Document:

Exhibit 4(a)

 

 

CREDIT AGREEMENT

 

dated as of

 

November 30, 2001

 

among

 

UNITED STATES STEEL LLC

 

THE LENDERS PARTY HERETO

 

THE LC ISSUING BANKS PARTY HERETO

 

JPMORGAN CHASE BANK,

as Administrative Agent, Collateral Agent and
Swingline Lender

 

GENERAL ELECTRIC CAPITAL CORPORATION,

as Documentation Agent and Co-Collateral
Agent

 

and

 

PNC BANK, NATIONAL ASSOCIATION and

FOOTHILL CAPITAL CORPORATION,

as Co-Syndication Agents

 

 

J.P. MORGAN SECURITIES INC.,

as Lead Arranger and Bookrunner

 

 

 

TABLE
OF CONTENTS

 

	
  Article 1

  
	
  DEFINITIONS

  
	
   

  
	
  Section
  1.01.  Defined Terms

  
	
  Section
  1.02.  Classification of Loans and
  Borrowings

  
	
  Section
  1.03.  Terms Generally

  
	
  Section
  1.04.  Accounting Terms; Changes in GAAP

  
	
   

  
	
  Article 2

  
	
  THE CREDITS

  
	
   

  
	
  Section
  2.01.  Commitments

  
	
  Section
  2.02.  Revolving Loans

  
	
  Section
  2.03.  Requests to Borrow Revolving Loans

  
	
  Section
  2.04.  Swingline Loans

  
	
  Section
  2.05.  Letters of Credit

  
	
  Section
  2.06.  Funding of Revolving Loans

  
	
  Section
  2.07.  Interest Elections

  
	
  Section
  2.08.  Termination or Reduction of
  Commitments

  
	
  Section
  2.09.  Payment at Maturity; Evidence of Debt

  
	
  Section
  2.10.  Optional and Mandatory Prepayments

  
	
  Section
  2.11.  Change in Control

  
	
  Section
  2.12.  Fees

  
	
  Section
  2.13.  Interest

  
	
  Section
  2.14.  Alternate Rate of Interest

  
	
  Section
  2.15.  Increased Costs

  
	
  Section
  2.16.  Break Funding Payments

  
	
  Section
  2.17.  Taxes

  
	
  Section
  2.18.  Payments Generally; Pro Rata
  Treatment; Sharing of Set-offs

  
	
  Section
  2.19.  Lender’s Obligation to Mitigate;
  Replacement of Lenders

  
	
  Section
  2.20.  Optional Increase in Commitments

  
	
   

  
	
  Article 3

  
	
  REPRESENTATIONS
  AND WARRANTIES

  
	
   

  
	
  Section
  3.01.  Organization; Powers

  
	
  Section
  3.02.  Authorization; Enforceability

  
	
  Section
  3.03.  Governmental Approvals; No Conflicts

  
	
  Section
  3.04.  Financial Statements; No Material
  Adverse Change

  
	
  Section
  3.05.  Security Documents

  
	
  Section
  3.06.  Borrower’s Subsidiaries

  

 

2

 

	
  Section
  3.07.  Litigation and Environmental Matters

  
	
  Section
  3.08.  Compliance with Laws and Agreements

  
	
  Section
  3.09.  Investment and Holding Company Status

  
	
  Section
  3.10.  ERISA

  
	
  Section
  3.11.  Regulation U

  
	
  Section
  3.12.  Disclosure

  
	
  Section
  3.13.  Senior Debt

  
	
  Section
  3.14.  Processing of Receivables

  
	
  Section
  3.15.  Senior Unsecured Debt Documents

  
	
  Section
  3.16.  Solvency

  
	
   

  
	
  Article 4

  
	
  CONDITIONS

  
	
   

  
	
  Section
  4.01.  Effective Date

  
	
  Section
  4.02.  Conditions to Initial Utilization

  
	
  Section
  4.03.  Conditions to Each Utilization

  
	
   

  
	
  Article 5

  
	
  AFFIRMATIVE COVENANTS

  
	
   

  
	
  Section
  5.01.  Financial Statements and Other
  Information

  
	
  Section
  5.02.  Notice of Material Events

  
	
  Section
  5.03.  Information Regarding Collateral

  
	
  Section
  5.04.  Existence; Conduct of Business

  
	
  Section
  5.05.  Payment of Obligations

  
	
  Section
  5.06.  Maintenance of Properties

  
	
  Section
  5.07.  Insurance

  
	
  Section
  5.08.  Casualty and Condemnation

  
	
  Section
  5.09.  Proper Records; Rights to Inspect and
  Appraise

  
	
  Section
  5.10.  Compliance with Laws

  
	
  Section
  5.11.  Use of Proceeds and Letters of Credit

  
	
  Section
  5.12.  Further Assurances

  
	
  Section
  5.13.  Amendments to Effective Date
  Receivables Financing

  
	
  Section
  5.14.  Designation of Subsidiaries

  
	
   

  
	
  Article 6

  
	
  NEGATIVE COVENANTS

  
	
   

  
	
  Section
  6.01.  Debt; Certain Equity Securities

  
	
  Section
  6.02.  Liens

  
	
  Section
  6.03.  Fundamental Changes

  
	
  Section
  6.04.  Investments, Loans, Advances,
  Guarantees and Acquisitions

  
	
  Section
  6.05.  Asset Sales

  
	
  Section
  6.06.  Subsidiary Debt

  

 

3

 

	
  Section
  6.07.  Sale and Leaseback Transactions

  
	
  Section
  6.08.  Restricted Payments

  
	
  Section
  6.09.  Transactions with Affiliates

  
	
  Section
  6.10.  Restrictive Agreements

  
	
  Section
  6.11.  Designation of Unrestricted
  Subsidiaries

  
	
  Section
  6.12.  Capital Expenditures

  
	
  Section
  6.13.  Interest Expense Coverage Ratio

  
	
  Section
  6.14.  Leverage Ratio

  
	
  Section
  6.15.  Periods of Less Than Four Fiscal
  Quarters

  
	
  Section
  6.16.  Hedging Agreements

  
	
  Section
  6.17.  Environmental Matters

  
	
  Section
  6.18.  Amendment of Material Documents

  
	
   

  
	
  Article 7

  
	
  EVENTS OF DEFAULT

  
	
   

  
	
  Article 8

  
	
  THE AGENTS

  
	
   

  
	
  Section
  8.01.  Appointment and Authorization

  
	
  Section
  8.02.  Rights and Powers as a Lender

  
	
  Section 8.03.  Limited Duties and Responsibilities

  
	
  Section 8.04.  Authority to Rely on Certain Writings, Statements
  and Advice

  
	
  Section 8.05.  Sub-Agents and Related Parties

  
	
  Section 8.06.  Resignation; Successor Agents

  
	
  Section 8.07.  Credit Decisions by Lenders

  
	
  Section 8.08.  Agents’ Fees

  
	
  Section 8.09.  Documentation Agent and Co-Collateral Agent

  
	
   

  
	
  Article 9

  
	
  MISCELLANEOUS

  
	
   

  
	
  Section 9.01.  Notices

  
	
  Section 9.02.  Waivers; Amendments

  
	
  Section 9.03.  Expenses; Indemnity; Damage Waiver

  
	
  Section 9.04.  Successors and Assigns

  
	
  Section 9.05.  Designated Lenders

  
	
  Section 9.06.  Survival

  
	
  Section 9.07.  Counterparts; Integration; Effectiveness

  
	
  Section 9.08.  Severability

  
	
  Section 9.09.  Right of Setoff

  
	
  Section 9.10.  Governing Law; Jurisdiction; Consent to Service of
  Process

  
	
  Section 9.11.  WAIVER OF JURY TRIAL

  
	
  Section 9.12.  Headings

  

 

4

 

	
  Section 9.13.  Confidentiality

  
	
  Section 9.14.  Interest Rate Limitation

  

 

 

5

 

CREDIT AGREEMENT dated as of November 30, 2001 among UNITED STATES
STEEL LLC, the LENDERS party hereto, the LC ISSUING BANKS party hereto,
JPMORGAN CHASE BANK, as Administrative Agent, Collateral Agent and Swingline
Lender, and GENERAL ELECTRIC CAPITAL CORPORATION, as Documentation Agent and
Co-Collateral Agent.

 

WHEREAS, the Borrower desires to borrow funds and obtain letters of
credit under this Agreement for general corporate purposes, including working
capital;

 

WHEREAS, the Borrower is willing to secure (i) its obligations under
this Agreement and (ii) certain other obligations under interest rate hedging
arrangements and other arrangements entered into with certain Lenders, by
granting Liens on certain of its assets to the Collateral Agent as provided in
the Security Documents; and

 

WHEREAS, the Lenders and the LC Issuing Banks are willing to make loans
or issue or participate in letters of credit hereunder, and those Lenders who
are counterparties to the interest rate hedging arrangements and other
arrangements referred to above are willing to enter into or maintain them,
under the terms and conditions set forth in this Agreement and the Security
Documents;

 

NOW, THEREFORE, the parties hereto agree as follows:

 

ARTICLE 1

DEFINITIONS

 

Section 1.01.  Defined Terms.  As
used in this Agreement, the following terms have the meanings specified below:

 

“Adjusted LIBO Rate”
means, with respect to any Eurodollar Borrowing for any Interest Period, an
interest rate per annum (rounded upwards, if necessary, to the next 1/16 of 1%)
equal to (a) the LIBO Rate for such Interest Period multiplied by
(b) the Statutory Reserve Adjustment.

 

“Administrative Agent”
means JPMorgan Chase Bank, in its capacity as administrative agent under the
Loan Documents, and its successors in such capacity.

 

“Administrative Questionnaire”
means an Administrative Questionnaire in a form supplied by the Administrative
Agent.

 

“Affiliate” means, with
respect to a specified Person, another Person that  directly, or indirectly through one or more intermediaries,
Controls, or is Controlled by or under common Control with such specified
Person.

 

6

 

“Agents” means the
Administrative Agent, the Documentation Agent, the Collateral Agent and the
Co-Collateral Agent.

 

“Alternate Base Rate”
means, for any day, a rate per annum equal to the greater of (a) the Prime
Rate in effect on such day and (b) the Federal Funds Effective Rate in
effect on such day plus 1/2
of 1%.  Any change in the Alternate Base
Rate due to a change in the Prime Rate or the Federal Funds Effective Rate will
be effective from and including the effective date of such change in the Prime
Rate or the Federal Funds Effective Rate, respectively.

 

“Applicable Rate” means
for any day:

 

(a)                                  with
respect to any Revolving Loan or Swingline Loan that is a Base Rate Loan, the
applicable rate per annum set forth in the Pricing Schedule in the row opposite
the caption “Base Rate Margin” and in the column corresponding to the “Pricing
Level” that applies for such day;

 

(b)                                 with
respect to any Revolving Loan that is a Eurodollar Loan, the applicable rate
per annum set forth in the Pricing Schedule in the row opposite the caption
“Euro-Dollar Margin” and in the column corresponding to the “Pricing Level”
that applies for such day;

 

(c)                                  with
respect to the commitment fees payable hereunder, the applicable rate per annum
set forth in the Pricing Schedule in the row opposite the caption “Commitment
Fee Rate” and in the column corresponding to the “Pricing Level” that applies
for such day;

 

In each case,  the
“Applicable Rate” will be based on the Senior Debt Rating as of the most recent
determination date; provided
that:

 

(i)                                     on the Effective
Date,  the “Applicable Rates” for
purposes of clauses (a), (b)and (c) above will be the applicable rates per
annum set forth in the Pricing Schedule and corresponding to Level III Pricing;

 

(ii)                                  at any time when an
Event of Default has occurred and is continuing, such Applicable Rates will be
those set forth in the Pricing Schedule and corresponding to the Pricing Level
in effect for such day plus 2.00%; and

 

(iii)                               at the option of the
Administrative Agent (or at the request of the Required Lenders), if the
Borrower fails to deliver consolidated financial statements to the
Administrative Agent as and when required by Section 5.01(a)(i) or
Section 5.01(a)(ii), such Applicable Rates will be those set forth in the
Pricing Schedule and corresponding to Level V Pricing during the period from
the expiration of the time specified for such delivery until such financial
statements are so delivered.

 

7

 

“Arranger” means J.P.
Morgan Securities Inc., in its capacity as arranger of the credit facility
provided under this Agreement.

 

“Assignment” means an
assignment and assumption agreement entered into by a Lender and an assignee
(with the consent of any party whose consent is required by Section 9.04),
and accepted by the Administrative Agent, in the form of Exhibit A or any
other form approved by the Administrative Agent.

 

“Availability Block” means
(i) at all times prior to the date on which the Borrower has delivered to the
Administrative Agent the financial statements required pursuant to
Section 5.01(a)(ii) relating to the Fiscal Quarter ending September 30,
2002 (the “Specified Financial Delivery Date”),
an amount equal to the sum of (x) an amount equal to 25% of the aggregate
amount of the Commitments plus (y) the aggregate amount of Total Spin-Off
Proceeds that have not been applied in accordance with Section 6.04 to
permanently reduce Debt of the Borrower and (ii) at all times from and after such
Specified Financial Delivery Date, an amount equal to zero.

 

“Availability Reserves”
means, as of any date of determination, such reserves in amounts as the
Collateral Agent may from time to time establish (upon ten business days’
notice to the Borrower in the case of new reserve categories established after
the Effective Date and formula changes) and revise (upward or downward) in good
faith in accordance with its customary credit policies: (i) to reflect events,
conditions, contingencies or risks which, as reasonably determined by the
Collateral Agent, do or are reasonably likely to materially adversely affect
either (a) the Collateral or its value or (b) the security interests and other
rights of the Collateral Agent or any Lender in the Collateral (including the
enforceability, perfection and priority thereof) or (ii) to reflect the
Collateral Agent’s reasonable belief that any collateral report or financial
information furnished by or on behalf of the Borrower is or may have been
incomplete, inaccurate or misleading in any material respect or (iii) in
respect of any state of facts which the Collateral Agent reasonably determines
in good faith constitutes a Default or an Event of Default; provided that, at
any date of determination (unless and until otherwise determined by the
Collateral Agent), “Availability  Reserves” shall include (a) a reserve equal
to two times the most current month-end liability to Outside Processor,
Third-Party Warehouseman and Borrower Joint Venture locations holding Eligible
Inventory, (b) a reserve for obligations secured by Liens on Collateral for
which UCC financing statements are filed, (c) a reserve for permitted Liens and
(d) a reserve for claims secured by purchase money liens.

 

“Available Inventory”
means, at any time the sum of:

 

(a)                                  the lesser of (i) 65%
of Eligible Finished Goods Inventory and (ii) the product of (x) 85% of the net
recovery rates as determined by 

 

8

 

an independent appraisal multiplied by (y) Eligible Finished Goods
Inventory; plus

 

(b)                                 the lesser of (i) 60%
of Eligible Semi-Finished Goods and Scrap Inventory and (ii) the product of (x)
85% of the net recovery rates as determined by an independent appraisal
multiplied by (y) Eligible Semi-Finished Goods and Scrap Inventory; plus

 

(c)                                  the lesser of (i) 25%
of Eligible Raw Materials Inventory and (ii) the product of (x) 85% of the net
recovery rates as determined by an independent appraisal multiplied by (y)
Eligible Raw Materials Inventory.

 

“Available Receivables”
means, at any time, a percentage (not to exceed 85%) of the difference of (i)
Eligible  Receivables minus (ii) a
Dilution Reserve, such percentage and such Dilution Reserve to be determined by
the Collateral Agent in its sole discretion (taking into consideration actual
dilution) upon the completion of collateral review field work to be performed
subsequent to the termination of the Effective Date Receivables Financing.

 

“Base Rate”, when used
with respect to any Loan or Borrowing, refers to whether such Loan, or the
Loans comprising such Borrowing, are bearing interest at a rate determined by
reference to the Alternate Base Rate.

 

“Board of Directors”
means, the Board of Directors of the Borrower or any committee thereof duly
authorized to act on behalf of such Board of Directors.

 

“Borrower” means United
States Steel LLC, a Delaware limited liability company, and its successors
(including United States Steel Corporation upon consummation of the
reorganization of United States Steel LLC in corporate form under such name).

 

“Borrower Joint Venture”
means any joint venture in which the Borrower holds, or acquires after the
Effective Date, a direct or indirect equity interest.

 

“Borrowing” means Loans of
the same Interest Type made, converted or continued on the same day and, in the
case of Eurodollar Loans, as to which the same Interest Period is in
effect.  The term “Borrowing” does not
apply to a Swingline Loan.

 

“Borrowing Base” means, at
any time, subject to adjustment as provided in Section 5.09(b), an amount
equal to the sum of (i) Available Inventory less
(ii) Availability Reserves less
(iii) the aggregate outstanding amount (calculated as the Mark-to-Market Value)
of the Derivative Obligations of the Borrower that 

 

9

 

constitute Secured Derivative Obligations (as defined in the Security
Agreement), up to a maximum amount of $25,000,000 plus (iv) Available Receivables if the Effective Date
Receivables Financing shall have terminated (and the obligations in respect
thereof paid in full) and not been replaced with another Receivables Financing
on terms (other than terms relating to pricing or reserve percentages or
similar financial terms) satisfactory to the Administrative Agent (it being
understood that such Available Receivables shall exclude all Receivables that
have become Transferred Receivables (as defined in the Security Agreement) at
the time of, or prior to, such termination of the Effective Date Receivables
Financing).  Standards of eligibility
and reserves and advance rates of the Borrowing Base may be revised and
adjusted from time to time by the Collateral Agent in its sole discretion
(subject to Section 9.02(b)(viii) hereof), with any such changes in such
standards to be effective three Business Days after delivery of notice thereof
to the Borrower.

 

“Borrowing Base Certificate”
means a certificate, duly executed and certified as accurate and complete by a
Financial Officer of the Borrower, appropriately completed and substantially in
the form of Exhibit D-1 (or, at any time when such certificate is required to
be delivered on a bi-weekly basis pursuant to Section 5.01(b),
substantially in the form of Exhibit D-2) together with all attachments and
supporting documentation (i) as contemplated thereby, (ii) as outlined on
Schedule 1 to Exhibit D-1 and (iii) as reasonably requested by the Collateral
Agent.

 

“Borrowing Request” means
a request by the Borrower for a Borrowing in accordance with Section 2.03.

 

“Business Day” means any
day that is not a Saturday, Sunday or other day on which commercial banks in
New York City are authorized or required by law to remain closed; provided that, when used in connection
with a Eurodollar Loan, the term “Business Day” shall also exclude any day on
which banks are not open for dealings in dollar deposits in the London
interbank market.

 

“Capital Expenditures”
means, for any period, the additions to property, plant and equipment and other
capital expenditures of the Borrower and its Restricted Subsidiaries that are
(or would be) set forth as capital expenditures in a consolidated statement of
cash flows of the Borrower and its Restricted Subsidiaries for such period
prepared in accordance with GAAP

 

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

 

10

 

“Cash Collateral Account”
has the meaning specified in Section 1 of the Security Agreement.

 

“Change in Control” means
the occurrence of any of the following:

 

(a)                                  any “person” (as such
term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the
“beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act,
except that for the purposes of this clause (a) such person shall be deemed to
have “beneficial ownership” of all shares that any such person has the right to
acquire, whether such right is exercisable immediately or only after the
passage of time), directly or indirectly, of more than 35% of either the
aggregate ordinary voting power or the aggregate equity value represented by
the issued and outstanding Equity Interests in the Borrower;

 

(b)                                 individuals who
constituted the Board of Directors of the Borrower at any given time (together
with any new directors whose election by such Board of Directors or whose
nomination for election by the shareholders of the Borrower as approved by a
vote of 66-2/3 % of the
directors of the Borrower then still in office who were either directors at
such time or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the Board of
Directors then in office;

 

(c)                                  the adoption of a plan
relating to the liquidation or dissolution of the Borrower; or

 

(d)                                 the merger or
consolidation of the Borrower with or into another Person or the merger of
another Person with or into the Borrower, or the sale of all or substantially
all the assets of the Borrower (determined on a consolidated basis) to another
Person, other than a merger or consolidation transaction in which holders of
Equity Interests representing 100% of the ordinary voting power represented by
the Equity Interests in the Borrower immediately prior to such transaction (or
other securities into which such securities are converted as part of such
merger or consolidation transaction) own directly or indirectly at least a
majority of the ordinary voting power represented by the Equity Interests in
the surviving Person in such merger or consolidation transaction issued and
outstanding immediately after such transaction and in substantially the same
proportion as before the transaction.

 

“Change in Law” means (a)
the adoption of any law, rule or regulation after the date of this Agreement,
(b) any change in any law, rule or regulation or in the interpretation or
application thereof by any Governmental Authority after such date or (c)
compliance by any Lender or the LC Issuing Bank (or, for 

 

11

 

purposes of Section 2.15(b), by any lending office of such Lender
or by such Lender’s or the LC Issuing Bank’s holding company, if any) with any
request, guideline or directive (whether or not having the force of law) of any
Governmental Authority made or issued after such date.

 

“Co-Collateral Agent”
means General Electric Capital Corporation, in its capacity as co-collateral
agent for the Lenders under the Loan Documents, and its successors in such capacity.

 

“Collateral” means any and
all “Collateral”, as defined in any Security Document.

 

“Collateral Access Agreement”
means an agreement substantially in the form of Exhibit F-1 or Exhibit F-2.

 

“Collateral Agent” means
JPMorgan Chase Bank, in its capacity as collateral agent for the Lenders under
the Loan Documents, and its successors in such capacity.

 

“Collateral Requirement”
means the requirement that:

 

(a)                                  the Administrative
Agent (i) shall have received a counterpart of the Security Agreement duly executed
and delivered by JPMorgan Chase Bank, as Collateral Agent, and (ii) shall have
received from the Borrower a counterpart of the Security Agreement duly
executed and delivered on behalf of the Borrower;

 

(b)                                 all documents and
instruments, including Uniform Commercial Code financing statements, required
by law or reasonably requested by the Collateral Agent to be filed, registered
or recorded to create the Liens intended to be created by the Security
Documents and perfect or record such Liens to the extent, and with the
priority, required by the Security Documents, shall have been filed, registered
or recorded or delivered to the Collateral Agent for filing, registration or
recording;

 

(c)                                  the Borrower shall
have obtained all consents and approvals required to be obtained by it in
connection with the execution and delivery of all Security Documents to which
it is a party, the performance of its obligations thereunder and the granting
of the Liens granted by it thereunder;

 

(d)                                 the Borrower shall
have taken all other action required under the Security Documents to perfect,
register and/or record the Liens granted by it thereunder; and

 

12

 

(e)                                  the Administrative
Agent shall have received a fully executed copy of the Intercreditor Agreement.

 

“Commitment” means, with
respect to each Lender, the commitment, if any, of such Lender to make
Revolving Loans and to acquire participations in Letters of Credit and
Swingline Loans hereunder, expressed as an amount representing the maximum
aggregate amount of such Lender’s Exposure hereunder, as such commitment may be
(a) reduced from time to time pursuant to Section 2.08 and (b) reduced or
increased from time to time pursuant to assignments by or to such Lender pursuant
to Section 9.04.  The initial
amount of each Lender’s Commitment is set forth on Schedule 2.01, or in the
Assignment pursuant to which such Lender shall have assumed its initial
Commitment, as applicable.  The initial
aggregate amount of the Commitments is $400,000,000.

 

“Consolidated Cash Interest Expense”
means, for any period, the amount by which:

 

(a)                                  the sum of (i) the
interest expense (including imputed interest expense in respect of Capital
Lease Obligations) of the Borrower and its Restricted Subsidiaries for such
period, determined on a consolidated basis in accordance with GAAP, (ii) any
interest accrued during such period, in respect of Debt of the Borrower or any
Restricted Subsidiary, that is required under GAAP to be capitalized rather
than included in consolidated interest expense for such period, and (iii) to
the extent not included in cash interest expense for such period pursuant to
subclause (i) of this clause (a), cash payments (if any) made during such
period in respect of obligations referred to in clause (b)(ii) below that were
amortized or accrued in a previous period, exceeds

 

(b)                                 the sum of (i) to the
extent included in such consolidated interest expense for such period, non-cash
amounts attributable to amortization of financing costs paid in a previous
period, (ii) to the extent included in such consolidated interest expense for
such period, non-cash amounts attributable to amortization of debt discount or
accrued interest payable in kind for such period and (iii) the interest income
of the Borrower and its Restricted Subsidiaries for such period, determined on
a consolidated basis in accordance with GAAP.

 

“Consolidated EBITDA”
means, for any period, the sum of (a) Consolidated Net Income for such period,
minus (b) to the extent included in calculating such Consolidated Net Income
(and without duplication), any gains for such period, plus (c) each of the
following (without duplication) to the extent deducted in calculating such
Consolidated Net Income;

 

13

 

(i)  all income tax expense of
the Borrower and its Restricted Subsidiaries for such period;

 

(ii)  Consolidated Cash Interest
Expense for such period;

 

(iii)  depreciation, depletion
and amortization expense of the Borrower and its Restricted Subsidiaries for
such period (excluding amortization expense attributable to any prepaid
operating activity item that was paid in cash in a prior period); and

 

(iv)  all other non-cash charges
of the Borrower and its Restricted Subsidiaries for such period (excluding any
such non-cash charge to the extent that it represents an accrual of or reserve
for cash expenditures in any future period); and in each case, with respect to
any period prior to the Separation, as such amounts are attributed to the U.S.
Steel Group.  Notwithstanding the
foregoing, the provision for taxes based on the income or profits of, and the
depreciation and amortization and non-cash charges of, a Restricted Subsidiary
shall be added to Consolidated Net Income to compute Consolidated EBITDA only
to the extent (and in the same proportion) that the net income of such
Restricted Subsidiary is included in calculating Consolidated Net Income and
only if a corresponding amount would be permitted at the date of determination
to be dividended to the Borrower by such Restricted Subsidiary without prior
approval (that has not been obtained), pursuant to the terms of its charter and
all agreements, instruments, judgments, decrees, orders, statutes, rules and
governmental regulations applicable to such Restricted Subsidiary or its
stockholders.

 

“Consolidated Net Income”
means, for any period, the net income or loss of the Borrower and its
Restricted Subsidiaries for such period determined on a consolidated basis in
accordance with GAAP (and calculated for any period prior to the Separation as
net income or loss attributed to the U.S. Steel Group for such period); provided that there shall be excluded (a)
the income of any Person (except the Borrower and its Restricted Subsidiaries)
in which any other Person (except the Borrower, a Restricted Subsidiary or a
director holding qualifying shares in compliance with applicable law) owns an
Equity Interest, except to the extent that dividends or other distributions
were actually paid by such Person to the Borrower or any Restricted Subsidiary
during such period, and (b) the income or loss of any Person accrued before (i)
the date it becomes a Restricted Subsidiary, (ii) the date it is merged into or
consolidated with the Borrower or any Restricted Subsidiary or (iii) the date
its assets are acquired by the Borrower or any Restricted Subsidiary.

 

“Control” means
possession, directly or indirectly, of the power (a) to vote 30% or more of any
class of voting securities of a Person or (b) to direct or 

 

14

 

cause the direction of the management or policies of a Person, whether
through the ownership of voting securities, by contract or otherwise.  “Controlling”
and “Controlled” have meanings
correlative thereto.

 

“Debt” of any Person
means, without duplication:

 

(a)  all obligations of such Person for borrowed money or with
respect to deposits or advances of any kind,

 

(b)  all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments,

 

(c)  all obligations of such Person on which interest charges are
customarily paid (other than obligations where interest is levied only on late
or past due amounts),

 

(d)  all obligations of such Person under conditional sale or
other title retention agreements relating to property acquired by such Person,

 

(e)  all obligations of such Person in respect of the deferred
purchase price of property or services (excluding current accounts payable
incurred in the ordinary course of business),

 

(f)  all Debt of others secured by (or for which the holder of
such Debt has an existing right, contingent or otherwise, to be secured by) any
Lien on property owned or acquired by such Person, whether or not the Debt
secured thereby has been assumed,

 

(g)  all Guarantees by such Person of Debt of others,

 

(h)  all Capital Lease Obligations of such Person,

 

(i)  all obligations, contingent or otherwise, of such Person as
an account party in respect of letters of credit and letters of guaranty,

 

(j)  all capital stock of such Person which is required to be
redeemed or is redeemable at the option of the holder if certain events or
conditions occur or exist or otherwise,

 

(k)  the aggregate amount advanced by buyers or lenders with
respect to all Receivables Financings, net of repayments or recoveries through
liquidation of the assets transferred pursuant to such Receivables Financing,
and

 

(l)  all obligations, contingent or otherwise, of such Person in
respect of bankers’ acceptances.

 

15

 

The Debt of any Person shall include the Debt of any other entity
(including any partnership in which such Person is a general partner) to the
extent that such Person is liable therefor as a result of such Person’s
ownership interest in or other relationship with such entity, except to the
extent that contractual provisions binding on the holder of such Debt provide
that such Person is not liable therefor.

 

Notwithstanding the foregoing, the term “Debt” will exclude (x) any
indebtedness for which Marathon Oil Corporation indemnifies the Borrower
pursuant to the terms of the Financial Matters Agreement, so long as such
indebtedness (i) has not been refinanced and (ii) Marathon Oil Corporation has
an Investment Grade Rating from both Moody’s and S&P and (y) Industrial
Revenue Bond Obligations to the extent the Borrower (i) has delivered to the
holders of such obligations an irrevocable notice of redemption or directed
delivery of such a notice and (ii) has set aside cash or U.S. Government Obligations,
pursuant to a defeasance mechanism or otherwise, sufficient to redeem such
obligations.  As used herein, the term
“U.S. Government Obligations” shall refer to direct obligations (or
certificates representing an ownership interest in such obligations) of the
United States of America (including any agency or instrumentality thereon) for
the payment of which the full faith and credit of the United States of America
is pledged and which are not callable or redeemable at the issuer’s option.

 

Notwithstanding the foregoing, in connection with the purchase by the
Borrower or any Restricted Subsidiary of any business, the term “Debt” will
exclude post-closing payment adjustments to which the seller may become
entitled to the extent such payment is determined by a final closing; provided, however, that, at the time of
closing, the amount of any such payment is not determinable and, to the extent
such payment thereafter becomes fixed and determined, the amount is paid when
due.

 

“Default” means any event
or condition which constitutes an Event of Default or which upon notice, lapse
of time or both would, unless cured or waived, become an Event of Default.

 

“Derivative  Obligations” has the meaning specified in
Section 1 of the Security Agreement.

 

“Designated Lender” means,
with respect to any Designating Lender, an Eligible Designee designated by it
pursuant to Section 9.05(a) as a Designated Lender for purposes of this
Agreement.

 

“Designating Lender”
means, with respect to each Designated Lender, the Lender that designated such
Designated Lender pursuant to Section 9.05(a).

 

“Dilution
Reserve” means a reserve amount to be determined by
the Collateral Agent in its sole discretion upon the completion of collateral
review 

 

16

 

field work to be performed subsequent to the termination of the
Effective Date Receivables Financing.

 

“Documentation Agent”
means General Electric Capital Corporation in its capacity as documentation
agent for the Lenders under the Loan Documents, and its successors in such
capacity.

 

“dollars” or “$” refers to lawful money of the United
States.

 

“Domestic  Subsidiary” means each Subsidiary that is
not a Foreign Subsidiary.

 

“Effective Date” means the
date on which each of the conditions specified in Section 4.01 is
satisfied (or waived in accordance with Section 9.02).

 

“Effective Date Receivables Financing”
means the Receivables Financing of the Borrower that is in effect on the
Effective Date, as amended, supplemented or modified from time to time (subject
to Section 5.13 hereof), and as such receivables financing may be renewed,
extended or rolled over on substantially the same terms as are in effect on the
Effective Date; provided that the
Debt arising from the Effective Date Receivables Financing shall comply with
the limitations set forth in Section 6.06(g).

 

“Eligible Designee” means
a special purpose corporation that (i) is organized under the laws of the
United States or any state thereof, (ii) is engaged in making, purchasing or
otherwise investing in commercial loans in the ordinary course of its business
and (iii) issues (or the parent of which issues) commercial paper rated at
least A-1 or the equivalent thereof by S&P or P-1 or the equivalent thereof
by Moody’s.

 

“Eligible  Finished Goods  Inventory” means all Finished Goods Inventory that is Eligible
Inventory.

 

“Eligible Inventory” means
at any date of determination thereof, the aggregate value (as reflected on the
plant level records of the Borrower and consistent with the Borrower’s current
and historical accounting practices whereby manufactured items are valued at
pre-determined costs and purchased items are valued at rolling average actual
cost) at such date of all Qualified Inventory owned by the Borrower and located
in any jurisdiction in the United States of America as to which appropriate UCC
financing statements have been filed (or delivered to the Collateral Agent for
filing pursuant to Section 4.01(h) naming the Borrower as “debtor” and
JPMorgan Chase Bank as Collateral Agent, as “secured party,” adjusted on any
date of determination to exclude, without duplication, all Qualified Inventory
that is Ineligible Inventory, minus all Valuation Reserves.

 

17

 

“Eligible  Raw  Materials
Inventory” means all Raw Materials
Inventory that is Eligible Inventory.

 

“Eligible Receivables” means at any date of determination
thereof, the aggregate value (determined on a basis consistent with GAAP and
the Borrower’s then current and historical accounting practices) of all
Qualified Receivables of the Borrower, net of (x) any amounts in respect of
sales, excise or similar taxes included in such Receivables and (y) returns,
discounts, claims, credits and allowances of any nature at any time issued,
owing, granted, outstanding available or claimed (calculated without
duplication of deductions taken pursuant to the exclusion of “Ineligible
Receivables” as described below), adjusted on any date of determination to
exclude, without duplication, all Qualified Receivables that are Ineligible
Receivables.

 

“Eligible  Semi-Finished  Goods and Scrap Inventory” means all Semi-Finished Goods and
Scrap Inventory that is Eligible Inventory.

 

“Environmental Laws” means
all laws, rules, regulations, codes, ordinances, orders, decrees, judgments,
injunctions, notices or binding agreements issued, promulgated or entered into
by any Governmental Authority, relating in any way to the environment, the
preservation or reclamation of natural resources, the management, release or
threatened release of any Hazardous Material or the effects of the environment
on health and safety.

 

“Environmental Liability”
means any liability, contingent or otherwise (including any liability for
damages, costs of remediation, fines, penalties or indemnities), of the
Borrower directly or indirectly resulting from or based on (a) violation
of any Environmental Law, (b) the generation, use, handling,
transportation, storage, treatment or disposal of any Hazardous Material,
(c) exposure to any Hazardous Material, (d) the release or threatened
release of any Hazardous Material into the environment or (e) any contract,
agreement or other consensual arrangement pursuant to which liability is
assumed or imposed with respect to any of the foregoing.

 

“Equity Interests” means
(i) shares of capital stock, partnership interests, membership interests in a
limited liability company, beneficial interests in a trust or other equity
ownership interests in a Person or (ii) any warrants, options or other rights
to acquire such shares or interests.

 

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

 

“ERISA Affiliate” means
any trade or business (whether or not incorporated) that, together with the
Borrower or any Subsidiary, is treated as a single employer under
Section 414(b) or (c) of the Internal Revenue Code or, solely for purposes
of Section 302 of ERISA and Section 412 of the Internal 

 

18

 

Revenue Code, is treated as a single employer under Section 414 of
the Internal Revenue Code.

 

“ERISA Event” means
(a) any “reportable event”, as defined in Section 4043 of ERISA or
the regulations issued thereunder with respect to a Plan (except an event for
which the 30-day notice period is waived); (b) the existence with respect
to any Plan of an “accumulated funding deficiency” (as defined in
Section 412 of the Internal Revenue Code or Section 302 of ERISA),
whether or not waived; (c) the filing pursuant to Section 412(d) of
the Internal Revenue Code or Section 303(d) of ERISA of an application for
a waiver of the minimum funding standard with respect to any Plan; (d) the
incurrence by the Borrower or any ERISA Affiliate of any liability under
Title IV of ERISA with respect to the termination of any Plan;
(e) the receipt by the Borrower or any ERISA Affiliate from the PBGC or a
plan administrator of any notice relating to an intention to terminate any Plan
or Plans or to appoint a trustee to administer any Plan; (f) the incurrence by
the Borrower or any ERISA Affiliate of any liability with respect to withdrawal
or partial withdrawal from any Plan or Multiemployer Plan; or (g) the
receipt by the Borrower or any ERISA Affiliate of any notice, or the receipt by
any Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice,
concerning the imposition of Withdrawal Liability or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA.

 

“Eurodollar”, when used
with respect to any Loan or Borrowing, refers to whether such Loan, or the
Loans comprising such Borrowing, are bearing interest at a rate determined by
reference to the Adjusted LIBO Rate.

 

“Events of Default” has
the meaning specified in Article 7.

 

“Exchange Act” means the
Securities Exchange Act of 1934, as amended from time to time.

 

“Excluded Taxes” means,
with respect to any Lender Party or other recipient of a payment made by or on
account of any obligation of the Borrower hereunder:

 

(a)                                  income or franchise
taxes imposed on (or measured by) its net income, receipts, capital or net
worth by the United States (or any
jurisdiction within the United States, except to the extent that such
jurisdiction within the United States imposes such taxes solely in connection
with such Lender Party’s enforcement of its rights or exercise of its remedies
under the Loan Documents), or by the jurisdiction under the laws of which such
recipient is organized or in which its principal office is located or, in the
case of any Lender, in which its applicable lending office is located;

 

19

 

(b)                                 any branch profits
taxes imposed by the United States or any similar tax imposed by any other
jurisdiction described in clause (a) above; and

 

(c)                                  in the case of a
Foreign Lender, any withholding tax that (i) is in effect and would apply to
amounts payable to such Foreign Lender at the time such Foreign Lender becomes
a party to this Agreement or designates a new lending office or (ii) is
attributable to such Foreign Lender’s failure to comply with
Section 2.17(e).

 

Notwithstanding the foregoing, a withholding tax will not be an
“Excluded Tax” to the extent that (A) it is imposed on amounts payable to a
Foreign Lender by reason of an assignment made to such Foreign Lender at the
Borrower’s request pursuant to Section 2.19(b), (B) it is imposed on
amounts payable to a Foreign Lender by reason of any other assignment and does
not exceed the amount for which the assignor would have been indemnified
pursuant to Section 2.17(a) or (C) in the case of designation of a new
lending office, it does not exceed the amount for which such Foreign Lender
would have been indemnified if it had not designated a new lending office.

 

“Exposure” means, with
respect to any Lender at any time, the sum of (i) the aggregate outstanding
principal amount of such Lender’s Revolving Loans and (ii) such Lender’s LC
Exposure and Swingline Exposure at such time.

 

“Facility Availability”
means, at any time, an amount equal to (i) the lesser of (x) the aggregate
amount of the Lenders’ Commitments at such time and (y) the Borrowing Base, at
such time, less (ii) the Total
Outstanding Amount at such time, less
(iii) the Availability Block at such time.

 

“Federal Funds Effective Rate”
means, for any day, the weighted average (rounded upwards, if necessary, to the
next 1/100  of 1%) of the rates on overnight Federal
funds transactions with members of the Federal Reserve System arranged by
Federal funds brokers, as published on the next succeeding Business Day by the
Federal Reserve Bank of New York, or, if such rate is not so published on
such Business Day, the average (rounded upwards, if necessary, to the next 1/100
of 1%) of the quotations for such day for such transactions received by the
Administrative Agent from three Federal funds brokers of recognized standing
selected by it.

 

“Federal Reserve Board”
means the Board of Governors of the Federal Reserve System of the United
States.

 

“Financial Matters Agreement”
means the Financial Matters Agreement to be dated as of the date of the
Separation between the Borrower and Marathon Oil Corporation.

 

20

 

“Financial Officer” means
the chief financial officer, treasurer, any assistant treasurer, the controller
or any assistant controller of the Borrower.

 

“Financing Transactions”
means the execution, delivery and performance by the Borrower of the Loan
Documents to which it is to be a party, the borrowing of Loans, the use of the
proceeds thereof and the issuance of Letters of Credit hereunder.

 

“Finished Goods Inventory”
means finished goods to be sold by the Borrowers in the ordinary course of
business, including plates, finished tubes, tin plates and finished sheets, but
excluding Semi-Finished Goods and Scrap Inventory and Raw Materials Inventory.

 

“Fiscal Quarter” means a
fiscal quarter of the Borrower.

 

“Fiscal Year” means a
fiscal year of the Borrower.

 

“Foreign Lender” means any
Lender that is organized under the laws of a jurisdiction outside the United
States.

 

“Foreign Subsidiary” means
a Subsidiary (which may be a corporation, limited liability company,
partnership or other legal entity) organized under the laws of a jurisdiction
outside the United States, and conducting substantially all its operations
outside the United States.

 

“GAAP” means generally
accepted accounting principles as in effect from time to time in the United
States, applied on a basis consistent (except for changes concurred in by the
Borrower’s independent public accountants) with the most recent audited
consolidated financial statements of USX Corporation and its consolidated
Subsidiaries delivered to the Lenders.

 

“Governmental Authority”
means the government of the United States, any other nation or any political
subdivision thereof, whether state or local, and any agency, authority,
instrumentality, regulatory body, court, central bank or other entity
exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.

