Document:

EX-10.1

 

Exhibit 10.1

EXECUTION COPY

 

 

AMENDED AND RESTATED REVOLVING LOAN AGREEMENT

Dated as of July 8, 2005

among

WHEELING-PITTSBURGH CORPORATION,

WHEELING-PITTSBURGH STEEL CORPORATION,

as Borrower,

THE LENDERS SIGNATORY HERETO

FROM TIME TO TIME,

as Lenders,

ROYAL BANK OF CANADA,

as Administrative Agent,

GENERAL ELECTRIC CAPITAL CORPORATION,

as Inventory and Receivables Security Agent and Documentation Agent,

and

THE CIT GROUP/BUSINESS CREDIT, INC., WACHOVIA BANK, NATIONAL

ASSOCIATION and FLEET CAPITAL CORP.,

as Syndication Agents

 

 

	 	 	 
	RBC Capital Markets, as Global

Coordinating Arranger, Co-Lead Arranger and Joint

Bookrunner
	 	GECC Capital Markets Group, Inc., as

Co-Lead Arranger and Joint Bookrunner

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	1. AMOUNT AND TERMS OF CREDIT	 	 	2	 
	 
	 	 	 	 	 	 
	1.1
	 	Credit Facilities	 	 	2	 
	1.2
	 	Letters of Credit	 	 	6	 
	1.3
	 	Prepayments	 	 	7	 
	1.4
	 	Use of Proceeds	 	 	10	 
	1.5
	 	Interest and Applicable Margins	 	 	10	 
	1.6
	 	Eligible Accounts	 	 	13	 
	1.7
	 	Eligible Inventory	 	 	15	 
	1.8
	 	Cash Management Systems	 	 	17	 
	1.9
	 	Fees	 	 	17	 
	1.10
	 	Receipt of Payments	 	 	17	 
	1.11
	 	Application and Allocation of Payments	 	 	18	 
	1.12
	 	Loan Account and Accounting	 	 	18	 
	1.13
	 	Indemnity	 	 	19	 
	1.14
	 	Access	 	 	20	 
	1.15
	 	Taxes	 	 	21	 
	1.16
	 	Capital Adequacy; Increased Costs; Illegality	 	 	21	 
	1.17
	 	Single Loan	 	 	23	 
	1.18
	 	Availability Reserve	 	 	23	 
	1.19
	 	Effect of Amendment and Restatement	 	 	23	 
	 
	 	 	 	 	 	 
	2. CONDITIONS PRECEDENT	 	 	23	 
	 
	 	 	 	 	 	 
	2.1
	 	Conditions to the Initial Loans	 	 	23	 
	2.2
	 	Further Conditions to Each Loan	 	 	25	 
	 
	 	 	 	 	 	 
	3. REPRESENTATIONS AND WARRANTIES	 	 	26	 
	 
	 	 	 	 	 	 
	3.1
	 	Financial Condition	 	 	26	 
	3.2
	 	No Change	 	 	27	 
	3.3
	 	Existence; Compliance with Law	 	 	28	 
	3.4
	 	Power; Authorization; Enforceable Obligations	 	 	28	 
	3.5
	 	No Legal Bar	 	 	28	 
	3.6
	 	Litigation	 	 	29	 
	3.7
	 	No Default	 	 	29	 
	3.8
	 	Ownership of Property; Liens	 	 	29	 
	3.9
	 	Intellectual Property	 	 	29	 
	3.10
	 	Taxes	 	 	29	 
	3.11
	 	Federal Regulations	 	 	30	 
	3.12
	 	Labor Matters	 	 	30	 
	3.13
	 	ERISA	 	 	30	 
	3.14
	 	Investment Company Act; Other Regulations	 	 	31	 
	3.15
	 	Subsidiaries	 	 	31	 

i

 

