled to receive if this Note had been
converted at the Applicable Conversion Price in a conversion
pursuant to Section 5 (and without regard for the requirement of a
Change of Control Transaction under Section 5(a) or 5(b)(ii)) as of
the date of distribution of such indebtedness, assets or rights or
warrants. In either case the adjustments shall be described in a
statement provided to the Holder of the portion of assets or
evidences of indebtedness so distributed or such subscription rights
applicable to one share of Common Stock. Such adjustment shall be
made whenever any such distribution is made and shall become
effective as of the record date with respect to such distribution
(or the date of distribution, if there shall be no record date).

     (e) Limitation on Issuance of Conversion Shares. Notwithstanding
anything to the contrary set forth in this Note, upon a conversion
of this Note individually or the Notes in the aggregate, pursuant to
their terms, in no event shall the Borrower be required to issue
Common Stock (or securities convertible into or exercisable for
Common Stock) to the extent that such issuance would be in excess of
19.9% of the Common Stock or voting power of all voting equity
securities of the Borrower then outstanding as of such Conversion
Date, as such matters are governed by Rule 4350(i)(D) of the Rules
of Nasdaq, as amended or replaced from time to time. To the extent
that the conversion of principal and accrued but unpaid interest
hereunder shall have been limited by this Section 5(e), then such
unconverted principal and interest shall remain outstanding under
this Note and interest shall continue to be paid as provided in
Section 2 above, with any remaining principal amount of this Note
being due and payable without the necessity of notice, presentment
or demand on the Maturity Date.

     6. Subordination. (a) The obligations arising under this Note shall
be and hereby are subordinated to the Senior Debt, whether now or hereafter
incurred or owed by the Borrower to the Senior Debt Holders. Notwithstanding the
foregoing or in Section 6(b) hereof, interest may be paid hereunder as and when
due and principal may be paid on the Maturity Date in cash so long as no default
or event of default exists in respect of the Senior Debt would occur as the
result of such payment. The Holder acknowledges and agrees that the obligations
hereunder may not be voluntarily prepaid without the consent of the Senior Debt
Holders. The Holders further acknowledge and agree that the obligations
hereunder may not be paid in cash unless such payment is permitted by the terms
of the Senior Debt Documents.

     (b) Without limiting the generality of the foregoing provisions of
Section 6(a), so long as the Senior Debt shall be outstanding, the obligations
arising under this Note shall be and hereby are subordinated to the full and
final payment in cash of the Senior Debt on the terms and conditions set forth
in this Section 6(b).

     The Borrower may not pay the principal of or cash interest on this Note
if:

     (A) a default in the payment of the principal or interest
on any Senior Debt occurs and is continuing or any
other amount owing in respect of any Senior Debt is
not paid when due (whether at maturity, by
acceleration or otherwise); or

     (B) any other default on Senior Debt occurs and the maturity of such Senior Debt is
accelerated in accordance with its terms;

unless, in either case, the default has been cured or waived and any such
acceleration has been rescinded or such Senior Debt has been satisfied in full;
provided, however, that the Borrower shall pay all amounts outstanding on the
Note without regard to the foregoing if the Borrower receives written notice
approving such payment from the authorized representative of the Senior Debt
with respect to which either of the events set forth in clause (A) or (B) of
this sentence has occurred and is continuing.

     During the continuance of any default (other than a default described
in clause (A) or (B) of the preceding sentence) with respect to any Senior Debt
pursuant to which the maturity thereof may be accelerated immediately, or with
the giving of notice and/or the expiration of any applicable grace periods, the
Borrower may not pay the principal or cash interest on the Note for a period (a
“Payment Blockage Period”) commencing upon the receipt by the Holder (with a
copy to the Borrower) of written notice (a “Blockage Notice”) of such default
from the authorized representative of such Senior Debt specifying an election to
effect a Payment Blockage Period and ending 179 days thereafter (or earlier if
such Payment Blockage Period is terminated:

 

 

     (X) by written notice to the Holder and the Borrower from
the authorized representative of the Senior Debt that
gave such Blockage Notice;

     (Y) by repayment in full in cash or cash equivalents of such Senior Debt; or

     (Z) because the default giving rise to such Blockage Notice is
no longer continuing).

Notwithstanding the provisions described in the immediately preceding sentence
(but subject to the provisions contained in the preceding paragraph and in the
immediately succeeding paragraph), unless the holders of such Senior Debt or the
authorized representative of such holders shall have accelerated the maturity of
such Senior Debt, the Borrower shall resume blocked payments of the Note after
the end of such Payment Blockage Period.