 

“Guarantee” by any Person
(the “guarantor”) means any
obligation, contingent or otherwise, of the guarantor guaranteeing or having
the economic effect of guaranteeing any Debt or other obligation of any other
Person (the “primary obligor”) in
any manner, whether directly or indirectly, and including any obligation of the
guarantor, direct or indirect, (a) to purchase or pay (or advance or
supply funds for the purchase or payment of) such Debt or other obligation or
to purchase (or advance or supply funds for the purchase of) any security for
the payment thereof, (b) to purchase or lease property, securities or
services for the purpose of assuring the owner of such Debt or other obligation
of 

 

21

 

the payment thereof, (c) to maintain working capital, equity
capital or any other financial statement condition or liquidity of the primary
obligor so as to enable the primary obligor to pay such Debt or other
obligation or (d) as an account party in respect of any letter of credit or
letter of guaranty issued to support such Debt or other obligation; provided that the term “Guarantee” shall
not include endorsements for collection or deposit in the ordinary course of
business.

 

“Hazardous Materials”
means all explosive or radioactive substances or wastes and all hazardous or
toxic substances, wastes or other pollutants, including petroleum or petroleum
distillates, asbestos or asbestos-containing materials, polychlorinated biphenyls,
radon gas, infectious or medical wastes and all other substances or wastes of
any nature regulated pursuant to any Environmental Law.

 

“Hedging Agreement” means
any interest rate protection agreement, foreign currency exchange agreement,
commodity price protection agreement or other interest rate, currency exchange
rate or commodity price hedging arrangement.

 

“Indemnified Taxes” means
all Taxes except Excluded Taxes.

 

“Industrial Revenue Bond Obligations”
means an obligation to a state or local government unit that secures the
payment of bonds issued by a state or local government unit or any obligation
under the Financial Matters Agreement relating to Industrial Revenue Bond
Obligations or any Debt incurred to refinance, in whole or in part, such obligations.

 

“Ineligible Inventory”
means all Qualified Inventory described in one or more of the following
clauses, without duplication:

 

(a)                                  Qualified Inventory
that is not subject to a perfected first priority Lien in favor of the
Collateral Agent or that is subject to any Lien other than the Liens permitted
pursuant to Section 6.02; or

 

(b)                                 Qualified Inventory
that is not located at or in transit to property that is either owned or leased
by the Borrower; provided that
any Qualified Inventory located at or in transit to property that is leased by
the Borrower shall be deemed “Ineligible Inventory” pursuant to this clause (b)
unless the Borrower shall have delivered to the Collateral Agent a Collateral
Access Agreement (or, if applicable, a landlord waiver in form and substance
satisfactory to the Collateral Agent) with respect to such leased location; and
provided  further that any Qualified Inventory
located at or in transit to a Third-Party Location shall not be deemed
“Ineligible Inventory” pursuant to this clause (b) on any date of determination
if (w) the value of such Qualified Inventory on such date of determination (as
reflected on the plant level records of the Borrower and consistent with the
Borrower’s current and historical accounting practices whereby 

 

22

 

manufactured items are valued at pre-determined costs and purchased
items are valued at rolling average actual cost) is greater than $500,000,
(x) the Borrower shall have delivered to the Collateral Agent a Collateral
Access Agreement with respect to such Third-Party Location, (y) the
aggregate number of Third-Party Locations designated by the Borrower as
eligible locations in respect of which Qualified Inventory shall be excluded
from “Ineligible Inventory” in reliance on this clause (b) does not exceed 60
on such date of determination and (z) in the case of any Third Party Location
owned or leased by a Borrower Joint Venture, the terms of the joint venture
arrangements in respect of such Borrower Joint Venture are satisfactory to the
Collateral Agent and the Lenders; or

 

(c)                                  Qualified Inventory
that is on consignment and Qualified Inventory subject to a negotiable document
of title (as defined in the Uniform Commercial Code as in effect from time to
time in the State of New York); or

 

(d)                                 Qualified Inventory
located on the premises of customers or vendors (other than Outside
Processors); or

 

(e)                                  Qualified Inventory
comprised of Finished Goods Inventory and Semi-Finished Goods and Scrap
Inventory that has been written down pursuant to the Borrower’s existing
accounting procedures (as such existing accounting procedures are set forth in
Schedule 1.01 hereto); provided,
however, that the scrap value of such Qualified Inventory will be included in
the calculation of “Eligible Inventory”; or

 

(f)                                    Qualified Inventory
that consists of maintenance spare parts; or

 

(g)                                 Qualified Inventory
that is classified as supplies, and sundry in the Borrower’s historical and
current accounting records, including, but not limited to, fuel oil, coal
chemicals, metal products, miscellaneous, non-LIFO inventory, store supplies,
cleaning mixtures, lubricants and the like; or

 

(h)                                 Qualified Inventory
that is billed not shipped Inventory; or

 

(i)                                     Qualified
Inventory considered non-conforming, which shall mean, on any date, all
inventory classified as “non-prime” or “seconds” or other “off-spec” Inventory,
to the extent that such Qualified Inventory exceeds 3% of Total Qualified
Inventory; provided that the
scrap value of such Qualified Inventory shall be included in the calculation of
Eligible Inventory.  For purposes of
this clause (i), “Total  Qualified  Inventory”
means all Raw Materials Inventory, Finished Goods Inventory and Semi-Finished
Goods and Scrap Inventory; or

 

23

 

(j)                                     Qualified
Inventory that is not located in the United States; or

 

(k)                                  Qualified Inventory
that is not owned solely by the Borrower, or as to which the Borrower does not
have good, valid and marketable title thereto; or

 

(l)                                     intercompany
profit included in the value of Qualified Inventory; or

 

(m)                               Qualified Inventory that
consists of scale, slag and other by-products; or

 

(n)                                 Qualified Inventory
that consists of raw materials other than iron ore, coke, coal, scrap,
limestone, other alloys and fluxes; or

 

(o)                                 Qualified Inventory
that does not otherwise conform to the representations and warranties contained
in this Agreement or the other Loan Documents; or

 

(p)                                 depreciation included
in the value of Qualified Inventory; or

 

(q)                                 non-production costs
included in the value of Qualified Inventory; or

 

(r)                                    slabs that are more
than two months old and other semi-finished and finished goods that are more
than eight months old  provided that the scrap value of such
inventory shall be included in the calculation of Eligible Inventory; or

 

(s)                                  such other Qualified
Inventory as may be deemed ineligible by the Collateral Agent from time to time
in its sole discretion.

 

“Ineligible
Receivables” shall be determined by the Collateral
Agent in its sole discretion upon the completion of collateral review field
work to be performed subsequent to the termination of the Effective Date
Receivables Financing and shall include such ineligibles based on traditional
asset based lending concepts, and any other ineligibles as may be deemed
appropriate at the sole discretion of the Collateral Agent.

 

“Information Memorandum”
means the Confidential Information Memorandum dated October 4, 2001 relating to
the Borrower and the Financing Transactions.

 

24

 

“Intercreditor  Agreement” means the Intercreditor
Agreement dated as of November 30, 2001 among JPMorgan Chase Bank, as a Funding
Agent, The Bank of Nova Scotia, as a Funding Agent and as Receivables
Collateral Agent, JPMorgan Chase Bank, as Lender Agent, U.S. Steel Receivables
LLC, as Transferor, and United States Steel LLC, as Originator, as Initial
Servicer and as Borrower, as acknowledged and agreed by the Administrative
Agent, the Collateral Agent and the Co-Collateral Agent, substantially in the
form of Exhibit E.

 

“Interest Election” means
an election by the Borrower to change or continue the Interest Type of a
Borrowing in accordance with Section 2.07.

 

“Interest
Payment Date” means (a) with respect to any Base Rate
Loan, the last day of each March, June, September and December, (b) with
respect to any Swingline Loan, the day on which such Loan is required to be
repaid and (c) with respect to any Eurodollar Loan, the last day of the
Interest Period applicable to the Borrowing of which such Loan is a part and,
if such Interest Period is longer than three months, each day during such
Interest Period that occurs at intervals of three months’ duration after the
first day of such Interest Period.

 

“Interest Period”
means, with respect to any Eurodollar Borrowing, the period beginning on
the date of such Borrowing and ending on the numerically corresponding day in
the calendar month that is one, two, three or six months thereafter, as
the Borrower may elect; provided
that (a) if any Interest Period would end on a day other than a Business Day,
such Interest Period shall be extended to the next succeeding Business Day
unless such next succeeding Business Day would fall in the next calendar month,
in which case such Interest Period shall end on the next preceding Business Day
and (b) any Interest Period that commences on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding day
in the last calendar month of such Interest Period) shall end on the last
Business Day of the last calendar month of such Interest Period.  For purposes hereof, the date of a Borrowing
initially shall be the date on which such Borrowing is made and thereafter
shall be deemed to be the effective date of the most recent conversion or
continuation of such Borrowing.

 

“Interest Type”, when used
with respect to any Loan or Borrowing, refers to whether the rate of interest
on such Loan, or on the Loans comprising such Borrowing, is determined by
reference to the Adjusted LIBO Rate or the Alternate Base Rate.

 

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

 

25

 

“Inventory” has the
meaning set forth in Article 9 of the Uniform Commercial Code as in effect from
time to time in the State of New York.

 

“Investment Grade Rating”
means a rating equal to or higher than Baa3 (or the equivalent) by Moody’s and
BBB- (or the equivalent) by S&P.

 

“LC Disbursement” means a
payment made by the LC Issuing Bank in respect of a drawing under a Letter of
Credit.

 

“LC Exposure” means, at
any time, the sum of (a) the aggregate undrawn amount of all Letters of Credit
outstanding at such time plus (b) the aggregate amount of all LC Disbursements
that have not yet been reimbursed by or on behalf of the Borrower at such
time.  The LC Exposure of any Revolving
Lender at any time will be its Percentage of the total LC Exposure at such time.

 

“LC Issuing Bank” means
JPMorgan Chase Bank, PNC Bank, National Association, Mellon Bank, N.A. and any
other Lender that may agree to issue letters of credit hereunder, in each case
in its capacity as an issuer of a Letter of Credit, and their respective
successors in such capacity as provided in Section 2.05(i).  The LC Issuing Bank may, in its discretion,
arrange for one or more Letters of Credit to be issued by its Affiliates, in
which case the term “LC Issuing Bank” shall include each such Affiliate with
respect to Letters of Credit issued by it.

 

“LC Reimbursement Obligations”
means, at any time, all obligations of the Borrower to reimburse the LC Issuing
Bank for amounts paid by it in respect of drawings under Letters of Credit,
including any portion of such obligations to which Lenders have become
subrogated by making payments to the LC Issuing Bank pursuant to
Section 2.05(e).

 

“Lender Affiliate” means,
(a) with respect to any Lender, (i) an Affiliate of such Lender or (ii) any
entity (whether a corporation, partnership, trust or otherwise) that is engaged
in making, purchasing, holding or otherwise investing in bank loans and similar
extensions of credit in the ordinary course of its business and is administered
or managed by such Lender or an Affiliate of such Lender and (b) with respect
to any Lender that is a fund which invests in bank loans and similar extensions
of credit, any other fund that invests in bank loans and similar extensions of
credit and is managed by the same investment advisor as such Lender or by an
Affiliate of such investment advisor.

 

“Lender Parties” means the
Lenders, the LC Issuing Bank and the Agents.

 

“Lenders” means the
Persons listed on Schedule 2.01 and any other Person that shall have
become a party hereto pursuant to an Assignment, other than any such Person
that ceases to be a party hereto pursuant to an Assignment.  

 

26

 

Unless the context requires otherwise, the term “Lenders” includes the
Swingline Lender.

 

“Letter of Credit” means
any letter of credit issued pursuant to this Agreement.

 

“Leverage Ratio” means, on
any day, the ratio of (a) Total Debt as of such day to (b) Consolidated EBITDA
for the period of four consecutive Fiscal Quarters (subject to
Section 6.15) ended on such day (or, if such day is not the last day of a
Fiscal Quarter, ended on the last day of the Fiscal Quarter most recently ended
before such day).

 

“LIBO Rate” means, with
respect to any Eurodollar Borrowing for any Interest Period, the rate appearing
on Page 3750 of the Dow Jones Market Service (or on any successor or substitute
page of such Service, or any successor to or substitute for such Service,
providing rate quotations comparable to those currently provided on such page
of such Service, as determined by the Administrative Agent from time to time
for purposes of providing quotations of interest rates applicable to dollar
deposits in the London interbank market) at approximately 11:00 a.m., London
time, two Business Days before the beginning of such Interest Period, as the rate
for dollar deposits with a maturity comparable to such Interest Period.  If such rate is not available at such time
for any reason, then the “LIBO Rate” with respect to such Eurodollar Borrowing
for such Interest Period shall be the rate at which dollar deposits of
$5,000,000 and for a maturity comparable to such Interest Period are offered by
the principal London office of the Administrative Agent in immediately
available funds in the London interbank market at approximately
11:00 a.m., London time, two Business Days before the beginning of such
Interest Period.

 

“Lien” means, with respect
to any asset, (a) any mortgage, deed of trust, lien, pledge,
hypothecation, encumbrance, charge or security interest in, on or of such
asset, (b) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement (or any financing lease
having substantially the same economic effect as any of the foregoing) relating
to such asset and (c) in the case of securities, any purchase option, call
or similar right of a third party with respect to such securities.

 

“Loan Documents” means
this Agreement, any promissory note issued by the Borrower pursuant to
Section 2.09(e) and the Security Documents.

 

“Loans” means loans made
by the Lenders to the Borrower pursuant to this Agreement.  Unless the context requires otherwise, the
term “Loans” includes Swingline Loans.

 

“Lorain Merger” means the
proposed merger of Lorain Tubular Company LLC with and into the Borrower.

 

27

 

“Marathon Oil Corporation”
means Marathon Oil Corporation, a Delaware corporation (currently named USX
Corporation), together with its successors.

 

“Mark-to-Market  Value” has the meaning specified in
Section 1 of the Security Agreement.

 

“Material Adverse Effect”
means a material adverse effect on (a) the business, operations,
properties, assets, financial condition, contingent liabilities or material
agreements of the Borrower and its Subsidiaries taken as a whole, (b) the
ability of the Borrower to perform any of its obligations under any Loan
Document or (c) the rights of or benefits available to any Lender Party
under, or the validity or enforceability of, any Loan Document.

 

“Material Debt” means Debt
(other than obligations in respect of the Loans and Letters of Credit), or
obligations in respect of one or more Hedging Agreements, of any one or more of
the Borrower and its Restricted Subsidiaries in an aggregate principal amount
exceeding $20,000,000.  For purposes of
determining Material Debt, the “principal amount” of the obligations of the
Borrower or any Restricted Subsidiary in respect of any Hedging Agreement at
any time will be the maximum aggregate amount (after giving effect to any
netting agreements) that the Borrower or such Subsidiary would be required to
pay if such Hedging Agreement were terminated at such time.

 

“Maturity Date” means
December 31, 2004 (or, if such day is not a Business Day with respect to
Eurodollar Loans, the next preceding day that is a Business Day with respect to
Eurodollar Loans).

 

“Maximum Facility Availability”
means, at any date, an amount equal to the sum of (a) the lesser of (i) the
aggregate amount of the Lenders’ Commitments on such date and (ii) the
Borrowing Base on such date, less
(b) the Availability Block on such date.

 

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

 

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

 

“Other Taxes” means any
and all present or future recording, stamp, documentary, excise, transfer,
sales, property or similar taxes, charges or levies arising from any payment
made under any Loan Document or from the execution, delivery or enforcement of,
or otherwise with respect to, any Loan Document.

 

“Outside Processor” means
any Person that provides processing services with respect to Qualified
Inventory owned by the Borrower and on whose 

 

28

 

premises Qualified Inventory is located, which premises are neither
owned nor leased by the Borrower.

 

“Participants” has the
meaning specified in Section 9.04(e).

 

“PBGC” means the Pension
Benefit Guaranty Corporation referred to and defined in ERISA and any successor
entity performing similar functions.

 

“Percentage” means, with
respect to any Lender, the percentage of the total Commitments represented by
such Lender’s Commitment.  If the
Commitments have terminated or expired, the Percentages will be determined
based on the Commitments most recently in effect, adjusted to give effect to
any assignments.

 

“Perfection Certificate”
means a certificate in the form of Exhibit A to the Security Agreement or any
other form approved by the Administrative Agent.

 

“Permitted Investments”
means any of the following: (i) any investment in direct obligations of the
United States of America or any agency thereof; (ii) investments in time
deposit accounts, certificates of deposit and money market deposits maturing
within 180 days of the date of acquisition thereof issued by any Lender or a bank
or trust company which is organized under the laws of the United States of
America, any State thereof or any foreign country recognized by the United
States of America, and which bank or trust company has capital, surplus and
undivided profits aggregating in excess of $50,000,000 (or the foreign currency
equivalent thereof) and whose long-term debt is rated “A” (or such similar
equivalent rating) or higher by at least one nationally recognized statistical
rating organization (as defined in Rule 436 under the Exchange Act) or any
money market fund sponsored by a registered broker dealer or mutual fund
distributor; (iii) repurchase obligations with a term of not more than 30 days
for underlying securities of the types described in clause (i) above entered into
with a Lender or a bank meeting the qualifications described in clause (ii)
above; (iv) investments in commercial paper, maturing not more than 90 days
after the date of acquisition, issued by a corporation (other than an Affiliate
of the Borrower) organized and in existence under the laws of the United States
of America or any foreign country recognized by the United States of America
with a rating at the times as of which any investment therein is made of “P-1”
(or higher) by Moody’s or “A-1” (or higher) by S&P; (v) investments in
securities with maturities of six months or less from the date of acquisition
issued or fully guaranteed by any state, commonwealth or territory of the
United States of America, or by any political subdivision or taxing authority
thereof, and rated at least “A” by S&P or “A” by Moody’s; (vi) overnight
investments with banks rated “B” or better by Fitch, Inc.; (vii) in the case of
a Restricted Subsidiary that is a Foreign Subsidiary, investments of the type
and maturity described in clauses (i) through (vi) above of foreign obligors,
which investments or obligors (or the parents of such obligors) 

 

29

 

have ratings described in such clauses or equivalent ratings from
comparable foreign rating agencies; and (viii) deposits in Slovak financial
institutions that do not at any time exceed $5,000,000 in the aggregate.

 

“Permitted Liens” means:

 

(a)                                  Liens imposed by law
for taxes that are not yet due or are being contested in compliance with
Section 5.05;

 

(b)                                 carriers’,
warehousemen’s, mechanics’, materialmen’s, repairmen’s and other like Liens
imposed by law, arising in the ordinary course of business and securing
obligations that are not overdue by more than 30 days or are being contested in
compliance with Section 5.05;

 

(c)                                  pledges and deposits
made in the ordinary course of business in compliance with workers’
compensation, unemployment insurance and other social security laws or
regulations;

 

(d)                                 deposits to secure the
performance of bids, trade contracts, leases, statutory obligations, surety and
appeal bonds, performance bonds and other obligations of a like nature, and
Liens imposed by statutory or common law relating to banker’s liens or rights
of setoff or similar rights relating to deposit accounts, in each case in the
ordinary course of business;

 

(e)                                  Liens arising in the
ordinary course of business in favor of issuers of documentary letters of
credit;

 

(f)                                    judgment liens in
respect of judgments that do not constitute an Event of Default under clause
(k) of Article 7; and

 

(g)                                 easements, zoning
restrictions, rights-of-way, licenses, reservations, minor irregularities of
title and similar encumbrances on real property imposed by law or arising in
the ordinary course of business that do not secure any monetary obligation and
do not materially detract from the value of the affected property or interfere
with the ordinary conduct of business of the Borrower or any Restricted
Subsidiary;

 

provided that the
term “Permitted Liens” shall not include any Lien that secures Debt.

 

“Person” means any natural
person, corporation, limited liability company, trust, joint venture,
association, company, partnership, Governmental Authority or other entity.

 

30

 

“Plan” means any employee
pension benefit plan (except a Multiemployer Plan) subject to the provisions of
Title IV of ERISA or Section 412 of the Internal Revenue Code or
Section 302 of ERISA, and in respect of which the Borrower or any ERISA Affiliate
is (or, if such plan were terminated, would under Section 4069 of ERISA be
deemed to be) a “contributing sponsor” as defined in Section 4001(a)(13)
of ERISA.

 

“Pricing Schedule” means
the Pricing Schedule attached hereto.

 

“Prime Rate” means, for any
day, the rate of interest per annum then most recently publicly announced by
JPMorgan Chase Bank as its prime rate in effect at its principal office in New
York City.  Each change in the Prime
Rate will be effective for purposes hereof from and including the date such
change is publicly announced as being effective.

 

“Qualified  Inventory” means all Raw Materials
Inventory, Semi-Finished Goods and Scrap Inventory and Finished Goods Inventory
held by the Borrower in the normal course of business and owned solely by the
Borrower (per plant level records whereby manufactured items are valued at
pre-determined costs and purchased items are valued at rolling average actual
cost).

 

“Qualified Receivables”  means
all Receivables that are directly created by the Borrower in the ordinary
course of business arising out of the sale of goods or rendition of services by
the Borrower, which are at all times acceptable to the Collateral Agent in all
respects in the exercise of its reasonable judgment and the customary credit
policies of the Collateral Agent.

 

“Rating Agency” means each
of S&P and Moody’s.

 

“Raw  Materials  Inventory”
means any raw materials used or consumed in the manufacture or production of
other inventory including, without limitation, iron ore and sinter, coke, coal,
limestone and other alloys and fluxes, but excluding steel scrap and iron scrap
(it being understood that steel scrap and iron scrap shall be included in
Inventory not constituting “Raw Materials”).

 

“Receivables” means any
account (as defined in the Uniform Commercial Code as in effect from time to
time in the State of New York) and any other right, title or interest which, in
accordance with GAAP, would be included in receivables on a consolidated
balance sheet of the Borrower.

 

“Receivables Financing”
means any receivables securitization program or other type of accounts
receivable financing transaction by the Borrower or any of its Restricted
Subsidiaries; provided that
substantially all Debt incurred in connection therewith (other than Debt of a
Special Purpose Financing Subsidiary) arises from a transfer of accounts
receivable which is intended by the parties thereto to be treated as a sale.

 

31

 

“Receivables  Purchase  Agreement”
means the Amended and Restated Receivables Purchase Agreement dated as of
November 28, 2001 among U.S. Steel Receivables LLC, as seller, the Borrower, as
initial servicer and in its individual capacity, The Bank of Nova Scotia, as
collateral agent, JPMorgan Chase Bank, as a committed purchaser and a funding
agent, and the various other Persons from time to time party thereto, as
amended, supplemented or modified from time to time (subject to
Section 5.13 hereof), entered into in connection with the Effective Date Receivables
Financing.

 

“Register” has the meaning
specified in Section 9.04(c).

 

“Regulation U” means
Regulation U of the Board of Governors of the Federal Reserve System, as in
effect from time to time.

 

“Related Parties” means,
with respect to any specified Person, such Person’s Affiliates and the
respective directors, officers, employees, agents and advisors of such Person
and its Affiliates.

 

“Required Lenders” means,
at any time, Lenders having aggregate Exposures and unused Commitments
representing more than 50% of the sum of all Exposures and unused Commitments
at such time; provided that the
“Required Lenders” shall be comprised of a minimum of three Lenders.

 

“Restricted Debt” means
Debt of the Borrower or any Restricted Subsidiary, the payment, prepayment,
redemption, purchase or defeasance of which is restricted under
Section 6.08.

 

“Restricted Payment” means
any dividend or other distribution (whether in cash, securities or other
property) with respect to any Equity Interest in the Borrower, or any payment
(whether in cash, securities or other property) or incurrence of an obligation
by the Borrower or any of its Restricted Subsidiaries, including any sinking
fund or similar deposit, on account of the purchase, redemption, retirement,
acquisition, cancellation or termination of any Equity Interest in the Borrower
(including, for this purpose, any payment in respect of any Equity Interest
under a Synthetic Purchase Agreement).

 

“Restricted  Subsidiary” means any Subsidiary that is
not an Unrestricted Subsidiary.

 

“Revolving Availability Period”
means the period from and including the Effective Date to but excluding the
Maturity Date (or, if earlier, the date on which all outstanding Commitments
terminate).

 

“Revolving Loan” means a
Loan made pursuant to Section 2.02.

 

“S&P” means Standard
& Poor’s.

 

32

 

“SEC” means the Securities
and Exchange Commission.

 

“Secured Obligations” has
the meaning specified in Section 1 of the Security Agreement.

 

“Secured Parties” has the
meaning specified in Section 1 of the Security Agreement.

 

“Security Agreement” means
the Security Agreement among the Borrower and the Collateral Agent,
substantially in the form of Exhibit C.

 

“Security Documents” means
the Security Agreement, the Intercreditor Agreement and each other security
agreement, instrument or document executed and delivered pursuant to
Section 5.12 to secure any of the Secured Obligations.

 

“Semi-Finished  Goods and Scrap Inventory” means
semi-finished goods produced by the Borrower in the ordinary course of
business, including slabs, blooms, coiled strip, black plate, sheets hot rolled
and cold rolled, unfinished tubes, scrap and pig iron.

 

“Senior Debt Rating” means
a rating of the Borrower’s senior long-term debt which is not secured or
supported by a guarantee, letter of credit or other form of credit enhancement;
provided that if a Senior Debt
Rating by a Rating Agency is required to be at or above a specified level and
such Rating Agency shall have changed its system of classifications after the
date hereof, the requirement will be met if the Senior Debt Rating by such
Rating Agency is at or above the new rating which most closely corresponds to
the specified level under the old rating system; and provided further that the Senior Debt Rating in effect on
any date is that in effect at the close of business on such date.

 

“Senior Unsecured Debt”
means the 103/4 % Senior
Notes due August 1, 2008 issued by the Borrower before the Effective Date in
the aggregate principal amount of $535,000,000 and the Debt represented
thereby.

 

“Senior Unsecured Debt Documents”
means the indenture under which the Senior Unsecured Debt is issued and all
other instruments, agreements and other documents evidencing or governing the
Senior Unsecured Debt or providing for any Guarantee or other right in respect
thereof.

 

“Separation”
means the separation of the Borrower from USX Corporation pursuant to an
Agreement and Plan of Reorganization to be entered into among USX Corporation,
the Borrower and certain of its Subsidiaries, as described in USX Corporation’s
2000 Form 10-K, USX Corporation’s Latest Form 10-Q and USX Corporation’s Latest
Proxy Statement.

 

33

 

“Significant Subsidiary”
of any Person means any subsidiary of such Person, whether now or hereafter
owned, formed or acquired which, at the time of determination is a “significant
subsidiary” of such Person, as such term is defined on the date of this
Agreement in Regulation S-X of the SEC (a copy of which is attached as Exhibit
G), except that “5 percent” will be substituted for “10 percent” in each place
where it appears in such definition of “significant subsidiary”; provided however, that an Unrestricted
Subsidiary of the Borrower shall not be a “Significant Subsidiary”.

 

“Special  Purpose  Financing
Subsidiary” means a Subsidiary of
the Borrower which is a special-purpose company created and used solely for
purposes of effecting a Receivables Financing.

 

“Statutory Reserve Adjustment”
means a fraction (expressed as a decimal), the numerator of which is the number
one and the denominator of which is the number one minus the aggregate of the
maximum reserve percentages (including any marginal, special, emergency or
supplemental reserves) expressed as a decimal established by the Federal
Reserve Board to which the Administrative Agent is subject with respect to
eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in
Regulation D of the Federal Reserve Board).  Such reserve percentages will include those imposed pursuant to
such Regulation D.  Eurodollar
Loans will be deemed to constitute eurocurrency funding and to be subject to
such reserve requirements without benefit of or credit for proration,
exemptions or offsets that may be available from time to time to any Lender
under such Regulation D or any comparable regulation.  The Statutory Reserve Adjustment will be
adjusted automatically on and as of the effective date of any change in any
applicable reserve percentage.

 

“StraightLine Line of Business”
means the division of the Borrower known as “Straightline” or “Straightline
Source” that sells steel products via the internet.

 

“subsidiary” means, with
respect to any Person (the “parent”)
at any date, (a) any corporation, limited liability company, partnership or
other entity the accounts of which would be consolidated with those of the
parent in the parent’s consolidated financial statements if such financial
statements were prepared in accordance with GAAP as of such date and (b) any
other corporation, limited liability company, partnership or other entity
(i) of which securities or other ownership interests (x) representing more
than 50% of the ordinary voting power or, in the case of a partnership, more
than 50% of the general partnership voting interests or (y) otherwise having
ordinary voting power to elect a majority of the board of directors or other
persons performing similar functions, are, as of such date, owned, controlled
or held, or (ii) that is otherwise Controlled (pursuant to clause (b) of the
definition of “Control”) as of such date, by the parent and/or one or more of
its subsidiaries.

 

34

 

“Subsidiary” means any
subsidiary of the Borrower.

 

“Swingline Exposure” means,
at any time, the aggregate outstanding principal amount of the Swingline Loans
at such time.  The Swingline Exposure of
any Lender at any time will be its Percentage of the total Swingline Exposure
at such time.

 

“Swingline Lender” means
JPMorgan Chase Bank, in its capacity as the lender of Swingline Loans
hereunder.

 

“Swingline Loan” means a
Loan made pursuant to Section 2.04.

 

“Synthetic Purchase Agreement”
means any swap, derivative or other agreement or combination of agreements
pursuant to which the Borrower or a Restricted Subsidiary is or may become
obligated to make (i) any payment in connection with the purchase by any third
party, from a Person other than the Borrower or a Restricted Subsidiary, of any
Equity Interest or Restricted Debt or (ii) any payment (other than on account
of a permitted purchase by it of any Equity Interest or Restricted Debt) the
amount of which is determined by reference to the price or value at any time of
any Equity Interest or Restricted Debt; provided
that no phantom stock or similar plan providing for payments only to current or
former directors, officers or employees of the Borrower or its Restricted
Subsidiaries (or their heirs or estates) will be deemed to be a Synthetic
Purchase Agreement.

 

“Taxes” means any and all
present or future taxes, levies, imposts, duties, deductions, charges or
withholdings imposed by any Governmental Authority.

 

“Third-Party Location”
means any property that is either owned or leased by (a) a Third-Party
Warehouseman, (b) an Outside Processor, or (c) a Borrower Joint Venture.

 

“Third-Party
Warehouseman”  means
any Person on whose premises Qualified Inventory is located, which premises are
neither owned nor leased by the Borrower, any customer of or vendor to the
Borrower, or an Outside Processor.

 

“Total Debt” means, as of
any date, the sum of (a) the aggregate principal amount of Debt of the Borrower
and its Restricted Subsidiaries outstanding as of such date, in the amount that
would be reflected on a balance sheet prepared as of such date on a
consolidated basis in accordance with GAAP, and (b) the aggregate principal
amount of Debt of the Borrower and its Restricted Subsidiaries outstanding as
of such date that is not required to be reflected on a balance sheet in
accordance with GAAP, determined on a consolidated basis.

 

35

 

“Total Outstanding Amount”
means, at any date, the aggregate Exposures of all Lenders at such date.

 

“Total  Spin-Off  Proceeds”
has the meaning set forth in Section 6.04.

 

“Transaction Liens” means
the Liens on Collateral granted by the Borrower under the Security Documents.

 

“Tubular Line of Business”
means the business of Lorain Tubular Company LLC and any other assets and
liabilities of the Borrower or any of its Restricted Subsidiaries primarily
related to their tubular products business.

 

“United States” means the
United States of America.

 

“Unrestricted Subsidiary”
means any Subsidiary designated by the Borrower’s board of directors as an
Unrestricted Subsidiary pursuant to Section 5.14 subsequent to the date of
this Agreement.

 

“USSK” means U.S. Steel
Košice, s.r.o., a company organized under the laws of the Slovak Republic.

 

“U.S. Steel Group” means
the group of businesses of USX Corporation that is primarily engaged in the
production and sale of steel mill products, coke, and taconite pellets and that
has been reported as the “U.S. Steel Group” in USX Corporation’s reports on
Forms 10-K and 10-Q filed with the SEC.

 

“USX Corporation” means
USX Corporation, a Delaware corporation, and its successors.

 

“USX Corporation’s Latest Form 10-Q”
means USX Corporation’s quarterly report on Form 10-Q for the quarter ended
September 30, 2001, as filed with the SEC pursuant to the Exchange Act.

 

“USX Corporation’s Latest Proxy
Statement” means USX Corporation’s proxy statement on Form 8-K as
filed with the SEC on September 20, 2001.

 

“USX Corporation’s 2000 Form 10-K”
means USX Corporation’s annual report on Form 10-K for 2000, as filed with the
SEC pursuant to the Exchange Act.

 

“Valuation Reserves” means
the sum of the following:

 

(a)                                  a
favorable variance reserve for variances between pre-determined cost and actual
costs;

 

36

 

(b)                                 a
calculated revaluation reserve, as determined by the Collateral Agent in its
sole discretion;

 

(c)                                  a
reserve for costs incurred at headquarters which are allocated to Inventory;

 

(d)                                 a
lower of cost or market reserve which includes all Inventory sold for less than
pre-determined cost as deemed appropriate by the Collateral Agent in its sole
discretion;

 

(e)                                  a
reserve for iron ore transportation costs, as determined by the Collateral
Agent in its sole discretion; and

 

(f)                                    such
other reserves as may be deemed appropriate by the Collateral Agent from time
to time in their sole discretion.

 

“Withdrawal Liability”
means liability to a Multiemployer Plan as a result of a complete or partial
withdrawal from such Multiemployer Plan, as such terms are defined in
Part I of Subtitle E of Title IV of ERISA.

 

Section 1.02. 
Classification of Loans and Borrowings.  For purposes of this Agreement,
Loans and Borrowings may be classified by Interest Type (e.g., a “Eurodollar
Loan” or a “Eurodollar Borrowing”).

 

Section 1.03.  Terms
Generally.  The
definitions of terms herein (including those incorporated by reference to
another document) apply equally to the singular and plural forms of the terms
defined.  Whenever the context may
require, any pronoun includes the corresponding masculine, feminine and neuter
forms.  The words “include”, “includes” and “including”
shall be deemed to be followed by the phrase “without
limitation”.  The word “will” shall be construed to have the same
meaning and effect as the word “shall”.  Unless the context requires otherwise, (a)
any definition of or reference to any agreement, instrument or other document
herein shall be construed as referring to such agreement, instrument or other
document as from time to time amended, supplemented or otherwise modified
(subject to any restrictions on such amendments, supplements or modifications
set forth herein), (b) any reference herein to any Person shall be construed to
include such Person’s successors and assigns, (c) the words “herein”, “hereof”
and “hereunder”, and words of
similar import, shall be construed to refer to this Agreement in its entirety
and not to any particular provision hereof, (d) all references herein to
Articles, Sections, Exhibits and Schedules shall be construed to refer to
Articles and Sections of, and Exhibits and Schedules to, this Agreement and (e)
the word “property” shall be
construed to refer to any and all tangible and intangible assets and
properties, including cash, securities, accounts and contract rights.

 

37

 

Section 1.04.  Accounting
Terms; Changes in GAAP.  Except
as otherwise expressly provided herein, all terms of an accounting or financial
nature shall be construed in accordance with GAAP as in effect from time to
time; provided that, if the
Borrower notifies the Administrative Agent that the Borrower requests an
amendment of any provision hereof to eliminate the effect of any change
occurring after the date hereof in GAAP or in the application thereof (or if
the Administrative Agent notifies the Borrower that the Required Lenders
request an amendment of any provision hereof for such purpose), regardless of
whether such notice is given before or after such change in GAAP or in the
application thereof, then such provision shall be applied on the basis of GAAP
as in effect and applied immediately before such change shall have become
effective until such notice shall have been withdrawn or such provision amended
in accordance herewith.

 

ARTICLE 2

THE CREDITS

 

Section 2.01.  Commitments.  (a)  Subject
to the terms and conditions set forth herein, each Lender agrees to make
Revolving Loans to the Borrower from time to time during the Revolving
Availability Period in an aggregate principal amount that will not at any time
result in  (A)  such Lender’s Exposure exceeding its Commitment or
(B) the Total Outstanding Amount exceeding the Maximum Facility
Availability then in effect.  Within the
foregoing limits and subject to the terms and conditions set forth herein, the
Borrower may borrow, prepay and reborrow Revolving Loans.

 

(b)                                 The
Commitments of the Lenders are several, i.e., the failure of any Lender to make
any Loan required to be made by it shall not relieve any other Lender of its
obligations hereunder, and no Lender shall be responsible for any other
Lender’s failure to make Loans as and when required hereunder.

 

Section 2.02.  Revolving Loans.  (a)  Each
Revolving Loan shall be made as part of a Borrowing consisting of Loans of the
same Interest Type made by the Lenders ratably in accordance with their
respective Commitments, as the Borrower may request (subject to
Section 2.14) in accordance herewith. 
Each Lender at its option may make any Eurodollar Loan by causing any
domestic or foreign branch or Affiliate of such Lender to make such Loan.  Any exercise of such option shall not affect
the Borrower’s obligation to repay such Loan as provided herein.

 

(b)                                 At
the beginning of each Interest Period for any Eurodollar Borrowing, the
aggregate amount of such Borrowing shall be an integral multiple of $1,000,000
and not less than $5,000,000.  When each
Base Rate Borrowing is made, the aggregate amount of such Borrowing shall be an
integral multiple of $1,000,000 and not less than $5,000,000; provided that a Base Rate Borrowing 

 

38

 

may be in an aggregate amount that (i) is
equal to the entire unused balance of the Commitments or (ii) is required to
finance the reimbursement of an LC Disbursement as contemplated by
Section 2.05(e).  Borrowings of
more than one Interest Type may be outstanding at the same time; provided that there shall not at any time
be more than a total of  seven Eurodollar Borrowings outstanding.

 

(c)                                  Notwithstanding
any other provision hereof, the Borrower will not be entitled to request, or to
elect to convert or continue, any Eurodollar Borrowing if the Interest Period
requested with respect thereto would end after the Maturity Date.

 

Section 2.03.  Requests to Borrow Revolving Loans.  To
request a Revolving Borrowing, the Borrower shall notify the Administrative
Agent of such request by telephone (a) in the case of a Eurodollar Borrowing,
not later than 11:00 a.m., New York City time, three Business Days before
the date of the proposed Borrowing or (b) in the case of a Base Rate Borrowing,
not later than 12:00 noon, New York City time, on the date of the proposed
Borrowing.  Each such telephonic
Borrowing Request shall be irrevocable and shall be confirmed promptly by hand
delivery or telecopy to the Administrative Agent of a written Borrowing Request
in a form approved by the Administrative Agent and signed by the Borrower.  Each such telephonic and written Borrowing
Request shall specify the following information in compliance with
Section 2.02:

 

(i)                                     the aggregate
amount of such Borrowing;

 

(ii)                                  the date of such
Borrowing, which shall be a Business Day;

 

(iii)                               whether such Borrowing
is to be a Base Rate Borrowing or a Eurodollar Borrowing;

 

(iv)                              in the case of a
Eurodollar Borrowing, the initial Interest Period to be applicable thereto,
which shall be a period contemplated by the definition of “Interest Period”;
and

 

(v)                                 the location and
number of the Borrower’s account to which funds are to be disbursed, which
shall comply with the requirements of Section 2.06.

 

If no election as to the Interest Type of a Borrowing is specified, the
requested Borrowing will be a Base Rate Borrowing.  If no Interest Period with respect to a requested Eurodollar
Borrowing is specified, the Borrower will be deemed to have selected an Interest
Period of one month’s duration.  Promptly
after it receives a Borrowing Request in accordance with this Section, the
Administrative Agent shall advise each Lender as to the details of such
Borrowing Request and the amount of such Lender’s Loan to be made pursuant
thereto.

 

39

 

Section 2.04.  Swingline Loans.  (a)  Subject
to the terms and conditions set forth herein, the Swingline Lender agrees to
make Swingline Loans to the Borrower from time to time during the Revolving
Availability Period, in each case in an amount that (i) is an integral multiple
of $100,000 and not less than $250,000, (ii) will not result in the aggregate
outstanding principal amount of all Swingline Loans exceeding $25,000,000 and
(iii) will not result in the Total Outstanding Amount exceeding the Maximum
Facility Availability then in effect; provided
that the Swingline Lender will not be required to make a Swingline Loan to
refinance an outstanding Swingline Loan. 
Within the foregoing limits and subject to the terms and conditions set
forth herein, the Borrower may borrow, prepay and reborrow Swingline Loans.

 

(b)                                 To
request a Swingline Loan, the Borrower shall notify the Administrative Agent of
such request by telephone (confirmed by telecopy or e-mail transmission), not
later than 3:00 p.m., New York City time, on the proposed date of
borrowing.  Each such notice shall be
irrevocable and shall specify the requested date (which shall be a Business
Day) and amount of the requested Swingline Loan.  The Administrative Agent shall promptly advise the Swingline
Lender of any such notice received from the Borrower.  The Swingline Lender shall make each Swingline Loan available to
the Borrower by means of a credit to the Borrower’s general deposit account
with the Swingline Lender (or, if such Swingline Loan is made to finance the
reimbursement of an LC Disbursement as provided in Section 2.05(e), by
remittance to the LC Issuing Bank) by 5:00 p.m., New York City time, on
the requested date of such Swingline Loan. 
Each Swingline Loan shall bear interest at the rate specified in
Section 2.13(c).