	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	3.16
	 	Environmental Matters	 	 	31	 
	3.17
	 	Accuracy of Information, etc.	 	 	32	 
	3.18
	 	Collateral Documents	 	 	33	 
	3.19
	 	Solvency	 	 	33	 
	3.20
	 	Regulation H	 	 	33	 
	3.21
	 	Certain Documents	 	 	33	 
	3.22
	 	[Intentionally Omitted]	 	 	33	 
	3.23
	 	Senior Indebtedness	 	 	34	 
	3.24
	 	Insurance	 	 	34	 
	3.25
	 	Deposit and Disbursement Accounts	 	 	34	 
	3.26
	 	Government Contracts	 	 	34	 
	3.27
	 	Customer and Trade Relations	 	 	34	 
	3.28
	 	Bonding; Licenses	 	 	34	 
	3.29
	 	Brokers	 	 	34	 
	3.30
	 	Off Balance Sheet Transactions	 	 	35	 
	3.31
	 	Inactive Subsidiaries	 	 	35	 
	 
	 	 	 	 	 	 
	4. FINANCIAL STATEMENTS AND INFORMATION	 	 	35	 
	 
	 	 	 	 	 	 
	4.1
	 	Reports and Notices	 	 	35	 
	4.2
	 	Communication with Accountants	 	 	35	 
	 
	 	 	 	 	 	 
	5. AFFIRMATIVE COVENANTS 	 	 	35	 
	 
	 	 	 	 	 	 
	5.1
	 	Payment of Obligations	 	 	35	 
	5.2
	 	Maintenance of Existence; Compliance	 	 	35	 
	5.3
	 	Maintenance of Property	 	 	36	 
	5.4
	 	Books and Records	 	 	36	 
	5.5
	 	Notices	 	 	36	 
	5.6
	 	Environmental Laws	 	 	37	 
	5.7
	 	Additional Collateral, etc.	 	 	38	 
	5.8
	 	Insurance	 	 	40	 
	5.9
	 	Supplemental Disclosure	 	 	41	 
	5.10
	 	Intellectual Property	 	 	42	 
	5.11
	 	Landlord Agreements, Mortgagee Agreements, Bailee Letters and Real Estate Purchases	 	 	42	 
	5.12
	 	Further Assurances	 	 	42	 
	 
	 	 	 	 	 	 
	6. NEGATIVE COVENANTS	 	 	42	 
	 
	 	 	 	 	 	 
	6.1
	 	Financial Condition Covenants	 	 	43	 
	6.2
	 	Indebtedness	 	 	43	 
	6.3
	 	Liens	 	 	44	 
	6.4
	 	Fundamental Changes	 	 	46	 
	6.5
	 	Disposition of Property	 	 	46	 
	6.6
	 	Restricted Payments	 	 	47	 
	6.7
	 	Capital Expenditures	 	 	47	 
	6.8
	 	Investments	 	 	48	 

ii

 

	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	6.9
	 	Optional Payments and Modifications of Certain Agreements	 	 	51	 
	6.10
	 	Transactions with Affiliates	 	 	52	 
	6.11
	 	Sales and Leasebacks	 	 	52	 
	6.12
	 	Swap Agreements	 	 	52	 
	6.13
	 	Changes in Fiscal Periods	 	 	52	 
	6.14
	 	Clauses Restricting Subsidiary Distributions	 	 	52	 
	6.15
	 	Lines of Business	 	 	53	 
	6.16
	 	Restrictions on WP Steel Venture	 	 	53	 
	6.17
	 	Excluded Foreign Subsidiaries	 	 	53	 
	 
	 	 	 	 	 	 
	7. TERM	 	 	53	 
	 
	 	 	 	 	 	 
	7.1
	 	Termination	 	 	53	 
	7.2
	 	Survival of Obligations Upon Termination of Financing Arrangements	 	 	53	 
	 
	 	 	 	 	 	 
	8. EVENTS OF DEFAULT; RIGHTS AND REMEDIES	 	 	53	 
	 
	 	 	 	 	 	 
	8.1
	 	Events of Default	 	 	53	 
	 
	 	 	 	 	 	 
	9. ASSIGNMENT AND PARTICIPATIONS; APPOINTMENT OF AGENT	 	 	57	 
	 
	 	 	 	 	 	 
	9.1
	 	Assignment and Participations	 	 	57	 
	9.2
	 	Appointment of Agents	 	 	59	 
	9.3
	 	Agent’s Reliance, Etc	 	 	60	 
	9.4
	 	Royal Bank of Canada, GE Capital and Affiliates	 	 	61	 
	9.5
	 	Lender Credit Decision	 	 	61	 
	9.6
	 	Indemnification	 	 	62	 
	9.7
	 	Successor Agent	 	 	62	 
	9.8
	 	Setoff and Sharing of Payments	 	 	63	 
	9.9
	 	Advances; Payments; Non-Funding Lenders; Information; Actions in Concert	 	 	63	 
	 