     Not more than three Blockage Notices may be given in any period of 360
consecutive days, irrespective of the number of defaults with respect to Senior
Debt during such period. In no event, however, may the total number of days
during which any Payment Blockage Period or Periods is in effect exceed 179 days
in the aggregate during any period of 360 consecutive days. For the purposes of
this Section 6(b), no default or event of default that existed or was continuing
on the date of commencement of any Payment Blockage Period with respect to
Senior Debt initiating such Payment Blockage Period shall be, or be made, the
basis of the commencement of a subsequent Payment Blockage Period by the
Representative of such Senior Debt, whether or not within a period of 360
consecutive days, unless such default or event of default shall have been cured
or waived for a period of not less than 90 consecutive days.

     (c) The Holder will not take or omit to take any action or assert any
claim with respect to the obligations hereunder or otherwise which is
inconsistent with this Section 6(c). Without limiting the foregoing, so long as
an event of the kind set forth in clause (A) or (B) of Section 6(b) has occurred
and is continuing, the Holder will not assert, collect or enforce the
obligations arising under this Note or any part thereof or take any action to
foreclose or realize upon the obligations arising under this Note or any part
thereof or enforce this Note except to the extent (but only to such extent) that
the commencement of a legal action may be required to toll the running of any
applicable statute of limitation, to defend any challenge to the validity of the
obligations arising under this Note, or to file a proof of claim or to make a
vote in a proceeding described in Section 6(f).

     (d) Until the Senior Debt is satisfied in full, the Holder will hold in
trust and immediately pay over to the Collateral Trustee, for the benefit of the
Senior Debt Holders, in the same form of payment received, with appropriate
endorsements, for application to the Senior Debt any cash amount that the
Borrower pays to the Holder with respect to this Note in contravention of
Section 6(a) or Section 6(b) hereof. Subject to the irrevocable satisfaction in
full of all Senior Debt, the Holder shall, to the extent of all payments or
distributions made to the Collateral Trustee, for the benefit of the Senior Debt
Holders, pursuant to this Section 6 which would otherwise be payable in respect
of this Note, be subrogated to the rights of the Senior Debt Holders to receive
payments or distributions of cash, properties or securities applicable to the
Senior Debt until the principal of and interest on this Note shall be paid in
full. For purposes of such subrogation, no payments or distributions to the
Collateral Trustee, for the benefit of the Senior Debt Holders, of any cash,
property or securities to which the Holder would be entitled except for the
provisions of this Section 6, and no payment over to the Collateral Trustee, for
the benefit of the Senior Debt Holders, pursuant to this Section 6 by the Holder
as between the Borrower, its creditors (other than the Senior Debt Holders) and
the Holder, shall be deemed to be a payment by the Borrower to or on account of
the Senior Debt.

     (e) If the Holder, in contravention of the terms of this Section 6,
shall commence, prosecute or participate in any suit, action or proceeding
against the Borrower, then the Collateral Trustee or the Administrative Agent,
for the benefit of the Senior Debt Holders may intervene and interpose as a
defense or plea the provisions of this Section 6. If the Holder, in
contravention of the terms of this Section 6, shall attempt to collect any
amounts owing under this Note or to enforce this Note, then the Collateral
Trustee or Administrative Agent, for the benefit of the Senior Debt Holders may,
by virtue of this Section 6, restrain the enforcement thereof in the name of the
Collateral Trustee or Administrative Agent, for the benefit of the Senior Debt
Holders. If the Holder, in contravention of the terms of this Section 6, obtains
any cash or other assets of the Borrower as a result of any administrative,
legal or equitable actions, or otherwise, the Holder agrees forthwith to pay,
deliver and assign to the Collateral Trustee or the Administrative Agent, for
the account of the Senior Debt Holders, with appropriate

 

 

endorsements, any such
cash for application to the Senior Debt and any such other assets as collateral
for the Senior Debt.