 

(c)                                  The
Borrower unconditionally promises to pay to the Swingline Lender the then
unpaid principal amount of each Swingline Loan on the earlier of the Maturity
Date and the first day after such Swingline Loan is made that is the 15th or
last day of a calendar month and is one Business Day after such Swingline Loan
is made; provided that on each
day that a Borrowing of Revolving Loans is made, the Borrower shall repay all
Swingline Loans that were outstanding when such Borrowing was requested.

 

(d)                                 The
Borrower will have the right at any time to prepay any Swingline Loan in full
or in part in an amount that is an integral multiple of $100,000 and not less
than $250,000.  The Borrower shall notify the Swingline Lender and
the Administrative Agent, by telephone (confirmed by telecopy or e-mail
transmission), of the date and amount of any such prepayment not later than
12:00 noon on the date of prepayment. 
Each such prepayment shall be made directly to the Swingline Lender and
shall be accompanied by accrued interest on the amount prepaid.

 

(e)                                  The
Swingline Lender may, by written notice given to the Administrative Agent not
later than 3:00 p.m., New York City time, on any 

 

40

 

Business Day, require the Lenders to acquire
participations on such Business Day in all or a portion of the Swingline Loans
then outstanding.  Such notice shall
specify the aggregate amount of Swingline Loans in which Lenders will
participate.  Promptly after it receives
such notice, the Administrative Agent shall notify each Lender as to the
details thereof and such Lender’s Percentage of such aggregate amount of
Swingline Loans.  Each Lender agrees,
upon receipt of such notification, to pay to the Administrative Agent, for the
account of the Swingline Lender, such Lender’s Percentage of such aggregate
amount of Swingline Loans.  Each
Lender’s obligation to acquire participations in Swingline Loans pursuant to
this subsection is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including the occurrence and continuance of a Default
or any reduction or termination of the Commitments, and each payment by a
Lender to acquire such participations shall be made without any offset,
abatement, withholding or reduction whatsoever.  Each Lender shall comply with its obligation under this
subsection by wire transfer of immediately available funds, in the same manner
as provided in Section 2.06 with respect to Loans made by such Lender (and
Section 2.06(b) shall apply, mutatis
mutandis, to the payment
obligations of the Lenders under this subsection), and the Administrative Agent
shall promptly pay to the Swingline Lender the amounts so received by it from
the Lenders.  The Administrative Agent
shall notify the Borrower of any participations in Swingline Loans acquired
pursuant to this subsection, and thereafter payments in respect of such
Swingline Loans shall be made to the Administrative Agent and not to the Swingline
Lender.  Any amounts received by the
Swingline Lender from the Borrower (or any other party on behalf of the
Borrower) in respect of a Swingline Loan after the Swingline Lender receives
the proceeds of a sale of participations therein shall be promptly remitted to
the Administrative Agent, which shall promptly remit any such amounts received
by it to the Lenders that shall have made payments pursuant to this subsection
and to the Swingline Lender, as their interests may appear.  The purchase of participations in Swingline
Loans pursuant to this subsection will not relieve the Borrower of any default
in the payment thereof.

 

Section 2.05.  Letters of Credit.  (a) General.  Subject to the terms and conditions set
forth herein, the Borrower may request the issuance of Letters of Credit for
its own account, in a form reasonably acceptable to the Administrative Agent
and the LC Issuing Bank, from time to time during the Revolving Availability
Period.  If the terms and conditions of
any form of letter of credit application or other agreement submitted by the
Borrower to, or entered into by the Borrower with, the LC Issuing Bank relating
to any Letter of Credit are not consistent with the terms and conditions of
this Agreement, the terms and conditions of this Agreement shall control.

 

(b)                                 Notice of
Issuance, Amendment, Renewal or Extension; Certain Conditions.  To request the issuance of a
Letter of Credit (or the amendment, renewal or extension of an outstanding
Letter of Credit), the Borrower shall hand 

 

41

 

deliver or telecopy (or transmit by electronic communication, if
arrangements for doing so have been approved by the LC Issuing Bank) to the LC
Issuing Bank and the Administrative Agent (reasonably in advance of the
requested date of issuance, amendment, renewal or extension) a notice
requesting the issuance of a Letter of Credit, or identifying the Letter of
Credit to be amended, renewed or extended, and specifying the requested date of
issuance, amendment, renewal or extension (which shall be a Business Day), the
date on which such Letter of Credit is to expire (which shall comply with
Section 2.05(c)), the amount of such Letter of Credit, the name and
address of the beneficiary thereof and such other information as shall be
necessary to prepare, amend, renew or extend such Letter of Credit.  If requested by the LC Issuing Bank, the
Borrower also shall submit a letter of credit application on the LC Issuing
Bank’s standard form (with such changes as are agreed by such LC Issuing Bank
and the Borrower) in connection with any request for a Letter of Credit.  A Letter of Credit shall be issued, amended,
renewed or extended only if (and upon issuance, amendment, renewal or extension
of each Letter of Credit the Borrower shall be deemed to represent and warrant
that), after giving effect to such issuance, amendment, renewal or extension,
(i) the LC Exposure will not exceed $75,000,000 and (ii) the
Total Outstanding Amount will not exceed the Maximum Facility Availability then
in effect.

 

(c)                                  Expiration Date.  Each Letter of Credit shall expire at or
before the close of business on the earlier of (i) the date that is
eighteen months after such Letter of Credit is issued (or, in the case of any
renewal or extension thereof, eighteen months after such renewal or extension)
and (ii) the date that is five Business Days before the Maturity Date.

 

(d)                                 Participations.  Effective upon the issuance of a Letter of Credit (or an
amendment to a Letter of Credit increasing the amount thereof) and without any
further action on the part of the LC Issuing Bank or the Lenders, the LC
Issuing Bank grants to each Lender, and each Lender acquires from the LC
Issuing Bank, a participation in such Letter of Credit equal to such Lender’s
Percentage of the aggregate amount available to be drawn thereunder.  Pursuant to such participations, each Lender
agrees to pay to the Administrative Agent, for the account of the LC Issuing
Bank, such Lender’s Percentage of (i) each LC Disbursement made by the LC
Issuing Bank and not reimbursed by the Borrower on the date due as provided in
Section 2.05(e) and (ii) any reimbursement payment required to be refunded
to the Borrower for any reason.  Each
Lender’s obligation to acquire participations and make payments pursuant to
this subsection is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including any amendment, renewal or extension of any
Letter of Credit or the occurrence and continuance of a Default or any reduction
or termination of the Commitments, and each such payment shall be made without
any offset, abatement, withholding or reduction whatsoever.

 

42

 

(e)                                  Reimbursement.  If
the LC Issuing Bank makes any LC Disbursement under a Letter of Credit, the
Borrower shall reimburse such LC Disbursement by paying an amount equal to such
LC Disbursement to the Administrative Agent not later than 12:00 noon, New York
City time, on the day that such LC Disbursement is made, if the Borrower
receives notice of such LC Disbursement before 10:00 a.m., New York City time,
on such day, or, if such notice has not been received by the Borrower before
such time on such day, then not later than 12:00 noon, New York City time, on
(i) the Business Day that the Borrower receives such notice, if such notice is
received before 10:00 a.m., New York City time, on the day of receipt, or (ii)
the next Business Day, if such notice is not received before such time on the
day of receipt; provided that, if
such LC Disbursement is at least $250,000, the Borrower may, subject to the
conditions to borrowing set forth herein, request in accordance with
Section 2.03 or 2.04 that such payment be made with the proceeds of a Base
Rate Revolving Loan or a Swingline Loan in an equivalent amount and, to the
extent so financed, the Borrower’s obligation to make such payment shall be
discharged and replaced by the resulting Base Rate Revolving Loan or Swingline
Loan.  If the Borrower fails to make
such payment when due, the Administrative Agent shall notify each Lender of the
applicable LC Disbursement, the payment then due from the Borrower in respect
thereof and such Lender’s Percentage thereof. 
Promptly after it receives such notice, each Lender shall pay to the
Administrative Agent its Percentage of the payment then due from the Borrower,
in the same manner as is provided in Section 2.06 with respect to Loans
made by such Lender (and Section 2.06(b) shall apply, mutatis  mutandis,
to such payment obligations of the Lenders), and the Administrative Agent shall
promptly pay to the LC Issuing Bank the amounts so received by it from the
Lenders.  If a Lender makes a payment
pursuant to this subsection to reimburse the LC Issuing Bank for any LC
Disbursement (other than by funding Base Rate Revolving Loans as contemplated
above), (i) such payment will not constitute a Loan and will not relieve the
Borrower of its obligation to reimburse such LC Disbursement and (ii) such
Lender will be subrogated to its pro rata share of the LC Issuing Bank’s claim
against the Borrower for such reimbursement. 
Promptly after the Administrative Agent receives any payment from the
Borrower pursuant to this subsection, the Administrative Agent will distribute
such payment to the LC Issuing Bank or, if Lenders have made payments pursuant
to this subsection to reimburse the LC Issuing Bank, then to such Lenders and
the LC Issuing Bank as their interests may appear.

 

(f)                                    Obligations Absolute.  The Borrower’s obligation to reimburse LC
Disbursements as provided in Section 2.05(e) shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement under any and all circumstances whatsoever and
irrespective of (i) any lack of validity or enforceability of any Letter of
Credit or this Agreement, or any term or provision therein, (ii) any draft or
other document presented under a Letter of Credit proving to be forged,
fraudulent or invalid in any respect or any 

 

43

 

statement therein being untrue or inaccurate
in any respect, (iii) payment by the LC Issuing Bank under a Letter of Credit
against presentation of a draft or other document that does not comply with the
terms of such Letter of Credit, or (iv) any other event or circumstance
whatsoever, whether or not similar to any of the foregoing, that might, but for
the provisions of this Section, constitute a legal or equitable discharge of,
or provide a right of setoff against, the Borrower’s obligations
hereunder.  None of the Administrative
Agent, the Lenders, the LC Issuing Bank and their respective Related Parties
shall have any liability or responsibility by reason of or in connection with
the issuance or transfer of any Letter of Credit or any payment or failure to
make any payment thereunder (irrespective of any of the circumstances referred
to in the preceding sentence), or any error, omission, interruption, loss or
delay in transmission or delivery of any draft, notice or other communication
under or relating to any Letter of Credit (including any document required to
make a drawing thereunder), any error in interpretation of technical terms or
any consequence arising from causes beyond the control of the LC Issuing Bank; provided that the foregoing shall not
excuse the LC Issuing Bank from liability to the Borrower to the extent of any
direct damages (as opposed to consequential damages, claims in respect of which
are waived by the Borrower to the extent permitted by applicable law) suffered
by the Borrower that are caused by the LC Issuing Bank’s failure to exercise
care when determining whether drafts and other documents presented under a
Letter of Credit comply with the terms thereof.  In the absence of gross negligence or wilful misconduct on the
part of the LC Issuing Bank (as finally determined by a court of competent
jurisdiction), the LC Issuing Bank shall be deemed to have exercised care in
each such determination.  Without
limiting the generality of the foregoing, the parties agree that, with respect
to documents presented which appear on their face to be in substantial
compliance with the terms of a Letter of Credit, the LC Issuing Bank may, in
its sole discretion, either (A) accept and make payment upon such documents
without responsibility for further investigation, regardless of any notice or
information to the contrary, or (B) refuse to accept and make payment upon such
documents if such documents do not strictly comply with the terms of such
Letter of Credit.

 

(g)                                 Disbursement Procedures.  The LC Issuing Bank shall, promptly after
its receipt thereof, examine all documents purporting to represent a demand for
payment under a Letter of Credit.  The
LC Issuing Bank shall promptly notify the Administrative Agent and the Borrower
by telephone (confirmed by telecopy) of such demand for payment and whether the
LC Issuing Bank has made or will make an LC Disbursement pursuant thereto; provided that any failure to give or delay
in giving such notice will not relieve the Borrower of its obligation to
reimburse the LC Issuing Bank and the Lenders with respect to any such LC
Disbursement.

 

(h)                                 Interim Interest.  Unless the Borrower reimburses an LC
Disbursement in full on the day it is made, the unpaid amount thereof shall
bear 

 

44

 

interest, for each day from and including the day on which such LC
Disbursement is made to but excluding the day on which the Borrower reimburses
such LC Disbursement, at the rate per annum then applicable to Base Rate
Revolving Loans; provided that,
if the Borrower fails to reimburse such LC Disbursement when due pursuant to
Section 2.05(e), then Sections 2.13(d)and 2.13(e) shall apply.  Interest accrued pursuant to this subsection
shall be for the account of the LC Issuing Bank, except that a pro rata share
of interest accrued on and after the day that any Lender reimburses the LC
Issuing Bank for a portion of such LC Disbursement pursuant to
Section 2.05(e) shall be for the account of such Lender.

 

(i)                                     Replacement of LC Issuing Bank.  The LC Issuing Bank may be replaced at any
time by written agreement among the Borrower, the Administrative Agent, the
replaced LC Issuing Bank and the successor LC Issuing Bank.  The Administrative Agent shall notify the
Lenders of any such replacement.  At the
time any such replacement becomes effective, the Borrower shall pay all unpaid
fees accrued for the account of the replaced LC Issuing Bank pursuant to
Section 2.12(b).  On and after the
effective date of any such replacement, (i) the successor LC Issuing Bank will
have all the rights and obligations of the LC Issuing Bank under this Agreement
with respect to Letters of Credit to be issued thereafter and (ii) references
herein to the term “LC Issuing Bank” will be deemed to refer to such successor
or to any previous LC Issuing Bank, or to such successor and all previous LC
Issuing Banks, as the context shall require. 
After an LC Issuing Bank is replaced, it will remain a party hereto and
will continue to have all the rights and obligations of an LC Issuing Bank
under this Agreement with respect to Letters of Credit issued by it before such
replacement, but will not be required to issue additional Letters of Credit.

 

(j)                                     Cash Collateralization.  If an Event of Default shall occur and be
continuing, on the Business Day that the Borrower receives notice from the
Administrative Agent or the Required Lenders (or, if the maturity of the Loans
has been accelerated, Lenders with LC Exposures representing more than 50% of
the total LC Exposure) demanding the deposit of cash collateral pursuant to
this subsection, the Borrower shall deposit in its Cash Collateral Account an
amount in cash equal to 102% of the total LC Exposure as of such date plus any
accrued and unpaid interest thereon; provided
that the obligation to deposit such cash collateral will become effective
immediately, and such deposit will become immediately due and payable, without
demand or other notice of any kind, upon the occurrence of any Event of Default
with respect to the Borrower described in clause (i) or (j) of Article
7.  Any amount so deposited (including
any earnings thereon) will be withdrawn from the Borrower’s Cash Collateral
Account by the Administrative Agent and applied to pay LC Reimbursement
Obligations as they become due; provided
that (i) if at any time all Events of Default have been cured or waived, such
amount, to the extent not theretofore so applied, (and excluding amounts
required to be deposited in the Cash Collateral Account pursuant to Section 2.10(b)
or Section 5.12(b)) will be returned to the Borrower upon its 

 

45

 

request and (ii) if at any time the maturity of the Loans has been
accelerated, such amount (to the extent not theretofore so applied or returned)
will be applied to pay the Secured Obligations as provided in Section 7 of
the Security Agreement.

 

Section 2.06.  Funding of
Revolving Loans.  (a)  Each Lender making a Revolving Loan hereunder shall wire
the principal amount thereof in immediately available funds, by 1:00 p.m., New
York City time, on the proposed date of such Loan, to the account of the
Administrative Agent most recently designated by it for such purpose by notice
to the Lenders.  The Administrative
Agent shall make such funds available to the Borrower by promptly crediting the
amounts so received, in like funds, to an account of the Borrower maintained
with the Administrative Agent in New York City and designated by the Borrower
in the applicable Borrowing Request; provided
that Base Rate Revolving Loans made to finance the reimbursement of an LC
Disbursement as provided in Section 2.05(e) will be remitted by the
Administrative Agent to the LC Issuing Bank.

 

(b)                                 Unless
the Administrative Agent receives notice from a Lender before the proposed date
of any Borrowing that such Lender will not make its share of such Borrowing
available to the Administrative Agent, the Administrative Agent may assume that
such Lender has made such share available on such date in accordance with Section 2.06(a)
and may, in reliance on such assumption, make a corresponding amount available
to the Borrower.  In such event, if a
Lender has not in fact made its share of such Borrowing available to the Administrative
Agent, such Lender and the Borrower severally agree to pay to the
Administrative Agent forthwith on demand such corresponding amount with
interest thereon, for each day from and including the day such amount is made
available to the Borrower to but excluding the date of payment to the Administrative
Agent, at (i) in the case of such Lender, the greater of the Federal Funds
Effective Rate and a rate reasonably determined by the Administrative Agent in
accordance with banking industry rules on interbank compensation or (ii) in the
case of the Borrower, the interest rate applicable to Base Rate Loans.  If such Lender pays such amount to the
Administrative Agent, such amount shall constitute such Lender’s Loan included
in such Borrowing.

 

Section 2.07.  Interest
Elections.  (a)  Each
Borrowing of Revolving Loans initially shall be of the Interest Type specified
in the applicable Borrowing Request and, in the case of a Eurodollar Borrowing,
shall have an initial Interest Period as specified in such Borrowing Request.  Thereafter, the Borrower may elect to
convert such Borrowing to a different Interest Type or, in the case of a
Eurodollar Borrowing, to continue such Borrowing for one or more additional
Interest Periods, all as provided in this Section.  The Borrower may elect different options with respect to
different portions of the affected Borrowing, in which case each such portion
shall be allocated ratably among the Lenders holding the Loans comprising such
Borrowing, and the Loans comprising each such portion shall be considered a
separate Borrowing.

 

46

 

(b)                                 To
make an election pursuant to this Section, the Borrower shall notify the
Administrative Agent thereof by telephone by the time that a Borrowing Request
would be required under Section 2.03 if the Borrower were requesting that
a Borrowing of the Interest Type resulting from such election be made on the
effective date of such election.  Each
such telephonic Interest Election shall be irrevocable and shall be confirmed
promptly by hand delivery, telecopy or e-mail transmission to the
Administrative Agent of a written Interest Election in a form approved by the
Administrative Agent and signed by the Borrower.

 

(c)                                  Each
telephonic and written Interest Election shall specify the following information
in compliance with Section 2.02 and subsection (e) of this Section:

 

(i)                                     the Borrowing to
which such Interest Election applies and, if different options are being
elected with respect to different portions thereof, the portions thereof to be
allocated to each resulting Borrowing (in which case the information to be
specified pursuant to clauses (iii) and (iv) below shall be specified for each
resulting Borrowing);

 

(ii)                                  the effective date of
the election made pursuant to such Interest Election, which shall be a Business
Day;

 

(iii)                               whether
the resulting Borrowing is to be a Base Rate Borrowing or a Eurodollar
Borrowing; and

 

(iv)                              if
the resulting Borrowing is to be a Eurodollar Borrowing, the Interest Period to
be applicable thereto after giving effect to such election, which shall be a
period contemplated by the definition of “Interest Period”.

 

If an Interest Election requests a Eurodollar Borrowing but does not
specify an Interest Period, the Borrower will be deemed to have selected an
Interest Period of one month’s duration.

 

(d)                                 Promptly
after it receives an Interest Election, the Administrative Agent shall advise
each Lender as to the details thereof and such Lender’s portion of each
resulting Borrowing.

 

(e)                                  If
the Borrower fails to deliver a timely Interest Election with respect to a
Eurodollar Borrowing before the end of an Interest Period applicable
thereto,  such Borrowing (unless repaid)
will be converted to a Base Rate Borrowing at the end of such Interest
Period.  Notwithstanding any contrary provision
hereof, if an Event of Default has occurred and is continuing and the
Administrative Agent, at the request of the Required Lenders, so notifies the
Borrower, then, so long as an Event of Default is continuing, (i) no
outstanding 

 

47

 

Borrowing may be converted to or continued as
a Eurodollar Borrowing and (ii) each Eurodollar Borrowing (unless repaid) will
be converted to a Base Rate Borrowing at the end of the Interest Period
applicable thereto on the date of such notice.

 

Section 2.08.  Termination or Reduction of Commitments.  (a)  Unless
previously terminated, the Commitments will terminate on the Maturity Date.

 

(b)                                 The
Borrower may at any time terminate, or from time to time reduce, the Commitments;
provided that (i) the amount of
each reduction of the Commitments shall be an integral multiple
of $1,000,000 and not less than $5,000,000 and (ii) the Borrower
shall not terminate or reduce the Commitments if, after giving effect thereto
and to any concurrent prepayment of Revolving Loans pursuant to
Section 2.10, the total Exposures would exceed the total Commitments.

 

(c)                                  The
Borrower shall notify the Administrative Agent of any election to terminate or
reduce the Commitments under Section 2.08(b), at least three Business Days
before the effective date of such termination or reduction, specifying such
election and the effective date thereof. 
Promptly after it receives any such notice, the Administrative Agent shall
advise the Lenders of the contents thereof. 
Each notice delivered by the Borrower pursuant to this Section will be
irrevocable; provided that any
such notice terminating the Commitments may state that it is conditioned on the
effectiveness of other credit facilities, in which case such notice may be
revoked by the Borrower (by notice to the Administrative Agent on or before the
specified effective date) if such condition is not satisfied.  Any termination or reduction of the
Commitments will be permanent and will be made ratably among the Lenders in
accordance with their respective Commitments.

 

Section 2.09.  Payment at
Maturity; Evidence of Debt.  (a)  The
Borrower unconditionally promises to pay to the Administrative Agent on the
Maturity Date, for the account of each Lender, the then unpaid principal amount
of such Lender’s Revolving Loans.

 

(b)                                 Each
Lender shall maintain in accordance with its usual practice an account or
accounts evidencing the indebtedness of the Borrower to such Lender resulting
from each Loan made by such Lender, including the amounts of principal and
interest payable and paid to such Lender from time to time.

 

(c)                                  The
Administrative Agent shall maintain accounts in which it shall record
(i) the amount of each Loan made hereunder, the Interest Type thereof and
each Interest Period (if any) applicable thereto, (ii) the amount of any
principal or interest due and payable or to become due and payable from the
Borrower to each 

 

48

 

Lender hereunder and (iii) the amount of
any sum received by the Administrative Agent hereunder for the account of the
Lenders and each Lender’s share thereof.

 

(d)                                 The
entries made in the accounts maintained pursuant to subsections (b) and (c) of
this Section shall be prima  facie evidence of the existence and
amounts of the obligations recorded therein; provided
that any failure by any Lender or the Administrative Agent to maintain such
accounts or any error therein shall not affect the Borrower’s obligation to
repay the Loans in accordance with the terms of this Agreement.

 

(e)                                  Any
Lender may request that Loans made by it be evidenced by a promissory
note.  In such event, the Borrower shall
prepare, execute and deliver to such Lender a promissory note payable to the
order of such Lender (or, if requested by such Lender, to such Lender and its
registered assigns) and in a form approved by the Administrative Agent.  Thereafter, the Loans evidenced by such
promissory note and interest thereon shall at all times (including after
assignment pursuant to Section 9.04) be represented by one or more
promissory notes in such form payable to the order of the payee named therein
(or, if such promissory note is a registered note, to such payee and its
registered assigns).

 

Section 2.10.  Optional
and Mandatory Prepayments.  (a) Optional
Prepayments.  The
Borrower will have the right at any time to prepay any Borrowing in whole or in
part, subject to the provisions of this Section.

 

(b)                                 Mandatory Prepayments.  If at any date the Total Outstanding Amount
exceeds the Maximum Facility Availability calculated as of such date, then not
later than the next succeeding Business Day, the Borrower shall be required to
prepay the Loans (or, if no Loans are outstanding, deposit cash in the Cash
Collateral Account to cash collateralize Letter of Credit liabilities) in an
amount equal to such excess until the Total Outstanding Amount, net of the
amount of cash collateral deposited in the Cash Collateral Account, does not
exceed the Maximum Facility Availability.

 

(c)                                  Allocation  of  Prepayments.  Before any optional or mandatory prepayment
of Borrowings hereunder, the Borrower shall select the Borrowing or Borrowings
to be prepaid and shall specify such selection in the notice of such prepayment
pursuant to Section 2.10(f).

 

(d)                                 Partial Prepayments.  Each partial prepayment of a Borrowing shall
be in an amount that would be permitted under Section 2.02(b) for a
Borrowing of the same Interest Type, except as needed to apply fully the
required amount of a mandatory prepayment. 
Each partial prepayment of a Borrowing shall be applied ratably to the
Loans included in such Borrowing.

 

49

 

(e)                                  Accrued Interest.  Each prepayment of a Borrowing shall be
accompanied by accrued interest to the extent required by Section 2.11 or
Section 2.13.

 

(f)                                    Notice of
Prepayments.  The Borrower
shall notify the Administrative Agent by telephone (confirmed by telecopy or
e-mail transmission) of any prepayment of any Borrowing hereunder (i) in the
case of a Eurodollar Borrowing, not later than 12:00 noon, New York City time,
three Business Days before the date of prepayment and (ii) in the case of a
Base Rate Borrowing, not later than 12:00 noon, New York City time, on the date
of prepayment.  Each such notice shall
be irrevocable and shall specify the prepayment date, the principal amount of
each Borrowing or portion thereof to be prepaid and, in the case of a mandatory
prepayment, a reasonably detailed calculation of the amount of such prepayment;
provided that, if a notice of
optional prepayment is given in connection with a conditional notice of
termination of the Commitments as contemplated by Section 2.08(c), then
such notice of prepayment may be revoked if such notice of termination is
revoked in accordance with Section 2.08(c).  Promptly after it receives any such notice, the Administrative
Agent shall advise the Lenders of the contents thereof.

 

Section 2.11.  Change in Control.  (a)  If a Change in Control of the Borrower shall occur, the
Borrower will, within one Business Day after the occurrence thereof, give the
Administrative Agent notice thereof, and the Administrative Agent shall
promptly notify each Lender thereof. 
Such notice shall describe in reasonable detail the facts and
circumstances giving rise thereto and the date of such Change in Control and
each Lender may, by notice to the Borrower and the Administrative Agent (a “Termination  Notice”) given not later than ten days after the date of such
Change of Control, terminate its Commitment, which shall be terminated, and
declare any Loans made by it (together with accrued interest thereon) and any
other amounts payable hereunder for its account to be, and such Loans and such
amounts shall become, due and payable, in each case on the day following delivery
of such Termination Notice (or if such day is not a Business Day, the next
succeeding Business Day), without presentment, demand, protest or other notice
of any kind, all of which are hereby waived by the Borrower.

 

(b)                                 If
the Commitment of any Lender is terminated pursuant to this Section at a time
when any Letter of Credit is outstanding, then (i) such Lender shall remain
responsible to the LC Issuing Bank with respect to such Letter of Credit to the
same extent as if its Commitment had not terminated and (ii) the Borrower shall
pay to such Lender an amount in immediately available funds (which funds shall
be held as collateral pursuant to arrangements satisfactory to such Lender)
equal to such Lender’s Percentage of the aggregate amount available for drawing
under all Letters of Credit outstanding at such time.

 

50

 

(c)                                  If
the Commitment of any Lender is terminated pursuant to this Section at a time
when any Swingline Loan is outstanding, then (i) such Lender shall remain
responsible to the Swingline Lender with respect to such Swingline Loan to the
same extent as if its Commitment had not terminated and (ii) the Borrower shall
pay to such Lender an amount in immediately available funds (which funds shall
be held as collateral pursuant to arrangements satisfactory to such Lender)
equal to such Lender’s Percentage of the aggregate outstanding principal amount
of such Swingline Loan at such time.

 

Section 2.12.  Fees.  (a)  The Borrower shall pay to
the Administrative Agent for the account of each Lender a commitment fee, which
shall accrue at the Applicable Rate on the average daily unused amount of each
Commitment of such Lender during the period from and including the Effective
Date to the date on which such Commitment terminates.  Accrued commitment fees will be payable in arrears on the last
day of March, June, September and December of each year and the day when the
Commitments terminate, commencing on the first such day to occur after the date
hereof.  All commitment fees will be
computed on the basis of a year of 360 days and will be payable for the actual
number of days elapsed (including the first day but excluding the last day).  For purposes of computing commitment fees, a
Lender’s Commitment will be deemed to be used to the extent of its outstanding
Revolving Loans and LC Exposure (and its Swingline Exposure will be disregarded
for such purpose).

 

(b)                                 The
Borrower shall pay (i) to the Administrative Agent for the account of each
Lender a participation fee with respect to its participations in Letters of
Credit, which shall accrue for each day, at the Applicable Rate that applies to
Eurodollar Revolving Loans, on the amount of such Lender’s LC Exposure
(excluding any portion thereof attributable to unreimbursed LC Disbursements)
on such day, during the period from the Effective Date to the later of the date
on which such Lender’s Commitment terminates and the date on which such Lender
ceases to have any LC Exposure, and (ii) to the LC Issuing Bank a fronting fee,
which shall accrue at the rate or rates per annum separately agreed upon by the
Borrower and such LC Issuing Bank on the average daily amount of the LC
Exposure (excluding any portion thereof attributable to unreimbursed LC
Disbursements) during the period from the Effective Date to the later of the
date on which the Commitments terminate and the date on which there ceases to
be any LC Exposure, as well as the fees separately agreed upon by the Borrower
and such LC Issuing Bank with respect to issuing, amending, renewing or
extending any Letter of Credit or processing drawings thereunder.  Participation fees and fronting fees accrued
through the last day of March, June, September and December of each year will
be payable on the third Business Day following such last day, commencing on the
first such date to occur after the Effective Date; provided that all such fees accrued to the date on which the
Commitments terminate will be payable on such date, and any such fees accruing
after such date will be payable on demand. 
Any other fees payable to the LC 

 

51

 

Issuing Bank pursuant to this subsection will
be payable within 10 days after demand. 
All such participation fees and fronting fees will be computed on the
basis of a year of 360 days and will be payable for the actual number of days
elapsed (including the first day but excluding the last day).

 

(c)                                  The
Borrower shall pay to the Administrative Agent, for its own account, fees
payable in the amounts and at the times separately agreed upon by the Borrower
and the Administrative Agent.

 

(d)                                 All
fees payable hereunder shall be paid on the dates due, in immediately available
funds, to the Administrative Agent (or to the LC Issuing Bank, in the case of fees
payable to it) for distribution, in the case of commitment fees and
participation fees, to the Lenders entitled thereto.  Fees paid shall not be refundable under any circumstances.

 

Section 2.13.  Interest.  (a)  The
Loans comprising each Base Rate Borrowing shall bear interest for each day at
the Alternate Base Rate plus the Applicable Rate.

 

(b)                                 The
Loans comprising each Eurodollar Borrowing shall bear interest for each
Interest Period in effect for such Borrowing at the Adjusted LIBO Rate for such
Interest Period plus the Applicable Rate.

 

(c)                                  The
Swingline Loans shall bear interest at the rate applicable to Base Rate
Revolving Loans.

 

(d)                                 Notwithstanding
the foregoing, if any principal of or interest on any Loan or any fee or other
amount payable by the Borrower hereunder is not paid when due, whether at
stated maturity, upon acceleration or otherwise, such overdue amount shall bear
interest, after as well as before judgment, at a rate per annum equal to (i) in
the case of overdue principal of any Loan, 2% plus the rate that would, in the
absence of an Event of Default, be otherwise applicable to such Loan as
provided in the preceding subsections of this Section or (ii) in the case of
any other amount, 2% plus the rate that would, in the absence of an Event of
Default, be applicable to Base Rate Revolving Loans, as provided in subsection
(a) of this Section.

 

(e)                                  Interest
accrued on each Loan shall be payable in arrears on each Interest Payment Date
for such Loan and upon termination of the Commitments; provided that (i) interest accrued
pursuant to Section 2.13(d) shall be payable on demand, (ii) upon any
repayment of any Loan (except a prepayment of a Base Rate Revolving Loan before
the end of the Revolving Availability Period), interest accrued on the
principal amount repaid shall be payable on the date of such repayment and
(iii) upon any conversion of a Eurodollar Loan before the end of the current
Interest Period therefor, interest accrued on such Loan shall be payable on the
effective date of such conversion.

 

52

 

(f)                                    All
interest hereunder will be computed on the basis of a year of 360 days, except
that interest computed by reference to the Alternate Base Rate at times when
the Alternate Base Rate is based on the Prime Rate will be computed on the
basis of a year of 365 days (or 366 days in a leap year), and in each case will
be payable for the actual number of days elapsed (including the first day but
excluding the last day).  Each
applicable Alternate Base Rate or Adjusted LIBO Rate shall be determined by the
Administrative Agent, and its determination thereof will be conclusive absent
manifest error.

 

Section 2.14.  Alternate Rate of Interest.  If
before the beginning of any Interest Period for a Eurodollar Borrowing:

 

(i)                                     deposits in
dollars in the applicable amounts are not being offered by the Administrative
Agent in the London interbank market for such Interest Period; or

 

(ii)                                  Lenders having 50% or
more of the aggregate principal amount of the Loans to be included in such
Borrowing advise the Administrative Agent that the Adjusted LIBO Rate for such
Interest Period will not adequately and fairly reflect the cost to such Lenders
of making or maintaining such Loans for such Interest Period;

 

then the Administrative Agent shall give notice thereof to the Borrower
and the Lenders by telephone or telecopy as promptly as practicable thereafter
and, until the Administrative Agent notifies the Borrower and the Lenders that
the circumstances giving rise to such notice no longer exist, (i) any Interest
Election that requests the conversion of any Borrowing to, or continuation of
any Borrowing as, a Eurodollar Borrowing will be ineffective and (ii) if any
Borrowing Request requests a Eurodollar Borrowing, such Borrowing will be made
as a Base Rate Borrowing.

 

Section 2.15.  Increased Costs.  (a)  If
any Change in Law shall:

 

(i)                                     impose, modify or
deem applicable any reserve, special deposit or similar requirement against
assets of, deposits with or for the account of, or credit extended by, any
Lender (except any such reserve requirement reflected in the Adjusted LIBO
Rate) or the LC Issuing Bank; or

 

(ii)                                  impose on any Lender
or the LC Issuing Bank or the London interbank market any other condition
affecting this Agreement or Eurodollar Loans made by such Lender or any Letter
of Credit or participation therein;

 

and the result of any of the foregoing shall be to increase the cost to
such Lender of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to 

 

53

 

make Eurodollar Loans) or to increase the cost to such Lender or the LC
Issuing Bank of participating in, issuing or maintaining any Letter of Credit
or to reduce any amount received or receivable by such Lender or the LC Issuing
Bank hereunder (whether of principal, interest or otherwise), then the Borrower
shall pay to such Lender or the LC Issuing Bank, as the case may be, such
additional amount or amounts as will compensate it for such additional cost
incurred or reduction suffered.

 

(b)                                 If
any Lender or the LC Issuing Bank determines that any Change in Law regarding
capital requirements has or would have the effect of reducing the rate of
return on such Lender’s or the LC Issuing Bank’s capital or on the capital of
such Lender’s or the LC Issuing Bank’s holding company, if any, as a
consequence of this Agreement or the Loans made by, or participations in
Letters of Credit held by, such Lender, or the Letters of Credit issued by the
LC Issuing Bank, to a level below that which such Lender or the LC Issuing Bank
or such Lender’s or the LC Issuing Bank’s holding company could have achieved
but for such Change in Law (taking into consideration such Lender’s or the LC
Issuing Bank’s policies and the policies of such Lender’s or the LC Issuing
Bank’s holding company with respect to capital adequacy), then from time to
time following receipt of the certificate referred to in subsection (c) of this
Section, the Borrower shall pay to such Lender or the LC Issuing Bank, as the
case may be, such additional amount or amounts as will compensate it or its
holding company for any such reduction suffered.

 

(c)                                  A
certificate of a Lender or the LC Issuing Bank setting forth the amount or
amounts necessary to compensate it or its holding company, as the case may be,
as specified in subsection (a) or (b) of this Section shall be delivered to the
Borrower and shall be conclusive absent manifest error.  Each such certificate shall contain a
representation and warranty on the part of the Lender to the effect that such
Lender has complied with its obligations pursuant to Section 2.19 hereof
in an effort to eliminate or reduce such amount.  The Borrower shall pay such Lender or the LC Issuing Bank, as the
case may be, the amount shown as due on any such certificate within
10 days after receipt thereof.

 

(d)                                 Failure
or delay by any Lender or the LC Issuing Bank to demand compensation pursuant
to this Section will not constitute a waiver of its right to demand such compensation;
provided that the Borrower will
not be required to compensate a Lender or the LC Issuing Bank pursuant to this
Section for any increased cost or reduction incurred more than 180 days before
it notifies the Borrower of the Change in Law giving rise to such increased
cost or reduction and of its intention to claim compensation therefor.  However, if the Change in Law giving rise to
such increased cost or reduction is retroactive, then the 180-day period referred
to above will be extended to include the period of retroactive effect thereof.

 

54

 

Section 2.16.  Break Funding Payments.  If
(a) any principal of any Eurodollar Loan is repaid on a day other than the last
day of an Interest Period applicable thereto (including as a result of an Event
of Default), (b) any Eurodollar Loan is converted on a day other than the last
day of an Interest Period applicable thereto, (c) the Borrower fails to borrow,
convert, continue or prepay any Revolving Loan on the date specified in any
notice delivered pursuant hereto (regardless of whether such notice may be
revoked under Section 2.10(f) and is revoked in accordance therewith), or
(d) any Eurodollar Loan is assigned on a day other than the last day of an
Interest Period applicable thereto as a result of a request by the Borrower
pursuant to Section 2.19, then the Borrower shall compensate each Lender
for its loss, cost and expense attributable to such event.  In the case of a Eurodollar Loan, such loss,
cost and expense to any Lender shall be deemed to include an amount determined
by such Lender to be the excess, if any, of (i) the amount of interest that
would have accrued on the principal amount of such Loan had such event not
occurred, at the Adjusted LIBO Rate that would have been applicable to such
Loan, for the period from the date of such event to the end of the then current
Interest Period therefor (or, in the case of a failure to borrow, convert or
continue, the Interest Period that would have begun on the date of such
failure), over (ii) the amount of interest that would accrue on such principal
amount for such period at the interest rate which such Lender would bid were it
to bid, at the beginning of such period, for dollar deposits of a comparable
amount and period from other banks in the eurodollar market.  A certificate of any Lender setting forth
any amount or amounts that such Lender is entitled to receive pursuant to this
Section shall be delivered to the Borrower and shall be conclusive absent
manifest error.  The Borrower shall pay
such Lender the amount shown as due on any such certificate within 10 days
after receipt thereof.

 

Section 2.17.  Taxes.  (a)  All
payments by the Borrower under the Loan Documents shall be made free and clear
of and without deduction for any Indemnified Taxes or Other Taxes; provided that, if the Borrower shall be
required to deduct any Indemnified Taxes or Other Taxes from such payments,
then (i) the sum payable will be increased as necessary so that, after all
required deductions (including deductions applicable to additional sums payable
under this Section) are made, each relevant Lender Party receives an amount
equal to the sum it would have received had no such deductions been made, (ii)
the Borrower shall make such deductions and (iii) the Borrower shall pay the
full amount deducted to the relevant Governmental Authority in accordance with
applicable law.

 

(b)                                 In
addition, the Borrower shall pay any Other Taxes to the relevant Governmental
Authority in accordance with applicable law.

 

(c)                                  The
Borrower shall indemnify each Lender Party, within 10 days after written demand
therefor, for the full amount of any Indemnified Taxes or Other Taxes paid by
such Lender Party with respect to any payment by or 

 

55

 

obligation of the Borrower under the Loan
Documents (including Indemnified Taxes or Other Taxes imposed or asserted on or
attributable to amounts payable under this Section) and any penalties, interest
and reasonable expenses arising therefrom or with respect thereto, whether or
not such Indemnified Taxes or Other Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority.  A certificate as to the amount of any such payment delivered to
the Borrower by a Lender Party on its own behalf, or by the Administrative
Agent on behalf of a Lender Party, shall be conclusive absent manifest
error.  If the Borrower has indemnified
any Lender Party pursuant to this Section 2.17(c), such Lender Party shall
take such steps as the Borrower shall reasonably request (at the Borrower’s
expense) to assist the Borrower in recovering the Indemnified Taxes or Other
Taxes and any penalties or interest attributable thereto; provided that no Lender Party shall be
required to take any action pursuant to this Section 2.17(c) unless, in
the judgment of such Lender Party, such action (i) would not subject such
Lender Party to any unreimbursed cost or expense and (ii) would not otherwise
be disadvantageous to such Lender Party.

 

(d)                                 As
soon as practicable after the Borrower pays any Indemnified Taxes or Other
Taxes to a Governmental Authority, the Borrower shall deliver to the
Administrative Agent the original or a certified copy of a receipt issued by
such Governmental Authority evidencing such payment, a copy of the return
reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.

 

(e)                                  Any
Foreign Lender that is entitled to an exemption from or reduction of
withholding tax under the laws of the United States, or any treaty to which the
United States is a party, with respect to payments under this Agreement shall
deliver to the Borrower (with a copy to the Administrative Agent), at the time
or times prescribed by applicable law, such properly completed and executed
documentation prescribed by applicable law or reasonably requested by the
Borrower as will permit such payments to be made without withholding or at a
reduced rate.  If any such Foreign
Lender becomes subject to any Tax because it fails to comply with this
subsection as and when prescribed by applicable law, the Borrower shall take
such steps (at such Foreign Lender’s expense) as such Foreign Lender shall
reasonably request to assist such Foreign Lender to recover such Tax.