	 	 	 	 	 	 
	10. SUCCESSORS AND ASSIGNS	 	 	66	 
	 
	 	 	 	 	 	 
	10.1
	 	Successors and Assigns	 	 	66	 
	 
	 	 	 	 	 	 
	11. MISCELLANEOUS	 	 	66	 
	 
	 	 	 	 	 	 
	11.1
	 	Complete Agreement; Modification of Agreement	 	 	66	 
	11.2
	 	Amendments and Waivers	 	 	66	 
	11.3
	 	Fees and Expenses	 	 	68	 
	11.4
	 	No Waiver	 	 	70	 
	11.5
	 	Remedies	 	 	70	 
	11.6
	 	Severability	 	 	70	 
	11.7
	 	Conflict of Terms	 	 	70	 
	11.8
	 	Confidentiality	 	 	70	 
	11.9
	 	GOVERNING LAW	 	 	71	 
	11.10
	 	Notices	 	 	72	 

iii

 

	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	11.11
	 	Section Titles	 	 	73	 
	11.12
	 	Counterparts	 	 	73	 
	11.13
	 	WAIVER OF JURY TRIAL	 	 	73	 
	11.14
	 	Press Releases and Related Matters	 	 	73	 
	11.15
	 	Reinstatement	 	 	73	 
	11.16
	 	Advice of Counsel	 	 	74	 
	11.17
	 	No Strict Construction	 	 	74	 

iv

 

INDEX OF APPENDICES

	 	 	 	 	 
	Annex A (Recitals)
	 	-	 	Definitions
	Annex B (Section 1.2)
	 	-	 	Letters of Credit
	Annex C (Section 1.8)
	 	-	 	Cash Management System
	Annex D (Section 2.1(a))
	 	-	 	Closing Checklist
	Annex E (Section 4.1(a))
	 	-	 	Financial Statements and Projections -- Reporting
	Annex F (Section 4.1(b))
	 	-	 	Collateral Reports
	Annex G (Section 6.1)
	 	-	 	Financial Covenants
	Annex H (Section 9.9(a))
	 	-	 	Lenders’ Wire Transfer Information
	Annex I (Section 11.10)
	 	-	 	Notice Addresses
	Annex J
(from Annex A -
Commitments definition)
	 	-	 	Commitments as of Restatement Date
	 