     (f) At any meeting of creditors of the Borrower or in the event of any
case or proceeding, voluntary or involuntary, for the distribution, division or
application of all or part of the assets of the Borrower or the proceeds
thereof, whether such case or proceeding be for the liquidation, dissolution or
winding up of the Borrower or its business, a receivership, insolvency or
bankruptcy case or proceeding, an assignment for the benefit of creditors or a
proceeding by or against the Borrower for relief under federal Bankruptcy Law or
any other bankruptcy, reorganization or insolvency law or any other law relating
to the relief of debtors, readjustment of indebtedness, reorganization,
arrangement, composition or extension or marshalling of assets or otherwise, the
Collateral Trustee is hereby irrevocably authorized at any such meeting or in
any such proceeding to receive or collect for the benefit of the Senior Debt
Holders any cash or other assets of the Borrower distributed, divided or applied
by way of dividend or payment, or any securities issued on account of any
obligations arising under this Note (other than securities issued upon
conversion of the Note in accordance with Section 5), and apply such cash to or
to hold such other assets or securities as collateral for the Senior Debt, and
to apply to the Senior Debt any cash proceeds of any realization upon such other
assets or securities that the Collateral Trustee in its discretion elects to
effect, until all of the Senior Debt shall have been paid in full in cash,
rendering to the Holder any surplus to which the Holder is then entitled.

     (g) Notwithstanding the foregoing provisions of clause (f), the Holder
shall be entitled to receive and retain any securities of the Borrower or any
other corporation or other entity provided for by a plan of reorganization or
readjustment, the payment of which securities is subordinate, at least to the
extent provided in this Section 6 with respect to this Note, to the payment of
all Senior Debt outstanding at such time.

     (h) At any such meeting of creditors or in the event of any such case
or proceeding, the Holder shall retain the right to vote and otherwise act with
respect to this Note (including, without limitation, the right to vote to accept
or reject any plan of partial or complete liquidation, reorganization,
arrangement, composition or extension), provided that the Holder shall not vote
with respect to any such plan or take any other action in any way so as to
contest (a) the validity of any Senior Debt or any collateral therefor or
guaranties thereof, (b) the relative rights and duties of any Senior Debt
Holders established in any instruments or agreements creating or evidencing any
of the Senior Debt with respect to any of such collateral or guaranties or (c)
the Holder’s obligations and agreements set forth in this Section 6.

     (i) The Senior Debt shall continue to be Senior Debt and entitled to
the benefits of these subordination provisions irrespective of any waiver of any
term of the Senior Debt or any extension or renewal of the Senior Debt.

     (j) The Holder and Borrower will not, at any time, modify any of the
terms of this Section 6 without the prior written consent of the representatives
of all of the Senior Debt outstanding at such time; nor will the Holder sell,
transfer, pledge, assign, hypothecate or otherwise dispose of any or all of this
Note to any person other than a person who agrees in a writing, satisfactory in
form and substance to the Collateral Trustee, to succeed to the rights and to be
bound by all of the obligations of the Holder hereunder; provided, that
notwithstanding any non-compliance with this Section 6(j), any transferee,
purchaser, pledgee or other beneficiary under this Note shall be bound by the
subordination provisions set forth in this Section 6. In the case of any such
disposition by the Holder, the Holder will notify the Collateral Trustee at
least ten (10) days prior to the date of any of such intended disposition.

     (k) Nothing contained in this Section 6 shall impair, as between the
Borrower and the Holder, the obligation of the Borrower to pay to the Holder all
amounts payable in respect of this Note as and when the same shall become due
and payable in accordance with the terms thereof (it being acknowledged by
Holder that certain terms of this Section 6 may impair Borrower’s right and
ability to do so), or prevent the Holder (except as expressly otherwise provided
herein) from exercising all rights, powers and remedies otherwise permitted by
this Note and by applicable law upon a default under this Note, all, however,
subject to the rights of the Senior Debt Holders as set forth in Section 6
hereof. Nothing contained in this Section 6 shall impair the conversion of this
Note in accordance with the terms hereof. The failure of the Borrower to make
any payment with respect to this Note in accordance with its terms by reason of
the operation of Section 6 hereof shall not be construed as preventing the
occurrence of

 

 

an Event of Default under this Note. No provision of this Section
6 shall be deemed to subordinate, to any extent, any claim or right of the
Holder to any claim against the Borrower by any creditor of the Borrower or any
other person except to the extent expressly provided in this Section 6 with
respect to the Senior Debt Holders.