 

Section 2.18.  Payments
Generally; Pro Rata Treatment; Sharing of Set-offs.  (a)  The
Borrower shall make each payment required to be made by it under the Loan
Documents (whether of principal, interest or fees, or reimbursement of LC
Disbursements, or amounts payable under Section 2.15, 2.16 or 2.17 or
otherwise) before the time expressly required under the relevant Loan Document
for such payment (or, if no such time is expressly required, before 12:00 noon,
New York City time), on the date when due, in immediately available funds,
without set-off or counterclaim.  Any
amount received after such time on any day 

 

56

 

may, in the discretion of the Administrative
Agent, be deemed to have been received on the next succeeding Business Day for
purposes of calculating interest thereon. 
All such payments shall be made to the Administrative Agent at its
offices at One Chase Manhattan Plaza, 8th Floor, New York, NY 10081,
except payments to be made directly to the LC Issuing Bank or the Swingline
Lender as expressly provided herein and except that payments pursuant to
Sections 2.15, 2.16, 2.17 and 9.03 shall be made directly to the Persons
entitled thereto and payments pursuant to other Loan Documents shall be made to
the Persons specified therein.  The
Administrative Agent shall distribute any such payment received by it for the
account of any other Person to the appropriate recipient promptly after receipt
thereof.  Unless otherwise specified
herein, if any payment under any Loan Document shall be due on a day that is
not a Business Day, the date for payment will be extended to the next
succeeding Business Day and, if such payment accrues interest, interest thereon
will be payable for the period of such extension.  All payments under each Loan Document shall be made in dollars.

 

(b)                                 If
at any time insufficient funds are received by and available to the
Administrative Agent to pay fully all amounts of principal, unreimbursed LC
Disbursements, interest and fees then due hereunder, such funds shall be
applied (i) first, to pay interest and fees then due hereunder, ratably among
the parties entitled thereto in accordance with the amounts of interest and
fees then due to such parties, and (ii) second, to pay principal and unreimbursed
LC Disbursements then due hereunder, ratably among the parties entitled thereto
in accordance with the amounts of principal and unreimbursed LC Disbursements
then due to such parties.

 

(c)                                  If
any Lender shall, by exercising any right of set-off or counterclaim or
otherwise, obtain payment in respect of any principal of or interest on any of
its Loans or any of its participations in LC Disbursements or Swingline Loans
resulting in such Lender receiving payment of a greater proportion of the aggregate
amount of its Loans and participations in LC Disbursements and Swingline Loans
and accrued interest thereon than the proportion received by any other Lender,
then the Lender receiving such greater proportion shall purchase (for cash at
face value) participations in the Loans and participations in LC Disbursements
and Swingline Loans of other Lenders to the extent necessary so that the
benefit of all such payments shall be shared by the Lenders ratably in
accordance with the aggregate amount of principal of and accrued interest on
their respective Loans and participations in LC Disbursements and Swingline
Loans; provided that (i) if any
such participations are purchased and all or any portion of the payment giving
rise thereto is recovered, such participations shall be rescinded and the
purchase price restored to the extent of such recovery, without interest, and
(ii) the provisions of this subsection shall not apply to any payment made by
the Borrower pursuant to and in accordance with the express terms of this
Agreement or any payment obtained by a Lender as 

 

57

 

consideration for the assignment of or sale
of a participation in any of its Loans or participations in LC Disbursements to
any assignee or participant, other than to the Borrower or any Subsidiary or
Affiliate thereof (as to which the provisions of this subsection shall
apply).  The Borrower consents to the
foregoing and agrees, to the extent it may effectively do so under applicable
law, that any Lender acquiring a participation pursuant to the foregoing
arrangements may exercise against the Borrower rights of set-off and
counterclaim with respect to such participation as fully as if such Lender were
a direct creditor of the Borrower in the amount of such participation.

 

(d)                                 Unless,
before the date on which any payment is due to the Administrative Agent for the
account of one or more Lender Parties hereunder, the Administrative Agent
receives from the Borrower notice that the Borrower will not make such payment,
the Administrative Agent may assume that the Borrower has made such payment on
such date in accordance herewith and may, in reliance on such assumption,
distribute to each relevant Lender Party the amount due to it.  In such event, if the Borrower has not in
fact made such payment, each Lender Party severally agrees to repay to the
Administrative Agent forthwith on demand the amount so distributed to such
Lender Party with interest thereon, for each day from and including the day
such amount is distributed to it to but excluding the day it repays the
Administrative Agent, at the greater of the Federal Funds Effective Rate and a
rate determined by the Administrative Agent in accordance with banking industry
rules on interbank compensation.

 

(e)                                  If
any Lender fails to make any payment required to be made by it pursuant to
Section 2.04(e), 2.05(d), 2.05(e), 2.06(b), 2.18(d) or 9.03(c), the
Administrative Agent may, in its discretion (notwithstanding any contrary
provision hereof), apply any amounts thereafter received by the Administrative
Agent for the account of such Lender to satisfy such Lender’s obligations under
such Sections until all such unsatisfied obligations are fully paid.

 

Section 2.19.  Lender’s Obligation to Mitigate; Replacement
of Lenders.  (a)  If any Lender requests
compensation under Section 2.15, or if the Borrower is required to
pay any additional amount to any Lender or any Governmental Authority for the
account of any Lender pursuant to Section 2.17, then such Lender shall use
all commercially reasonable efforts to mitigate or eliminate the amount of such
compensation or additional amount, including without limitation, by designating
a different lending office for funding or booking its Loans hereunder or by
assigning its rights and obligations hereunder to another of its offices,
branches or affiliates; provided
that no Lender shall be required to take any action pursuant to this
Section 2.19(a) unless, in the judgment of such Lender, such designation
or assignment or other action (i) would eliminate or reduce amounts payable
pursuant to Section 2.15 or 2.17, as the case may be, in the future, (ii)
would not subject such Lender to any unreimbursed cost or expense and (iii)
would not otherwise be disadvantageous to such Lender.  The Borrower 

 

58

 

shall pay all reasonable costs and expenses
incurred by any Lender in connection with any such designation or assignment.

 

(b)                                 If
any Lender requests compensation under Section 2.15, or if the Borrower is
required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 2.17, or if
any Lender defaults in its obligation to fund Loans hereunder, then the
Borrower may, at its sole expense and effort, upon notice to such Lender and
the Administrative Agent, require such Lender to assign, without recourse (in
accordance with and subject to the restrictions contained in
Section 9.04), all its interests, rights and obligations under this
Agreement to an assignee that shall assume such obligations (which assignee may
be another Lender, if a Lender accepts such assignment); provided that (i) the Borrower shall have
received the prior written consent of the Administrative Agent (and, if a
Commitment is being assigned, the LC Issuing Bank and the Swingline Lender),
which consents shall not unreasonably be withheld, (ii) such Lender shall have
received payment of an amount equal to the outstanding principal of its Loans
and participations in LC Disbursements and Swingline Loans, accrued interest
thereon, accrued fees and all other amounts payable to it hereunder, from the
assignee (to the extent of such outstanding principal and accrued interest and
fees) or the Borrower (in the case of all other amounts) and (iii) in the case
of any such assignment resulting from a claim for compensation under
Section 2.15 or payments required to be made pursuant to
Section 2.17, such assignment will result in a material reduction in such
compensation or payments.  A Lender
shall not be required to make any such assignment if, prior thereto, as a
result of a waiver by such Lender or otherwise, the circumstances entitling the
Borrower to require such assignment cease to apply.

 

Section 2.20.  Optional Increase in Commitments.  At
any time, if no Default shall have occurred and be continuing (or would result
after giving effect thereto), the Borrower, may, if it so elects, increase the
aggregate amount of the Commitments (each such increase to be in an aggregate
amount that is an integral multiple of $1,000,000 and not less than
$5,000,000), either by designating a financial institution not theretofore a
Lender to become a Lender (such designation to be effective only with the prior
written consent of the Administrative Agent and each LC Issuing Bank, which
consent will not be unreasonably withheld or delayed, and only if such
financial institution accepts a Commitment in an aggregate amount that is an
integral multiple of $1,000,000 and not less than $5,000,000), or by agreeing
with an existing Lender that such Lender’s Commitment shall be increased. Upon
execution and delivery by the Borrower and such Lender or other financial
institution of an instrument (a “Commitment
Acceptance”) in form reasonably
satisfactory to the Administrative Agent, such existing Lender shall have a
Commitment as therein set forth or such other financial institution shall
become a Lender with a 

 

59

 

Commitment as therein set forth and all the
rights and obligations of a Lender with such a Commitment hereunder; provided:

 

(a)                                  that
the Borrower shall provide prompt notice of such increase to the Administrative
Agent, who shall promptly notify the Lenders;

 

(b)                                 that
the Borrower shall have delivered to the Administrative Agent a copy of the
Commitment Acceptance;

 

(c)                                  that
the amount of such increase, together with all other increases in the aggregate
amount of the Commitments pursuant to this Section 2.20 since the date of
this Agreement, does not exceed $150,000,000;

 

(d)                                 that,
before and after giving effect to such increase, the representations and
warranties of the Borrower contained in Article 3 of this Agreement shall be
true and correct; and

 

(e)                                  that
the Administrative Agent shall have received such evidence (including an
opinion of Borrower’s counsel) as it may reasonably request to confirm the
Borrower’s due authorization of the transactions contemplated by this
Section 2.20 and the validity and enforceability of the obligations of the
Borrower resulting therefrom.

 

On the date of any such increase, the Borrower shall be deemed to have
represented to the Administrative Agent and the Lenders that the conditions set
forth in clauses (a) through (e) above have been satisfied.

 

Upon any increase in the aggregate amount of the Commitments pursuant
to this Section 2.20:

 

(x) 
within five Domestic Business Days, in the case of any Base Rate
Borrowings then outstanding, and at the end of the then current Interest Period
with respect thereto, in the case of any Eurodollar Borrowings then
outstanding, the Borrower shall prepay such Borrowing in its entirety and, to
the extent the Borrower elects to do so and subject to the conditions specified
in Article 4, the Borrower shall reborrow Loans from the Lenders in proportion
to their respective Commitments after giving effect to such increase, until
such time as all outstanding Loans are held by the Lenders in such proportion;
and

 

(y) 
each existing Lender whose Commitment has not increased pursuant to this
Section 2.20 (each, a “Non-Increasing
Lender”) shall be deemed, without
further action by any party hereto, to have sold to each Lender whose
Commitment has been assumed or increased under this Section 2.20 (each, an
“Increased  Commitment  Lender”), and each Increased Commitment Lender shall be
deemed, without further action by 

 

60

 

any party hereto, to have purchased from each Non-Increasing Lender, a
participation (on the terms specified in Section 2.05 and 2.04, respectively)
in each outstanding Letter of Credit and each Swingline Loan in which such
Non-Increasing Lender has acquired a participation in an amount equal to such
Increased Commitment Lender’s Percentage thereof, until such time as all LC
Exposures and Swingline Exposures are held by the Lenders in proportion to
their respective Commitments after giving effect to such increase.

 

ARTICLE
3

REPRESENTATIONS AND WARRANTIES

 

The Borrower represents and warrants to the
Lender Parties that:

 

Section 3.01.  Organization; Powers.  The Borrower and each of its
Restricted Subsidiaries is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, has all
requisite power and authority to carry on its business as now conducted and,
except where failures to do so, in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, is qualified to do business
in, and is in good standing in, every jurisdiction where such qualification is
required.

 

Section 3.02.  Authorization; Enforceability.  The Financing Transactions to be
entered into by the Borrower are within its corporate, limited liability
company or similar company powers and have been duly authorized by all
necessary corporate, limited liability company (or similar) action and, if
required, stockholder or equity holder action. 
This Agreement has been duly executed and delivered by the Borrower and
constitutes, and each other Loan Document to which the Borrower is to be a party,
when executed and delivered by the Borrower, will constitute, a legal, valid
and binding obligation of the Borrower, as the case may be, in each case
enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium and other laws affecting creditors’
rights generally and subject to general principles of equity, regardless of
whether considered in a proceeding in equity or at law.

 

Section 3.03.  Governmental Approvals; No Conflicts.  The Financing Transactions (a) do
not require any consent or approval of, registration or filing with, or other
action by, any Governmental Authority, except (i) such as have been obtained or
made and are in full force and effect and (ii) filings necessary to perfect the
Transaction Liens, (b) will not violate any applicable law or regulation or the
charter, by-laws, limited liability company agreement or other organizational
documents of the Borrower or any order of any Governmental Authority, (c) will
not violate or result in a default under any indenture, agreement or other
instrument binding upon the Borrower or any of its properties,

 

61

 

or give rise to a right thereunder to require the Borrower to make any
payment, and (d) will not result in the creation or imposition of any Lien
(other than the Transaction Liens) on any property of the Borrower.

 

Section 3.04.  Financial Statements; No Material Adverse
Change. (a)  The Borrower has heretofore furnished to
the Lenders (i) USX Corporation’s 2000 Form 10-K containing the audited
consolidated balance sheet of the U.S. Steel Group as of December 31, 2000 and
the related consolidated statements of income and cash flows for the Fiscal
Year then ended, reported on by PricewaterhouseCoopers
LLP, independent public accountants, and (ii) USX Corporation’s Latest
Form 10-Q containing the unaudited consolidated balance sheet of the U.S. Steel
Group as of September 30, 2001 and the related consolidated statements of
income and cash flows for the Fiscal Quarter then ended and for the portion of
the Fiscal Year then ended, all certified by its chief financial
officer.  Such financial statements
present fairly, in all material respects, the consolidated financial position
of the U.S. Steel Group as of such dates and its consolidated results of
operations and cash flows for such periods in accordance with GAAP, subject to
normal year-end adjustments and the absence of footnotes in the case of the
statements referred to in clause (ii) above.

 

(b)           The Borrower has
heretofore furnished to the Lenders its pro forma consolidated balance sheet as
of June 30, 2001, prepared giving effect to the Financing
Transactions as if the Financing Transactions had occurred on such date.  Such pro forma consolidated balance sheet
(i) has been prepared in good faith based on the same assumptions used to
prepare the pro forma financial statements included in the Information
Memorandum (which assumptions are believed by the Borrower to be reasonable),
(ii) is based on the best information available to the Borrower after due
inquiry, (iii) accurately reflects all adjustments necessary to give effect to
the Financing Transactions and (iv) presents fairly, in all material respects,
the pro forma consolidated financial position of the Borrower and its
Subsidiaries as of June 30, 2001 as if the Financing Transactions had occurred
on such date.

 

(c)           Since December
31, 2000, there has been no material adverse change in the business,
operations, properties, assets, financial condition, contingent liabilities or
material agreements of the Borrower and its Subsidiaries, taken as a whole,
except as disclosed prior to the Effective Date in USX Corporation’s 2000 Form
10-K, USX Corporation’s Latest Form 10-Q or USX Corporation’s Latest Proxy
Statement.

 

Section 3.05.  Security Documents.  The Security Documents create
valid security interests in the Collateral purported to be covered thereby,
which security interests are and will remain perfected security interests,
prior to all other Liens, other than Liens permitted under Section 6.02.  Each of the representations and

 

62

 

warranties made by the Borrower in the Security Documents to which it
is a party is true and correct in all material respects.

 

Section 3.06.  Borrower’s Subsidiaries.  As of the Effective Date, the
Borrower has no Subsidiaries other than those set forth on Schedule 3.06.  Each Subsidiary identified on Schedule 3.06
is a Restricted Subsidiary.

 

Section 3.07.  Litigation and Environmental Matters.  (a)  Except as set forth in (i)
USX Corporation’s 2000 Form 10-K, (ii) USX Corporation’s Latest Form 10-Q,
(iii) USX Corporation’s Latest Proxy Statement, (iv) USX Corporation’s
quarterly reports on Form 10-Q for the quarters ended March 31, 2001 and June
30, 2001, as filed with the SEC pursuant to the Exchange Act or (v) the
Borrower’s and USX Corporation’s registration statement on Form S-4, as filed
with the SEC on October 12, 2001, there is no action, suit, arbitration proceeding
or other proceeding, inquiry or investigation, at law or in equity, before or
by any arbitrator or Governmental Authority pending against the Borrower or of
which the Borrower has otherwise received official notice or which, to the
knowledge of the Borrower, is threatened against the Borrower (i) as to which
there is a reasonable possibility of an unfavorable decision, ruling or finding
which would reasonably be expected to result in a Material Adverse Effect or
(ii) that involves any of the Loan Documents or the Financing Transactions.

 

(b)           Except
as set forth in USX Corporation’s 2000 Form 10-K, USX Corporation’s Latest Form
10-Q or USX Corporation’s Latest Proxy Statement, the Borrower does not
presently anticipate that remediation costs and penalties associated with any
Environmental Law, to the extent not previously provided for, will have a
Material Adverse Effect.

 

Section 3.08.  Compliance with Laws and Agreements.  The Borrower is in compliance
with all laws, regulations and orders of any Governmental Authority applicable
to it or its property (including (i) all Environmental Laws, (ii)  ERISA,
(iii) applicable laws, regulations and orders dealing with intellectual
property, and (iv) the Fair Labor Standards Act and other applicable law
dealing with such matters) and all indentures, agreements and other instruments
binding on it or its property, except where failures to do so, in the
aggregate, would not reasonably be expected to result in a Material Adverse
Effect.  No Default has occurred and is
continuing.

 

Section 3.09.  Investment and Holding Company Status.  The Borrower is not (a) an
“investment company” or a company “controlled” by an “investment company”
within the meaning of the Investment Company Act of 1940, as amended or
(b) a “holding company” or “subsidiary company” of a “holding company”, or
an “affiliate” of a “holding company” or of a “subsidiary company”

 

63

 

of a “holding company”, within the meaning of
the Public Utility Holding Company Act of 1935, as amended.

 

Section 3.10.  ERISA. 
No ERISA Event has occurred or is reasonably expected to
occur that, when taken together with all other ERISA Events for which liability
is reasonably expected to occur, would reasonably be expected to result in a
Material Adverse Effect.

 

Section 3.11.  Regulation U.  Neither the Borrower nor any of its Subsidiaries is
engaged principally, or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying margin stock (within
the meaning of Regulation U).

 

Section 3.12.  Disclosure. 
The Borrower has disclosed to the Lenders all agreements,
instruments and corporate or other restrictions to which it is subject, and all
other matters known to it, that, individually or in the aggregate, would
reasonably be expected to result in a Material Adverse Effect.  The Information Memorandum and any other
written information (other than projected financial information) set forth in
(a) USX Corporation’s Proxy Statement on Form 14A filed with the SEC on
September 20, 2001, (b) the Borrower’s Confidential Offering Circulars dated
July 24, 2001 and September 6, 2001 relating to the Borrower’s 10-3/4%
Senior Notes, (c) the Borrower’s roadshow materials presented in connection
with its July, 2001 and September, 2001 offering of 10-3/4
Senior Notes, (d) a presentation prepared for the proposed members of the
Lender syndicate and (vi) materials regarding the Borrower’s inventory that has
been made available by or on behalf of the Borrower to the Arranger, any Agent
or any Lender in connection with the negotiation of this Agreement or any other
Loan Document or delivered hereunder or thereunder, is complete and correct in
all material respects and does not contain any untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
contained therein not materially misleading in light of the circumstances under
which such statements are made; provided
that, with respect to projected financial information, the Borrower represents
only that such information was prepared in good faith based on assumptions
believed to be reasonable at the time.

 

Section 3.13.  Senior Debt.  The Secured Obligations constitute “Secured
Indebtedness” and “Senior Indebtedness” under and as defined in the Senior
Unsecured Debt Documents.

 

Section 3.14.  Processing of Receivables.  In the ordinary course of its
business, the Borrower processes its accounts receivable in a manner such that
(i) each payment received by the Borrower in respect of accounts receivables is
allocated to a specifically identified invoice or invoices, which invoice or
invoices corresponds to a particular account receivable owing to the Borrower
and (ii) if, at any time, less than 100% of the accounts receivables to the
Borrower are included

 

64

 

in a Receivables Financing, payments received
in respect of those accounts receivable included in a Receivables Financing
would be identifiable and separable from payments received in respect of
accounts receivable not so included in a Receivables Financing.

 

Section 3.15.  Senior Unsecured Debt Documents.  The Borrower has heretofore
furnished to the Lenders true and correct copies of all Senior Unsecured Debt
Documents.

 

Section 3.16.  Solvency. 
Immediately after the Financing Transactions to occur on the
Effective Date are consummated and after giving effect to the application of
the proceeds of each Loan made on the Effective Date and after giving effect to
the application of the proceeds of each Loan made on any other date, (a) the
fair value of the assets of the Borrower, at a fair valuation, will exceed its
debts and liabilities, subordinated, contingent or otherwise; (b) the Borrower
will be able to pay its debts and liabilities, subordinated, contingent or
otherwise, as such debts and liabilities become absolute and matured; and (c)
the Borrower will not have unreasonably small capital with which to conduct the
business in which it is engaged as such business is now conducted and proposed
to be conducted after the Effective Date.

 

ARTICLE 4

CONDITIONS

 

Section 4.01.  Effective Date.  The obligations of the Lenders to make Loans and of
the LC Issuing Bank to issue Letters of Credit hereunder shall not become
effective until the date on which each of the following conditions is satisfied
(or waived in accordance with Section 9.02):

 

(a)           The
Administrative Agent (or its counsel) shall have received counterparts hereof
signed by the Borrower and each of the Lenders listed on the signature pages
hereof (or, in the case of any party as to which an executed counterpart shall
not have been received, receipt by the Administrative Agent in form
satisfactory to it of telex, facsimile or other written confirmation from such
party that it has executed a counterpart hereof).

 

(b)           The
Administrative Agent shall have received favorable written opinions (in each
case, addressed to the Administrative Agent and the Lenders and dated the
Effective Date) of Berry & Associates, special counsel for the Borrower,
and the General Counsel or an Assistant General Counsel of the Borrower, (i)
which opinions are substantially in the form of Exhibit B-1 and Exhibit B-2,
respectively, and (ii) covering such other matters relating to the Borrower,
the Loan Documents or the Financing

 

65

 

Transactions as the Required Lenders shall reasonably request.  The Borrower requests such counsel to
deliver such opinion.

 

(c)           The
Administrative Agent shall have received such documents and certificates as the
Administrative Agent or its counsel may reasonably request relating to the
organization, existence and good standing of the Borrower, the authorization
for and validity of the Financing Transactions and any other legal matters
relating to the Borrower, the Loan Documents or the Financing Transactions, all
in form and substance satisfactory to the Administrative Agent and its counsel.

 

(d)           The
Administrative Agent shall have received a certificate, dated the Effective
Date and signed by the President, a Vice President or a Financial Officer of
the Borrower, confirming compliance with the conditions set forth in clause
(a), (b) and (c) of Section 4.03.

 

(e)           The
fact that the Required Lenders shall not have notified the Administrative Agent
of their determination that, since December 31, 2000, any event, development or
circumstance has occurred that has had or would reasonably be expected to have
a Material Adverse Effect, other than those events, developments and
circumstances that have been disclosed (i) to the Administrative Agent in
writing or (ii) in USX Corporation’s 2000 Form 10-K, USX Corporation’s Latest
Form 10-Q, USX Corporation’s Latest Proxy Statement or the Borrower’s and USX Corporation’s
registration statement on Form S-4 filed on October 12, 2001.

 

(f)            The
fact that neither the Arranger nor the Administrative Agent shall have become
aware of any information or other matter affecting the Borrower or the
Financing Transactions which was in existence prior to the date of this
Agreement and is inconsistent in a material and adverse manner with any such
information or other matter disclosed to them prior to the date of this
Agreement.

 

(g)           The
Borrower shall have paid all fees and other amounts due and payable to the
Lender Parties on or before the Effective Date, including, to the extent
invoiced, all out-of-pocket expenses (including fees, charges and disbursements
of counsel) required to be reimbursed or paid by the Borrower under the Loan
Documents.

 

(h)           The
Collateral Requirement shall have been satisfied and the Administrative Agent
shall have received a completed Perfection Certificate dated the Effective
Date and signed by a Financial Officer or other executive officer of the Borrower,
together with all attachments contemplated thereby, including the results of a
search of the Uniform

 

66

 

Commercial Code (or equivalent) filings made with respect to the
Borrower in the jurisdictions contemplated by the Perfection Certificate and
copies of the financing statements (or similar documents) disclosed by such
search and evidence reasonably satisfactory to the Administrative Agent that
the Liens indicated by such financing statements (or similar documents) are
permitted by Section 6.02 or have been released.

 

(i)            The
Administrative Agent shall have received evidence reasonably satisfactory to it
that all insurance required by Section 5.07 is in effect.

 

(j)            All
consents and approvals required to be obtained from any Governmental Authority
or other Person in connection with the Financing Transactions shall have been
obtained and be in full force and effect, except where failure to obtain such
approval or consent would not have a Material Adverse Effect.

 

(k)           The
Lenders shall have received (i) a monthly computation of the Borrower’s
liquidity position (including cash, receivables, inventory and borrowings) for
each month of Fiscal Year 2001 that ends at least 20 days prior to the date of
this Agreement, (ii) a business plan for each Fiscal Year that begins during
the term of this Agreement (including financial forecasts on a quarterly basis
for Fiscal Year 2001 and Fiscal Year 2002 and on an annual basis for each
Fiscal Year thereafter) and (iii) a written analysis of the business and
prospects of the Borrower and its Subsidiaries for the term of this Agreement,
all in form and substance reasonably satisfactory to the Lenders in their good
faith judgment.

 

(l)            The
Administrative Agent shall have received a completed Borrowing Base Certificate
dated the Effective Date and signed by a Financial Officer.

 

(m)          The
Administrative Agent shall have completed all such field exams as it deems
reasonably necessary or desirable, and shall have received evidence
satisfactory to it that the Collateral Agent and Co-Collateral Agent and their
respective designated representatives shall have completed all such field exams
and received all such inventory appraisals from independent appraisers as the
Collateral Agent and Co-Collateral Agent deem reasonably necessary or
desirable.

 

(n)           The
Administrative Agent shall have received evidence satisfactory to it that the
Effective Date Receivables Financing shall have been consummated prior to or
concurrently with the occurrence of the Effective Date.

 

67

 

Promptly after the Effective Date occurs, the Administrative Agent
shall notify the Borrower and the Lenders thereof, and such notice shall be
conclusive and binding.  Notwithstanding
the foregoing, the obligations of the Lenders to make Loans and of the LC
Issuing Bank to issue Letters of Credit shall not become effective unless each
of the foregoing conditions is satisfied (or waived pursuant to Section 9.02)
before 5:00 p.m., New York City time, on December 3, 2001 (and, if any
such condition is not so satisfied or waived, the Commitments shall terminate
at such time).

 

Section 4.02.  Conditions to Initial Utilization.  The obligation of each Lender to
make a Loan on the occasion of the initial Borrowing, the obligation of the
Swingline Lender to make the initial Swingline Loan (if such initial Swingline
Loan is made prior to the occasion of the initial Borrowing and the issuance of
the initial Letter of Credit) and the obligation of the LC Issuing Bank to
issue the initial Letter of Credit (if such initial Letter of Credit is issued
prior to the occasion of the initial Borrowing and the making of the initial
Swingline Loan), are each subject to the satisfaction of the following
conditions:

 

(a)           The
Effective Date shall have occurred.

 

(b)           The
Administrative Agent shall have received evidence satisfactory to it that the
Lorain Merger shall have been consummated.

 

(c)           The
Administrative Agent shall have received evidence satisfactory to it that the
Separation shall have been completed ((x) without the requirement of any
Borrowing or Swingline Loan being made or any Letter of Credit (other than
Letters of Credit in an aggregate amount not in excess of $15,000,000) being
issued hereunder, (y) with trade payables being paid currently and expenses and
liabilities being paid in the ordinary course of business and (z) without
acceleration of sales), and the Borrower shall no longer be a subsidiary of USX
Corporation.

 

(d)           After
giving effect to the consummation of the Lorain Merger and the Separation, the
Borrowing Base, as set forth in the most recent Borrowing Base Certificate
(dated within 30 days of the date of such initial Borrowing, Swingline Loan or
Letter of Credit), shall not be less than $325,000,000.

 

(e)           The
Administrative Agent shall have received evidence satisfactory to it that the
Borrower’s contemplated tax settlement with Marathon Oil Corporation shall have
been consummated and shall have resulted in a value transfer to the Borrower
(in the form of a reduction in Debt attributed to the Borrower) in an amount
equal to or greater than $300,000,000.

 

68

 

Section 4.03.  Conditions to Each Utilization.  The obligation of each Lender to
make a Loan on the occasion of any Borrowing (including the initial Borrowing),
the obligation of the Swingline Lender to make any Swingline Loan (including
the initial Swingline Loan) and the obligation of the LC Issuing Bank to issue,
amend, renew or extend any Letter of Credit (including the initial Letter of
Credit), are each subject to receipt of the Borrower’s request therefor in
accordance herewith and to the satisfaction of the following conditions:

 

(a)           Immediately
after giving effect to such Borrowing or Swingline Loan or the issuance,
amendment, renewal or extension of such Letter of Credit, as applicable, no
Default shall have occurred and be continuing.

 

(b)           The
representations and warranties of the Borrower set forth in the Loan Documents
shall be true on and as of the date of such Borrowing or Swingline Loan or the
date of issuance, amendment, renewal or extension of such Letter of Credit, as
applicable.

 

(c)           Immediately
before and after such Borrowing or Swingline Loan is made, or such Letter of
Credit is issued, amended, renewed or extended, as applicable, the Total
Outstanding Amount will not exceed the Maximum Facility Availability.

 

Each Borrowing, each Swingline Loan and each issuance, amendment,
renewal or extension of a Letter of Credit shall be deemed to constitute a
representation and warranty by the Borrower on the date thereof as to the
matters specified in clauses (a), (b) and (c) of this Section.

 

ARTICLE 5

AFFIRMATIVE COVENANTS

 

Until all the Commitments have expired or terminated and the principal
of and interest on each Loan and all fees payable hereunder have been paid in
full and all Letters of Credit have expired or been cancelled and all LC
Disbursements have been reimbursed, the Borrower covenants and agrees with the
Lenders that:

 

Section 5.01.  Financial Statements and Other
Information.  (a)  The Borrower will furnish to the
Administrative Agent (for delivery to each Lender):

 

(i)            as
soon as available and in any event within 90 days after the end of each
Fiscal Year, its audited consolidated balance sheet as of the end of such
Fiscal Year and the related statements of income and cash flows for such Fiscal
Year, setting forth in each case in comparative form the figures for the
previous Fiscal Year, all reported on by

 

69

 

PricewaterhouseCoopers LLC or other independent public accountants of
recognized national standing (without a “going concern” or like qualification
or exception and without any qualification or exception as to the scope of such
audit) as presenting fairly in all material respects the financial position,
results of operations and cash flows of the Borrower and its consolidated
Subsidiaries on a consolidated basis in accordance with GAAP;

 

(ii)           as
soon as available and in any event within 45 days after the end of each of
the first three Fiscal Quarters of each Fiscal Year, its consolidated balance
sheet as of the end of such Fiscal Quarter and the related statements of income
and cash flows for such Fiscal Quarter and for the then elapsed portion of such
Fiscal Year, setting forth in each case in comparative form the figures for the
corresponding period or periods of (or, in the case of the balance sheet, as of
the end of) the previous Fiscal Year, all certified by a Financial Officer as
(x) reflecting all adjustments (which adjustments are normal and recurring
unless otherwise disclosed) necessary for a fair presentation of the results
for the period covered and (y) having been prepared in accordance with the
applicable rules of the SEC;

 

(iii)          as
soon as available and in any event within 30 days after the end of each fiscal
month (x) its shipment and average selling price data for such month and for
the then elapsed portion of the Fiscal Year and (y) the additional monthly
financial information described in (and substantially in the form of) Schedule
5.01, certified as to accuracy by a Financial Officer;

 

(iv)          concurrently
with each delivery of financial statements under clause (i) or (ii) above, a
certificate of a Financial Officer (x) certifying as to whether a Default has
occurred and is continuing and, if a Default has occurred and is continuing,
specifying the details thereof and any action taken or proposed to be taken
with respect thereto, (y) setting forth reasonably detailed calculations
demonstrating compliance with Sections 6.12 through 6.14, inclusive, and (z)
stating whether any change in GAAP or in the application thereof has become
effective since the date of the Borrower’s most recent audited financial
statements referred to in Section 3.04 or delivered pursuant to this Section
and, if any such change has become effective, specifying the effect of such
change on the financial statements accompanying such certificate;

 

(v)           concurrently
with each delivery of financial statements under clause (i) above, a
certificate of the accounting firm that reported on such financial statements
stating whether during the course of their examination of such financial
statements they obtained knowledge of any

 

70

 

Default (which certificate may be limited to the extent required by
accounting rules or guidelines);

 

(vi)          no
later than 45 days after the beginning of each Fiscal Year, a detailed
consolidated budget for such Fiscal Year (which budget shall (A) include a
projected consolidated balance sheet and related statements of projected
operations and cash flows as of the end of and for such Fiscal Year, a
projected Borrowing Base as of the last day of each Fiscal Quarter in such
Fiscal Year, and projected levels of Facility Availability as of the last day
of each Fiscal Quarter in such Fiscal Year, and (B) set forth the assumptions
used in preparing such budget) and, promptly when available, any significant
revisions of such budget;

 

(vii)         promptly
after the same become publicly available, copies of all periodic and other
material reports and proxy statements filed by the Borrower or any Restricted
Subsidiary with the SEC, or any Governmental Authority succeeding to any or all
of the functions of the SEC;

 

(viii)        concurrently
with each delivery of financial statements under clause (i) or (ii) above, the
related consolidating financial statements reflecting the adjustments necessary
to eliminate the accounts of Unrestricted Subsidiaries (if any) from such
consolidated financial statements;

 

(ix)           promptly
upon the effectiveness of any material amendment or modification of, or any
waiver of the rights of the Borrower or any Restricted Subsidiary under, (A)
any Senior Unsecured Debt Document, (B) the certificate of formation, limited
liability company agreement, certificate of incorporation, by-laws or other
organizational documents of the Borrower or any Restricted Subsidiary or (C)
any document evidencing any Receivables Financing, written notice of such
amendment, modification or waiver describing in reasonable detail the purpose
and substance thereof; and

 

(x)            promptly
following any request therefor, such other information regarding the
operations, business affairs and financial condition of the Borrower and its
Restricted Subsidiaries, or compliance with the terms of any Loan Document, as
the Administrative Agent or any Lender may reasonably request.

 

Information required to be delivered pursuant to Sections 5.01(a)(i),
5.01(a)(ii) or 5.01(a)(vii) above shall be deemed to have been delivered on the
date on which the Borrower provides notice to the Administrative Agent that
such information has been posted on the Borrower’s website on the Internet at
the website address

 

71

 

listed on the signature pages hereof, at sec.gov/edaux/searches.htm or
at another website identified in such notice and accessible by the Lenders
without charge; provided that (i)
such notice may be included in a certificate delivered pursuant to Section
5.01(a)(iv) and (ii) the Borrower shall deliver paper copies of the information
referred to in  Sections 5.01(a)(i),
5.01(a)(ii) and 5.01(a)(vii) to the Administrative Agent for any Lender which
requests such delivery.

 

(b)           Borrowing Base Reports.  The Borrower will furnish to the
Administrative Agent, the Collateral Agent and the Co-Collateral Agent (and the
Administrative Agent shall thereafter deliver to each Lender):

 

(i)            as
soon as available and in any event within 15 days after the end of
each calendar month, a completed Borrowing Base Certificate (accompanied by
supporting documentation and supplemental reporting) calculating and certifying
the Borrowing Base as of the end of such calendar month, signed on behalf of
the Borrower by a Financial Officer and in form and substance satisfactory to
the Collateral Agent; provided
that such Borrowing Base Certificate (accompanied by supporting documentation
and supplemental reporting) shall be furnished to the Administrative Agent, the
Collateral Agent and the Co-Collateral Agent as soon as available and in any
event within two Business Days after the end of each period of two calendar
weeks (each such biweekly period deemed, for purposes hereof, to end on a Friday)
at the end of which Facility Availability (calculated, for purposes of this
Section 5.01(b)(i), without giving effect to the Availability Block) is
less than $100,000,000; and;

 

(ii)           within
two Business Days of any request therefor, such other information in such
detail concerning the amount, composition and manner of calculation of the
Borrowing Base as any Lender may reasonably request.

 

Section 5.02.  Notice of Material Events.  The Borrower will furnish to the
Administrative Agent and each Lender prompt written notice of the following:

 

(a)           the
occurrence of any Default;

 

(b)           the
filing or commencement of any action, suit or proceeding by or before any
arbitrator or Governmental Authority against or affecting the Borrower or any
Restricted Subsidiary or any Affiliate thereof that, if adversely determined,
could reasonably be expected to result in a Material Adverse Effect;

 

(c)           the
occurrence of any ERISA Event that, alone or together with any other ERISA
Events that have occurred, could reasonably be expected to result in
liabilities of the Borrower and its Restricted Subsidiaries in an aggregate
amount exceeding $50,000,000;

 

72

 

(d)           the
occurrence of any change in the Borrower’s Senior Debt Ratings by either
Moody’s or S&P; and

 

(e)           any
other development that results in, or would reasonably be expected to result
in, a Material Adverse Effect.

 

Each notice delivered under this Section shall be accompanied by a
statement of a Financial Officer or other executive officer of the Borrower
setting forth the details of the event or development requiring such notice and
any action taken or proposed to be taken with respect thereto.

 

Section 5.03.  Information Regarding Collateral.  (a)  The Borrower will furnish to the Administrative Agent
prompt written notice of any change in (i) the Borrower’s corporate name or any
trade name used to identify it in the conduct of its business or the Borrower’s
chief executive office, its principal place of business, or any office or
facility at which Collateral owned by it is located (including the
establishment of any such new office or facility), (ii) the Borrower’s identity
or corporate structure, (iii) the Borrower’s State Organizational
Identification Number (or Charter Number) and (iv) the Borrower’s Federal
Taxpayer Identification Number.  The
Borrower will not effect or permit any change referred to in the preceding
sentence unless all filings have been made under the Uniform Commercial Code
and all other actions have been taken that are required so that such change
will not at any time adversely affect the validity, perfection or priority of
any Transaction Lien on any of the Collateral. 
The Borrower will also promptly notify the Administrative Agent if any
material portion of the Collateral is damaged or destroyed.

 

(b)           Each year, at the
time annual financial statements with respect to the preceding Fiscal Year are
delivered pursuant to Section 5.01(a)(i), the Borrower will deliver to the
Administrative Agent a certificate of a Financial Officer and the chief legal
officer (or other in-house counsel) of the Borrower (i) setting forth the
information required pursuant to Sections A.1, A.2 and B.1 of the
Perfection Certificate or confirming that there has been no change in such
information since the date of the Perfection Certificate delivered on the
Effective Date or the date of the most recent certificate delivered pursuant to
this subsection and (ii) certifying that all Uniform Commercial Code financing
statements (including fixture filings, as applicable) or other appropriate
filings, recordings or registrations, including all refilings, rerecordings and
reregistrations, containing a description of the Collateral have been filed of
record in each appropriate office in each jurisdiction identified pursuant to
clause (i) above to the extent necessary to protect and perfect the Transaction
Liens for a period of at least 18 months after the date of such certificate
(except as noted therein with respect to any continuation statements to be
filed within such period).

 

73

 

(c)           The Borrower will
furnish to the Administrative Agent, the Collateral Agent and the Co-Collateral
Agent prompt written notice of the occurrence of any “Termination Event” (as
defined in the Effective Date Receivables Financing). From and after the
occurrence of any such Termination Event, the Borrower shall furnish to the
Administrative Agent and the Collateral Agent a daily written report reflecting
then current amortization of the Effective Date Receivables Financing.  On any date when the Effective Date
Receivables Financing shall have terminated and the payment of all obligations
owing by the Borrower and its Subsidiaries in respect thereof shall have been
paid in full, the Borrower shall provide prompt written notice thereof to the
Administrative Agent, the Collateral Agent and the Co-Collateral Agent.

 

(d)           Upon the request of
any Lender, the Borrower will furnish to the Collateral Agent copies of any servicer
reports that have been furnished to JPMorgan Chase Bank or The Bank of Nova
Scotia, in their respective capacities as agents, under the Effective Date
Receivables Financing.

 

Section 5.04.  Existence; Conduct of Business.  The Borrower will, and will cause
each of its Subsidiaries (other than any Unrestricted Subsidiary) to, do or
cause to be done all things necessary to preserve, renew and keep in full force
and effect its legal existence and the rights, licenses, permits, privileges,
franchises, patents, copyrights, trademarks and trade names material to the
conduct of its business; provided
that the foregoing shall not prohibit any merger, consolidation, liquidation or
dissolution permitted under Section 6.03.

 

Section 5.05.  Payment of Obligations.  The Borrower will, and will cause
each of its Subsidiaries (other than any Unrestricted Subsidiary) to, pay all
of its material Debt and other material obligations, including Tax liabilities,
before the same shall become delinquent or in default, except where (a) the
validity or amount thereof is being contested in good faith by appropriate
proceedings, (b) the Borrower or such Subsidiary has set aside on its books
adequate reserves with respect thereto in accordance with GAAP, (c) such
contest effectively suspends collection of the contested obligation and the
enforcement of any Lien securing such obligation and (d) the failure to make
payment pending such contest would not reasonably be expected to result in a
Material Adverse Effect.