	Exhibit A
	 	-	 	Form of Security Agreement
	Exhibit B-1
	 	-	 	Form of Senior Current Asset Security Agreement
	Exhibit B-2
	 	-	 	Form of Junior Current Asset Security Agreement
	Exhibit B-3
	 	-	 	Form of Current Asset Intercreditor Agreement
	Exhibit C
	 	-	 	Form of JV Pledge Agreement
	Exhibit D
	 	-	 	Form of Guarantee Agreement
	Exhibit E
	 	-	 	Form of Closing Certificate
	Exhibit 1.1(a)(i)
	 	-	 	Form of Notice of Revolving Credit Advance
	Exhibit 1.1(a)(ii)
	 	-	 	Form of Revolving Note
	Exhibit 1.1(b)(ii)
	 	-	 	Form of Swing Line Note
	Exhibit 1.5(a)
	 	-	 	Form of Applicable Margin Certificate
	Exhibit 1.5(e)
	 	-	 	Form of Notice of Conversion/Continuation
	Exhibit 4.1(b)
	 	-	 	Form of Borrowing Base Certificate
	Exhibit 9.1(a)
	 	-	 	Form of Assignment Agreement
	Schedule 1.1
	 	-	 	Administrative Agent’s and Inventory and Receivables Security Agent’s Representatives
	Schedule 1.2
	 	-	 	Mortgaged Properties
	Schedule 1.3
	 	-	 	Terms of Profit Sharing Notes
	Schedule 1.4
	 	-	 	Environmental Budget
	Schedule 1.5
	 	-	 	Coke Facility Refurbishment Project
	Disclosure Schedule 3.4
	 	-	 	Required Consents
	Disclosure Schedule 3.8
	 	-	 	Ownership of Property, Liens
	Disclosure Schedule 3.10
	 	-	 	Tax Claims
	Disclosure Schedule 3.13
	 	-	 	ERISA Matters
	Disclosure Schedule 3.15
	 	-	 	Subsidiaries
	Disclosure Schedule 3.18(a)
	 	-	 	UCC Filing Jurisdictions
	Disclosure Schedule 3.18(b)-1
	 	-	 	Mortgage Filing Jurisdictions
	Disclosure Schedule 3.18(b)-2
	 	-	 	Owned and Leased Real Property
	Disclosure Schedule 3.24
	 	-	 	Insurance
	Disclosure Schedule 3.25
	 	-	 	Accounts
	Disclosure Schedule 3.26
	 	-	 	Government Contracts

v

 

	 	 	 	 	 
	Disclosure Schedule 3.27
	 	-	 	Customer and Trade Relations
	Disclosure Schedule 3.28
	 	-	 	Bonds, Patent, Trademark Licenses
	Disclosure Schedule 5.7(b)
	 	-	 	Commercially Reasonable Efforts Leasehold Mortgages
	Disclosure Schedule 6.2(d)
	 	-	 	Existing Indebtedness
	Disclosure Schedule 6.3(f)
	 	-	 	Existing Indebtedness Liens
	Disclosure Schedule 6.5(e)
	 	-	 	Coke Plant Joint Venture Assets
	Disclosure Schedule 6.10
	 	-	 	Affiliate Transactions
	Disclosure Schedule 6.16
	 	-	 	WP Steel Venture Activities

[Exhibits, Schedules and Disclosure Schedules have been omitted and will be furnished upon request.]

 

     This AMENDED AND RESTATED REVOLVING LOAN AGREEMENT (this “Agreement”), dated as of
July 8, 2005 among WHEELING-PITTSBURGH CORPORATION, a Delaware corporation (“Holdings”),
WHEELING-PITTSBURGH STEEL CORPORATION, a Delaware corporation (“Borrower”), ROYAL BANK OF
CANADA, a Canadian chartered bank (in its individual capacity, “Royal Bank of Canada”), for
itself, as Lender and as Administrative Agent for the Lenders from time to time party hereto,
GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware corporation (in its individual capacity, “GE
Capital”), for itself, as Lender, and as Inventory and Receivables Security Agent and
Documentation Agent for the Lenders, and the other Lenders from time to time party hereto.

RECITALS

     WHEREAS, Holdings, Borrower, Royal Bank of Canada, GE Capital and the other lenders therein
(the “Prior Lenders”) are parties to that certain Credit Agreement dated as of July 31,
2003 (as amended, supplemented or otherwise modified from time to time, the “Prior Loan
Agreement”) pursuant to which the Prior Lenders agreed to extend revolving credit facilities to
Borrower in the amount of two hundred twenty-five million dollars ($225,000,000) in the aggregate
to provide (a) working capital financing for Borrower, (b) funds for repayment of certain existing
indebtedness and (c) funds for other general corporate purposes of Borrower permitted thereunder;
and

     WHEREAS, the Borrower has requested, and the Agents and the Lenders have agreed, to amend and
restate the Prior Loan Agreement pursuant to the terms and conditions set forth herein; and

     WHEREAS, pursuant to the Collateral Documents, Borrower has agreed to secure all of its
obligations under the Loan Documents by granting to the Inventory and Receivables Security Agent,
for the benefit of Agents and Lenders, a first priority security interest in and lien on the
Current Asset Collateral (as defined below) and to the Collateral Agent, for the benefit of the
Agents and Lenders, a third priority security interest and lien on all of its other existing and
after-acquired personal property and certain real property; and