     (l) The provisions of Section 6 hereof shall continue in full force and
effect, and the obligations and agreements of the Holder and the Borrower
hereunder shall continue to be fully operative, until all of the Senior Debt
shall have been paid and satisfied in full and such payment and satisfaction
shall be final and not avoidable. To the extent that the Borrower or any
guarantor of or provider of collateral for the Senior Debt makes any payment on
the Senior Debt that is subsequently invalidated, declared to be fraudulent or
preferential or set aside or is required to be repaid to a trustee, receiver or
any other party under any bankruptcy, insolvency or reorganization act, state or
federal law, common law or equitable cause (such payment being hereinafter
referred to as a “Voided Payment”), then to the extent of such Voided Payment,
that portion of the Senior Debt that had been previously satisfied by such
Voided Payment shall be revived and continue in full force and effect as if such
Voided Payment had never been made. To the extent that the Holder has received
any payments with respect to this Note subsequent to the date of the Collateral
Trustee’s or any Senior Debt Holder’s initial receipt of such Voided Payment and
such payments have not been invalidated, declared to be fraudulent or
preferential or set aside or are required to be repaid to a trustee, receiver,
or any other party under any bankruptcy act, state or federal law, common law or
equitable cause, the Holder shall be obligated and hereby agrees that any such
payment so made or received shall be deemed to have been received in trust for
the benefit of such Senior Debt Holder, and the Holder hereby agrees to pay to
the Collateral Trustee for the benefit of such Senior Debt Holder, upon demand,
the full amount so received by the Holder during such period of time to the
extent necessary fully to restore to such Senior Debt Holder the amount of such
Voided Payment. Upon the payment and satisfaction in full of all of the Senior
Debt, which payment shall be final and not avoidable, the provisions of Section
6 hereof will automatically terminate without any additional action by any party
hereto.

     (m) No right of any Senior Debt Holder to enforce the subordination
provisions of this Note shall be limited in any way by any act or failure to
act, by the Borrower or the Holder, or by any noncompliance by the Borrower with
the terms of this Note, regardless of any knowledge thereof that any such Senior
Debt Holder may have or be otherwise charged with.

     7. Reserved.

     8. Default and Remedies. (a) Any of the following events shall constitute an “Event of Default”:

     (i) Borrower’s failure to pay any principal or accrued interest evidenced by any Note when due in
accordance with the terms of such Note;

     (ii) Borrower’s failure to deliver a New Certificate in accordance with the requirements of
Section 5(d)(i);

     (iii) Borrower’s failure to comply with any other covenant or
obligation arising under the Notes or the Purchase Agreement or in
any other document executed or delivered in connection therewith
(including the accuracy in all material respects of the
representations and warranties made by the Borrower therein) that,
if curable, is not cured or waived within 20 days after the
occurrence of such failure; provided, however, that if the failure
to comply with any such other covenant or obligation cannot by its
nature be cured within the 20-day period or cannot, after diligent
attempts by Borrower, be cured within such 20-day period, and such
default is likely to be cured within a reasonable time, then
Borrower shall have an additional reasonable period (which shall not
in any case exceed an additional 10 days) to attempt to cure such
default, and within such reasonable time period the failure to cure
such default shall not be deemed an Event of Default;

     (iv) Default under the terms of any other indebtedness of
Borrower or any subsidiary of Borrower that is not cured or waived
within any grace period applicable thereto;

     (v) The Borrower shall fail to have reserved and maintained a
sufficient number of authorized shares of Common Stock to issue upon
conversion of all outstanding Notes;

 

 

     (vi) The Common Stock shall fail to be listed or quoted for
trading on any Trading Market for more than 10 consecutive Trading
Days; or

     (vii) The occurrence of any Bankruptcy Event.

     (b) If an Event of Default shall occur and be continuing, the
aggregate principal amount of this Note (together with all accrued
interest thereon and all other amounts payable in connection therewith)
shall become immediately due and payable without any further action on
the part of the Holder, and the Borrower shall, upon receipt of written
request therefore from the Holder of this Note, immediately thereafter
pay to such Holder all amounts due and payable with respect thereto,
subject to the Holder’s right to convert the Note pursuant to Section
5(b)(i).

     (c) Subject to Section 6 hereof, if the Borrower shall fail to
issue and deliver pursuant to Section 5(d) a New Certificate to the
Holder for the number of shares of Common Stock to which the Holder is
entitled upon the conversion of this Note, and if after the date on
which such shares were required to be delivered pursuant to Section 5(d)
but prior to delivery of such shares of Common Stock, the Holder
purchases (in an open market transaction or otherwise) a number of
shares of Common Stock equal to the number of shares subject to the
conversion in order to deliver same in satisfaction of a sale by the
Holder of the number of shares of Common Stock issuable upon such
conversion that the Holder anticipated receiving from the Borrower (a
“Buy-In”), then the Borrower shall, within three (3) business days after
the Holder’s request and provision of trade confirmations, pay cash to
the Holder in an amount equal to the Holder’s total purchase price
(including brokerage commissions and other out-of-pocket expenses, if
any) for the shares of Common Stock so purchased (the “Buy-In Price”),
at which point the Borrower’s obligation to deliver such New Certificate
(and to issue such Common Stock) shall terminate.