 

Section 5.06.  Maintenance of Properties.  The Borrower will, and will cause
each of its Subsidiaries (other than any Unrestricted Subsidiary) to, maintain
all property material to the conduct of its business in good working order and
condition, ordinary wear and tear excepted.

 

Section 5.07.  Insurance. 
(a)  The
Borrower will, and will cause each of its Subsidiaries (other than any
Unrestricted Subsidiary) to maintain, at its sole cost and expense, insurance
coverage (x) as in effect on the date of the Agreement and described in
Schedule 5.07 or (y) otherwise with financially sound and reputable

 

74

 

insurers (which insurers shall be reasonably acceptable to the
Administrative Agent, the Collateral Agent and the Co-Collateral Agent) in such
amounts, and with such deductibles (including provisions for self-insurance),
as are set forth on Schedule 5.07 hereof. 
If at any time the Borrower is unable to maintain (or cause to be
maintained) such insurance coverage with the deductibles shown on Schedule 5.07
at favorable premiums, it shall so advise the Administrative Agent, the
Collateral Agent and the Co-Collateral Agent in writing at least 30 days prior
to the expiration of the then current policy (enclosing with such notice copies
of any proposals from insurers regarding the insurance coverage in question as
well as the Borrower’s recommendations with respect thereto).  The Administrative Agent shall promptly (but
in no event later than 15 days from receipt of such notice) advise the Borrower
of the requirements of the Administrative Agent (which requirements shall be
determined in good faith by mutual agreement among the Administrative Agent,
the Collateral Agent and the Co-Collateral Agent) regarding such insurance
coverage, and the Borrower shall be bound to adhere to such requirements. If
the Borrower at any time or times hereafter fails to obtain or maintain the
insurance coverage required pursuant to this Section 5.07 or to pay all
premiums relating thereto, the Collateral Agent may at any time or times
thereafter obtain and maintain such required insurance coverage and pay such
premiums and take such other actions with respect thereto that the Collateral
Agent deems reasonably advisable. The Collateral Agent shall not have any
obligation to obtain insurance for the Borrower or any of its Subsidiaries or
to pay any premiums therefor.  By doing
so, the Collateral Agent shall not be deemed to have waived any Default arising
from failure of the Borrower to maintain (or cause to be maintained) such
insurance or to pay (or cause to be paid) any premiums therefor.  All sums so disbursed, including reasonable
attorneys’ fees, court costs and other charges related thereto, shall be
payable on demand by the Borrower to the Administrative Agent and shall be
additional obligations hereunder secured by the Collateral.  The Collateral Agent and the Co-Collateral
Agent reserve the right at any time upon any change in the Borrower’s risk
profile to require additional insurance coverages and limits of insurance to,
in such Agents’ reasonable opinion, adequately protect the interests of the
Lender Parties in all or any portion of the Collateral.

 

(b)           Property damage
policies maintained with respect to any Collateral shall be endorsed or
otherwise amended to include a lenders’ loss payable clause, in each case in
favor of the Collateral Agent and providing for losses thereunder to be payable
to the Collateral Agent or its designee as loss payee and (ii) a provision to
the effect that none of the Administrative Agent, the Collateral Agent, the
Co-Collateral Agent nor any other Lender Party shall be a coinsurer. Commercial
general liability policies shall be endorsed to name the Collateral Agent as an
additional insured.  Each such policy
referred to in this subsection also shall provide that it shall not be
canceled, modified or not renewed (i) by reason of nonpayment of premium except
upon at least 10 days’ prior written notice thereof by the insurer to the
Collateral Agent (giving the Collateral Agent

 

75

 

the right to cure defaults in the payment of premiums) or (ii) for any
other reason except upon at least 30 days’ prior written notice thereof by the
insurer to the Collateral Agent. The Borrower shall deliver to the Collateral
Agent, prior to the cancellation, modification or nonrenewal of any such policy
of insurance, a copy of a renewal or replacement policy (or other evidence of
renewal of a policy previously delivered to the Collateral Agent) together with
evidence reasonably satisfactory to the Collateral Agent of payment of the
premium therefor.

 

Section 5.08.  Casualty and Condemnation.  The Borrower will furnish to the
Administrative Agent, the Collateral Agent and the Lenders prompt written notice
of any casualty or other insured damage to any material portion of the
Collateral or the commencement of any action or proceeding for the taking of
any Collateral or any part thereof or interest therein under power of eminent
domain or by condemnation or similar proceeding.

 

Section 5.09.  Proper Records; Rights to Inspect and
Appraise.  (a)  The Borrower will, and will cause
each of its Subsidiaries (other than any Unrestricted Subsidiary) to, keep
proper books of record and account in which complete and correct entries are
made of all transactions relating to its business and activities.  The Borrower will, and will cause each of
its Subsidiaries (other than any Unrestricted Subsidiary) to, permit any
representatives designated by the Administrative Agent, the Collateral Agent,
the Co-Collateral Agent or any Lender, upon reasonable prior notice, to visit
and inspect its properties, to examine and make extracts from its books and
records, and to discuss its affairs, finances and condition with its officers
and independent accountants, all at such reasonable times and as often as
reasonably requested.

 

(b)           The Borrower will,
and will cause each of its Subsidiaries (other than any Unrestricted
Subsidiary) to, permit the Collateral Agent and/or the Co-Collateral Agent and
any representatives designated by either of them (including any consultants,
accountants, lawyers and appraisers retained by the Collateral Agent) to
conduct collateral reviews and evaluations and appraisals of the assets
included in the Borrowing Base and the Borrower’s computation of the Borrowing
Base, all at such reasonable times and as often as reasonably requested.  The Borrower shall pay the documented fees
and expenses of employees of the Collateral Agent (including reasonable and customary
internally allocated fees of such employees incurred in connection with
periodic collateral evaluations and appraisals and internally allocated
monitoring fees associated with the Collateral Agent’s “collateral agent
services group” or similar body) or any representatives (including any
inventory appraisal firm) retained by the Collateral Agent to conduct any such
evaluation or appraisal; provided
the Borrower shall not be required to pay such fees and expenses of collateral
reviews and appraisals performed by the Collateral Agent and the Co-Collateral
Agent, except (i) in respect of one such collateral review and one such
appraisal performed by the Collateral Agent (or, at the option of the
Co-Collateral Agent,

 

76

 

by the Collateral Agent and the Co-Collateral Agent together) in any
calendar year, and (ii) in respect of up to four such collateral reviews and
four such appraisals performed by the Collateral Agent (or, at the option of
the Co-Collateral Agent, by the Collateral Agent and the Co-Collateral Agent
together) at such times as Facility Availability (calculated for purposes
hereof without giving effect to the Availability Block) is less than
$100,000,000, and (iii) in respect of any such collateral reviews and such
collateral appraisals performed by the Collateral Agent and the Co-Collateral
Agent during the continuance of a Default or Event of Default; and provided  further
that the Borrower shall not be required to pay the fees and expenses of
inventory appraisal firms hired by the Collateral Agent, except (i) in respect
of one inventory appraisal per calendar year during the term of this Agreement,
(ii) in respect of up to four inventory appraisals per calendar year at
such times as Facility Availability (calculated for this purpose without giving
effect to the Availability Block) is less than $100,000,000, and (iii) in
respect of any one or more additional inventory appraisals conducted at the
request of the Collateral Agent during the continuance of a Default or Event of
Default.  The Collateral Agent, the
Co-Collateral Agent and any representative designated by either of them to
conduct such collateral reviews, evaluations and appraisals shall, during any
review, inspection or other activity performed at any of the Borrower’s plant
sites, (x) be accompanied at all times by a plant safety representative (and
the Borrower hereby agrees to cause such a plant safety representative to be
available for such purpose at such reasonable hours as may be requested and
upon reasonable prior notice) and (y) comply at all times with the Borrower’s
rules regarding safety and security to the extent that the Collateral Agent,
Co-Collateral Agent or representative has been notified of such rules.  In connection with any collateral monitoring
or review and appraisal relating to the computation of the Borrowing Base, the
Borrower shall make adjustments to the Borrowing Base (which may include
maintaining additional reserves or modifying the eligibility criteria for
components of the Borrowing Base) to the extent required by the Collateral
Agent or the Required Lenders as a result of any such monitoring, review or
appraisal.  The Collateral Agent and the
Co-Collateral Agent shall furnish to the Administrative Agent (for delivery to
each Lender) a copy of the final written collateral review or appraisal report
prepared in connection with such monitoring, review or appraisal.

 

Section 5.10.  Compliance with Laws.  The Borrower will, and will cause
each of its Subsidiaries (other than any Unrestricted Subsidiary) to, comply
with all laws, rules, regulations and orders of any Governmental Authority
(including all Environmental Laws and ERISA and the respective rules and
regulations thereunder) applicable to it or its property, other than such laws,
rules or regulations (a) the validity or applicability of which the Borrower or
any Subsidiary is contesting in good faith by appropriate proceedings or (b)
the failure to comply with which cannot reasonably be expected to result in a
Material Adverse Effect.

 

77

 

Section 5.11.  Use of Proceeds and Letters of Credit.  The proceeds of the Revolving
Loans and Swingline Loans will be used only to finance the general corporate
purposes (including working capital needs) of the Borrower.  No part of the proceeds of any Loan will be
used, directly or indirectly, for any purpose that entails a violation of any
of the Regulations of the Federal Reserve Board, including Regulations T, U and
X.  Letters of Credit will be requested
and used only to finance the general corporate purposes (including working
capital needs) of the Borrower, and will not be used, whether directly or
indirectly, for any purpose that entails a violation of any of the Regulations
of the Federal Reserve Board, including regulations T, U and X.

 

Section 5.12.  Further Assurances.  (a)  The Borrower will execute and deliver any and all
further documents, financing statements, agreements and instruments, and take
all such further actions (including the filing and recording of financing
statements and other documents), that may be required under any applicable law,
or that the Administrative Agent, the Collateral Agent or the Required Lenders
may reasonably request, to cause the Collateral Requirement to be and remain
satisfied, all at the Borrower’s expense. 
The Borrower will provide to the Collateral Agent, from time to time
upon request, evidence reasonably satisfactory to the Collateral Agent as to
the perfection and priority of the Transaction Liens created or intended to be
created by the Security Documents.

 

(b)           If, on the date when
all of the Commitments are terminated (whether pursuant to Section 2.08 or
otherwise), any Letter of Credit remains outstanding, the Borrower shall
deposit in the Cash Collateral Account on such date an amount in cash equal to
102% of the total LC Exposure as of such date plus any accrued and unpaid
interest thereon.  Any amount so
deposited (including any earnings thereon) will be withdrawn from the Cash
Collateral Account by the Administrative Agent and applied to pay LC
Reimbursement Obligations as they become due; provided
that at such time as all outstanding Letters of Credit have expired, and all LC
Reimbursement Obligations (plus accrued and unpaid interest thereon) have been
paid in full, such amount, to the extent not therefore applied, shall be
returned to the Borrower.

 

Section 5.13.  Amendments to Effective Date Receivables
Financing.  The Borrower
shall (a) provide the Administrative Agent and the Collateral Agent with
written notice of any proposed amendment, modification or other change to, and
each consent to a departure from, the terms or provisions of the Effective Date
Receivables Financing and (b) promptly following the effectiveness thereof,
provide the Administrative Agent and the Collateral Agent with a copy of each
such amendment, modification or other change to, and each such consent to a
departure from, the terms or provisions of the Effective Date Receivables
Financing. The Borrower shall not, without the prior written consent of the
Required Lenders, amend, modify or otherwise change or obtain a consent to a
departure from (i) the definitions of “USS Credit Agreement” or “USS Security

 

78

 

Agreement” contained in the Receivables Purchase Agreement or (ii) any
other provision of (including by the addition of a provision) the Effective
Date Receivables Financing which could in any way impair the interests of the
Lender Parties in the Collateral.

 

Section 5.14.  Designation of Subsidiaries.  The Borrower’s board of directors
may at any time designate any Restricted Subsidiary as an Unrestricted
Subsidiary or any Unrestricted Subsidiary as a Restricted Subsidiary; provided that (i) immediately before and
after such designation, no Default shall have occurred and be continuing
(including, without limitation, any Default as a result of a breach of the
covenants set forth in Sections 6.01, 6.02 and 6.04), (ii) immediately after giving
effect to such designation, the Borrower shall be in compliance, on a pro forma
basis, with the covenants set forth in Section 6.13 and Section 6.14 (and, as a
condition precedent to the effectiveness of any such designation, the Borrower
shall deliver to the Administrative Agent a copy of the board resolution giving
effect to such designation and a certificate of a Financial Officer setting
forth in reasonable detail the calculations demonstrating such compliance),
(iii) no Subsidiary may be designated as an Unrestricted Subsidiary under this
Agreement unless it is, or will concurrently become, an “Unrestricted
Subsidiary” as defined in, and for all purposes of, the Senior Unsecured Debt
Documents and (iv) no Unrestricted Subsidiary may be designated as a Restricted
Subsidiary under this Agreement unless it is, or will concurrently become, a
“Restricted Subsidiary” as defined in, and for all purposes of, the Senior
Unsecured Debt Documents.  The
designation of any Restricted Subsidiary as an Unrestricted Subsidiary shall
constitute an investment by the Borrower therein at the date of designation in
an amount equal to the net book value of the Borrower’s investment therein. The
designation of any Unrestricted Subsidiary as a Restricted Subsidiary shall constitute
the incurrence at the time of designation of any Debt or Liens of such
Subsidiary existing at such time.

 

ARTICLE 6

NEGATIVE COVENANTS

 

Until all the Commitments have expired or terminated and the principal
of and interest on each Loan and all fees payable hereunder have been paid in
full and all Letters of Credit have expired or been cancelled and all LC
Disbursements have been reimbursed, the Borrower covenants and agrees with the
Lenders that:

 

Section 6.01.  Debt; Certain Equity Securities.  (a)  The Borrower will not
create, incur, assume or permit to exist any Debt, except:

 

(i)            Debt
created under the Loan Documents;

 

79

 

(ii)           other
Debt that would be permitted to be incurred by the Borrower pursuant to and in
accordance with Section 4.12(b) of the Senior Unsecured Debt Documents (as such
Senior Unsecured Debt Documents are in effect on the date of this Agreement,
and without giving effect to any suspension or release of the Borrower’s
obligation to comply with such Section 4.12(b) which may occur pursuant to
Section 4.9 of the Senior Unsecured Debt Documents); and

 

(iii)          other
unsecured Debt in an aggregate principal amount not exceeding $100,000,000 at
any time outstanding, to the extent that the Borrower would be permitted to
incur such Debt pursuant to and in accordance with Section 4.12(a) of the
Senior Unsecured Debt Documents (as such Senior Unsecured Debt Documents are in
effect on the date of this Agreement, and without giving effect to any suspension
or release of the Borrower’s obligation to comply with such Section 4.12(a)
which may occur pursuant to Section 4.9 of the Senior Unsecured Debt
Documents); provided that all
such Debt is on terms and conditions and subject to covenants that, taken as a
whole, are no more restrictive than the terms, conditions and covenants
contained in this Agreement; and provided
further that the aggregate
principal amount of all such Debt having a final maturity date on or before the
Maturity Date does not exceed $25,000,000;

 

provided that,
notwithstanding anything to the contrary in this Section 6.08(a), the Borrower
will not create, incur, assume or permit to exist any Debt arising from a
Receivables Financing, except to the extent that the aggregate amount of such
Debt, together with the aggregate amount of Debt incurred by Restricted
Subsidiaries in reliance on Section 6.06(g), does not exceed $600,000,000 (it
being understood that for purposes of determining the amount of Debt arising in
connection with a Receivables Financing, Debt arising from transactions among
the Borrower and its Subsidiaries in connection therewith shall be
disregarded).

 

(b)           The Borrower will
not issue any preferred stock or other preferred Equity Interests, which in
either case, is subject to mandatory redemption at any time prior to the first
anniversary of the Maturity Date.

 

Section 6.02.  Liens. 
The Borrower will not, and will not permit any of its
Subsidiaries (other than any Unrestricted Subsidiary) to, create or permit to
exist any Lien on any property now owned or hereafter acquired by it, or assign
or sell any income or revenues (including accounts receivable) or rights in
respect of any thereof, except:

 

(i)            Liens
on Collateral granted by the Borrower under the Security Documents;

 

80

 

(ii)           Permitted
Liens;

 

(iii)          any
Lien on any property of the Borrower or any Restricted Subsidiary existing on
the date hereof and listed in Schedule 6.02; provided that (A) such Lien shall not apply to any other
property of the Borrower or any Restricted Subsidiary and (B) such Lien shall
secure only those obligations which it secures on the date hereof and
extensions, renewals and replacements thereof that do not increase the
outstanding principal amount thereof;

 

(iv)          any
Lien existing on any property or asset before the acquisition thereof by the
Borrower or any Restricted Subsidiary or existing on any property or asset of
any Person that first becomes a Restricted Subsidiary after the date hereof
before the time such Person becomes a Restricted Subsidiary; provided that (A) such Lien is not
created in contemplation of or in connection with such acquisition or such
Person becoming a Restricted Subsidiary, as the case may be, (B) such Lien
will not apply to any other property or asset of the Borrower or any Restricted
Subsidiary and (C) such Lien will secure only those obligations which it
secures on the date of such acquisition or the date such Person first becomes a
Restricted Subsidiary, as the case may be, and extensions, renewals and
replacements thereof that do not increase the outstanding principal amount
thereof;

 

(v)           Liens
on fixed or capital assets acquired, constructed or improved by the Borrower or
any Restricted Subsidiary; provided
that (A) the Debt secured by such liens is permitted by Section 6.01,
(B) such Liens and the Debt secured thereby are incurred before or within
90 days after such acquisition or the completion of such construction or
improvement, (C) the Debt secured thereby does not exceed 90% of the
cost of acquiring, constructing or improving such fixed or capital assets and
(D) such Liens will not apply to any other property of the Borrower or any
Restricted Subsidiary;

 

(vi)          Liens
to secure a Debt owing to the Borrower;

 

(vii)         any
Lien arising out of the refinancing, extension, renewal or refunding of any
Debt secured by a Lien permitted by any of clauses (iii), (iv) or (v) of this
Section; provided that such Debt
is not increased (except by the amount of fees, expenses and premiums required
to be paid in connection with such refinancing, extension, renewal or
refunding) and is not secured by any additional assets;

 

(viii)        Liens
securing Debt arising out of a Receivables Financing;

 

81

 

(ix)           Liens
securing industrial revenue or pollution control bonds issued by the Borrower
(or prior to the Separation, by USX Corporation); provided, however, that such Liens relate solely to the
project being financed and are removed within 90 days following completion of
the project being financed; and

 

(x)            Liens
not otherwise permitted by the foregoing clauses of this Section 6.02 on assets
not constituting Collateral, securing Debt in an aggregate principal amount at
any time outstanding not to exceed $10,000,000.

 

Section 6.03.  Fundamental Changes.  (a)  The Borrower will not, and will not permit any of its
Subsidiaries (other than any Unrestricted Subsidiary) to, merge into or
consolidate with any other Person, or liquidate or dissolve, or permit any
other Person to merge into or consolidate with it, except that, if at the time
thereof and immediately after giving effect thereto no Default shall have
occurred and be continuing, (i) any Person organized under the laws of the
United States of America or one of its States or the District of Columbia may
merge into the Borrower in a transaction in which the Borrower is the surviving
corporation, (ii) any Person (other than the Borrower) organized under the
laws of the United States of America or one of its States or the District of
Columbia may merge into any Restricted Subsidiary in a transaction in which the
surviving entity is a Restricted Subsidiary and, (iii) any Restricted
Subsidiary may liquidate or dissolve if the Borrower determines in good faith
that such liquidation or dissolution is in the best interests of the Borrower
and is not materially disadvantageous to the Lenders; provided that, if any such merger involves
a Person that is not a wholly owned Subsidiary immediately before such merger,
such merger shall not be permitted unless also permitted by Section 6.04.

 

(b)           Neither the Borrower
nor any Subsidiary (other than a Special Purpose Financing Subsidiary or any
Unrestricted Subsidiary) will engage to any material extent in any business
except businesses of the types conducted by the Borrower and its respective
Subsidiaries on the date of this Agreement and businesses reasonably related,
ancillary or complementary thereto.

 

Section 6.04.  Investments, Loans, Advances, Guarantees and
Acquisitions.  (a)  The
Borrower will not, and will not permit any of its Subsidiaries (other than an
Unrestricted Subsidiary) to, purchase, hold or acquire (including pursuant to
any merger with any Person that was not a wholly owned Subsidiary before such
merger) any Equity Interest in or evidence of indebtedness or other security
(including any option, warrant or other right to acquire any of the foregoing)
of, make or permit to exist any loan or advance to, Guarantee any obligation
of, or make or permit to exist any investment or other interest in, any other
Person, or purchase or otherwise acquire (in one transaction or a series of
transactions) any assets of any other Person constituting a business unit,
except:

 

82

 

(i)            Permitted
Investments and investments in cash;

 

(ii)           investments
existing on the date of this Agreement, which investments (other than
investments that, individually, do not exceed $10,000,000) are listed in
Schedule 6.04;

 

(iii)          investments
by the Borrower and its Restricted Subsidiaries in Equity Interests in their
respective Restricted Subsidiaries (or in any Person that will, upon the making
of such investment, become a Restricted Subsidiary); provided that the aggregate amount of investments by the
Borrower in, and loans and advances by the Borrower to, and Guarantees by the
Borrower of Debt of, Restricted Subsidiaries permitted solely in reliance on
this clause (iii), taken together with the aggregate amount of loans and
advances made by the Borrower to Restricted Subsidiaries in reliance on clause
(iv), shall not exceed an amount at any time outstanding equal to 5% of
the Borrower’s Net Worth (and, for purposes hereof, the “Borrower’s  Net  Worth” at any
date shall be equal to the shareholders’ equity of the Borrower (other than any
amount attributable to stock which is required to be redeemed or is redeemable
at the option of the holder, if certain events or conditions occur or exist or
otherwise) as determined by reference to the financial statements of the
Borrower then most recently delivered pursuant to Section 5.01(a)(i) or Section
5.01(a)(ii));

 

(iv)          loans
or advances made by the Borrower to any Restricted Subsidiary or made by any
Restricted Subsidiary to the Borrower or any other Restricted Subsidiary; provided that the amount of such loans and
advances made by the Borrower to Restricted Subsidiaries shall be subject to
the limitation set forth in clause 6.04(a)(iii) above and provided further that the amount of such
loans and advances made by a Restricted Subsidiary to another Restricted
Subsidiary shall be subject to the limitations set forth in Section 6.06(c) and
Section 6.06(e);

 

(v)           investments
by the Borrower in one or more Restricted Subsidiaries (or in any Person that
will, upon the making of such investment, become a Restricted Subsidiary) in
connection with the Borrower’s sale or spin-off of all or part of one or more
lines of business (including, without limitation, the Borrower’s Tubular Line
of Business and/or the Borrower’s StraightLine Lines of Business); provided that (x) such sale or spin-off
actually occurs within 360 days following the date of any such investment, (y)
the Leverage Ratio will not exceed 3.75:1.00 on a pro forma basis after giving
effect to such spin-off and (z) the Borrower has delivered to the
Administrative Agent financial projections (in form and substance satisfactory
to the Administrative Agent) demonstrating compliance, after giving effect to
such spin-off, with Sections 6.13 and 6.14 through and including September 30,
2002;

 

83

 

(vi)          investments
by the Borrower or a Restricted Subsidiary in a Restricted Subsidiary in
respect of ordinary cash management activities;

 

(vii)         so
long as no Default has occurred and is continuing, investments by the Borrower
or a Restricted Subsidiary in one or more Restricted Subsidiaries, Unrestricted
Subsidiaries (which investments in Unrestricted Subsidiaries include, in
accordance with Section 5.14, any designation of a Subsidiary as an
Unrestricted Subsidiary) or any other Person; provided
that the aggregate amount of all investments permitted by this
clause (vii) (excluding investments in Unrestricted Subsidiaries  where the consideration consists of Equity
Interests of the Borrower, to the extent of such Equity Interest consideration)
shall not exceed $20,000,000 at any time outstanding;

 

(viii)        Guarantees
constituting Debt permitted by Section 6.01 and Section 6.06; provided that the aggregate principal
amount of Debt of Subsidiaries that is Guaranteed by the Borrower shall be
subject to the limitation set forth in clause 6.04(a)(iii) above;

 

(ix)           investments
received in connection with (x) the bankruptcy,  reorganization or recapitalization of, or settlement of delinquent
accounts and disputes with, customers and suppliers or (y) foreclosure by the
Borrower or any of its Restricted Subsidiaries with respect to any secured
investment or other transfer of title with respect to any secured investment in
default, in each case in the ordinary course of business;

 

(x)            receivables
owing to the Borrower or any Restricted Subsidiary if created or acquired in
the ordinary course of business and payable or dischargeable in accordance with
customary trade terms; provided, however,
that such trade terms may include such concessionary trade terms as the
Borrower or any such Restricted Subsidiary deems reasonable under the
circumstances;

 

(xi)           payroll,
travel and similar advances to cover matters that are expected at the time of such
advances ultimately to be treated as expenses for accounting purposes and that
are made in the ordinary course of business;

 

(xii)          loans
or advances to employees made in the ordinary course of business consistent
with past practices of the Borrower or such Restricted Subsidiary;

 

(xiii)         investments
in stock, obligations or securities received in settlement of debts created in
the ordinary course of business and owing to the Borrower or any Restricted
Subsidiary or in satisfaction of judgments;

 

84

 

(xiv)        investments
in any Person to the extent such investment represents the non-cash portion of
the consideration received for an asset sale permitted under Section 6.05(b),
(e) or (f);

 

(xv)         loans
or advances to USS/POSCO Industries for repairs of damages and business
interruption caused by the fire that occurred on May 31, 2001 in an aggregate
amount not to exceed $25,000,000; provided
that to the extent such loans or advances are not repaid with the proceeds of
insurance on or before June 30, 2003, (A) any such loans or advances made by
the Borrower shall be subject to the limitations set forth in Section 6.01 and
(B) any such loans or advances made by a Restricted Subsidiary shall be subject
to the limitations set forth in Section 6.06(c);

 

(xvi)        investments
in the Borrower;

 

(xvii)       investments
in any Person if, as a result of such investment, such other Person is merged
with or consolidated into, or transfers or conveys all or substantially all its
assets to, the Borrower or a Restricted Subsidiary, in each case subject to the
limitations set forth in Section 6.04(b); and

 

(xviii)      Receivables
Financings otherwise permitted under this Agreement.

 

provided that the
foregoing shall not prohibit a spin-off of a portion (not to exceed 25%) of the
Borrower’s Tubular Line of Business if (A) of the aggregate gross proceeds from
such spin-off transaction (the “Total
Spin-Off  Proceeds”), at least 75% is in the form of
cash or cash equivalents (“Cash  Spin-Off  Proceeds”),
(B) Cash Spin-Off Proceeds are applied to permanently reduce Debt of the
Borrower to the extent the Borrower elects and (C) an amount equal to the
excess of (1) the Total Spin-Off Proceeds over (2) the amount of Cash Spin-Off
Proceeds applied within 45 days after receipt thereof to permanently reduce
Debt of the Borrower, shall increase the amount of the Availability Block (in
accordance with the definition of “Availability Block” set forth in Section
1.01).

 

(b)           The Borrower will
not, and will not permit any of its Subsidiaries (other than an Unrestricted
Subsidiary) to make any material acquisition unless (i) immediately before and
after giving effect thereto, no Default shall have occurred and be continuing,
(ii) in the case of any acquisition of a Person, such acquisition is
non-hostile, (iii) the assets received by the Borrower or its Restricted
Subsidiary in connection therewith are used or usable in the same line of
business in which the Borrower or such Restricted Subsidiary have previously
been engaged, (iv) immediately before and after giving effect thereto, Facility
Availability is at least $100,000,000 and (v) immediately before and after
giving effect thereto, the Borrower would be in pro forma compliance with the
covenants

 

85

 

set forth in Sections 6.13 and 6.14 (calculated giving effect to such
acquisition as if it had been consummated on the first day of the fiscal period
with respect to which such covenant is calculated).

 

Section 6.05.  Asset Sales.  The Borrower will not, and will not permit any of its
Subsidiaries (other than any Unrestricted Subsidiary) to, sell, transfer, lease
or otherwise dispose of any property, including any Equity Interest owned by
it, nor will any Subsidiary (other than an Unrestricted Subsidiary) issue any
additional Equity Interest in such Subsidiary, except:

 

(a)           sales
of inventory, used or surplus equipment and Permitted Investments in the
ordinary course of business;

 

(b)           sales,
transfers and other dispositions to the Borrower or a Restricted Subsidiary; provided that the aggregate fair market
value of all assets sold or otherwise transferred to a Foreign Subsidiary in
reliance on this clause (b) shall not exceed $50,000,000; and provided  further
that any sales, transfers or dispositions involving a Restricted Subsidiary are
entered into in the ordinary course of business and pursuant to the reasonable
requirements of the Borrower’s or such Subsidiary’s business and on fair and
reasonable terms and conditions no less favorable to the Borrower or such
Subsidiary as the terms and conditions which would apply in a comparable
transaction on an arm’s length basis with a Person other than a Subsidiary or
Affiliate of the Borrower;

 

(c)           transfers
of assets in connection with a Receivables Financing that is otherwise
permitted under this Agreement;

 

(d)           sales,
transfers and other dispositions of assets (except Equity Interests in a
Restricted Subsidiary) that are not permitted by any other clause of this
Section; provided that the
aggregate fair market value of all assets sold, transferred or otherwise
disposed of in reliance on this clause shall not exceed $25,000,000 during any
Fiscal Year;

 

(e)           sale
of real property in the ordinary course of business;

 

(f)            sales
of real property that has not been used by the Borrower or any Restricted
Subsidiary in the production of steel or steel products at any time within 90
days prior to the date of sale;

 

(g)           sales
that are permitted pursuant to Section 6.04(a)(v); and

 

(h)           Sale-Leaseback
Transactions permitted pursuant to Section 6.07.

 

86

 

provided that all
sales, transfers, leases and other dispositions permitted by this Section
(except those permitted by clause (b), (e) or (f) above) shall be made for fair
value and solely for cash consideration and provided
further that any sale of real property having a value in excess of
$10,000,000 that is permitted by clause (e) or (f) of this Section shall be
made for fair value and for at least 10% cash consideration.

 

Section 6.06.  Subsidiary Debt.  The Borrower will not permit any of its Restricted
Subsidiaries to incur or otherwise be liable in respect of any Debt other than:

 

(a)           Debt
of such Restricted Subsidiary existing on the date of this Agreement and
identified on Schedule 6.06, and refinancings, extensions, renewals or
refundings of such Debt that do not increase the outstanding principal amount
thereof or result in an earlier maturity date or decreased weighted average
life thereof;

 

(b)           Debt
of such Restricted Subsidiary owing to the Borrower;

 

(c)           Debt
of such Restricted Subsidiary owing to a Domestic Subsidiary that is a
Restricted Subsidiary; provided that the aggregate amount for all
Subsidiaries of all Debt permitted by this clause (c) shall not exceed
$50,000,000 at any time outstanding and provided
further that the aggregate amount for all Foreign Subsidiaries of
all Debt permitted by this clause (c) shall not exceed $25,000,000 at any time
outstanding;

 

(d)           Debt
of such Restricted Subsidiary in respect of capital leases; provided that the aggregate amount for all
Restricted Subsidiaries of all such Debt permitted by this clause (d) shall not
exceed $20,000,000;

 

(e)           Debt
of such Restricted Subsidiary owing to a Foreign Subsidiary that is a
Restricted Subsidiary; provided
that the aggregate amount for all Restricted Subsidiaries (other than Foreign
Subsidiaries) of all such Debt shall not exceed $5,000,000;

 

(f)            Debt
of any Person that first becomes a Restricted Subsidiary after the date of this
Agreement; provided that (i) such
Debt exists at the time such Person first becomes a Restricted Subsidiary and
is not created in contemplation of or in connection with such Person becoming a
Restricted Subsidiary and (ii) the aggregate principal amount of Debt permitted
by this clause (f) shall not exceed $50,000,000 at any time outstanding;

 

(g)           Debt
arising from Receivables Financings; provided
that the aggregate amount for all Restricted Subsidiaries of such Debt shall
not exceed $600,000,000 (it being understood that for purposes of determining

 

87

 

the amount of Debt arising in connection with a Receivables Financing,
Debt arising from transactions among the Borrower and its Subsidiaries in
connection therewith shall be disregarded);

 

(h)           Debt
of any Restricted Subsidiary incurred to finance the acquisition, construction
or improvement of any fixed or capital assets, including Capital Lease
Obligations and any Debt assumed in connection with the acquisition of any such
assets or secured by a Lien on any such assets before the acquisition thereof,
and extensions, renewals and replacements of any such Debt that do not increase
the outstanding principal amount thereof or result in an earlier maturity date
or decreased weighted average life thereof; provided
that (A) such Debt is incurred before or within 90 days after such acquisition
or the completion of such construction or improvement and (B) the aggregate
principal amount of Debt permitted by this clause (h) shall not exceed
$25,000,000 at any time outstanding;

 

(i)            Debt
of such Subsidiary owing to another Subsidiary in respect of ordinary cash
management activities; and

 

(j)            Debt
of USSK incurred pursuant to one or more working capital facilities in an
aggregate amount not to exceed $50,000,000 at any time outstanding.

 

Section 6.07.  Sale and Leaseback Transactions.  The Borrower will not, and will
not permit any of its Subsidiaries (other than any Unrestricted Subsidiary) to,
enter into any arrangement, directly or indirectly, whereby it shall sell or
transfer any property, real or personal, used or useful in its business,
whether now owned or hereafter acquired, and thereafter rent or lease such
property or other property that it intends to use for substantially the same
purpose or purposes as the property sold or transferred (a “Sale-Leaseback Transaction”), except for
Sale-Leaseback Transactions, that, considered in the aggregate with all
Sale-Leaseback Transactions engaged in by the Borrower and its Restricted
Subsidiaries during the term of this Agreement, do not involve properties
having a fair market value in excess of $150,000,000; provided that all obligations under such
sale-leaseback agreements shall constitute Debt for purposes of calculating
compliance with the covenants set forth in this Article 6.

 

Section 6.08.  Restricted Payments.  The Borrower will not, and will
not permit any of its Restricted Subsidiaries to, declare or make, or agree to
pay or make, directly or indirectly, any Restricted Payment, or incur any
obligation (contingent or otherwise) to do so, unless (a) Facility Availability
is equal to or greater than $100,000,000 (both immediately before and after
giving effect to such Restricted Payment) and (b) the Borrower is in compliance
with the covenants set forth in Sections 6.13 and 6.14 immediately before and
after giving

 

88

 

effect to such Restricted Payment; provided that, notwithstanding the
foregoing, the Borrower may (i) pay regular quarterly dividends on its capital
stock in an aggregate amount not exceeding $40,000,000 in any Fiscal Year and
(ii) make other Restricted Payments in the ordinary course of business as
required pursuant to and in accordance with the Borrower’s stock option plans
or other benefit plans for management and/or employees of the Borrower.

 

Section 6.09.  Transactions with Affiliates.  The Borrower will not, and will
not permit any of its Subsidiaries (other than any Unrestricted Subsidiary) to,
directly or indirectly, pay any funds to or for the account of, make any
investment (whether by acquisition of stock or indebtedness, by loan, advance,
transfer of property, Guarantee or other agreement to pay, purchase or service,
directly or indirectly, any Debt, or otherwise) in, Guarantee any Debt of,
sell, lease or otherwise transfer any property to, or purchase, lease or
otherwise acquire any property or services from, or otherwise engage in or
effect any other transaction with, any of its Affiliates; provided that this Section 6.09 shall not
prohibit:

 

(i)            the
Borrower or any of its Restricted Subsidiaries from performing its respective
obligations under the agreements and transactions described on Schedule 6.09;

 

(ii)           the
Borrower or any of its Restricted Subsidiaries from entering into transactions
with any Affiliate if such transactions are entered into in the ordinary course
of business and pursuant to the reasonable requirements of the Borrower’s or
such Subsidiary’s business and on fair and reasonable terms and conditions no
less favorable to the Borrower or such Subsidiary as the terms and conditions
which would apply in a comparable transaction on an arm’s length basis with a
Person other than an Affiliate or a Subsidiary; and

 

(iii)          Restricted
Payments permitted by 6.08, so long as, immediately after giving effect
thereto, no Default shall have occurred and be continuing.

 

Section 6.10.  Restrictive Agreements.  The Borrower will not and will
not permit any of its Subsidiaries (other than any Unrestricted Subsidiary) to,
directly or indirectly, enter into or permit to exist any agreement or other
arrangement that prohibits, restricts or imposes any condition on (a) the
ability of the Borrower or any Restricted Subsidiary to create or permit to
exist any Lien on any of its property or (b) the ability of any Restricted
Subsidiary to pay dividends or other distributions with respect to any shares
of its capital stock or to make or repay loans or advances to the Borrower or
any other Restricted Subsidiary or to Guarantee Debt of the Borrower or any
other Restricted Subsidiary; provided
that (i) the foregoing shall not apply to restrictions and conditions imposed
by law or by any Loan Document, any Senior Unsecured Debt Document or any
document

 

89

 

evidencing any Receivables Financing, (ii)
the foregoing shall not apply to restrictions and conditions existing on the
date hereof and identified on Schedule 6.10 (but shall apply to any amendment
or modification expanding the scope of, or any extension or renewal of, any
such restriction or condition), (iii) the foregoing shall not apply to
customary restrictions and conditions contained in agreements relating to the
sale of a Subsidiary pending such sale, provided
that such restrictions and conditions apply only to the Subsidiary that is to
be sold and such sale is permitted hereunder, (iv) clause (a) of this Section
shall not apply to restrictions or conditions imposed by any agreement relating
to secured Debt permitted by this Agreement if such restrictions or conditions
apply only to the property securing such Debt and (v) clause (a) of this
Section shall not apply to customary provisions in leases and other contracts
restricting the assignment thereof.

 

Section 6.11.  Designation of Unrestricted
Subsidiaries.  The Borrower
will not cause or permit any Subsidiary that is a Restricted Subsidiary on the
date of this Agreement to be designated as or otherwise become an Unrestricted
Subsidiary.

 

Section 6.12.  Capital Expenditures.  The Borrower will not permit the
aggregate amount of Capital Expenditures made by the Borrower and its
Restricted Subsidiaries (other than Foreign Subsidiaries) in any Fiscal Year
referred to below (or other fiscal period referred to below) to exceed the sum
of:

 

(i)            $145,000,000
(in the case of the period of two consecutive Fiscal Quarters ending December
31, 2001), $380,000,000 (in the case of the Fiscal Year ending December 31,
2002), $340,000,000 (in the case of the Fiscal Year ending December 31, 2003)
or $400,000,000 (in the case of the Fiscal Year ending December 31, 2004); plus

 

(ii)           for
each Fiscal Year ending after December 31, 2001, the amount (if any) by which
(x) the amount of Capital Expenditures for the immediately preceding Fiscal
Year (or other fiscal period specified in clause (i)) permitted pursuant to
clause (i) above (without including any carryover amount from any prior Fiscal
Year or fiscal period) exceeded (y) the amount of Capital Expenditures actually
made during such immediately preceding Fiscal Year (or other fiscal period
specified in clause (i));

 

provided that, in
any Fiscal Year ending after December 31, 2001, the aggregate amount of Capital
Expenditures made by the Borrower and its Restricted Subsidiaries (other than
Foreign Subsidiaries) may exceed the sum determined pursuant to clauses (i) and
(ii) above for such Fiscal Year (such sum, the “General CapEx Limit” for such Fiscal Year) by an aggregate
amount not to exceed $75,000,000, if (but only to the extent that) immediately
after giving effect

 

90

 

to each Capital Expenditure that would, taken together with all prior
Capital Expenditures made by the Borrower and its Restricted Subsidiaries
(other than Foreign Subsidiaries) during such Fiscal Year, exceed the General
CapEx Limit, Facility Availability would be greater than $200,000,000.

 

Section 6.13.  Interest Expense Coverage Ratio.  At the last day of any Fiscal
Quarter ending during any period set forth below, the Borrower will not permit
the ratio of (a) Consolidated EBITDA to (b) Consolidated Cash Interest Expense,
in each case for any period of four consecutive Fiscal Quarters (subject to
Section 6.15) ending on such date, to be less than the ratio set forth below
opposite such period:

 

	
  Period

  	
   

  	
  Ratio

  	
   

  
	
  September 30, 2002 - March 30, 2003

  	
   

  	
  2.00:1.00

  	
   

  
	
  March 31, 2003 and thereafter

  	
   

  	
  2.50:1.00

  	
   

  

 

Section 6.14.  Leverage Ratio.  The Borrower will not permit the Leverage Ratio at any
time during any period set forth below to exceed the ratio set forth opposite
such period:

 

	
  Period

  	
   

  	
  Ratio

  	
   

  
	
  September
  30, 2002 - December 30, 2002

  	
   

  	
  6.00:1.00

  	
   

  
	
  December 31, 2002 - March 30, 2003

  	
   

  	
  5.50:1.00

  	
   

  
	
  March 31, 2003 - June 29, 2003

  	
   

  	
  5.00:1.00

  	
   

  
	
  June 30, 2003 - September 29, 2003

  	
   

  	
  4.50:1.00

  	
   

  
	
  September 30, 2003 - March 30, 2004

  	
   

  	
  4.00:1.00

  	
   

  
	
  March 31, 2004 and thereafter

  	
   

  	
  3.75:1.00

  	
   

  

 

Section 6.15.  Periods of Less Than Four Fiscal
Quarters.  If any
determination hereunder is required by the terms hereof to be made for a period
of four consecutive Fiscal Quarters at a time when fewer than four full Fiscal
Quarters have elapsed since the Effective Date, such determination shall be
made for the period elapsed from the first day of the first Fiscal Quarter
beginning after the Effective Date through the last day of the most recent
Fiscal Quarter then ended (annualized on a simple arithmetic basis, if such
determination is to be used in a ratio with a balance sheet item).