     WHEREAS, Holdings is willing to guarantee all of the obligations of Borrower to Agents and
Lenders under the Loan Documents and to grant to the Inventory and Receivables Security Agent, for
the benefit of Agents and Lenders, a first priority security interest in and lien on its Current
Asset Collateral, if any, and to grant to Collateral Agent, for the benefit of Agents and Lenders,
a third priority security interest in and pledge of all of the Capital Stock of Borrower and WP
Steel Venture and a third priority security interest and lien on all of its other existing and
after-acquired personal property to secure such guarantee; and

     WHEREAS, capitalized terms used in this Agreement shall have the meanings ascribed to them in
Annex A and, for purposes of this Agreement and the other Loan Documents, the rules of
construction set forth in Annex A shall govern. All Annexes, Disclosure Schedules,
Exhibits and other attachments (collectively, “Appendices”) hereto, or expressly identified
to this Agreement, are incorporated herein by reference, and taken together with this Agreement,
shall constitute but a single agreement. These Recitals shall be construed as part of the
Agreement.

 

 

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

1. AMOUNT AND TERMS OF CREDIT

     1.1 Credit Facilities.

     (a) Revolving Credit Facility.

          (i) Subject to the terms and conditions hereof, each Lender agrees to make available
to Borrower from time to time until the Commitment Termination Date its Pro Rata Share of
advances (each, a “Revolving Credit Advance”). The Pro Rata Share of the Revolving
Loan of any Lender shall not at any time exceed its separate Revolving Loan Commitment.
The obligations of each Lender hereunder shall be several and not joint. Until the
Commitment Termination Date, Borrower may from time to time borrow, repay and reborrow
under this Section 1.1(a); provided, that the amount of any Revolving
Credit Advance to be made at any time shall not exceed the Borrowing Availability at such
time. The Borrowing Availability may be further reduced by Reserves imposed by the
Inventory and Receivables Security Agent in its reasonable credit judgment. Borrower shall
notify the representatives of the Administrative Agent and the Inventory and Receivables
Security Agent identified in Schedule 1.1 at the address specified therein prior to
each Revolving Credit Advance. Upon receipt of such notice the Inventory and Receivables
Security Agent shall, to the extent such information has changed, promptly, and in any
event on the same day such notice is received from the Borrower, provide the Administrative
Agent with written notice of (i) the Borrowing Base then in effect and (ii) any reserves
established by the Inventory and Receivables Security Agent with respect to the Borrowing
Base or the Maximum Amount; in the event that the Inventory and Receivables Security Agent
fails to deliver such notice to the Administrative Agent, the Administrative Agent shall be
entitled to rely on the then most recent Borrowing Base and reserve information
communicated to it in writing by the Inventory and Receivables Security Agent. Borrower
must give any such notice no later than 2:00 p.m. (New York time) on the date which is (i)
one (1) Business Day prior to the date of the proposed Revolving Credit Advance, in the
case of an Index Rate Loan or (ii) three (3) Business Days prior to the date of the
proposed Revolving Credit Advance, in the case of a LIBOR Loan. Borrower must give each
such notice (a “Notice of Revolving Credit Advance”) in writing (by telecopy or
overnight courier) substantially in the form of Exhibit 1.1(a)(i), which shall
include the information required in such Exhibit and be accompanied by such other
information as the Administrative Agent may require. Each Revolving Credit Advance shall
be in an amount equal to $5,000,000 or a whole multiple of $1,000,000 in excess thereof.
If Borrower desires that the Revolving Credit Advances bear interest by reference to a
LIBOR Rate, Borrower must comply with Section 1.5(e). The Borrower and the Lenders
hereby agree that presently outstanding “Revolving Loans” (including the presently
outstanding “Letter of Credit Obligations”) made under, and as such terms are defined in,
the Prior Loan Agreement shall be deemed to be Revolving Loans hereunder for the account of
the Borrower and that, on the Restatement Date, each Prior Lender party to the Prior Loan
Agreement will assign

2

 

portions of its existing “Revolving Loan Commitment” under, and as such term is
defined in, the Prior Loan Agreement to and among the various Lenders with Revolving Credit
Commitments in amounts sufficient to cause each Lender’s respective Revolving Loan
Commitment to be the amounts set forth next to such Lender’s name on Annex J
hereto.