     10. Cumulative Rights. In addition to the rights provided under Section 9,
the Holder of this Note shall also have any other rights that such Holder may
have been afforded under any contract or agreement at any time, and any other
rights that such Holder may have pursuant to applicable law. No delay on the
part of the Holder in the exercise of any power or right under this Note or
under any other instrument executed pursuant hereto shall operate as a waiver
thereof, nor shall a single or partial exercise of any power or right preclude
other or further exercise thereof or the exercise of any other power or right.

     11. Waivers. Borrower waives presentment, demand for payment, notice of dishonor, protest and notice of
protest with respect to this Note.

     12. Attorneys’ Fees and Costs. If there is an Event of Default, the Holder
shall be entitled to receive and Borrower agrees to pay all costs of collection
incurred by the Holder, including without limitation, reasonable attorney’s fees
for consultation and suit.

     13. Treatment of Notes. Each Note issued pursuant to the Purchase Agreement
or subsequently issued in replacement thereof shall rank pari passu with each
other Note as to the payment of principal and interest. Further, this Note and
any note subsequently issued in replacement hereof shall rank pari passu or
senior as to the payment of principal and interest with all present and future
indebtedness of the Borrower other than the Senior Debt and other indebtedness
of the Borrower that is secured with any collateral thereof. The Holder agrees
that any payments to the Holders of Notes, whether principal, interest or
otherwise on account of such Notes (other than payments arising in connection
with Events of Default that are not applicable to all Holders or payments made
under Section 12), shall be made pro rata among holders of the Notes based upon
the aggregate unpaid principal amount of the Notes.

     14. Certain Definitions. For purposes of this Note, the following terms shall have the indicated
meanings:

     "Administrative Agent” means the Royal Bank of
placecountry-regionCanada, acting in its capacity as Administrative Agent for
the Senior Term Lenders and General Electric Capital Corporation, as
administrative agent for the Senior Revolving Lenders.

 

 

     "Applicable Interest Rate” means (a) prior to the Reset
Date, six percent (6.0%) per annum, and (b) commencing as of the
Reset Date, nine percent (9.0%) per annum retroactively applied to
the Original Issue Date.

     "Applicable Conversion Price” means (a) prior to the Reset
Date, $20.00 (subject to adjustment as provided in Section
5(d)(iii)), and (b) commencing as of the Reset Date, the dollar
amount calculated by multiplying the average closing price of a
share of Common Stock over the five (5) Trading Day period ending
on the Trading Day prior to the Reset Date as reported by the
applicable Trading Market by 0.85 (provided that the product shall
not be greater than $20.00 (the “Maximum Conversion Price”) nor
less than $15.00 (the “Minimum Conversion Price”), as adjusted by
Section 5(d)(iii)).

     "Bankruptcy Event” means any of the following events: (a)
Borrower or any Significant Subsidiary (as such term is defined in
Rule 1.02(s) of Regulation S-X of the Securities and Exchange
Commission) thereof commences a case or other proceeding under any
bankruptcy, reorganization, arrangement, adjustment of debt, relief
of debtors, dissolution, insolvency or liquidation or similar law
of any jurisdiction relating to Borrower or any Significant
Subsidiary thereof; (b) there is commenced against Borrower or any
Significant Subsidiary thereof any such case or proceeding that is
not dismissed within 60 days after commencement; (c) Borrower or
any Significant Subsidiary thereof is adjudicated insolvent or
bankrupt or any order of relief or other order approving any such
case or proceeding is entered; (d) Borrower or any Significant
Subsidiary thereof suffers any appointment of any custodian or the
like for it or any substantial part of its property that is not
discharged or stayed within 60 days; (e) Borrower or any
Significant Subsidiary thereof makes a general assignment for the
benefit of creditors; (f) Borrower or any Significant Subsidiary
thereof calls a meeting of its creditors with a view to arranging a
composition, adjustment or restructuring of its debts; or (g)
Borrower or any Significant Subsidiary thereof, by any act or
failure to act, expressly indicates its consent to, approval of or
acquiescence in any of the foregoing or takes any corporate or
other action for the purpose of effecting any of the foregoing.

     "Bankruptcy Law” means Title 11, United States Code, or any
similar federal or state law for the relief of debtors.