 

Section 6.16.  Hedging Agreements.  The Borrower will not, and will
not permit any of its Subsidiaries (other than any Unrestricted Subsidiary) to,
enter into any Hedging Agreement, except Hedging Agreements entered into in the
ordinary course of business to hedge or mitigate risks to which the Borrower or
any of its Restricted Subsidiaries is exposed in the conduct of its business or
the management of its liabilities.

 

91

 

Section 6.17.  Environmental Matters.  The Borrower will, and will cause
each of its Subsidiaries (other than any Unrestricted Subsidiary) to, comply
with all applicable Environmental Laws except where failure to do so,
individually or in the aggregate, does not, and would not reasonably be
expected to, have a material adverse effect on the Borrower’s ability to
perform its obligations under any Loan Document or impose any liability on any
Lender.

 

Section 6.18.  Amendment of Material Documents.  The Borrower will not, and will
not permit any of its Subsidiaries (other than, with respect to clause (b)
hereof, any Unrestricted Subsidiary) to, without the prior written consent of
the Required Lenders, amend, modify or waive any of its rights under (a) any
Senior Unsecured Debt Document or (b) its certificate of formation, limited
liability company agreement, certificate of incorporation, by-laws or other
organizational documents, in each case in any manner that would reasonably be
expected to be adverse to the Lender Parties.

 

ARTICLE 7

EVENTS OF DEFAULT

 

If any of the following events (“Events
of Default”) shall occur:

 

(a)           the
Borrower shall fail to pay any principal of any Loan or any LC Reimbursement
Obligation when the same shall become due, whether at the due date thereof or
at a date fixed for prepayment thereof or otherwise;

 

(b)          
the Borrower shall fail to pay when due any interest on any Loan or any fee or
other amount (except an amount referred to in clause (a) above) payable under
any Loan Document, and such failure shall continue unremedied for a period of
five days;

 

(c)           any
representation, warranty or certification made or deemed made by or on behalf
of the Borrower or any Restricted Subsidiary in or in connection with any Loan
Document or any amendment or modification thereof or waiver thereunder, or in
any report, certificate, financial statement or other document furnished
pursuant to or in connection with any Loan Document or any amendment or
modification thereof or waiver thereunder, shall prove to have been incorrect
when made or deemed made and, if the circumstances giving rise to such false or
misleading representation or warranty are susceptible to being cured in all
material respects, such false or misleading representation or warranty shall
not be cured in all material respects for five days after the earlier to occur
of (i) the date on which an officer of the Borrower shall obtain

 

92

 

knowledge thereof, or (ii) the date on which written notice thereof
shall have been given to the Borrower by the Administrative Agent;

 

(d)           the
Borrower shall fail to observe or perform any covenant or agreement contained
in Section 5.01(a)(ii), Section 5.01(a)(iv), Section 5.02, Section 5.03(c),
Section 5.04, Sections 5.06 through Section 5.08, Sections 5.11 through 5.14 or
in Article 6;

 

(e)           the
Borrower shall fail to observe or perform (i) any covenant or agreement
contained in Section 5.01(b) or Section 5.03(d) and such failure shall continue
for 3 days after the earlier of notice of such failure to the Borrower from the
Administrative Agent or knowledge of such failure by an officer of the
Borrower, or (ii) any covenant or agreement contained in Section 5.01(a)(i),
Section 5.01(a)(iii), Sections 5.01(a)(v), 
through 5.01(a)(x), Section 5.03(a), Section 5.03(b), and such failure
shall continue for ten days after the earlier of notice of such failure to the
Borrower from the Administrative Agent or knowledge of such failure by an
officer of the Borrower;

 

(f)            the
Borrower shall fail to observe or perform any provision of any Loan Document
(other than those failures covered by clauses (a), (b), (d) and (e) of this
Article 7) and such failure shall continue for 30 days after the earlier of
notice of such failure to the Borrower from the Administrative Agent or
knowledge of such failure by an officer of the Borrower;

 

(g)           the
Borrower or any of its Restricted Subsidiaries shall fail to make a
payment or payments (whether of principal or interest and regardless of amount)
in respect of any Material Debt when the same shall become due, whether at the
due date thereof or at a date fixed for prepayment thereof or otherwise;

 

(h)           any
event or condition occurs that (i) results in any Material Debt becoming due
before its scheduled maturity or (ii) enables or permits (with or without the
giving of notice, the lapse of time or both) the holder or holders of Material
Debt or any trustee or agent on its or their behalf to cause any Material Debt
to become due, or to require the prepayment, repurchase, redemption or
defeasance thereof, before its scheduled maturity or (iii) results in the
termination of or enables one or more banks or financial institutions to
terminate commitments to provide in excess of $20,000,000 aggregate principal
amount of credit to the Borrower and/or its Restricted Subsidiaries; provided that, in the case of any event
described in clauses (ii) or (iii) that would permit Material Debt to be
accelerated or would permit termination of such commitments only after the
lapse of a cure period, so long as the Borrower has notified the

 

93

 

Administrative Agent immediately upon occurrence of such event, such
event shall give rise to an Event of Default hereunder upon expiration of such
cure period;

 

(i)            an
involuntary proceeding shall be commenced or an involuntary petition shall be
filed seeking (i) liquidation, reorganization or other relief in respect
of the Borrower or any of its Significant Subsidiaries or its debts, or of a
substantial part of its assets, under any Federal, state or foreign bankruptcy,
insolvency, receivership or similar law now or hereafter in effect or
(ii) the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for the Borrower or any of its Significant
Subsidiaries or for a substantial part of its assets, and, in any such case,
such proceeding or petition shall continue undismissed for 60 days or an
order or decree approving or ordering any of the foregoing shall be entered;

 

(j)            the
Borrower or any of its Significant Subsidiaries shall (i) voluntarily
commence any proceeding or file any petition seeking liquidation,
reorganization or other relief under any Federal, state or foreign bankruptcy,
insolvency, receivership or similar law now or hereafter in effect,
(ii) consent to the institution of, or fail to contest in a timely and
appropriate manner, any proceeding or petition described in clause (h) above,
(iii) apply for or consent to the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for any the Borrower
or any of its Significant Subsidiaries or for a substantial part of its assets,
(iv) file an answer admitting the material allegations of a petition filed
against it in any such proceeding, (v) make a general assignment for the
benefit of creditors or (vi) take any action for the purpose of effecting
any of the foregoing;

 

(k)           the
Borrower or any of its Significant Subsidiaries shall become unable, admit in
writing its inability or fail generally to pay its debts as they become due;

 

(l)                                     one or more
judgments for the payment of money in an aggregate amount exceeding $20,000,000
shall be rendered against the Borrower or any of its Significant Subsidiaries
and shall remain undischarged for a period of 30 consecutive days during which
execution shall not be effectively stayed, or any action shall be legally taken
by a judgment creditor to attach or levy upon any asset of the Borrower or any
of its Significant Subsidiaries to enforce any such judgment;

 

(m)          an
ERISA Event shall have occurred that, in the opinion of the Required Lenders,
when taken together with all other ERISA Events

 

94

 

that have occurred, would reasonably be expected to result in a
Material Adverse Effect;

 

(n)           any
Lien purported to be created under any Security Document shall cease to be, or
shall be asserted by the Borrower not to be, a valid and perfected Lien on any
Collateral, with the priority required by the applicable Security Document,
except as a result of a sale or other disposition of the applicable Collateral
in a transaction permitted under the Loan Documents; or

 

(o)           the
Effective Date Receivables Financing (or any replacement Receivables Financing
entered into in accordance with this Agreement and on terms satisfactory to the
Administrative Agent) shall have been terminated, whether voluntarily or
otherwise; provided that any such
termination of the Effective Date Receivables Financing (or any such
replacement Receivables Financing) shall not constitute an Event of Default
hereunder if (a) the Effective Date Receivables Financing (or such replacement
Receivables Financing) has been replaced with another Receivables Financing on
terms satisfactory to the Administrative Agent or (b) Facility Availability
(calculated on the date of termination of the Effective Date Receivables
Financing) is equal to or greater than 125% of the aggregate amount of the
outstandings under the Effective Date Receivables Financing (or such
replacement Receivables Financing) (calculated immediately before giving effect
to its termination);

 

then, and in every such event (except an event with respect to the
Borrower  described in clause (h) or (i)
above), and at any time thereafter during the continuance of such event, the
Administrative Agent may, and at the request of the Required Lenders shall, by
notice to the Borrower, take either or both of the following actions, at the
same or different times:   (i) terminate the Commitments, and
thereupon the Commitments shall terminate immediately, and (ii) declare the
Loans then outstanding to be due and payable in whole (or in part, in which
case any principal not so declared to be due and payable may thereafter be
declared to be due and payable), and thereupon the principal of the Loans so
declared to be due and payable, together with accrued interest thereon and all
fees and other obligations of the Borrower accrued hereunder, shall become due
and payable immediately, without presentment, demand, protest or other notice
of any kind, all of which are waived by the Borrower; and in the case of any
event with respect to the Borrower described in clause (h) or (i) above, the
Commitments shall automatically terminate and the principal of the Loans then
outstanding, together with accrued interest thereon and all fees and other
obligations of the Borrower accrued hereunder, shall automatically become due
and payable, without presentment, demand, protest or other notice of any kind,
all of which are waived by the Borrower. Additionally, and without limiting the
generality of the foregoing, on each Business Day during a Sweep Period (as
defined in the Security Agreement),

 

95

 

the Collateral Agent may apply funds on deposit in the Cash Collateral
Account in accordance with Section 5(f) of the Security Agreement.

 

ARTICLE 8

THE AGENTS

 

Section 8.01.  Appointment and Authorization.  Each Lender Party irrevocably
appoints each Agent as its agent and authorizes each Agent to take such actions
as agent on its behalf and to exercise such powers as are delegated to the
Agent by the terms of the Loan Documents, together with such actions and powers
as are reasonably incidental thereto.

 

Section 8.02.  Rights and Powers as a Lender.  Each Agent shall, in its capacity
as a Lender, have the same rights and powers as any other Lender and may
exercise or refrain from exercising the same as though it were not one of the
Agents.  Each Agent and its Affiliates
may accept deposits from, lend money to and generally engage in any kind of business
with the Borrower or any Subsidiary or Affiliate of the Borrower as if it were
not an Agent hereunder.

 

Section 8.03.  Limited Duties and Responsibilities.  None of the Agents shall have any duties or
obligations except those expressly set forth in the Loan Documents.  Without limiting the generality of the
foregoing, (a) none of the Agents shall be subject to any fiduciary or other
implied duties, regardless of whether a Default has occurred and is continuing,
(b) none of the Agents shall have any duty to take any discretionary action or
exercise any discretionary powers, except discretionary rights and powers
expressly contemplated by the Loan Documents that such Agent is required in
writing to exercise by the Required Lenders (or such other number or percentage
of the Lenders as shall be necessary under the circumstances as provided in
Section 9.02), and (c) except as expressly set forth in the Loan
Documents, none of the Agents shall have any duty to disclose, or shall be
liable for any failure to disclose, any information relating to the Borrower or
any of its Subsidiaries that is communicated to or obtained by the Agent or any
of its Affiliates in any capacity.  None
of the Agents shall be liable for any action taken or not taken by it with the
consent or at the request of the Required Lenders (or such other number or
percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 9.02) or in the absence of its own gross negligence or
wilful misconduct.  Each Agent shall be
deemed not to have knowledge of any Default unless and until written notice
thereof is given to such Agent by the Borrower or a Lender, and none of the
Agents shall be responsible for or have any duty to ascertain or inquire into
(i) any statement, warranty or representation made in or in connection
with any Loan Document, (ii) the contents of any certificate, report or
other document delivered thereunder or in connection therewith, (iii) the
performance or observance of any of the covenants, agreements or other terms or
conditions set

 

96

 

forth in any Loan Document, (iv) the
validity, enforceability, effectiveness or genuineness of any Loan Document or
any other agreement, instrument or document, or (v) the satisfaction of
any condition set forth in Article 4 or elsewhere in any Loan Document,
other than to confirm receipt of items expressly required to be delivered to
such Agent.

 

Section 8.04.  Authority to Rely on Certain Writings, Statements and
Advice.  Each Agent shall be
entitled to rely on, and shall not incur any liability for relying on, any
notice, request, certificate, consent, statement, instrument, document or other
writing believed by it to be genuine and to have been signed or sent by the
proper Person.  Each Agent also may rely
on any statement made to it orally or by telephone and believed by it to be
made by the proper Person, and shall not incur any liability for relying
thereon.  Each Agent may consult with
legal counsel (who may be counsel for the Borrower), independent accountants
and other experts selected by it, and shall not be liable for any action taken
or not taken by it in accordance with the advice of any such counsel,
accountants or experts.

 

Section 8.05.  Sub-Agents and Related Parties.  Each Agent may perform any and all its
duties and exercise its rights and powers by or through one or more sub-agents
appointed by it.  Each Agent and any
such sub-agent may perform any and all its duties and exercise its rights and
powers through their respective Related Parties.  The exculpatory provisions of the preceding Sections of this
Article shall apply to any such sub-agent and to the Related Parties of each
Agent and any such sub-agent, and shall apply to activities in connection with
the syndication of the credit facilities provided for herein as well as
activities as an Agent hereunder.

 

Section 8.06.  Resignation; Successor Agents.  Subject to the appointment and acceptance of
a successor Agent as provided in this Section, any Agent may resign at any time
(and, upon the request of the Required Lenders, JPMorgan Chase Bank will so
resign) by notifying the Lenders, the LC Issuing Bank and the Borrower.  Upon any such resignation, the Required
Lenders shall have the right, in consultation with the Borrower, to appoint a
successor Agent; provided that
consultation with the Borrower shall not be required if an Event of Default
shall have occurred and be continuing. 
If no successor Agent shall have been so appointed by the Required Lenders
and shall have accepted such appointment within 30 days after the retiring
Agent gives notice of its resignation, then the retiring Agent may, on behalf
of the Lenders and the LC Issuing Bank, appoint a successor Agent which shall
be a bank or financial institution with an office in New York, New York, or an
Affiliate of any such bank or financial institution.  Upon acceptance of its appointment as Agent hereunder by a
successor Agent, such successor Agent shall succeed to and become vested with
all the rights, powers, privileges and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and obligations
hereunder.  The fees payable by the

 

97

 

Borrower to a successor Agent shall be the
same as those payable to its predecessor unless otherwise agreed by the
Borrower and such successor Agent. 
After any retiring Agent’s resignation hereunder as Agent, the
provisions of this Article and Section 9.03 shall continue in effect for
the benefit of such retiring Agent, its sub-agents and their respective Related
Parties in respect of any actions taken or omitted to be taken by any of them
while the retiring Agent was acting as an Agent hereunder.

 

Section 8.07.  Credit Decisions by Lenders.  Each Lender acknowledges that it has,
independently and without reliance on any Agent or any other Lender Party and
based on such documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement.  Each Lender also acknowledges that it will,
independently and without reliance on any Agent or any other Lender Party and
based on such documents and information as it shall from time to time deem
appropriate, continue to make its own decisions in taking or not taking action
under or based on this Agreement, any other Loan Document or related agreement
or any document furnished hereunder or thereunder.

 

Section 8.08.  Agents’ Fees. The Borrower shall pay to
each Agent for its own account fees in the amounts and at the times previously
agreed upon by the Borrower and such Agent.

 

Section 8.09.  Documentation Agent and Co-Collateral Agent.
General Electric Capital Corporation, in its capacities as Documentation Agent
and Co-Collateral Agent, shall not have any duties or obligations of any kind
under this Agreement.

 

ARTICLE 9

MISCELLANEOUS

 

Section 9.01.  Notices. 
Except in the case of notices and other communications expressly
permitted to be given by telephone, all notices and other communications
provided for herein shall be in writing and shall be delivered by hand or
overnight courier service, mailed by certified or registered mail or sent by
telecopy, as follows:

 

(a)           if
to the Borrower, to it at 600 Grant Street, Room 1325, Pittsburgh, Pennsylvania
15219, Attention of Treasurer (Facsimile No. (412)
433-4567);

 

(b)           if
to the Administrative Agent, to JPMorgan Chase Bank, Loan and Agency Services
Group, One Chase Manhattan Plaza, 8th Floor, New York, New York
10081, Attention of Linda D. Hill (Facsimile No.

 

98

 

212-552-7490; with a copy to JPMorgan Chase Bank, 270 Park Avenue, 21st
Floor, New York, New York 10017, Attention of James Ramage (Facsimile No. (212)
270-4724);

 

(c)           if
to the Collateral Agent, to JPMorgan Chase Bank, 270 Park Avenue, 29th
Floor, New York, New York 10017, Attention of Laura Orsini-Tramontana
(Facsimile No. (212) 270-7449);

 

(d)           if
to the Co-Collateral Agent, to General Electric Capital Corporation, 800
Connecticut Avenue, Two North, Norwalk, Connecticut 06854, Attention
of Account Manager B United States
Steel (Facsimile No. (203) 852-3660);

 

(e)           if
to JPMorgan Chase Bank, as LC Issuing Bank, to it at 270 Park Avenue, 21st
Floor, New York, NY 10017, Attention of Carlos Morales (Facsimile No. (212)
270-4724); if to PNC Bank, National Association, as LC Issuing Bank, to it at
Firstside Center, 500 First Avenue, 3rd Floor, Pittsburgh, PA 15219, Attention
of Ruth Plecenik (Facsimile No. (412) 768–6118); if to Mellon Bank, N.A.,
as LC Issuing Bank, to it at 500 Ross Street, 8th Floor, Pittsburgh, PA  15262–0001, Attention of Joe Borello
(Facsimile No. (412) 236-3437);

 

(f)            if
to the Swingline Lender, to it at One Chase Manhattan Plaza, 8th Fl, New
York, NY 10081, Attention of Linda D. Hill (Facsimile No. (212)
552-7490);

 

(g)           if
to any other Lender, to it at its address (or facsimile number) set forth in
its Administrative Questionnaire.

 

Any party hereto may change its address or telecopy number for notices
and other communications hereunder by notice to the Administrative Agent and
the Borrower.  All notices and other
communications given to any party hereto in accordance with the provisions of
this Agreement will be deemed to have been given on the date of receipt.

 

Section 9.02.  Waivers; Amendments.  (a) 
No failure or delay by any Lender Party in exercising any right or power
hereunder or under any other Loan Document shall operate as a waiver thereof,
nor shall any single or partial exercise of any such right or power, or any abandonment
or discontinuance of steps to enforce such a right or power, preclude any other
or further exercise thereof or the exercise of any other right or power.  The rights and remedies of the Lender
Parties under the Loan Documents are cumulative and are not exclusive of any
rights or remedies that they would otherwise have.  No waiver of any provision of any Loan Document or consent to any
departure by the Borrower therefrom shall in any event be effective unless the
same shall be permitted by

 

99

 

subsection (b) of this Section, and then
such waiver or consent shall be effective only in the specific instance and for
the purpose for which given.  Without
limiting the generality of the foregoing, neither the making of a Loan nor the
issuance, amendment, renewal or extension of a Letter of Credit shall be
construed as a waiver of any Default, regardless of whether any Lender Party
had notice or knowledge of such Default at the time.

 

(b)           No Loan Document or provision
thereof may be waived, amended or modified except, in the case of this
Agreement, by an agreement or agreements in writing entered into by the
Borrower and the Required Lenders or, in the case of any other Loan Document,
by an agreement or agreements in writing entered into by the parties thereto
with the consent of the Required Lenders; provided
that no such agreement shall:

 

(i)            increase
the Commitment of any Lender without its written consent;

 

(ii)           reduce
the principal amount of any Loan or LC Disbursement or reduce the rate of
interest thereon, or reduce any fee payable hereunder, without the written
consent of each Lender Party affected thereby;

 

(iii)          postpone
the maturity of any Loan, or the required date of any mandatory payment of
principal (including without limitation pursuant to Section 2.10(b), or the
required date of reimbursement of any LC Disbursement, or any date for the
payment of any interest or fee payable hereunder, or reduce the amount of,
waive or excuse any such payment, or postpone the scheduled date of expiration
of any Commitment, without the written consent of each Lender Party affected
thereby;

 

(iv)          change
Section 2.18(b) or 2.18(c) in a manner that would alter the pro rata sharing of
payments required thereby, without the written consent of each Lender;

 

(v)           change
any provision of this Section or the percentage set forth in the definition of
“Required Lenders” or any other provision of any Loan Document specifying the
number or percentage of Lenders required to take any action thereunder, without
the written consent of each Lender;

 

(vi)          release
all or any substantial portion of the Collateral from the Transaction Liens,
without the written consent of each Lender (it being understood that, for
purposes of this Section 9.02(b)(vi), a 
release of Collateral comprising 10% or more of the Borrowing Base in
effect on the date of such release shall constitute release of a substantial
portion of Collateral);

 

100

 

(vii)         reduce
the amount of the Availability Block, without the written consent of each
Lender;

 

(viii)        increase
the Borrowing Base advance rates, eliminate or reduce Availability Reserves or
otherwise cause the Borrowing Base to be increased, without the written consent
of Lenders having aggregate Exposures and unused Commitments representing at
least 85% of the sum of all Exposures and unused Commitments at such time;

 

(ix)           increase
the aggregate amount of the Commitments by an amount in excess of the amount
permitted pursuant to Section 2.20(c), or amend Section 2.20(c) to
permit increases in the aggregate Commitments in excess of an aggregate amount
equal to $150,000,000 during the term of this Agreement, without the written
consent of Lenders having aggregate Exposures and unused Commitments
representing at least 75% of the sum of all Exposures and unused Commitments at
such time; or

 

(x)            unless
signed by a Designated Lender or its Designating Lender, subject such
Designated Lender to any additional obligation or affect its rights hereunder
(unless the rights of all the Lenders are similarly affected); and

 

provided further
that no such agreement shall amend, modify or otherwise affect the rights or
duties of any Agent, the LC Issuing Bank or the Swingline Lender without its
prior written consent; and provided further
that neither a reduction or termination of Commitments pursuant to Section 2.08
or 2.11, nor an increase in Commitments pursuant to Section 2.20, constitutes
an amendment, waiver or modification for purposes of this Section 9.02.

 

(c)       Notwithstanding the
foregoing, if the Required Lenders enter into or consent to any waiver,
amendment or modification pursuant to subsection (b) of this Section, no
consent of any other Lender will be required if, when such waiver, amendment or
modification becomes effective, (i) the Commitment of each Lender not
consenting thereto terminates and (ii) all amounts owing to it or accrued for
its account hereunder are paid in full.

 

Section 9.03.  Expenses; Indemnity; Damage Waiver.  (a) The Borrower shall pay (i) all
reasonable and documented out-of-pocket expenses incurred by each Agent and its
Affiliates, including the reasonable fees, charges and disbursements of Davis
Polk & Wardwell, special counsel for the Administrative Agent, in
connection with the syndication of the credit facilities provided for herein,
the preparation and administration of the Loan Documents and any amendments,
modifications or waivers of the provisions thereof (whether or not the
transactions contemplated hereby or thereby shall be consummated), (ii) all
reasonable and documented out-of-pocket expenses incurred by the LC Issuing

 

101

 

Bank in connection with the issuance, amendment, renewal or extension
of any Letter of Credit or any demand for payment thereunder and (iii) all
out-of-pocket expenses incurred by any Lender Party, including the fees,
charges and disbursements of any counsel for any Lender Party, in connection
with the enforcement or protection of its rights in connection with the Loan
Documents (including its rights under this Section), the Letters of Credit or
the Loans, including all such out-of-pocket expenses incurred during any
workout, restructuring or negotiations in respect of the Letters of Credit or
the Loans.

 

(b)           The Borrower shall
indemnify each of the Lender Parties and their respective Related Parties (each
such Person being called an “Indemnitee”)
against, and hold each Indemnitee harmless from, any and all losses, claims,
damages, liabilities and related expenses, including the fees, charges and
disbursements of counsel for any Indemnitee, incurred by or asserted against
any Indemnitee arising out of, in connection with, or as a result of
(i) the execution or delivery of any Loan Document or any other agreement
or instrument contemplated hereby, the performance by the parties to the Loan
Documents of their respective obligations thereunder or the consummation of the
Financing Transactions or any other transactions contemplated hereby,
(ii) any Loan or Letter of Credit or the use of the proceeds therefrom
(including any refusal by the LC Issuing Bank to honor a demand for payment
under a Letter of Credit if the documents presented in connection with such
demand do not comply with the terms of such Letter of Credit), (iii) any
actual or alleged presence or release of Hazardous Materials on or from any
property currently or formerly owned or operated by the Borrower or any
Subsidiary, or (iv) any actual or prospective claim, litigation, investigation
or proceeding relating to any of the foregoing, whether based on contract, tort
or any other theory and regardless of whether any Indemnitee is a party
thereto; provided that (i) such
indemnity shall not be available to any Indemnitee to the extent that such
losses, claims, damages, liabilities or related expenses are determined by a
court of competent jurisdiction by final and nonappealable judgment to have
resulted from such Indemnitee’s gross negligence or wilful misconduct; (ii)
such indemnity shall not be available to any Indemnitee for losses, claims,
damages, liabilities or related expenses arising out of a proceeding in which
such Indemnitee and the Borrower are adverse parties to the extent that the
Borrower prevails on the merits, as determined by a court of competent
jurisdiction (it being understood that nothing in this Agreement shall preclude
a claim or suit by the Borrower against any Indemnitee for such Indemnitee’s
failure to perform any of its obligations to the Borrower under the Loan
Documents); (iii) the Borrower shall not, in connection with any such
proceeding or related proceedings in the same jurisdiction and in the absence
of conflicts of interest, be liable for the fees and expenses of more than one
law firm at any one time for the Indemnitees (which law firm shall be selected
(x) by mutual agreement of the Administrative Agent and the Borrower or (y) if
no such agreement has been reached following the Administrative Agent’s good
faith consultation with the Borrower with respect thereto, by the

 

102

 

Administrative Agent in its sole discretion); (iv) each Indemnitee
shall give the Borrower (x) prompt notice of any such action brought against
such Indemnitee in connection with a claim for which it is entitled to
indemnity under this Section and (y) an opportunity to consult from time to
time with such Indemnitee regarding defensive measures and potential
settlement; and (v) the Borrower shall not be obligated to pay the amount of
any settlement entered into without its written consent (which consent shall
not be unreasonably withheld).

 

(c)           To the extent that
the Borrower fails to pay any amount required to be paid by it to any Agent,
the LC Issuing Bank or the Swingline Lender under subsection (a) or (b) of this
Section, each Lender severally agrees to pay to such Agent, the LC Issuing Bank
or the Swingline Lender, as the case may be, such Lender’s pro rata share
(determined as of the time that the applicable unreimbursed expense or
indemnity payment is sought) of such unpaid amount; provided that the unreimbursed expense or indemnified loss,
claim, damage, liability or related expense, as the case may be, was incurred
by or asserted against such Agent, the LC Issuing Bank or the Swingline Lender
in its capacity as such.  For purposes
hereof, a Lender’s “pro rata share”
shall be determined based on its share of the sum of the total Exposures and
unused Commitments at the time.

 

(d)           To the extent
permitted by applicable law, the Borrower shall not assert, and each hereby
waives, any claim against any Indemnitee, on any theory of liability, for
special, indirect, consequential or punitive damages (as opposed to direct or
actual damages) arising out of, in connection with, or as a result of, this
Agreement or any agreement or instrument contemplated hereby, the Financing
Transactions, any Loan or Letter of Credit or the use of the proceeds thereof.

 

(e)           All amounts due
under this Section shall be payable within five Business Days after
written demand therefor.

 

Section 9.04.  Successors and Assigns.  (a) 
The provisions of this Agreement shall be binding on and inure to the
benefit of the parties hereto and their respective successors and assigns
permitted hereby (including any Affiliate of the LC Issuing Bank that issues
any Letter of Credit), except that the Borrower may not assign or otherwise
transfer any of its rights or obligations hereunder without the prior written
consent of each Lender (and any attempted assignment or transfer by the
Borrower without such consent shall be null and void).  Nothing in this Agreement, expressed or
implied, shall be construed to confer upon any Person (except the parties
hereto, their respective successors and assigns permitted hereby (including any
Affiliate of the LC Issuing Bank that issues any Letter of Credit) and, to the
extent expressly provided herein, the Related Parties of the Lender Parties)
any legal or equitable right, remedy or claim under or by reason of this
Agreement.

 

103

 

(b)           Any Lender may
assign to one or more assignees all or a portion of its rights and obligations
under this Agreement (including all or a portion of any Commitment it has at
the time and any Loans at the time owing to it); provided that:

 

(i)            except
in the case of an assignment to a Lender or a Lender Affiliate, each of the
Borrower and the Administrative Agent (and, in the case of an assignment of all
or a portion of a Commitment or any Lender’s obligations in respect of its LC
Exposure or Swingline Exposure, the LC Issuing Bank and the Swingline Lender)
must give their prior written consent to such assignment (which consents shall
not be unreasonably withheld);

 

(ii)           each
partial assignment shall be made as an assignment of a proportionate part of
all the assigning Lender’s rights and obligations under this Agreement;

 

(iii)          unless
each of the Borrower and the Administrative Agent otherwise consent, the amount
of the Commitment or Loans of the assigning Lender subject to each such
assignment (determined as of the date on which the relevant Assignment is
delivered to the Administrative Agent) shall not be less than $5,000,000; provided that this clause (iii) shall not
apply to an assignment to a Lender or a Lender Affiliate or an assignment of
the entire remaining amount of the assigning Lender’s Commitment or Loans;

 

(iv)          the
parties to each assignment shall execute and deliver to the Administrative
Agent an Assignment, together with a processing and recordation fee of $3,500; provided that only one such fee shall be
due in respect of a simultaneous assignment to more than one Lender Affiliate;
and

 

(v)           the
assignee, if it shall not be a Lender, shall deliver to the Administrative
Agent a completed Administrative Questionnaire;

 

and provided further that
any consent of the Borrower otherwise required under this subsection shall not
be required if an Event of Default has occurred and is continuing.  Subject to acceptance and recording thereof
pursuant to subsection (d) of this Section, from and after the effective date
specified in each Assignment the assignee thereunder shall be a party hereto
and, to the extent of the interest assigned by such Assignment, have the rights
and obligations of a Lender under this Agreement, and the assigning Lender
thereunder shall, to the extent of the interest assigned by such Assignment, be
released from its obligations under this Agreement (and, in the case of an
Assignment covering all of the assigning Lender’s rights and obligations under
this Agreement, such Lender shall cease to

 

104

 

be a party hereto but shall continue to be entitled to the benefits of
Sections 2.15, 2.16, 2.17 and 9.03). 
Any assignment or transfer by a Lender of rights or obligations under
this Agreement that does not comply with this subsection shall be treated for
purposes of this Agreement as a sale by such Lender of a participation in such
rights and obligations in accordance with subsection (e) of this Section.

 

(c)           The Administrative
Agent, acting for this purpose as an agent of the Borrower, shall maintain at
one of its offices in New York City a copy of each Assignment delivered to it
and a register for the recordation of the names and addresses of the Lenders,
their respective Commitments and the principal amounts of the Loans and LC
Disbursements owing to each Lender pursuant to the terms hereof from time to
time (the “Register”).  The entries in the Register shall be
conclusive (absent manifest error), and the parties hereto may treat each
Person whose name is recorded in the Register pursuant to the terms hereof as a
Lender for all purposes of this Agreement, notwithstanding notice to the
contrary.  The Register shall be
available for inspection by any party hereto at any reasonable time and from
time to time upon reasonable prior notice.

 

(d)           Upon its receipt of
a duly completed Assignment executed by an assigning Lender and an assignee,
the assignee’s completed Administrative Questionnaire (unless the assignee
shall already be a Lender hereunder), the processing and recordation fee
referred to in subsection (b) of this Section and any written consent to such
assignment required by subsection (b) of this Section, the Administrative Agent
shall accept such Assignment and record the information contained therein in
the Register.  No assignment shall be
effective for purposes of this Agreement unless it has been recorded in the
Register as provided in this subsection.

 

(e)           Any Lender may,
without the consent of the Borrower or any other Lender Party, sell
participations to one or more banks or other entities (“Participants”) in all or a portion of such
Lender’s rights and obligations under this Agreement (including all or a
portion of its Commitments and the Loans owing to it); provided that (i) such Lender’s
obligations under this Agreement shall remain unchanged, (ii) such Lender
shall remain solely responsible to the other parties hereto for the performance
of such obligations and (iii) the Borrower and the other Lender Parties
shall continue to deal solely and directly with such Lender in connection with
such Lender’s rights and obligations under this Agreement.  Any agreement or instrument pursuant to
which a Lender sells such a participation shall provide that such Lender shall
retain the sole right to enforce the Loan Documents and to approve any
amendment, modification or waiver of any provision of the Loan Documents; provided that such agreement or instrument
may provide that such Lender will not, without the consent of the Participant,
agree to any amendment, modification or waiver described in clause (i), (ii),
(iii) or (vii) of the first proviso to Section 9.02(b) that affects such

 

105

 

Participant.  Subject to
subsection (f) of this Section, each Participant shall be entitled to the
benefits of Sections 2.15, 2.16 and 2.17 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to subsection (b)
of this Section.  To the extent
permitted by law, each Participant also shall be entitled to the benefits of
Section 9.09 as though it were a Lender, provided
that such Participant agrees to be subject to Section 2.18(c) as though it were
a Lender.

 

(f)            A Participant shall
not be entitled to receive any greater payment under Section 2.15 or 2.17 than
the applicable Lender would have been entitled to receive with respect to the
participation sold to such Participant, unless the sale of the participation to
such Participant is made with the Borrower’s prior written consent.  A Participant that would be a Foreign Lender
if it were a Lender shall not be entitled to the benefits of Section 2.17
unless the Borrower is notified of the participation sold to such Participant
and such Participant agrees, for the benefit of the Borrower, to comply with
Section 2.17(e) as though it were a Lender.

 

(g)           Any Lender may at
any time pledge or assign a security interest in all or any portion of its
rights under this Agreement to secure obligations of such Lender, including any
pledge or assignment to secure obligations to a Federal Reserve Bank, and this
Section shall not apply to any such pledge or assignment of a security
interest; provided that no such
pledge or assignment of a security interest shall release a Lender from any of
its obligations hereunder or substitute any such pledgee or assignee for such
Lender as a party hereto.

 

Section 9.05.  Designated Lenders. (a)  Subject to the provisions of this Section
9.05(a), any Lender may from time to time elect to designate an Eligible
Designee to provide all or a portion of the Loans to be made by such Lender
pursuant to this Agreement; provided
that such designation shall not be effective unless the Borrower and the
Administrative Agent consent thereto. 
When a Lender and its Eligible Designee shall have signed an agreement
substantially in the form of Exhibit H hereto (a “Designation Agreement”) and the Borrower and the
Administrative Agent shall have signed their respective consents thereto, such
Eligible Designee shall become a Designated Lender for purposes of this
Agreement.  The Designating Lender shall
thereafter have the right to permit such Designated Lender to provide all or a
portion of the loans to be made by such Designating Lender pursuant to Section
2.01 and the making of such Loans or portions thereof shall satisfy the
obligation of the Designating Lender to the same extent, and as if, such Loans
or portion thereof were made by the Designating Lender.  As to any Loans or portion thereof made by
it, each Designated Lender shall have all the rights that a Lender making such
Loans or portion thereof would have had under this Agreement and otherwise; provided that (x) its voting rights under
this Agreement shall be exercised solely by its Designating Lender and (y) its
Designating Lender shall remain solely responsible to the other parties hereto

 

106

 

for the performance of its obligations under this Agreement, including
its obligations in respect of the Loans or portion thereof made by it. No
additional promissory note shall be required to evidence Loans or portions
thereof made by a Designated Lender; and the Designating Lender shall be deemed
to hold any promissory note issued pursuant to Section 2.09(c) as agent for its
Designated Lender to the extent of the Loans or portion thereof funded by such
Designated Lender.  Each Designating
Lender shall act as administrative agent for its Designated Lender and give and
receive notices and other communications on its behalf. Any payments for the
account of any Designated Lender shall be paid to its Designating Lender as
administrative agent for such Designated Lender and neither the Borrower nor
the Administrative Agent shall be responsible for any Designating Lender’s
application of such payments.  In
addition, any Designated Lender may (i) with notice to, but without the prior
written consent of, the Borrower or the Administrative Agent, assign all or
portions of its interest in any Loans to its Designating Lender or to any
financial institutions consented to by the Borrower and the Administrative
Agent providing liquidity and/or credit facilities to or for the account of
such Designated Lender to support the funding of Loans or portions thereof made
by such Designated Lender and (ii) disclose on a confidential basis any
non-public information relating to its Loans or portions thereof to any rating
agency, commercial paper dealer or provider of any guarantee, surety, credit or
liquidity enhancement to such Designated Lender.

 

(b)           Each party to this
Agreement agrees that it will not institute against, or join any other Person
in instituting against, any Designated Lender any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceeding or other proceeding under any
federal or state bankruptcy or similar law, for one year and a day after all
outstanding senior indebtedness of such Designated Lender is paid in full.  The Designating Lender for each Designated
Lender agrees to indemnify, save, and hold harmless each other party hereto for
any loss, cost, damage and expense arising out of its inability to institute
any such proceeding against such Designated Lender.  This Section 9.05(b) shall survive the termination of this
Agreement.

 

Section 9.06.  Survival. 
All covenants, agreements, representations and warranties made by the
Borrower in the Loan Documents and in certificates or other instruments
delivered in connection with or pursuant to the Loan Documents shall be
considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of the Loan Documents and the making of any
Loans and issuance of any Letters of Credit, regardless of any investigation
made by any such other party or on its behalf and notwithstanding that any
Lender Party may have had notice or knowledge of any Default or incorrect
representation or warranty at the time any credit is extended hereunder, and
shall continue in full force and effect as long as any principal of or accrued
interest on any Loan or any fee or other amount payable hereunder is
outstanding and unpaid or any Letter of Credit is outstanding or any Commitment
has not

 

107

 

expired or terminated.  The provisions of Sections 2.15, 2.16, 2.17
and 9.03 and Article 8 shall survive and remain in full force and effect
regardless of the consummation of the Financing Transactions, the repayment of
the Loans, the expiration or termination of the Letters of Credit and the Commitments
or the termination of this Agreement or any provision hereof.

 

Section 9.07.  Counterparts; Integration; Effectiveness.  This Agreement may be executed in
counterparts (and by different parties hereto on different counterparts), each
of which shall constitute an original, but all of which when taken together
shall constitute a single contract. 
This Agreement, the other Loan Documents and any separate letter
agreements with respect to fees payable to the Administrative Agent constitute
the entire contract among the parties relating to the subject matter hereof and
supersede any and all previous agreements and understandings, oral or written,
relating to the subject matter hereof. 
Except as provided in Article 4.01, this Agreement  (i) will become effective when the
Administrative Agent shall have signed this Agreement and received counterparts
hereof that, when taken together, bear the signatures of each of the other
parties hereto and (ii) thereafter will be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns.  Delivery of an executed counterpart of a
signature page of this Agreement by telecopy will be effective as delivery of a
manually executed counterpart of this Agreement.

 

Section 9.08.  Severability. 
If any provision of any Loan Document is invalid, illegal or
unenforceable in any jurisdiction then, to the fullest extent permitted by law,
(i) such provision shall, as to such jurisdiction, be ineffective to the extent
(but only to the extent) of such invalidity, illegality or unenforceability,
(ii) the other provisions of the Loan Documents shall remain in full force and
effect in such jurisdiction and shall be liberally construed in favor of the
Lender Parties in order to carry out the intentions of the parties thereto as
nearly as may be possible and (iii) the invalidity, illegality or
unenforceability of any such provision in any jurisdiction shall not affect the
validity, legality or enforceability of such provision in any other jurisdiction.

 

Section 9.09.  Right of Setoff.   If an Event of Default shall have occurred and be continuing,
each Lender and each of its Affiliates is authorized at any time and from time
to time, to the fullest extent permitted by law, to set off and apply any and
all deposits (general or special, time or demand, provisional or final) at any
time held and other obligations at any time owing by such Lender or Affiliate
to or for the credit or the account of the Borrower against any obligations of
the Borrower now or hereafter existing hereunder and held by such Lender,
irrespective of whether or not such Lender shall have made any demand hereunder
and although such obligations may be unmatured.  The rights of each Lender under this Section are in addition to
other rights and remedies (including other rights of setoff) that such Lender
may have.