          (ii) Borrower shall issue a promissory note to each Lender who delivers a written
request to Borrower for such issuance. Each promissory note issued to a Lender shall be in
the principal amount of the Revolving Loan Commitment of such Lender, dated the Restatement
Date and substantially in the form of Exhibit 1.1(a)(ii) (each a “Revolving
Note” and, collectively, the “Revolving Notes”). Each Revolving Note shall
represent the obligation of Borrower to pay the amount of such Lender’s Revolving Loan
Commitment or, if less, such Lender’s Pro Rata Share of the aggregate unpaid principal
amount of all Revolving Credit Advances to Borrower together with interest thereon as
prescribed in Section 1.5. The entire unpaid balance of the Revolving Loan and all
other non-contingent Obligations shall be immediately due and payable in full in
immediately available funds on the Commitment Termination Date.

          (iii) Any provision of this Agreement to the contrary notwithstanding, at the request
of Borrower, the Administrative Agent in its discretion may make, but shall not have any
implied or express obligation to make, Overadvances to Borrower in accordance with the
provisions of this Section 1.1(a)(iii). An “Overadvance” is a Revolving
Credit Advance to Borrower on behalf of Lenders in an amount that causes the outstanding
balance of the aggregate Revolving Loans to exceed the Borrowing Base (less the Swing Line
Loan). The making of an Overadvance shall not create any obligation of the Administrative
Agent or the Lenders to make additional Overadvances or constitute a waiver of
Administrative Agent’s and Lenders’ absolute right to refuse to make additional
Overadvances, Swing Line Advances or Revolving Credit Advances, or to incur any Letter of
Credit Obligations, as the case may be, at any time when an Overadvance exists.
Section 1.3(b) shall not apply to any Overadvance for so long as Administrative
Agent permits such Overadvance to remain outstanding. The Administrative Agent may make
Overadvances even if Borrower has not met the conditions to lending set forth in
Section 2. All Overadvances shall constitute Index Rate Loans, shall bear interest
at the Default Rate and shall be payable on the earlier of demand by the Administrative
Agent or the Commitment Termination Date. Except as otherwise provided in Section
1.11(b), the authority of the Administrative Agent to make Overadvances (i) is limited
to an aggregate amount outstanding at any time not to exceed $7,000,000 or such lesser
amount as would not cause the Revolving Loan to exceed the Maximum Amount and (ii) with
respect to any Overadvance which, after giving effect thereto, would cause the aggregate
amount of Overadvances then outstanding to exceed $1,000,000, is subject to the prior
agreement of the Inventory and Receivables Security Agent. Lenders holding more than 50% of
the Revolving Loan Commitments may revoke, prospectively, the authority of Administrative
Agent to make Overadvances.

     (b) Swing Line Facility.

          (i) Subject to the terms and conditions of this Agreement, the Swing Line Lender
agrees to make advances (each a “Swing Line Advance”) to the

3

 