     "Change of Control Transaction” means (i) any sale, lease,
exchange or other transfer (in one transaction or a series of
related transactions) of all or substantially all of the assets of
the Borrower (including, for the avoidance of doubt, the sale of
all or substantially all of the assets of the Borrower’s
subsidiaries in the aggregate) to any person or group of related
persons (as defined in Section 13(d) of the Securities Exchange Act
of 1934, as amended (the “1934 Act”, (ii) the approval by the
holders of the Borrower’s capital stock of any plan or proposal to
effect the liquidation, dissolution or winding up of the Borrower,
(iii) any person or group of related persons shall become the
beneficial owner (as defined in Rule 13d-3 under the 1934 Act) of
the outstanding Common Stock representing more than 50% of the
aggregate voting power of all classes of the voting securities of
the Borrower or (iv) the consolidation, merger or other business
combination of the Borrower with or into another person (other than
(A) a consolidation, merger or other business combination in which
holders of the Borrower’s voting power immediately prior to the
transaction continue after the transaction to hold, directly or
indirectly, a majority of the combined voting power of the
surviving entity or entities entitled to vote generally for the
election of a majority of the members of the board of directors (or
their equivalent if other than a corporation) of such entity or
entities, or (B) pursuant to a migratory merger effected solely for
the purpose of changing the jurisdiction of incorporation of the
Borrower). For the avoidance of any doubt, consummation of the
Esmark Transaction shall be deemed to constitute a “Change of
Control Transaction” for which the consideration paid with respect
to Borrower’s Common Stock exceeds the Applicable Conversion Price.

     "Collateral Trustee” shall mean Wilmington Trust Company,
acting in its capacity as Collateral Trustee for the Senior Debt
Holders, pursuant to the terms of the Security Documents, or its
successor appointed in accordance with the terms thereof.

     "Conversion Shares” means, collectively, the shares of
Common Stock into which the Notes are convertible in accordance
with the terms hereof.

 

 

     "Esmark Transaction” means the transactions contemplated by
any Agreement and Plan of Merger and Combination (or
similarly-titled document) entered into now or hereafter by and
among the Borrower, Esmark Incorporated and the other parties
thereto, as such may be amended from time to time, or any similar
transaction among the Borrower and Esmark Incorporated.

     "Fundamental Transaction” means the occurrence after the
Original Issue Date of (a) any merger or consolidation of Borrower
with or into another Person in which the stockholders of Borrower
immediately prior to such transaction hold securities of the
surviving entity representing less than a majority of the surviving
entity’s combined voting power, (b) any sale of all or
substantially all of Borrower’s assets in one or a series of
related transactions, or (c) any share exchange pursuant to which
the Common Stock is effectively converted into or exchanged for
securities, cash or property of another entity.

     "Original Issue Date” shall mean March   , 2007.

     "Required Holders” means Holders of Notes constituting not
less than 50% of the aggregate principal amount under all Notes
then outstanding.

     "Reset Date” means January 1, 2008, subject to possible
postponement as provided in Section 22 below.

     "Senior Debt” shall mean all principal, interest, fees,
costs, enforcement expenses (including legal fees and
disbursements), collateral protection expenses and other
reimbursement or indemnity obligations created or evidenced by the
Senior Debt Documents, or any prior, concurrent, or subsequent
notes, instruments or agreements of indebtedness, liabilities or
obligations of any type or form whatsoever relating thereto in
favor of any of the Senior Debt Holders. Senior Debt shall
expressly include any and all interest accruing or out of pocket
costs or expenses incurred by a Senior Debt Holder after the date
of any filing by or against the Borrower of any petition under the
federal Bankruptcy Law or any other bankruptcy, insolvency or
reorganization act regardless of whether any Senior Debt Holder’s
claim therefor is allowed or allowable in the case or proceeding
relating thereto.

     "Senior Debt Documents” means (i) The Amended and Restated
Revolving Credit Agreement, dated as of July 8, 2005, among the
Company, the lenders party thereto (the “Senior Revolving Lenders")
and General Electric Capital Corporation, as administrative agent
for such lenders, as the same may be amended, supplemented or
otherwise modified, including any refinancing, refunding,
replacement or extension thereof and whether by the same or any
other lender or groups of lenders, and (ii) Term Loan Agreement,
dated as of July 31, 2003, among the Company, the lenders party
thereto (the “Senior Term Lenders") and The Royal Bank of Canada,
as administrative agent for such lenders, as the same may be
amended, supplemented or otherwise modified, including any
refinancing, refunding, replacement or extension thereof and
whether by the same or any other lender or groups of lenders;
provided, however, that no such amendment, modification,
refinancing, refunding, replacement or extension of any of the
foregoing shall increase the principal amount outstanding
(including without duplication the costs associated with such
amendment, modification, refinancing, refunding, replacement or
extension) thereof, and (iii) all documents, instruments,
guarantees, evidences of indebtedness and collateral and security
agreements, pledges, mortgages delivered in connection therewith,
including, without limitation the guarantees of the Emergency Steel
Loan Guarantee Board (the “Federal Guarantor") and the West
Virginia Housing Development Fund (the “State Guarantor").