 

108

 

Section 9.10.  Governing Law; Jurisdiction; Consent to Service of
Process.  (a)  This Agreement shall be construed in accordance
with and governed by the law of the State of New York.

 

(b)           The Borrower
irrevocably and unconditionally submits, for itself and its property, to the
nonexclusive jurisdiction of the Supreme Court of the State of New York sitting
in New York County and of the United States District Court of the Southern
District of New York, and any relevant appellate court, in any action or
proceeding arising out of or relating to any Loan Document, or for recognition
or enforcement of any judgment, and each party hereto irrevocably and
unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State court or, to
the extent permitted by law, in such Federal court.  Each party hereto agrees that a final judgment in any such action
or proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law.  Nothing in any Loan Document shall affect
any right that any Lender Party may otherwise have to bring any action or
proceeding relating to any Loan Document against the Borrower or its properties
in the courts of any jurisdiction.

 

(c)           The Borrower
irrevocably and unconditionally waives, to the fullest extent it may legally
and effectively do so, any objection that it may now or hereafter have to the
laying of venue of any suit, action or proceeding arising out of or relating to
any Loan Document in any court referred to in subsection (b) of this Section.  Each party hereto irrevocably waives, to the
fullest extent permitted by law, the defense of an inconvenient forum to the
maintenance of any such suit, action or proceeding in any such court.

 

(d)           Each party hereto
irrevocably consents to service of process in the manner provided for notices
in Section 9.01.  Nothing in any
Loan Document will affect the right of any party hereto to serve process in any
other manner permitted by law.

 

Section 9.11.  WAIVER OF JURY TRIAL.  EACH PARTY HERETO WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN
ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO ANY
LOAN DOCUMENT OR ANY TRANSACTION CONTEMPLATED THEREBY (WHETHER BASED ON
CONTRACT, TORT OR ANY OTHER THEORY). 
EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO
HAVE BEEN INDUCED TO

 

109

 

ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS
AND CERTIFICATIONS IN THIS SECTION.

 

Section 9.12.  Headings. 
Article and Section headings and the Table of Contents herein are for
convenience of reference only, are not part of this Agreement and shall not
affect the construction of, or be taken into consideration in interpreting,
this Agreement.

 

Section 9.13.  Confidentiality.  Each Lender Party agrees to maintain the confidentiality of the
Information (as defined below), except that Information may be disclosed
(a) to its and its Affiliates’ directors, officers, employees and agents,
including accountants, legal counsel and other advisors (it being understood
that the Persons to whom such disclosure is made will be informed of the
confidential nature of such Information and instructed to keep such Information
confidential), (b)  to the extent requested by any regulatory authority, (c) to
the extent required by applicable laws or regulations or by any subpoena or
similar legal process, (d) to any other party to this Agreement, (e) in
connection with the exercise of any remedy hereunder or any suit, action or
proceeding relating to any Loan Document or the enforcement of any right
thereunder, (f) subject to an agreement containing provisions substantially the
same as those of this Section, to (i) any actual or prospective assignee of or
Participant in any of its rights or obligations under this Agreement or (ii)
any actual or prospective counterparty (or its advisors) to any swap or
derivative transaction relating to the Borrower and its obligations, (g) with
the consent of the Borrower or (h) to the extent such Information either
(i) becomes publicly available other than as a result of a breach of this
Section or (ii) becomes available to any Lender Party on a nonconfidential
basis from a source other than the Borrower. 
For the purposes of this Section, “Information”
means all information received from the Borrower relating to the Borrower or
its business, other than any such information that is available to any Lender
Party on a nonconfidential basis before disclosure by the Borrower; provided that, in the case of information
received from the Borrower after the date hereof, such information is clearly
identified at the time of delivery as confidential.

 

Section 9.14.  Interest Rate Limitation.  Notwithstanding anything herein to the
contrary, if at any time the interest rate applicable to any Loan, together
with all fees, charges and other amounts that are treated as interest on such
Loan under applicable law (collectively the “Charges”),
shall exceed the maximum lawful rate (the “Maximum
Rate”) that may be contracted for, charged or otherwise received by
the Lender holding such Loan in accordance with applicable law, the rate of
interest payable in respect of such Loan hereunder, together with all Charges
payable in respect thereof, shall be limited to the Maximum Rate and, to the
extent lawful, the interest and Charges that would have been payable in respect
of such Loan but were not payable as a result of the operation of this Section
shall be cumulated and the interest and Charges payable

 

110

 

to such Lender in respect of other Loans or periods shall be increased
(but not above the Maximum Rate therefor) until such Lender shall have received
such cumulated amount, together with interest thereon at the Federal Funds
Effective Rate to the date of payment.

 

111

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.

 

	
   

  	
  UNITED STATES STEEL LLC

  	 

	
   

  	
   

  	 

	
   

  	
  By:

  	
  /s/ Gretchen R. Haggerty

  	 

	
   

  	
  Name:

  	
  Gretchen R. Haggerty

  
	
   

  	
  Title:

  	
  Vice President-Accounting & Finance

  
					

 

112

 

	
   

  	
  JPMORGAN
  CHASE BANK, as

  Administrative Agent, Collateral Agent,

  Swingline Lender, and Lender

  	 

	
   

  	
   

  	 

	
   

  	
  By:

  	
  /s/ James H. Ramage

  	 

	
   

  	
  Name:

  	
  James H. Ramage

  
	
   

  	
  Title:

  	
  Managing Director

  
					

 

113

 

	
   

  	
  GENERAL
  ELECTRIC CAPITAL

  CORPORATION, as Documentation

  Agent, Co-Collateral Agent, and Lender

  	 

	
   

  	
   

  	 

	
   

  	
  By:

  	
  /s/ Christopher Cox

  	 

	
   

  	
  Name:

  	
  Christopher Cox

  
	
   

  	
  Title:

  	
  Duly Authorized Signatory

  
					

 

114

 

	
   

  	
  FOOTHILL
  CAPITAL CORPORATION, as

  Co-Syndication Agent and Lender

  	 

	
   

  	
   

  	 

	
   

  	
  By:

  	
  /s/ Sanat Amladi

  	 

	
   

  	
  Name:

  	
  Sanat Amladi

  
	
   

  	
  Title:

  	
  Assistant Vice President

  
					

 

115

 

	
   

  	
  PNC BANK,
  NATIONAL ASSOCIATION,

  as Co-Syndication Agent and Lender

  	 

	
   

  	
   

  	 

	
   

  	
  By:

  	
  /s/ David B. Gookin

  	 

	
   

  	
  Name:

  	
  David B. Gookin

  
	
   

  	
  Title:

  	
  Vice President

  
					

 

116

 

 

	
   

  	
  MELLON BANK,
  N.A.

  	 

	
   

  	
   

  	 

	
   

  	
  By:

  	
  /s/ Robert J. Reichenbach

  	 

	
   

  	
  Name:

  	
  Robert J. Reichenbach

  
	
   

  	
  Title:

  	
  Vice President

  
					

 

117

 

	
   

  	
  CREDIT
  SUISSE FIRST BOSTON

  	 

	
   

  	
   

  	 

	
   

  	
  By:

  	
  /s/ Paul L. Colon

  	 

	
   

  	
  Name:

  	
  Paul L. Colon

  
	
   

  	
  Title:

  	
  Vice President

  
					

 

	
   

  	
  By:

  	
  /s/ Vanessa Gomez

  	 

	
   

  	
  Name:

  	
  Vanessa Gomez

  
	
   

  	
  Title:

  	
  Associate

  
					

 

118

 

	
   

  	
  GMAC CAPITAL
  COMMERCIAL CREDIT LLC

  	 

	
   

  	
   

  	 

	
   

  	
  By:

  	
  /s/ Frank Imperato

  	 

	
   

  	
  Name:

  	
  Frank Imperato

  
	
   

  	
  Title:

  	
  Senior Vice President

  
					

 

119

 

	
   

  	
  HELLER
  FINANCIAL INC.

  	 

	
   

  	
   

  	 

	
   

  	
  By:

  	
  /s/ Alfred J. Scoyni

  	 

	
   

  	
  Name:

  	
  Alfred J. Scoyni

  
	
   

  	
  Title:

  	
  Vice President

  
					

 

120

 

 

	
   

  	
  THE BANK OF
  NEW YORK

  	 

	
   

  	
   

  	 

	
   

  	
  By:

  	
  /s/ Walter C. Parelli

  	 

	
   

  	
  Name:

  	
  Walter C. Parelli

  
	
   

  	
  Title:

  	
  Vice President

  
					

 

121

 

	
   

  	
  THE BANK OF
  NOVA SCOTIA

  	 

	
   

  	
   

  	 

	
   

  	
  By:

  	
  /s/ M.D. Smith

  	 

	
   

  	
  Name:

  	
  M.D. Smith

  
	
   

  	
  Title:

  	
  Agent

  
					

 

122

 

 

	
   

  	
  GOLDMAN
  SACHS CREDIT PARTNERS L.P.

  	 

	
   

  	
   

  	 

	
   

  	
  By:

  	
  /s/ Robert Wagner

  	 

	
   

  	
  Name:

  	
  Robert Wagner

  
	
   

  	
  Title:

  	
  Authorized Signatory

  
					

 

123

 

 

	
   

  	
  NATIONAL
  CITY BANK

  	 

	
   

  	
   

  	 

	
   

  	
  By:

  	
  /s/ William R. McDonnell

  	 

	
   

  	
  Name:

  	
  William R. McDonnell

  
	
   

  	
  Title:

  	
  Vice President

  
					

 

124

 

 

 

	
   

  	
  THE NORTHERN
  TRUST COMPANY

  	 

	
   

  	
   

  	 

	
   

  	
  By:

  	
  /s/ Craig L. Smith

  	 

	
   

  	
  Name:

  	
  Craig L. Smith

  
	
   

  	
  Title:

  	
  Vice President

  
					

 

125

 

AMENDMENT AND WAIVER TO CREDIT AGREEMENT

 

AMENDMENT AND
WAIVER dated as of August 13, 2002 to the Credit Agreement dated as of November
30, 2001 (the “Credit Agreement”)
among UNITED STATES STEEL CORPORATION (formerly known as United States Steel
LLC ) (the “Borrower”), the
LENDERS party thereto (the “Lenders”),
the LC ISSUING BANKS party thereto, JPMORGAN CHASE BANK, as Administrative
Agent (the “Administrative Agent”),
Collateral Agent and Swingline Lender, GENERAL ELECTRIC CAPITAL CORPORATION, as
Documentation Agent and Co-Collateral Agent, and PNC BANK, NATIONAL ASSOCIATION
and FOOTHILL CAPITAL CORPORATION, as Co-Syndication Agents.

 

W I T N E S S E T H :

 

The parties
hereto agree as follows:

 

SECTION 1.  Defined
Terms; References.  Unless
otherwise specifically defined herein, each term used herein that is defined in
the Credit Agreement has the meaning assigned to such term in the Credit
Agreement.  Each reference to “hereof”,
“hereunder”, “herein” and “hereby” and each other similar reference and each reference
to “this Agreement” and each other similar reference contained in the Credit
Agreement shall, after this Amendment and Waiver becomes effective, refer to
the Credit Agreement as amended hereby.

 

SECTION
2.  Certain
Amendments.  (a)  New Definitions.  Section 1.01 of the Credit Agreement is
amended by inserting each of the following new definitions in alphabetical
order therein:

 

“FAS 143” means United
States Statement of Financial Accounting Standards No. 143, Accounting for
Asset Retirement Obligations.

 

“Mining Business Asset Sale”
means the sale by the Borrower and certain of its Subsidiaries of all of their
respective coal and related mining operating assets.

 

(b)                                 Definition
of Consolidated Net Income.  The
definition of “Consolidated Net Income” in Section 1.01 of the Credit Agreement
is amended by adding to the end of such definition the following proviso:

 

“ ; and provided further that, for purposes of
determining compliance with Sections 6.13 and 6.14, Consolidated Net Income
shall be calculated (x) to exclude all amounts that would be included therein
solely as a result of the adoption and subsequent application of FAS 143, and
to include all amounts that would have been included therein if not for the
adoption of FAS 143 and (y) from and after consummation of the Mining Business
Asset

 

126

 

Sale, without
reflecting the accounting changes required under (and excluding the one-time
non-cash extraordinary loss recognized pursuant to) the Coal Industry Retiree
Health Act of 1992, but including amounts in respect of future period cash
obligations to the extent such amounts would have been included therein prior
to consummation of the Mining Business Asset Sale.”

 

(c)                                  Definition
of Debt.  The definition of “Debt”
in Section 1.01 of the Credit Agreement is amended by:

 

(i)                                     adding
to the end of clause (a) thereof the following parenthetical:  “(other than unspent cash deposits held in
escrow by or in favor of such Person, or in a segregated deposit account
controlled by such Person, in each case in the ordinary course of business to
secure the performance obligations of, or damages owing from, one or more third
parties)”; and

 

(ii)                                  adding
to the end of clause (i) thereof the following parenthetical: “(other than cash
collateralized letters of credit to secure the performance of workers’
compensation, unemployment insurance, other social security laws or
regulations, bids, trade contracts, leases, environmental and other statutory
obligations, surety and appeal bonds, performance bonds and other obligations
of a like nature, in each case, obtained in the ordinary course of business)”.

 

SECTION 3.  Certain Waivers.  (a) The Lenders party hereto hereby waive
compliance with the provisions of Section 6.05 of the Credit Agreement solely
to the extent necessary to permit the Borrower and its Subsidiaries (as
appropriate) to consummate (i) the Mining Business Asset Sale and (ii) the sale
of all of the shares of capital stock of VSZ akciová spolocnost Košice (“VSZ ”)
owned by the Borrower and its Subsidiaries.

 

(b)                                 Except
as provided in subsection (a) above, this Section 3 shall not operate as a
waiver of any right, remedy, power or privilege of the Lenders under any Loan
Document or of any other term or condition of any Loan Document.

 

SECTION 4. 
Representations of Borrower.  The
Borrower represents and warrants that (i) the representations and warranties of
the Borrower set forth in Article 3 of the Credit Agreement will be true on and
as of the Amendment and Waiver Effective Date and (ii) no Default will have
occurred and be continuing on such date.

 

SECTION 5.  Governing
Law.  This Amendment and
Waiver shall be governed by and construed in accordance with the laws of the
State of New York.

 

SECTION 6. 
Counterparts.  This
Amendment and Waiver may be signed in any number of counterparts, each of which
shall be an original, with the same effect as if the signatures thereto and
hereto were upon the same instrument.

 

127

 

SECTION 7. 
Effectiveness.  This
Amendment and Waiver shall become effective as of the date hereof (the “Amendment and Waiver Effective Date”) on
the date when the Administrative Agent shall have received from each of the
Borrower and the Required Lenders a counterpart hereof signed by such party or
facsimile or other written confirmation (in form satisfactory to the
Administrative Agent) that such party has signed a counterpart hereof.

 

128

 

IN WITNESS
WHEREOF, the parties hereto have caused this Amendment and Waiver to be duly
executed as of the date first above written.

 

	
   

  	
  UNITED STATES STEEL CORPORATION (formerly known as United States
  Steel LLC)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ G. R.
  Haggerty

  
	
   

  	
   

  	
  Name: 

  	
  Gretchen R.
  Haggerty

  
	
   

  	
   

  	
  Title

  	
  Senior Vice
  President & Treasurer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  JPMORGAN
  CHASE BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James H.
  Ramage

  
	
   

  	
   

  	
  Name:

  	
  James H.
  Ramage

  
	
   

  	
   

  	
  Title:

  	
  Managing
  Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GENERAL
  ELECTRIC CAPITAL CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Donald
  J. Cavanagh

  
	
   

  	
   

  	
  Name:

  	
  Donald J.
  Cavanagh

  
	
   

  	
   

  	
  Title:

  	
  Duly
  Authorized Signatory

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  FOOTHILL
  CAPITAL CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mike
  Baranowski

  
	
   

  	
   

  	
  Name:

  	
  Mike
  Baranowski

  
	
   

  	
   

  	
  Title:

  	
  Vice
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PNC BANK,
  NATIONAL ASSOCIATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Peter A.
  Yanief

  
	
   

  	
   

  	
  Name:

  	
  Peter A. Yanief

  
	
   

  	
   

  	
  Title:

  	
  Assistant
  Vice President

  

 

129

 

	
   

  	
  MELLON BANK,
  N.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert
  J. Reichenbach

  
	
   

  	
   

  	
  Name:

  	
  Robert J.
  Reichenbach

  
	
   

  	
   

  	
  Title:

  	
  Vice
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CREDIT
  SUISSE FIRST BOSTON

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Paul L.
  Colon

  
	
   

  	
   

  	
  Name:

  	
  Paul L.
  Colón

  
	
   

  	
   

  	
  Title:

  	
  Vice
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Vanessa
  Gomez

  
	
   

  	
   

  	
  Name:

  	
  Vanessa
  Gomez

  
	
   

  	
   

  	
  Title:

  	
  Associate

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GMAC CAPITAL
  COMMERCIAL CREDIT LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Daniel
  J. Murray

  
	
   

  	
   

  	
  Name:

  	
  Daniel J.
  Murray

  
	
   

  	
   

  	
  Title:

  	
  Senior Vice
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HELLER
  FINANCIAL INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Dwayne
  L. Coker

  
	
   

  	
   

  	
  Name:

  	
  Dwayne L.
  Coker

  
	
   

  	
   

  	
  Title:

  	
  Duly
  Authorized Signer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THE BANK OF
  NEW YORK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Russell
  A. Burr

  
	
   

  	
   

  	
  Name:

  	
  Russell A.
  Burr

  
	
   

  	
   

  	
  Title:

  	
  Senior Vice
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THE BANK OF
  NOVA SCOTIA

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ N. Bell

  
	
   

  	
   

  	
  Name:

  	
  N. Bell

  
	
   

  	
   

  	
  Title:

  	
  Senior
  Manager

  

 

130

 

	
   

  	
  FIRST
  COMMONWEALTH BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Paul J.
  Oris

  
	
   

  	
   

  	
  Name:

  	
  Paul J. Oris

  
	
   

  	
   

  	
  Title:

  	
  Vice
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  NATIONAL
  CITY BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James C.
  Ritchie

  
	
   

  	
   

  	
  Name:

  	
  James C.
  Ritchie

  
	
   

  	
   

  	
  Title:

  	
  Vice
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THE NORTHERN
  TRUST COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Craig
  Smith

  
	
   

  	
   

  	
  Name:

  	
  Craig Smith

  
	
   

  	
   

  	
  Title:

  	
  Vice
  President

  

 

131

 

AMENDMENT NO. 2 TO CREDIT AGREEMENT

 

SECOND
AMENDMENT dated as of December 18, 2002 (this “Amendment”) to the Credit
Agreement dated as of November 30, 2001 (as amended prior to the date hereof,
the “Credit Agreement”) among
UNITED STATES STEEL CORPORATION (formerly known as United States Steel LLC)
(the “Borrower”), the LENDERS
party thereto (the “Lenders”), the
LC ISSUING BANKS party thereto, JPMORGAN CHASE BANK, as Administrative Agent
(the “Administrative
Agent”), Collateral Agent and Swingline Lender, GENERAL ELECTRIC
CAPITAL CORPORATION, as Documentation Agent and Co-Collateral Agent, and PNC
BANK, NATIONAL ASSOCIATION and FOOTHILL CAPITAL CORPORATION, as Co-Syndication
Agents.

 

W I T N E S S E T H :

 

The parties
hereto agree as follows:

 

SECTION 1.  Defined Terms; References.  Unless otherwise specifically
defined herein, each term used herein that is defined in the Credit Agreement
has the meaning assigned to such term in the Credit Agreement.  Each reference to “hereof”, “hereunder”,
“herein” and “hereby” and each other similar reference and each reference to
“this Agreement” and each other similar reference contained in the Credit
Agreement shall, after this Amendment becomes effective, refer to the Credit
Agreement as amended hereby.

 

SECTION 2.  Certain New Definitions.  Section 1.01 of the Credit
Agreement is amended by inserting each of the following new definitions in
alphabetical order therein:

 

“National
Steel Acquisition” means the proposed acquisition of the National
Steel Assets by the Borrower and/or one or more of its Restricted Subsidiaries
in a sale pursuant to Section 363 of Title 11 of the United States Code.

 

“National
Steel Assets” means the steel-making and related assets of National
Steel Corporation and certain of its subsidiaries identified on Schedule
1.01(b) hereto.

 

“Post-National
Borrowing Base Calculation” has the meaning specified in Section
6.04(a)(xx).

 

“Post-National
Liquidity Availability” means, at any time, an amount equal to the
sum of (x) the Facility Availability plus (y) the aggregate committed
availability under the Effective Date Receivables Financing, in each case
determined at the time of (and immediately after giving effect to) consummation
of the National Steel Acquisition.

 

132

 

“Sartid”
means Sartid a.d. (in bankruptcy), a company organized under the laws of Serbia
and certain of its subsidiaries.

 

“Sartid
Acquisition Sub” means a Foreign Subsidiary (which may be designated
an Unrestricted Subsidiary in accordance with Section 5.14) that has been, or
will be, newly formed for the purpose of the proposed indirect acquisition by
the Borrower of Sartid and matters incident thereto (including, without
limitation, financing the acquisition and improvement of, and funding working
capital for, Sartid).

 

“Timberlands
Contribution” means one or more proposed contributions by the
Borrower to one or more of its employee benefit plans of certain timberlands
and related real property located in Alabama and Tennessee and having an
aggregate value not in excess of $150 million.

 

SECTION 3.  Debt Covenant.  Section 6.01(a)(iii) of the Credit Agreement is
amended by deleting the reference therein to “$100,000,000”, and substituting
therefor a reference to “$450,000,000”.

 

SECTION
4.  Investments and Acquisitions Covenant.  Section 6.04(a) of the Credit
Agreement is amended by (i) deleting the word “and” at the end of clause (xvii)
thereof; (ii) deleting the period at the end of clause (xviii) thereof, and
substituting therefor a semicolon; and (iii) adding the following new clauses
at the end of clause (xviii) (and immediately before the proviso):

 

“(xix)                     investments
by the Borrower and its Restricted Subsidiaries in the Sartid Acquisition Sub
and/or in Sartid (including Guarantees by the Borrower and its Restricted
Subsidiaries of Debt of the Sartid Acquisition Sub and/or Sartid); provided
that such investments are made (and such Guarantees are issued) in connection
with the acquisition, financing and operations of Sartid and the aggregate
amount of all such investments (including such Guarantees) permitted by this
clause (xix) does not exceed $50,000,000 in the aggregate during the term of
this Agreement; and

 

(xx)                              investments
in the National Steel Assets pursuant to the National Steel Acquisition; provided
that prior to the date on which any such investment is made, the Administrative
Agent shall have received either (i) evidence satisfactory to it that the
Post-National Liquidity Availability will be equal to or greater than
$300,000,000 or (ii) in the event that the Borrower has not delivered
appropriate documentation reflecting inclusion in the Borrowing Base of the
National Steel Assets comprised of Available Inventory and Available
Receivables (such documentation, collectively, the “Post-National Borrowing Base Calculation”),
a written notice from the Collateral Agent and the Co-Collateral Agent to the
effect that each is satisfied, in its sole discretion, that such Post-National
Borrowing Base Calculation will be delivered within a reasonable period of time
(as determined in the sole discretion of

 

133

 

the Collateral
Agent and the Co-Collateral Agent) and will demonstrate that the Post-National
Liquidity Availability will be equal to or greater than $300,000,000;”

 

SECTION 5.  Asset Sales Covenant.  Section 6.05 of the Credit
Agreement is amended by: (i) deleting the word “and” at the end of clause
(g);  (ii) deleting the period at the
end of clause (h), and substituting therefor a semicolon; (iii) deleting the
parenthetical that appears in the proviso and reads “(except those permitted
by clause (b), (e) or (f) above)”, and substituting therefor a parenthetical
that reads “(except those permitted by clause (b), (e), (f) or (i) above)”, and
(iv) adding the following new clause immediately after clause (h) (and
immediately before the proviso):

 

“and (i) transfers of assets pursuant to the Timberlands Contribution;”

 

SECTION 6.  Transactions With Affiliates Covenant.  Section 6.09 of the Credit
Agreement is amended by: (i) deleting the word “and” at the end of clause (ii)
thereof;  (ii) deleting the period at
the end of clause (iii) thereof, and substituting therefor a semicolon; and
(iii) adding the following new clause immediately after clause (iii) thereof:

 

“and (iv) the consummation of the Timberlands Contribution.”

 

SECTION 7.  Capital Expenditures Covenant.  Section 6.12 of the Credit
Agreement is amended by (i) deleting the reference therein to “$340,000,000”,
and substituting therefor a reference to “$515,000,000”; (ii) deleting the
reference therein to “$400,000,000”, and substituting therefor a reference to
“$525,000,000”; and (iii) inserting immediately after the words “provided
that,” the following:

 

“(x) so long as the National Steel Acquisition has not been consummated
in accordance with the terms of this Agreement, the reference to “$515,000,000”
in clause (i) above shall be deemed instead to be a reference to “$340,000,000”
and the reference to “$525,000,000” in clause (i) above shall be deemed instead
to be a reference to “$400,000,000” and (y)”

 

SECTION 8.  Addition of Schedule 1.01(b).  The Credit Agreement is amended
by adding Schedule 1.01(b) hereto as Schedule 1.01(b) to the Credit Agreement.

 

SECTION 9.  Representations of Borrower.  The Borrower represents and
warrants that (i) the representations and warranties of the Borrower set forth
in Article 3 of the Credit Agreement will be true on and as of the Second
Amendment Effective Date and (ii) no Default will have occurred and be
continuing on such date.

 

134

 

SECTION 10.  Governing Law.  This Amendment shall be governed by and construed in
accordance with the laws of the State of New York.

 

SECTION 11.  Counterparts.  This Amendment may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.

 

SECTION 12.  Effectiveness.  This Amendment shall become effective as of the date
hereof on the date when the Administrative Agent shall have received from each
of the Borrower and the Required Lenders a counterpart hereof signed by such
party or facsimile or other written confirmation (in form satisfactory to the
Administrative Agent) that such party has signed a counterpart hereof (the “Second Amendment Effective Date”);
provided, however, that this Amendment shall become void immediately and
automatically at 11:59 p.m. (New York City time) on December 20, 2002 unless
the Administrative Agent shall have received an amendment fee for the account
of each Lender which shall have approved this Amendment on or prior to such
date in an amount equal to 0.20% of such Lender’s total Commitment on such
date.

 

135

 

IN WITNESS
WHEREOF, the parties hereto have caused this Amendment to be duly executed as
of the date first above written.

 

	
   

  	
  UNITED STATES STEEL CORPORATION (formerly known as United States
  Steel LLC)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ G. R.
  Haggerty

  
	
   

  	
   

  	
  Name:

  	
  Gretchen R.
  Haggerty

  
	
   

  	
   

  	
  Title

  	
  Senior Vice
  President & Treasurer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GENERAL
  ELECTRIC CAPITAL CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Timothy
  Cauon

  
	
   

  	
   

  	
  Name:

  	
  Timothy
  Cauon

  
	
   

  	
   

  	
  Title:

  	
  Duly
  Authorized Signatory

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  FOOTHILL
  CAPITAL CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mike
  Baranowski

  
	
   

  	
   

  	
  Name:

  	
  Mike
  Baranowski

  
	
   

  	
   

  	
  Title:

  	
  Vice
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PNC BANK,
  NATIONAL ASSOCIATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David B.
  Gookin

  
	
   

  	
   

  	
  Name:

  	
  David B.
  Gookin

  
	
   

  	
   

  	
  Title:

  	
  Vice
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MELLON BANK,
  N.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert
  J. Reichenbach

  
	
   

  	
   

  	
  Name:

  	
  Robert J.
  Reichenbach

  
	
   

  	
   

  	
  Title:

  	
  Vice
  President

  
							

 

136

 

	
   

  	
  CREDIT
  SUISSE FIRST BOSTON

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Bill
  O’Daly

  
	
   

  	
   

  	
  Name:  

  	
  Bill O’Daly

  
	
   

  	
   

  	
  Title:

  	
  Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Cassandra
  Droogan

  
	
   

  	
   

  	
  Name:

  	
  Cassandra
  Droogan

  
	
   

  	
   

  	
  Title:

  	
  Associate

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GMAC
  COMMERCIAL CREDIT LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Daniel
  J. Murray

  
	
   

  	
   

  	
  Name:

  	
  Daniel J.
  Murray

  
	
   

  	
   

  	
  Title:

  	
  Senior Vice
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HELLER
  FINANCIAL INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Dwayne
  L. Coker

  
	
   

  	
   

  	
  Name:

  	
  Dwayne L.
  Coker

  
	
   

  	
   

  	
  Title:

  	
  Duly
  Authorized Signer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THE BANK OF
  NEW YORK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Walter
  C. Parelli

  
	
   

  	
   

  	
  Name:

  	
  Walter C.
  Parelli

  
	
   

  	
   

  	
  Title:

  	
  Vice
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THE BANK OF
  NOVA SCOTIA

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ N. Bell

  
	
   

  	
   

  	
  Name:

  	
  N. Bell

  
	
   

  	
   

  	
  Title:

  	
  Senior Manager

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  FIRST
  COMMONWEALTH BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Paul J.
  Oris

  
	
   

  	
   

  	
  Name:

  	
  Paul J. Oris

  
	
   

  	
   

  	
  Title:

  	
  Vice
  President

  
						

 

137

 

	
   

  	
  NATIONAL
  CITY BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Tom R.
  Poe

  
	
   

  	
   

  	
  Name:

  	
  Tom R. Poe

  
	
   

  	
   

  	
  Title:

  	
  SVP

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THE NORTHERN
  TRUST COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Craig
  Smith

  
	
   

  	
   

  	
  Name:

  	
  Craig Smith

  
	
   

  	
   

  	
  Title:

  	
  Vice
  President

  
					

 

138

 

Schedule 1.01(b)

 

Assets to be Acquired from National Steel Corporation

 

All right, title and interest
of National Steel Corporation and its wholly owned subsidiaries listed below
under the caption “Selling Subsidiaries” (collectively, the “Seller”)
in the facilities and entities listed below under the caption “Assets”
including: all real, property, buildings, structures, fixtures and
improvements; all rights, privileges, easements, licenses, hereditaments and
other appurtenances relating thereto; all equipment, machinery, vehicles,
locomotives, rolling stock furniture, fixtures and improvements and tooling
located thereon or otherwise owned used or held by Seller used or held for use
in the steel business; all inventories of raw materials, slabs, works in
process, finished products, goods, spare parts, replacement and component
parts, and office and other supplies located on the real property or owned,
used or held for use, by the Seller in the steel business; all patents,
trademarks, copyrights, software source codes and other intellectual property
related to any of the foregoing; all permits and licenses related to the
foregoing; and all accounts receivable.

 

Assets

 

1.                    Great
Lakes Operation, #1 Quality Drive, Ecorse, Michigan 48229

2.                    Midwest
Operation, 6300 U.S. Highway 12, Portage, Indiana 46368

3.                    Granite
City Operation, 1951 State Street, Granite City, Illinois 62040

4.                    National
Steel Corporation Headquarters, 4100 Edison Lakes Parkway, Mishawaka, Indiana
46545

5.                    ProCoil
Processing Center, 5260 Haggerty Road South, Canton, Michigan 48188

6.                    ProCoil
Distribution Center, 5100 Haggerty Road South, Canton, Michigan 48188

7.                    Coke
Oven Battery B at the Granite City Operation

8.                    Technical
Research Center, Trenton, Michigan

9.                    Seller’s
100% interest in Delray Connecting Railroad LLC, Ecorse

10.              Seller’s
interest in the Electrolytic Galvanizing Line Facility at the Great Lakes
Operation

11.              Seller’s
interest in the Continuous Caster and Ladle-Metallurgy Facilities at the Great
Lakes Operation

12.              Seller’s
interest in Double G Coatings, L.P.

13.              Seller’s
interest in Steel Health Resources LLC

14.              Seller’s
interest in NSL Inc.

 

139

 

Selling
Subsidiaries (State of Incorporation)

 

1.                    D.W.
Pipeline Company, (Michigan).

2.                    Granite
Intake Corporation, (Delaware).

3.                    National
Acquisition Corporation, (Delaware).

4.                    National
Caster Acquisition Corporation,( Delaware).

5.                    National
Caster Operating Company, (Delaware).

6.                    National
Casting Corporation, (Delaware).

7.                    National
Coating Limited Corporation, (Delaware).

8.                    National
Coating Line Corporation (Delaware).

9.                    National
Materials Procurement Corporation (Illinois).

10.              National
Pickle Line Corporation (Delaware.)

11.              NS
Holdings Corporation, (Delaware).

12.              ProCoil
Corporation, (Delaware).

 

140Exhibit 4(i)

 

CERTIFICATE OF DESIGNATION

OF

7.00% SERIES B MANDATORY CONVERTIBLE PREFERRED SHARES

OF

UNITED STATES STEEL CORPORATION

 

Pursuant to Section 151 of the

General Corporation Law of the State of Delaware

 

UNITED STATES
STEEL CORPORATION, a corporation organized and existing under the General
Corporation Law of the State of Delaware (the “Corporation”), does hereby
certify that the following resolution was duly adopted by the executive
committee of the Board of Directors of the Corporation (the “Board of
Directors”) at a meeting of the executive committee of the Board of Directors
held on February 4, 2003:

 

RESOLVED, that
pursuant to the authority conferred upon the Board of Directors by the
provisions of the Corporation’s Certificate of Incorporation, and by the Board
of Directors upon the executive committee of the Board of Directors, the
executive committee of the Board of Directors hereby creates a series of
5,750,000 shares of 7.00% Series B Mandatory Convertible Preferred Shares
without par value and hereby fixes the number, designation, relative rights,
preferences and limitations of the 7.00% Series B Mandatory Convertible
Preferred Shares as follows (certain capitalized terms being herein used as
defined in Section (10) below):

 

1.  Designation
and Number of Shares. Out of the 14,000,000 shares of preferred stock of
the Corporation authorized by the Certificate of Incorporation of the
Corporation, 5,750,000 shall be, and be designated as, 7.00% Series B Mandatory
Convertible Preferred Shares without par value (hereinafter referred to as this
“Series”).  The number of authorized
shares of this Series may be reduced by further resolution adopted by the Board
of Directors and by filing of a certificate pursuant to the provisions of the
General Corporation Law of the State of Delaware stating that such reduction
has been so authorized, but the number of authorized shares of this Series
shall not be increased.

 

2.  Ranking.
This Series shall rank, with respect to dividends and distributions upon the liquidation,
winding-up or dissolution of the Corporation (i) senior to (a) the Common
Stock, par value $1.00 per share, of the Corporation (the “Common Stock”) and
(b) to each other class or series of stock of the Corporation (including any
series of preferred stock established

 

 

after February 4, 2003 by the
Board of Directors) the terms of which do not expressly provide that it ranks
senior to or on a parity with this Series as to dividends and distributions
upon the liquidation, winding-up or dissolution of the Corporation and (ii)
junior to any equity security, the terms of which expressly provide that such
class or series will rank senior to this Series as to dividends and
distributions upon liquidation, winding-up or dissolution of the Corporation.

 

3.  Dividends.

 

(i)  General.  The dividend rate on shares of this Series
shall be $3.50 per annum, provided that the initial dividend on this Series for
the dividend period commencing on February 10, 2003, to but excluding June 15,
2003, will be $1.206 per share, in each case subject to adjustment as provided
in Section 12(ii) hereof. Cumulative cash dividends shall be payable quarterly
when, as and if declared by the Board of Directors of the Corporation or a duly
authorized committee thereof, out of the assets of the Corporation legally
available therefor on the 15th calendar day (or the following business day if
the 15th is not a business day) of March, June, September and December (each
such date being referred to herein as a “Dividend Payment Date”), provided,
that the initial dividend shall be payable, if declared, on June 15, 2003. The
amount of dividends payable on each share of this Series for each quarterly
period thereafter shall be computed by dividing the annual dividend rate by
four. The amount of dividends payable for any other period that is shorter or
longer than a dividend period will be computed on the basis of a 360-day year
consisting of twelve 30-day months.

 

A dividend
period is the period ending on the day before a Dividend Payment Date and
beginning on the preceding Dividend Payment Date or, if none, the date of
issue. Dividends payable, if declared, on a Dividend Payment Date shall be
payable to Holders (as defined below) of record as they appear on the stock
register of the Corporation on the record date, which shall be the close of
business on the first calendar day of the calendar month in which the
applicable Dividend Payment Date falls (each, a “Dividend Record Date”).

 

Dividends on
this Series shall be cumulative if the Corporation fails to declare or pay one
or more dividends on this Series in any amount, whether or not the earnings or
financial condition of the Corporation were sufficient to pay such dividends in
whole or in part.

 

Holders of
shares of this Series shall not be entitled to any dividend, whether payable in
cash, property or stock, in excess of the then applicable full dividends
calculated pursuant to this Section 3(i) (including accrued dividends, if any)
on shares of this Series. No interest or sum of money in lieu of interest shall
be payable in respect of any dividend or payment which may be in arrears.

 

Dividends in
arrears on this Series not declared for payment or paid on any Dividend Payment
Date may be declared by the Board of Directors of the Corporation or a duly
authorized committee thereof and paid on any date fixed by the Board of
Directors of the Corporation or a duly authorized committee thereof, whether or
not a Dividend Payment Date, to the Holders of record of the shares of this
Series, as they appear on the stock register of the Corporation on a record
date selected by the Board of Directors of the Corporation or a duly authorized
committee thereof, which shall be not more than 60 days prior to the date fixed
for such dividend payment.

 

2

 

(ii)  Payment
Restrictions.  The Corporation may
not declare or pay any dividend or make any distribution of assets (other than
dividends paid or other distributions made in capital stock of the Corporation
ranking junior to this Series as to the payment of dividends and the
distribution of assets upon liquidation, dissolution or winding-up and cash in
lieu of fractional shares in connection with any such dividend or distribution)
on, or redeem, purchase or otherwise acquire (except upon conversion or
exchange for capital stock of the Corporation ranking junior to this Series as
to the payment of dividends and the distribution of assets upon liquidation,
dissolution or winding-up and cash in lieu of fractional shares in connection
with any such conversion or exchange), the Corporation’s Common Stock or any
other stock of the Corporation ranking junior to this Series as to the payment
of dividends and the distribution of assets upon liquidation, dissolution or
winding-up, unless all accrued and unpaid dividends on this Series for all
prior dividend periods have been or contemporaneously are declared and paid and
the full quarterly dividend on this Series for the current dividend period has
been or contemporaneously is declared and set apart for payment.

 

Whenever all
accrued and unpaid dividends on this Series for all prior dividend periods are
not paid in full, the Corporation may not redeem, purchase or otherwise acquire
(except upon conversion or exchange for capital stock of the Corporation
ranking junior to this Series as to the payment of dividends and the
distribution of assets upon liquidation, dissolution or winding-up and cash in
lieu of fractional shares in connection with any such conversion or exchange),
other capital stock of the Corporation then outstanding ranking on a parity
with this Series as to the payment of dividends and the distribution of assets
upon liquidation, dissolution or winding-up, including this Series.

 

4.  Liquidation
Preference.

 

In the event
of any liquidation, dissolution or winding-up of the Corporation, the Holders
of shares of this Series shall be entitled to receive out of the assets of the
Corporation legally available for distribution to stockholders, before any
distribution of assets is made on the Common Stock of the Corporation or any
other class or series of stock of the Corporation ranking junior to this Series
as to the distribution of assets upon liquidation, dissolution or winding-up, a
liquidating distribution, in the amount of $50 per share, subject to adjustment
as provided in Section 12(ii) hereof, plus an amount equal to the sum of all
accrued and unpaid dividends (whether or not earned or declared) for the
portion of the then-current dividend period until the payment date and all
dividend periods prior thereto.

 

Neither the
sale nor transfer of all or substantially all of the property or business of
the Corporation, nor the merger or consolidation of the Corporation into or
with any other corporation, nor the merger or consolidation of any other
corporation into or with the Corporation shall constitute a liquidation,
dissolution or winding-up, for the purposes of the foregoing paragraph. After
the payment to the Holders of the shares of this Series of the full preferential
amounts provided for above, the Holders of the shares of this Series as such
shall have no right or claim to any of the remaining assets of the Corporation.

 

In the event
the assets of the Corporation available for distribution to the Holders of the shares
of this Series upon any liquidation, dissolution or winding-up of the
Corporation, whether voluntary or involuntary, shall be insufficient to pay in
full all amounts to which such

 

3

 

Holders are entitled as
provided above, no such distribution shall be made on account of any other
stock of the Corporation ranking on a parity with this Series as to the
distribution of assets upon such liquidation, dissolution or winding-up, unless
a pro rata distribution is made on this Series and such other stock of the
Corporation, with the amount allocable to each series of such stock determined
on the basis of the aggregate liquidation preference of the outstanding shares
of each series and distributions to the shares of each series being made on a
pro rata basis.

 

5.  Voting
Rights.

 

(i)  The
Holders of shares of this Series shall have no voting rights, except as set
forth below or as expressly required by applicable law. In exercising any such
vote, each outstanding share of this Series shall be entitled to one vote.