     "Senior Debt Holders” shall mean, collectively, the Senior
Revolving Lenders, the Senior Term Lenders, the Federal Guarantor
and the State Guarantor.

     "Trading Day” shall mean any day during which the Trading
Market shall be open for business.

     "Trading Market” means the following markets or exchanges
on which the Common Stock is listed or quoted for trading on the
date in question: the American Stock Exchange, the New
York Stock

 

 

Exchange, the Nasdaq Capital Market, the Nasdaq Global
Market, the Nasdaq Global Select Market or the OTC Bulletin Board.

     15. Amendment. No amendment or other modification of this Note shall be
effective unless such amendment or modification is in writing and signed by
Borrower and the Holder; provided, however, that (x) any such amendment or
modification signed by Borrower and the Holder shall be binding on all future
holders of this Note, and (y) any such amendment or modification that (i)
accelerates any scheduled payment or required prepayment date or accelerates the
maturity date of this Note, (ii) increases the principal or interest rate or any
premium on this Note, (iii) decreases the Conversion Price applicable to this
Note, or (iv) amends the provisions of Section 13 or this Section 15 shall
require the prior consent of the Required Holders.

     16. Governing Law. This Note shall be governed by and construed in accordance with the laws of the State
of Delaware, excluding conflict of law principles that would cause the application of laws of any other
jurisdiction.

     17. Usury. All agreements between Borrower and the Holder, whether now
existing or hereafter arising and whether written or oral, are expressly limited
so that in no contingency or event whatsoever, whether by acceleration of the
maturity of this Note or otherwise, shall the amount paid, or agreed to be paid,
to the Holder for the use, forbearance or detention of the money to be loaned
hereunder or otherwise, exceed the maximum amount permissible under applicable
law. If, from any circumstances whatsoever, fulfillment of any provision of this
Note, at the time performance of such provision shall be due, shall involve
transcending the limit of validity prescribed by law, then ipso facto, the
obligation to be fulfilled shall be reduced to the limit of such validity, and
if from any such circumstances the Holder shall ever receive anything of value
as interest or deemed interest by applicable law under this Note an amount that
would exceed the highest lawful rate, such amount that would be excessive
interest shall be applied to the reduction of the principal amount owing under
this Note or on account of any other indebtedness of Borrower to the Holder
relating to this Note, and not to the payment of interest, or if such excessive
interest exceeds the unpaid balance of principal of this Note, such excess shall
be refunded to Borrower. In determining whether or not the interest paid or
payable with respect to any indebtedness of Borrower to the Holder, under any
specific contingency, exceeds the highest lawful rate, Borrower and the Holder
shall, to the maximum extent permitted by applicable law, (i) characterize any
non-principal payment as an expense, fee or premium rather than as interest,
(ii) amortize, prorate, allocate and spread the total amount of interest
throughout the full term of such indebtedness so that the actual rate of
interest on account of such indebtedness is uniform throughout the term thereof,
and/or (iii) allocate interest between portions of such indebtedness, to the end
that no such portion shall bear interest at a rate greater than that permitted
by law. The terms and provisions of this Section shall control and supersede
every other conflicting provision of all agreements between Borrower and the
Holder.

     18. Notices. All notices and other communications (including payment)
hereunder shall be in writing or by telecopy, and shall be deemed to have been
duly made when delivered in person or sent by telecopy, same day or overnight
courier, or 72 hours after having been deposited in the United States first
class or registered or certified mail return receipt requested, postage prepaid.
Notices shall be sent:

If to the initial Holder:

[                         ]

If to Borrower:

Wheeling-Pittsburgh Corporation

1134 Market Street

Wheeling, WV 26003

Attention: Chief Financial Officer

Facsimile: (304) 234-2261

 

 