 

(ii)  If
the equivalent of six quarterly dividends payable, whether consecutively or
not, on this Series or any other class or series of preferred stock ranking on
a parity with this Series as to the payment of dividends has not been paid, the
number of directors of the Corporation shall be increased by two (without
duplication of any increase, resulting from the same failure to pay dividends,
made pursuant to the terms of any other series of preferred stock of the
Corporation ranking on a parity with this Series as to payment of dividends and
which does not have a separate class vote and upon which like voting rights
have been conferred and are exercisable (this Series, together with such other
class or classes, the “Electing Preferred Shares”)), and the Holders of this
Series, voting as a single class with the holders of shares of any such other
class of preferred stock, shall have the exclusive right to vote for and to
elect such two directors at any meeting of stockholders of the Corporation at
which directors are to be elected held during the period such dividends remain
in arrears. Each class or series of preferred stock entitled to vote for the
additional directors shall have a number of votes proportionate to the
aggregate liquidation preference of its outstanding shares. Such voting right
shall continue until full cumulative dividends for all past dividend periods on
all such preferred stock of the Corporation, including any shares of this
Series, have been paid or declared and set apart for payment. Any such elected
directors shall serve until the Corporation’s next annual meeting of
stockholders (notwithstanding that prior to the end of such term the right to
elect directors shall cease to exist) or until their respective successors
shall be elected and qualify.

 

(iii)  Whenever
such exclusive voting right shall vest, it may be exercised initially either at
a special meeting of Holders of Electing Preferred Shares or at any annual
stockholders’ meeting, but thereafter it shall be exercised only at annual
stockholders’ meetings. Any director who shall have been elected by the Holders
of Electing Preferred Shares as a class pursuant to this Section 5 may be
removed at any time, either for or without cause by, and only by, the
affirmative votes of the Holders of record of a majority of the outstanding
shares of Electing Preferred Shares given at a special meeting of such
stockholders called for such purpose, and any vacancy created by such removal
may also be filled at such meeting. Any vacancy caused by the death or
resignation of a director who shall have been elected by the Holders of
Electing Preferred Shares as a class pursuant to this Section 5 may be filled
only by the Holders of outstanding Electing Preferred Shares at a meeting
called for such purpose.

 

Any meeting of
the Holders of outstanding Electing Preferred Shares entitled to vote as a
class for the election or removal of directors shall be held at the place at
which the last

 

4

 

annual meeting of stockholders
was held. At such meeting, the presence in person or by proxy of the Holders of
a majority of the outstanding shares of all outstanding Electing Preferred
Shares shall be required to constitute a quorum; in the absence of a quorum, a
majority of the Holders present in person or by proxy shall have the power to
adjourn the meeting from time to time without notice, other than announcement
at the meeting, until a quorum shall be present.

 

(iv)  So
long as any shares of this Series is outstanding, the affirmative vote or
consent of the Holders of at least 66-2/3% of the outstanding shares of this
Series will be required for any amendment of the Certificate of Incorporation
of the Corporation (or any certificate supplemental thereto, including any
Certificate of Designation or any similar document relating to any series of
Preferred Stock) that will adversely affect the powers, preferences, privileges
or rights of this Series. The affirmative vote or consent of the Holders of at
least 66-2/3% of the outstanding shares of this Series and any other series of
the preferred stock of the Corporation ranking on a parity with this Series as
to payment of dividends and the distribution of assets upon liquidation,
dissolution or winding-up, voting as a single class without regard to series,
will be required (a) to issue, authorize or increase the authorized amount of,
or issue or authorize any obligation or security convertible into or evidencing
a right to purchase, any additional class or series of stock ranking prior to
this Series as to payment of dividends or the distribution of assets upon
liquidation, dissolution or winding-up or (b) to reclassify any authorized
stock of the Corporation into any class or series of stock or any obligation or
security convertible into or evidencing a right to purchase such stock ranking
prior to this Series as to payment of dividends or the distribution of assets
upon liquidation, dissolution or winding-up; provided that such vote will not
be required for the Corporation to issue, authorize or increase the authorized
amount of, or issue or authorize any obligation or security convertible into or
evidencing a right to purchase, any stock ranking on a parity with or junior to
this Series as to payment of dividends and the distribution of assets upon
liquidation, dissolution or winding-up.

 

6.  Mandatory
Conversion.

 

(i)  Each
share of this Series will automatically convert (unless previously converted at
the option of the Holder in accordance with Section 7, or a Merger Early
Settlement has occurred in accordance with Section 8) on June 15, 2006 or any
New Conversion Date, if a Conversion Date Deferral has occurred in accordance
with Section 6(ii) (the “Conversion Date”), into a number of newly issued
shares of Common Stock equal to the Conversion Rate (as defined in Section 9
below). Dividends on the shares of this Series shall cease to accrue and such
shares of this Series shall cease to be outstanding on the Conversion Date. The
Corporation shall make such arrangements as it deems appropriate for the
issuance of certificates, if any, representing Common Stock, and for the
payment of cash in respect of accrued and unpaid dividends (whether or not
earned or declared) on this Series, if any, or cash in lieu of fractional
shares of Common Stock, if any, in exchange for and contingent upon surrender
of certificates representing the shares of this Series (if such shares are held
in certificated form). The Corporation may defer the payment of dividends on
the Common Stock issuable upon conversion of shares of this Series and the
voting thereof until, and make such payment and voting contingent upon, the
surrender of the certificates representing the shares of this Series, provided
that the Corporation shall give the Holders of the shares of this Series such
notice of any such actions as the Corporation deems appropriate and upon such
surrender such Holders shall be entitled to receive such dividends declared and
paid on such Common Stock subsequent

 

5

 

to the Conversion Date. Amounts
payable in cash in respect of the shares of this Series or in respect of such
Common Stock shall not bear interest. Transfer or similar taxes in connection
with the issuance of Common Stock to any person other than the Holder will be
paid by the Holder.

 

(ii)  If
the Board of Directors of the Corporation makes a determination in good faith
that the payment in cash on June 15, 2006 in respect of all accrued and unpaid
dividends on this Series would breach any of the terms of, or constitute a
default under, the terms of the Corporation’s 10 3⁄4% Senior Notes due August 1,
2008 (the “Senior Notes”), the Conversion Date shall be deferred (a “Conversion
Date Deferral”) and the Corporation shall provide prompt notice of such
deferral to each Holder, but no earlier than 60 days before June 15, 2006.  The Corporation shall also deliver a copy of
such notice to the Transfer Agent. Each such notice shall contain the calculations
setting forth the Board of Directors’ determination as to the potential breach
or default of the Senior Notes. 
Subsequent to any Conversion Date Deferral, promptly after any
determination by the Board of Directors of the Corporation in good faith that
the payment of cash in respect of all accrued and unpaid dividends on this
Series would not breach any of the terms of, or constitute a default under, the
terms of the Senior Notes, the Board of Directors shall declare a new
conversion date (the “New Conversion Date”). 
Upon such declaration, the Corporation shall provide notice of the New
Conversion Date to each Holder at least 30 days but not more than 60 days
before the New Conversion Date.  The New
Conversion Date shall be the first Dividend Payment Date that is at least 30
days after the delivery of such notice. 
The Corporation shall also deliver a copy of such notice to the Transfer
Agent.  Delivery of notice of a Conversion
Date Deferral or the New Conversion Date may be satisfied by publishing such
notice in an Authorized Newspaper on a Business Day.  Notwithstanding any Conversion Date Deferral, dividends shall
continue to accrue on this Series until conversion.

 

7.  Early
Conversion at the Option of the Holder.

 

(i)  Shares
of this Series are convertible, in whole or in part, at the option of the
Holders thereof (“Optional Conversion”), at any time prior to the Conversion
Date, into shares of Common Stock at a rate of 3.1928 shares of Common Stock
for each share of this Series, subject to adjustment as set forth in Section
9(ii) below.

 

(ii)  Optional
Conversion of shares of this Series may be effected by delivering certificates
evidencing such shares (if such shares are held in certificated form), together
with written notice of conversion and a proper assignment of such certificates
to the Corporation or in blank (and, if applicable, payment of an amount equal
to the dividend payable on such shares), to the office of the Transfer Agent
(as defined below) for this Series or to any other office or agency maintained
by the Corporation for that purpose and otherwise in accordance with Optional
Conversion procedures established by the Corporation. Each Optional Conversion
shall be deemed to have been effected immediately prior to the close of business
on the date on which the foregoing requirements shall have been satisfied.

 

(iii)  Holders
of shares of this Series at the close of business on a Dividend Record Date
shall be entitled to receive the dividend payable on such shares on the
corresponding Dividend Payment Date notwithstanding the Optional Conversion of
such shares following such Dividend Record Rate and prior to such Dividend
Payment Date. However, shares of this Series

 

6

 

surrendered for Optional
Conversion after the close of business on a Dividend Record Date and before the
opening of business on the next succeeding Dividend Payment Date must be
accompanied by payment in cash of an amount equal to the dividend payable on
such shares on such Dividend Payment Date. Except as provided above, upon any
Optional Conversion of shares of this Series, the Corporation shall make no
payment or allowance for unpaid preferred dividends, whether or not in arrears,
on such shares of this Series as to which Optional Conversion has been effected
or for dividends or distributions on the Common Stock issued upon such Optional
Conversion.

 

8.  Early
Conversion Upon Cash Merger.

 

(i)  In
the event of a merger or consolidation of the Corporation of the type described
in Section 9(iii) in which the shares of Common Stock outstanding immediately
prior to such merger or consolidation are exchanged for consideration
consisting of at least 30% cash or cash equivalents (any such event, a “Cash
Merger”), then the Corporation (or the successor to the Corporation hereunder)
shall be required to offer the Holder of each share of this Series the right to
convert shares of this Series prior to the Conversion Date (“Merger Early
Settlement”) as provided herein. On or before the fifth Business Day after the
consummation of a Cash Merger, the Corporation or, at the request and expense
of the Corporation, the Transfer Agent, shall give all Holders notice of the
occurrence of the Cash Merger and of the right of Merger Early Settlement
arising as a result thereof. The Corporation shall also deliver a copy of such
notice to the Transfer Agent. Each such notice shall contain:

 

(a)  the date, which shall be not less than 20 nor more than
30 calendar days after the date of such notice, on which the Merger Early
Settlement will be effected (the “Merger Early Settlement Date”);

 

(b)  the date, which shall be on or one Business Day prior to
the Merger Early Settlement Date, by which the Merger Early Settlement right
must be exercised;

 

(c)  the Conversion Rate in effect immediately before such
Cash Merger and the kind and amount of securities, cash and other property
receivable by the Holder upon conversion of shares of this Series pursuant to
Section 9(iii); and

 

(d)  the instructions a Holder must follow to exercise the
Merger Early Settlement right.

 

(ii)  To
exercise a Merger Early Settlement right, a Holder shall deliver to the
Transfer Agent at the Corporate Trust Office (as defined below) by 5:00 p.m.,
New York City time on or one Business Day before the date by which the Merger
Settlement right must be exercised as specified in the notice, the
certificate(s) (if such shares are held in certificated form) evidencing the
shares of this Series with respect to which the Merger Early Settlement right
is being exercised duly endorsed for transfer to the Corporation or in blank
with a written notice to the Corporation stating the Holder’s intention to
convert early in connection with the Cash Merger and providing the Corporation
with payment instructions.

 

(iii)  On
the Merger Early Settlement Date, the Corporation shall deliver or cause to be
delivered the net cash, securities and other property to be received by such
exercising

 

7

 

Holder determined by assuming
the Holder had converted, immediately before the Cash Merger at the Conversion
Rate (as adjusted pursuant to Section 9(ii)), the shares of this Series for
which such Merger Early Settlement right was exercised into shares of Common
Stock. In the event a Merger Early Settlement right shall be exercised by a
Holder in accordance with the terms hereof, all references herein to Conversion
Date shall be deemed to refer to such Merger Early Settlement Date.

 

(iv)  Upon
a Merger Early Settlement, the Transfer Agent shall, in accordance with the
instructions provided by the Holder thereof on the notice provided to the
Corporation as set forth in paragraph (ii) above deliver to the Holder such net
cash, securities or other property issuable upon such Merger Early Settlement
together with payment in lieu of any fraction of a share, as provided herein.

 

(v)  In
the event that Merger Early Settlement is effected with respect to shares of
this Series representing less than all the shares of this Series held by a
Holder, upon such Merger Early Settlement the Corporation (or the successor to
the Corporation hereunder) shall execute and the Transfer Agent shall
authenticate, countersign and deliver to the Holder thereof, at the expense of
the Corporation, a certificate evidencing the shares as to which Merger Early
Settlement was not effected.

 

9.  Definition
of Conversion Rate; Anti-dilution Adjustments.

 

(i)  The
“Conversion Rate” is equal to (a) if the Average Market Price (as defined
below) is greater than or equal to $15.66 (the “Threshold Appreciation Price”),
3.1928 shares of Common Stock per share of this Series, (b) if the Average
Market Price is less than the Threshold Appreciation Price, but is greater than
$13.05, the number of shares of Common Stock per share of this Series that
equals $50 divided by the Average Market Price, and (c) if the Average Market
Price is equal to or less than $13.05, 3.8314 shares of Common Stock per share
of this Series, in each case subject to adjustment as provided in Section 9(ii)
(and in each case rounded upward or downward to the nearest 1/10,000th of a
share).

 

(ii)  Upon
the occurrence of any of the following events, (x) the formula for determining
the Conversion Rate, (y) the number of shares of Common Stock to be delivered
on an early conversion as set forth in Sections 7 or 8 and (z) the number of
shares of Common Stock to be delivered on mandatory conversion if there has
been a Conversion Date Deferral as set forth in Section 6(ii), shall each be
subject to the following adjustments (in the case of clauses (y) and (z), as
though references to the Conversion Rate were replaced with references to the
number of shares of Common Stock to be delivered on such conversion):

 

(a)  Stock Dividends. In case the Corporation shall
pay or make a dividend or other distribution on the shares of Common Stock in
Common Stock, the Conversion Rate, as in effect at the opening of business on
the day following the date fixed for the determination of stockholders entitled
to receive such dividend or other distribution shall be increased by dividing
such Conversion Rate by a fraction of which the numerator shall be the number
of shares of Common Stock outstanding at the close of business on the date
fixed for such determination and the denominator shall be the sum of such
number of shares and the total number of shares constituting such dividend or
other distribution,

 

8

 

such increase
to become effective immediately after the opening of business on the day
following the date fixed for such determination.

 

(b)  Stock Purchase Rights. In case the Corporation
shall issue (other than pursuant to a dividend reinvestment, share purchase or
similar plan) rights, options or warrants to all holders of its Common Stock
(not being available on an equivalent basis to Holders of the shares of this
Series upon conversion) entitling them to subscribe for or purchase shares of
Common Stock at a price per share less than the Current Market Price (as
defined below) per share of the Common Stock on the date fixed for the
determination of stockholders entitled to receive such rights, options or
warrants, the Conversion Rate in effect at the opening of business on the day
following the date fixed for such determination shall be increased by dividing
such Conversion Rate by a fraction, the numerator of which shall be the number
of shares of Common Stock outstanding at the close of business on the date
fixed for such determination plus the number of shares of Common Stock which
the aggregate of the offering price of the total number of shares of Common
Stock so offered for subscription or purchase would purchase at such Current
Market Price and the denominator of which shall be the number of shares of
Common Stock outstanding at the close of business on the date fixed for such
determination plus the number of shares of Common Stock so offered for
subscription or purchase, such increase to become effective immediately after
the opening of business on the day following the date fixed for such
determination.

 

(c)  Stock Splits; Reverse Splits. In case outstanding
shares of Common Stock shall be subdivided or split into a greater number of
shares of Common Stock, the Conversion Rate in effect at the opening of
business on the day following the day upon which such subdivision or split
becomes effective shall be proportionately increased, and, conversely, in case
outstanding shares of Common Stock shall each be combined into a smaller number
of shares of Common Stock, the Conversion Rate in effect at the opening of
business on the day following the day upon which such combination becomes
effective shall be proportionately reduced, such increase or reduction, as the
case may be, to become effective immediately after the opening of business on
the day following the day upon which such subdivision, split or combination
becomes effective.

 

(d)  Debt or Asset Distributions.  (1)  In case the Corporation
shall, by dividend or otherwise, distribute to all holders of its Common Stock
evidences of its indebtedness or assets (including securities, but excluding
any rights, options or warrants referred to in paragraph (b) of this Section
9(ii), any dividend or distribution paid exclusively in cash and any dividend,
shares of capital stock of any class or series, or similar equity interests, of
or relating to a subsidiary or other business unit in the case of a Spin-Off
referred to in the next subparagraph, or distribution referred to in paragraph
(a) of this Section 9(ii)), the Conversion Rate shall be increased by dividing
the Conversion Rate in effect immediately prior to the close of business on the
date fixed for the determination of stockholders entitled to receive such
distribution by a fraction, the numerator of which shall be the Current Market
Price per share of the Common Stock on the date fixed for such determination
less the then fair market value (as determined by the Board of Directors, whose
determination shall be conclusive and described in a Board Resolution filed
with the Transfer Agent) of the portion of the assets or evidences of

 

9

 

indebtedness
so distributed applicable to one share of Common Stock and the denominator of
which shall be such Current Market Price per share of Common Stock, such
adjustment to become effective immediately prior to the opening of business on
the day following the date fixed for the determination of stockholders entitled
to receive such distribution. In any case in which this subparagraph (d)(1) is applicable,
subparagraph (d)(2) of this Section 9(ii) shall not be applicable.

 

(2)  In the case of a Spin-Off, the Conversion Rate in effect
immediately before the close of business on the record date fixed for
determination of stockholders entitled to receive that distribution will be
increased by multiplying the Conversion Rate by a fraction, the numerator of
which is the Current Market Price per share of Common Stock plus the Fair
Market Value (as defined below) of the portion of those shares of Capital Stock
or similar equity interests so distributed applicable to one share of Common
Stock and the denominator of which is the Current Market Price per share of
Common Stock. Any adjustment to the Conversion Rate under this subparagraph
(d)(2) will occur at the earlier of (A) the tenth Trading Day from, and
including the effective date of, the Spin-Off and (B) the date of the
securities being offered in the Initial Public Offering of the Spin-Off, if
that Initial Public Offering is effected simultaneously with the Spin-Off.

 

(e)  Cash Distributions. In case the Corporation shall
(1) by dividend or otherwise, distribute to all holders of its Common Stock
cash (excluding any cash that is distributed in a Reorganization Event to which
Section 9(iii) applies or as part of a distribution referred to in paragraph
(d) of this Section 9(ii)) in an aggregate amount that combined together with
(2) the aggregate amount of any other distributions to all holders of its
Common Stock made exclusively in cash within the 12 months preceding the date
of payment of such distribution and in respect of which no adjustment pursuant
to this paragraph (e) or paragraph (f) of this Section 9(ii) has been made and
(3) the aggregate of any such cash plus the fair market value, as of the date
of the expiration of the tender or exchange offer referred to below (as
determined by the Board of Directors, whose determination shall be conclusive
and described in a Board Resolution), of the consideration payable in respect
of any tender or exchange offer by the Corporation or any of its subsidiaries
for all or any portion of the Common Stock concluded within the 12 months
preceding the date of payment of the distribution described in clause (1) of
this paragraph (e) and in respect of which no adjustment pursuant to this
paragraph (e) or paragraph (f) of this Section 9(ii) has been made, exceeds 15%
of the product of the Current Market Price (as defined below) per share of
Common Stock on the date for the determination of Holders of Common Stock entitled
to receive such distribution times the number of shares of Common Stock
outstanding on such date, then and in each such case, immediately after the
close of business on such date for determination, the Conversion Rate shall be
increased so that the same shall equal the rate determined by dividing the
Conversion Rate in effect immediately prior to the close of business on the
date fixed for determination of the stockholders entitled to receive such
distribution by a fraction (A) the numerator of which shall be equal to the
Current Market Price per share of Common Stock on the date fixed for such
determination less an amount equal to the quotient of (x) the combined amount
distributed or payable in the transactions described in clauses (1), (2) and
(3) of this paragraph (e) and (y) the number of shares of Common Stock
outstanding on such date for determination and (B) the denominator of which
shall be

 

10

 

equal to the
Current Market Price per share of Common Stock on such date for determination.

 

(f)  Tender Offers. In case (1) a tender or exchange
offer made by the Corporation or any subsidiary of the Corporation for all or
any portion of the Common Stock shall expire and such tender or exchange offer
(as amended upon the expiration thereof) shall require the payment to holders
(based on the acceptance (up to any maximum specified in the terms of the
tender or exchange offer) of Purchased Shares (as defined below)) of an
aggregate consideration having a fair market value (as determined by the Board
of Directors, whose determination shall be conclusive and described in a Board
Resolution) that combined together with (2) the aggregate of such payment plus
the fair market value (as determined by the Board of Directors, whose
determination shall be conclusive and described in a Board Resolution), as of
the expiration of such tender or exchange offer, of consideration payable in
respect of any other tender or exchange offer by the Corporation or any
subsidiary of the Corporation for all or any portion of the Common Stock
expiring within the 12 months preceding the expiration of such tender or
exchange offer and in respect of which no adjustment pursuant to paragraph (e)
of this Section 9(ii) or this paragraph (f) has been made and (3) the aggregate
amount of any distributions to all Holders of the Corporation’s Common Stock
made exclusively in cash within the 12 months preceding the expiration of such
tender or exchange offer and in respect of which no adjustment pursuant to
paragraph (e) of this Section 9(ii) or this paragraph (f) has been made,
exceeds 15% of the product of the Current Market Price per share of Common
Stock as of the last time (the “Expiration Time”) tenders could have been made
pursuant to such tender or exchange offer (as it may be amended) times the
number of shares of Common Stock outstanding (including any tendered shares) on
the Expiration Time, then, and in each such case, immediately prior to the
opening of business on the day after the date of the Expiration Time, the
Conversion Rate shall be adjusted so that the same shall equal the rate
determined by dividing the Conversion Rate immediately prior to the close of
business on the date of the Expiration Time by a fraction (A) the numerator of which
shall be equal to (x) the product of (I) the Current Market Price per share of
Common Stock on the date of the Expiration Time and (II) the number of shares
of Common Stock outstanding (including any tendered shares) on the Expiration
Time less (y) the amount of cash plus the fair market value (determined as
aforesaid) of the aggregate consideration payable to stockholders based on the
transactions described in clauses (1), (2) and (3) of this paragraph (f)
(assuming in the case of clause (1) the acceptance, up to any maximum specified
in the terms of the tender or exchange offer, of Purchased Shares), and (B) the
denominator of which shall be equal to the product of (x) the Current Market
Price per share of Common Stock as of the Expiration Time and (y) the number of
shares of Common Stock outstanding (including any tendered shares) as of the
Expiration Time less the number of all shares validly tendered and not
withdrawn as of the Expiration Time (the shares deemed so accepted, up to any
such maximum, being referred to as the “Purchased Shares”).

 

(g)  Reclassification. The reclassification of Common
Stock into securities including securities other than Common Stock (other than
any reclassification upon a Reorganization Event to which Section 9(iii) applies)
shall be deemed to involve (1) a distribution of such securities other than
Common Stock to all Holders of Common Stock

 

11

 

(and the
effective date of such reclassification shall be deemed to be “the date fixed
for the determination of stockholders entitled to receive such distribution”
and the “date fixed for such determination” within the meaning of paragraph (d)
of this Section 9(ii)), and (2) a subdivision, split or combination, as the
case may be, of the number of shares of Common Stock outstanding immediately
prior to such reclassification into the number of shares of Common Stock
outstanding immediately thereafter (and the effective date of such
reclassification shall be deemed to be “the day upon which such subdivision or
split becomes effective” or “the day upon which such combination becomes
effective,” as the case may be, and “the day upon which such subdivision, split
or combination becomes effective” within the meaning of paragraph (c) of this
Section 9(ii)).

 

(h)  Calculation of Adjustments. All adjustments to
the Conversion Rate shall be calculated to the nearest 1/10,000th of a share of
Common Stock (or if there is not a nearest 1/10,000th of a share to the next
lower 1/10,000th of a share). No adjustment in the Conversion Rate shall be
required unless such adjustment would require an increase or decrease of at
least 1% therein; provided, that any adjustments which by reason of this
subparagraph are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. If an adjustment is made to the
Conversion Rate pursuant to paragraph (a), (b), (c), (d), (e), (f), (g) or (i)
of this Section 9(ii), an adjustment shall also be made to the Average Market
Price solely to determine which of clauses (a), (b) or (c) of the definition of
Conversion Rate will apply on the Conversion Date. Such adjustment shall be
made by multiplying the Average Market Price by a fraction, the numerator of
which shall be the Conversion Rate immediately after such adjustment pursuant
to paragraph (a), (b), (c) (d), (e), (f), (g) or (i) of this Section 9(ii) and
the denominator of which shall be the Conversion Rate immediately before such
adjustment; provided, that if such adjustment to the Conversion Rate is
required to be made pursuant to the occurrence of any of the events
contemplated by paragraph (a), (b), (c), (d), (e), (f) or (g) of this Section
9(ii) during the period taken into consideration for determining the Average
Market Price, appropriate and customary adjustments shall be made to the
Conversion Rate.

 

(i)  Increase of Conversion Rate. The Corporation may
make such increases in the Conversion Rate, in addition to those required by
this Section 9(ii), as it considers to be advisable in order to avoid or
diminish any income tax to any Holders of Common Stock resulting from any
dividend or distribution of stock or issuance of rights or warrants to purchase
or subscribe for stock or from any event treated as such for income tax purposes
or for any other reasons. The Corporation shall have the power to resolve any
ambiguity or correct any error in this Section 9(ii) and its action in so
doing, as evidenced by a resolution of the Board of Directors, shall be final
and conclusive.

 

(j)  Notice of Adjustment. Whenever the Conversion
Rate is adjusted in accordance with Section 9(ii), the Corporation shall: (i)
forthwith compute the Conversion Rate in accordance with Section 9(ii), and
prepare and transmit to the Transfer Agent an Officer’s Certificate setting
forth the Conversion Rate, the method of calculation thereof in reasonable
detail, and the facts requiring such adjustment and upon which such adjustment
is based; and (ii) as soon as practicable following the occurrence of an event
that requires an adjustment to the Conversion Rate pursuant to Sections 9(ii)

 

12

 

(or if the
Corporation is not aware of such occurrence, as soon as practicable after
becoming so aware) provide a written notice to the Holders of this Series of
the occurrence of such event and a statement setting forth in reasonable detail
the method by which the adjustment to the Conversion Rate was determined and
setting forth the adjusted Conversion Rate.

 

(iii)  In
the event of:

 

(a)  any consolidation or merger of the Corporation with or
into another person (other than a merger or consolidation in which the
Corporation is the surviving corporation and in which the Common Stock
outstanding immediately prior to the merger or consolidation is not exchanged
for cash, securities or other property of the Corporation or another
corporation); or

 

(b)  any sale, transfer, lease or conveyance to another
person of the property of the Corporation as an entirety or substantially as an
entirety; or

 

(c)  any statutory exchange of securities of the Corporation
with another person (other than in connection with a merger or acquisition)
(any such event, a “Reorganization Event”):

 

each share of this Series
outstanding immediately prior to such Reorganization Event shall, after such
Reorganization Event, be convertible solely into the kind and amount of
securities, cash and other property receivable in such Reorganization Event
(without any interest thereon, and without any right to dividends or
distribution thereon that have a record date that is prior to the Conversion
Date) by a holder of the number of shares of Common Stock (including fractional
shares for this purpose) into which such share of this Series (x) might have
been converted immediately prior to such Reorganization Event pursuant to
Section 7(i), in the case of any conversion of a share of this Series at the
option of the Holder thereof, or (y) would have been converted pursuant to
Section 6(i) if the Conversion Date had occurred immediately prior to such
Reorganization Event, in the case of the mandatory conversion of a share of
this Series on the Conversion Date, assuming in each case that such holder of
such shares of Common Stock (1) is not a person with which the Corporation consolidated
or into which the Corporation merged or which merged into the Corporation or to
which such sale or transfer was made, as the case may be (any such person, a
“Constituent Person”), or an Affiliate (as defined below) of a Constituent
Person to the extent such Reorganization Event provides for different treatment
of Common Stock held by Affiliates of the Corporation and non-Affiliates, and
(2) failed to exercise his rights of election, if any, as to the kind or amount
of securities, cash and other property receivable upon such Reorganization
Event (provided that if the kind or amount of securities, cash and other
property receivable upon such Reorganization Event is not the same for each
share of Common Stock held immediately prior to such Reorganization Event by
other than a Constituent Person or an Affiliate thereof and in respect of which
such rights of election shall not have been exercised (“Non-electing Share”),
then for the purpose of this Section 9(iii) the kind and amount of securities,
cash and other property receivable upon such Reorganization Event by each
Non-electing Share shall be deemed to be the kind and amount so receivable per
share by a plurality of the Non-electing Shares).

 

13

 

In the event
of such a Reorganization Event, the person formed by such consolidation, merger
or exchange or the person which acquires the assets of the Corporation shall
execute and deliver to the Transfer Agent an agreement supplemental hereto
providing that the Holder of each share of this Series shall have the rights
provided by this Section 9(iii). Such supplemental agreement shall provide for
adjustments which, for events subsequent to the effective date of such
supplemental agreement, shall be as nearly equivalent as may be practicable to
the adjustments provided for in this Section 9. The above provisions of this
Section 9(iii) shall similarly apply to successive Reorganization Events.

 

10.  Definitions.

 

(i)  “Affiliate”
has the same meaning as given to that term in Rule 405 of the Securities Act of
1933, as amended, or any successor rule thereunder.

 

(ii)  “Authorized
Newspaper” means a newspaper customarily published at least once a day for at
least five days in each calendar week and of general circulation in New York
City.  Such publication (which may be in
different newspapers) is expected to be made in the Eastern edition of The Wall
Street Journal.

 

(iii)  The
“Average Market Price” means the average of the Closing Prices (as defined
below) per share of the Common Stock on each of the 20 consecutive Trading Days
(as defined below) ending on the third Trading Day immediately preceding (a)
June 15, 2006 or, if earlier, the date immediately prior to a Reorganization
Event with respect to a conversion pursuant to Section 6 or (b) the date
immediately prior to a Cash Merger with respect to a conversion pursuant to
Section 8.

 

(iv)  “Business
Day” means any day other than a Saturday or Sunday or any other day on which
banks in The City of New York are authorized or required by law or executive
order to close.

 

(v)  The
“Closing Price” of the Common Stock or any securities distributed in a
Spin-Off, as the case may be, on any date of determination means the closing
sale price (or, if no closing price is reported the last reported sale price)
per share on the New York Stock Exchange (“NYSE”) on such date or, if such
security is not quoted for trading on NYSE on any such date, as reported in the
composite transactions for the principal United States securities exchange on
which such security is so listed or quoted, or if such security is not so
listed or quoted on a United States national or regional securities exchange,
as reported by NYSE, or, if such security is not so reported, the last quoted
bid price for the such security in the over-the-counter market as reported by
the National Quotation Bureau or similar organization, or, if such bid price is
not available, the market value of such security on such date as determined by
a nationally recognized independent investment banking firm retained for this
purpose by the Corporation.

 

(vi)  “Corporate
Trust Office” means the principal corporate trust office of the Transfer Agent
at which, at any particular time, its corporate trust business shall be
administered.

 

(vii)  “Current
Market Price” means (a) on any day the average of the Closing Prices for the
five consecutive Trading Days preceding the earlier of the day preceding the
day in question and the day before the “ex date” with respect to the issuance
or distribution requiring

 

14

 

computation, (b) in the case of
any Spin-Off that is effected simultaneously with an Initial Public Offering of
the securities being distributed in the Spin-Off, the Closing Price of the
Common Stock on the Trading Day on which the initial public offering price of
the securities being distributed in the Spin-Off is determined, and (c) in the
case of any other Spin-Off, the average of the Closing Prices of the Common
Stock over the first 10 Trading Days after the effective date of such Spin-Off.
For purposes of this paragraph, the term “ex date,” when used with respect to
any issuance or distribution, shall mean the first date on which the Common
Stock trades regular way on such exchange or in such market without the right
to receive such issuance or distribution.

 

(viii)  “Fair
Market Value” means (a) in the case of any Spin-Off that is effected
simultaneously with an Initial Public Offering of such securities, the initial
public offering price of those securities, and (b) in the case of any other
Spin-Off, the average of the Closing Prices of those securities over the first
10 Trading Days after the effective date of such Spin-Off.

 

(ix)  “Holder”
means the person in whose name any shares of this Series are registered in the
books and records of the Corporation.

 

(x)  “Initial
Public Offering” means the first time securities of the same class or type as
the securities being distributed in the Spin-Off are offered to the public for
cash.

 

(xi)  “Spin-Off”
means a dividend or other distribution of shares of capital stock of any class
or series, or similar equity interests, of or relating to a subsidiary or other
business unit of the Corporation.

 

(xii)  “Trading
Day” means a day on which the Common Stock (A) is not suspended from trading on
any national or regional securities exchange or association or over-the-counter
market at the close of business and (B) has traded at least once on the
national or regional securities exchange or association or over-the-counter
market that is the primary market for the trading of the Common Stock.

 

(xiii)  “Transfer
Agent” shall be the Shareholder Services Division of the Corporation unless and
until a successor is selected by the Corporation, and then such successor.

 

11.  Fractional
Shares.

 

No fractional
Common Stock shall be issued upon the conversion of any shares of this Series.
In lieu of any fraction of a share of Common Stock that would otherwise be
issuable in respect of the aggregate number of shares of this Series
surrendered by the same Holder upon a conversion as described in Sections 7(i),
8 or 9(i), such Holder shall have the right to receive an amount in cash
(computed to the nearest cent) equal to the same fraction of (a) in the case of
Section 9(i), the Current Market Price or (b) in the case of Sections 7(i) or
8, the Closing Price of the Common Stock determined as of the second Trading
Day immediately preceding the effective date of conversion.

 

15

 

12.  Miscellaneous.

 

(i)  Procedures
for conversion of shares of this Series, in accordance with Sections 6, 7 or 8,
not held in certificated form will be governed by arrangements among the
depositary, participants and persons that may hold beneficial interests through
participants designed to permit conversion without the physical movement of
certificates. Payments, transfers, deliveries, exchanges and other matters
relating to beneficial interests in global security certificates may be subject
to various policies and procedures adopted by the depositary from time to time.

 

(ii)  The
liquidation preference and the annual dividend rate set forth herein, each
shall be subject to equitable adjustment whenever there shall occur a stock
split, combination, reclassification or other similar event involving this
Series. Such adjustments shall be determined in good faith by the Board of
Directors and submitted by the Board of Directors to the Transfer Agent.

 

(iii)  For
the purposes of Section 9, the number of shares of Common Stock at any time
outstanding shall not include shares held in the treasury of the Corporation
but shall include shares issuable in respect of scrip certificates issued in
lieu of fractions of shares of Common Stock. The Corporation will not pay any
dividend or make any distribution with respect to shares held in treasury.

 

(iv)  If
the Corporation shall take any action affecting the Common Stock, other than
action described in Section 9, that in the opinion of the Board of Directors would
materially adversely affect the conversion rights of the Holders of the shares
of this Series, then (x) the Conversion Rate, (y) the number of shares of
Common Stock to be delivered on an early conversion as set forth in Sections 7
or 8 and/or (z) the number of shares of Common Stock to be delivered on
mandatory conversion if there has been a Conversion Date Deferral as set forth
in Section 6(ii) may each be adjusted, to the extent permitted by law, in such
manner, if any, and at such time, as the Board of Directors may determine to be
equitable in the circumstances.

 

(v)  The
Corporation covenants that it will at all times reserve and keep available,
free from preemptive rights, out of the aggregate of its authorized but
unissued Common Stock for the purpose of effecting conversion of this Series,
the full number of shares of Common Stock deliverable upon the conversion of
all outstanding shares of this Series not theretofore converted. For purposes
of this Section 12(v), the number of shares of Common Stock that shall be
deliverable upon the conversion of all outstanding shares of this Series shall
be computed as if at the time of computation all such outstanding shares were
held by a single Holder.

 

(vi)  The
Corporation covenants that any shares of Common Stock issued upon conversion of
shares of this Series shall be validly issued, fully paid and non-assessable.

 

(vii)  The
Corporation shall endeavor to list the shares of Common Stock required to be
delivered upon conversion of shares of this Series, prior to such delivery,
upon each national securities exchange or quotation system, if any, upon which
the outstanding shares of Common Stock are listed at the time of such delivery.

 

(viii)  The
Corporation will pay any and all documentary stamp or similar issue or transfer
taxes payable in respect of the issue or delivery of shares of Common Stock or
other securities or property on conversion of shares of this Series pursuant
thereto; provided, however,

 

16

 

that the Corporation shall not
be required to pay any tax that may be payable in respect of any transfer
involved in the issue or delivery of shares of Common Stock or other securities
or property in a name other than that of the Holder of this Series to be
converted and no such issue or delivery shall be made unless and until the
person requesting such issue or delivery has paid to the Corporation the amount
of any such tax or established, to the reasonable satisfaction of the
Corporation, that such tax has been paid.

 

(ix)  This
Series is not redeemable.

 

(x)  All
shares of this Series shall be deemed outstanding, except from the date of
registration of transfer, all shares of this Series held of record by the
Corporation or any subsidiary of the Corporation.

 

(xi)  Whenever
possible, each provision hereof shall be interpreted in a manner as to be
effective and valid under applicable law, but if any provision hereof is held
to be prohibited by or invalid under applicable law, such provision shall be ineffective
only to the extent of such prohibition or invalidity, without invalidating or
otherwise adversely affecting the remaining provisions hereof. If a court of
competent jurisdiction should determine that a provision hereof would be valid
or enforceable if a period of time were extended or shortened or a particular
percentage were increased or decreased, then such court may make such change as
shall be necessary to render the provision in question effective and valid
under applicable law.

 

(xii)  This
Series may be issued in fractions of a share which shall entitle the Holder, in
proportion to such Holder’s fractional shares, to exercise voting rights,
receive dividends, participate in distributions and have the benefit of all
other rights of Holders of this Series.

 

(xiii)  Subject
to applicable escheat laws, any monies set aside by the Corporation in respect
of any payment with respect to shares of this Series, or dividends thereon, and
unclaimed at the end of two years from the date upon which such payment is due
and payable shall revert to the general funds of the Corporation, after which
reversion the Holders of such shares shall look only to the general funds of
the Corporation for the payment thereof. Any interest accrued on funds so
deposited shall be paid to the Corporation from time to time.

 

(xiv)  Except
as may otherwise be required by law, the shares of this Series shall not have
any voting powers, preferences and relative, participating, optional or other
special rights, other than those specifically set forth in this Certificate of
Designation.

 

(xv)  The
headings of the various subdivisions hereof are for convenience of reference
only and shall not affect the interpretation of any of the provisions hereof.

 

(xvi)  If
any of the voting powers, preferences and relative participating, optional and
other special rights of this Series and qualifications, limitations and
restrictions thereof set forth herein is invalid, unlawful or incapable of
being enforced by reason of any rule of law or public policy, all other voting
powers, preferences and relative participating, optional and other special
rights of this Series and qualifications, limitations and restrictions thereof
set forth herein that can be given effect without the invalid, unlawful or unenforceable
voting powers, preferences and relative participating, optional and other
special rights of this Series and

 

17

 

qualifications, limitations and
restrictions thereof shall, nevertheless, remain in full force and effect, and
no voting powers, preferences and relative participating, optional or other
special rights of this Series and qualifications, limitations and restrictions
thereof herein set forth shall be deemed dependent upon any other such voting
powers, preferences and relative participating, optional or other special
rights of this Series and qualifications limitations and restrictions thereof
unless so expressed herein.

 

(xvii)  Shares
of this Series that have been issued and reacquired in any manner, including
shares purchased or exchanged or converted, shall (upon compliance with any
applicable provisions of the laws of Delaware) have the status of authorized
but unissued shares of preferred stock of the Corporation undesignated as to
series and may be designated or redesignated and issued or reissued, as the
case may be, as part of any series of preferred stock of the Corporation,
provided that any issuance of such shares as this Series must be in compliance
with the terms hereof.

 

(xviii)  If
any certificates of shares of this Series shall be mutilated, lost, stolen or
destroyed, the Corporation shall issue, in exchange and in substitution for and
upon cancellation of the mutilated certificates of shares of this Series, or in
lieu of and substitution for certificates of this Series lost, stolen or
destroyed, a new certificate of this Series and of like tenor and representing
an equivalent amount of shares of this Series, but only upon receipt of
evidence of such loss, theft or destruction of such certificate of this Series
and indemnity, if requested, satisfactory to the Corporation and the Transfer
Agent. The Corporation is not required to issue any certificates representing
shares of this Series on or after the Conversion Date. In place of the delivery
of a replacement certificate following the Conversion Date, the Transfer Agent,
upon delivery of the evidence and indemnity described above, will deliver
shares of Common Stock pursuant to the terms of this Series evidenced by the
certificate.

 

IN WITNESS
WHEREOF, the Corporation has caused this Certificate of Designation to be
signed in its name and on its behalf as of this 6th day of February, 2003 by a
duly authorized officer of the Corporation.

 

	
   

  	
  UNITED
  STATES STEEL CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Gretchen
  R. Haggerty

  	
   

  
	
   

  	
  By: G. R.
  Haggerty

  
	
   

  	
  Title:
  Senior Vice President & Treasurer

  

 

18

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