     19. Successors and Assigns. Borrower shall not assign or delegate its
obligations hereunder without the prior written consent of the Required Holders.
The Holder may assign its rights hereunder to any Affiliate (as that term is
defined in the Securities Act) or to any other person, subject in either case to
applicable securities laws. The provisions of this Note shall be binding upon
and shall inure to the benefit of any successors or assigns; provided, however,
that any successor to Borrower or any surviving entity in a Fundamental
Transaction shall (i) be deemed to have assumed all of the obligations of
Borrower under this Note and the Purchase Agreement, and (ii) to issue to the
Holder a new note of such successor entity evidenced by a written instrument
substantially similar in form and substance to this Note, including, without
limitation, having a principal amount and interest rate equal to the principal
amounts and the interest rates of this Note and having similar ranking to this
Note, and satisfactory to the Required Holders (any such approval not to be
unreasonably withheld or delayed). The provisions of this Section 19 shall apply
similarly and equally to successive Fundamental Transactions and shall be
applied without regard to any limitations of this Note.

     20. Severability. In the event any one or more of the provisions contained in
this Note shall for any reason be held to be invalid, illegal or unenforceable
in any respect, such invalidity, illegality or unenforceability shall not affect
any other provision hereof, and this Note shall be construed as if such invalid,
illegal or unenforceable provision had never been contained herein.

     21. Business Days. If any payment of principal or interest on this Note shall
become due on a Saturday, Sunday, or a public holiday under the laws of the
State of West Virginia, such payment shall be made on the next succeeding
business day and such extension of time shall be included in computing interest
in connection with such payment.

     22. Postponement of Reset Date. If there shall have occurred, or there is
expected to occur, an Esmark Registration Delay (as defined below), the Borrower
shall provide written notice of such Esmark Registration Delay to the Holders no
later than December 1, 2007, and the parties hereby agree that they shall
mutually and reasonably discuss an appropriate postponement of the Reset Date to
a date upon which the Esmark Transaction is reasonably expected to occur;
provided, that any such postponement shall require the written consent of the
Required Holders, which shall not be unreasonably withheld, and provided,
further, that no such postponement shall extend the Reset Date to a date later
than March 1, 2008. An “Esmark Registration Delay” shall mean that: (a) the
Esmark Transaction has not occurred by January 1, 2008; (b) the Borrower and
Esmark Incorporated have delivered written notice to the Holders of the Notes
attesting the continued effectiveness of an agreement or agreements, the
consummation of which pursuant to its or their terms, would result in
consummation of the Esmark Transaction; (c) the Borrower has provided written
assurance, reasonably satisfactory to the Holders, that it has not received any
inquiries or proposals relating to, or entered into any negotiations with
respect to, and that there has otherwise been no proposal made to the Borrower
or its stockholders, by public announcement, written communication or otherwise,
for a Change of Control Transaction other than the Esmark Transaction; and (d)
the sole reason that the Esmark Transaction shall not have been consummated by
January 1, 2008, pursuant to its terms, is the failure of any registration
statement relating to the Esmark Transaction to have become effective, in each
case where (i) the Borrower is not reasonably able to obtain the effectiveness
of the registration statement in sufficient time to permit the consummation of
the Esmark Transaction prior to January 1, 2008, and (ii) the failure of the
registration statement to become effective is not the result of any act or
failure to act by the Borrower.

[Signature Page Follows]

 

 

IN WITNESS WHEREOF, the undersigned has executed this Note numbered 2007-___on
and as of the date first above written.

	 	 	 	 	 
	 	WHEELING-PITTSBURGH CORPORATION

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	
 

 

 
	 
	 

 

ANNEX A

NOTICE OF CONVERSION

     The undersigned hereby elects to convert the dollar amount of the
Subordinated Convertible Note indicated below into shares of common stock, no
par value per share (the “Common Stock”), of Wheeling-Pittsburgh Corporation, a
Delaware corporation (the “Borrower”), according to the conditions hereof and
under Section 5(b)(i), as of the Date to Effect Conversion specified below. If
shares are to be issued in the name of a person other than undersigned, the
undersigned will pay all transfer taxes payable with respect thereto and is
delivering herewith such certificates and opinions as reasonably requested by
the Borrower in accordance therewith. No fee will be charged to the Holder for
any conversion, except for such transfer taxes, if any.

     Additionally, the undersigned holder hereby tenders to the Borrower the original Note numbered 2007-     herewith.

Conversion calculations:

Date to Effect Conversion:

                                                                           
     

Principal amount of Note to be Converted

                                                                           
     

Accrued Interest to be Converted

                                                                           
     

Number of shares of Common Stock to be Issued

                                                                           
     

Applicable Conversion Price

                                                                           
     

	 	 	 	 	 
	 	[HOLDER]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00119-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00119-of-00352.parquet"}]]