Borrower from time to time in accordance with the provisions of this Section 1.1(b),
provided that the amount of Swing Line Advances which may be made on any date shall equal
the lesser of (i) the Swing Line Commitment less all outstanding Swing Line Advances and
(ii) the Borrowing Availability at such time (the “Swing Line Availability”).
Within the limits and on the conditions herein set forth with respect to Swing Line
Advances, the Borrower may from time to time borrow, repay and reborrow Swing Line
Advances. All Swing Line Advances shall be made as Index Rate Loans and may not be
converted into LIBOR Loans. The Borrower may access Swing Line Advances by giving the
Swing Line Lender irrevocable notice prior to 1:00 p.m. (New York time) on the date of the
requested Swing Line Advance specifying the amount of the requested Swing Line Advance
(which amount shall be in an aggregate principal amount of not less than $100,000 or
integral multiples of $5,000 in excess thereof). The Borrower may repay Swing Line
Advances at any time and from time to time without notice or penalty. All interest
payments and principal payments made by the Borrower in respect of Swing Line Advances
shall be made directly to the Swing Line Lender at the account designated to the Borrower
for such purpose and shall be for the sole account of the Swing Line Lender (except as
provided otherwise in Section 1.1(b)(iv)). Unless, not later than the Business Day
immediately prior to the date of a proposed Swing Line Advance, the Swing Line Lender
receives written notice from Requisite Lenders instructing it not to make Swing Line
Advances to Borrower, the Swing Line Lender shall, notwithstanding that any condition
precedent set forth in Section 2.2 shall not be satisfied, be entitled to fund the
Swing Line Advance and the Lenders shall make Revolving Credit Advances in accordance with
Section 1.1(b)(iii) or purchase participating interests in accordance with
Section 1.1(b)(iv). Borrower shall repay the aggregate outstanding principal
amount of the Swing Line Loan, and accrued interest thereon, on demand by Administrative
Agent (and Administrative Agent shall make such demand if requested by the Swing Line
Lender).

          (ii) Borrower shall issue a promissory note to evidence the Swing Line Commitment to
the Administrative Agent for further delivery to Swing Line Lender if the Swing Line Lender
shall so request in writing. Such note shall be in the principal amount of the Swing Line
Commitment of the Swing Line Lender, dated the Restatement Date and substantially in the
form of Exhibit 1.1(b)(ii) (the “Swing Line Note”). The Swing Line Note
shall represent the obligation of Borrower to pay the amount of the Swing Line Commitment
or, if less, the aggregate unpaid principal amount of all Swing Line Advances made to
Borrower together with interest thereon as prescribed in Section 1.5. The entire
unpaid balance of the Swing Line Loan and all other non-contingent Obligations shall be
immediately due and payable in full in immediately available funds on the Commitment
Termination Date.

          (iii) At any time the Swing Line Lender may, and on the first Business Day of each
week on which any Swing Line Advance is outstanding the Swing Line Lender shall, on behalf
of Borrower, deliver written notice (the “Swing Line Refunding Notice”) to
Administrative Agent for further delivery to each Lender, and Borrower hereby irrevocably
authorizes the Swing Line Lender to deliver the Swing Line Refunding Notice on Borrower’s
behalf to each Lender, directing each Lender, including the Swing Line Lender, to make a
Revolving Credit Advance to Borrower (which shall

4

 

be an Index Rate Loan) in an amount equal to such Lender’s Pro Rata Share of the
principal amount of the Swing Line Loan outstanding on the date of, and set forth in, the
Swing Line Refunding Notice (such principal amount, the “Refunded Swing Line
Loan”). Unless any of the events described in Section 8.1(f) has occurred (in
which event the procedures of Section 1.1(b)(iv) shall apply) and notwithstanding
that the conditions precedent set forth in this Agreement to the making of a Revolving
Credit Advance may not then be satisfied, each Lender shall disburse directly to
Administrative Agent its Pro Rata Share of the Refunded Swing Line Loan, in immediately
available funds, prior to 3:00 p.m. (New York time), on the Business Day next succeeding
the date the Swing Line Lender delivers the Swing Line Refunding Notice to the
Administrative Agent. Administrative Agent shall immediately pay the Refunded Swing Line
Loan to the Swing Line Lender, who shall apply it to repay the outstanding Swing Line Loan.

          (iv) If one of the events described in Section 8.1(f) occurs prior to
completion of the refunding of a Swing Line Loan with a Revolving Credit Advance pursuant
to Section 1.1(b)(iii), then, each Lender shall, on the date such Revolving Credit
Advance was to have been made for the benefit of Borrower pursuant to such Swing Line
Refunding Notice, purchase from the Swing Line Lender an undivided participation interest
in the Swing Line Loan in an amount equal to its Pro Rata Share of the Refunded Swing Line
Loan (the “Swing Line Participation Amount”) and shall disburse directly to
Administrative Agent the purchase price for the Swing Line Participation Amount in an
amount equal to its Pro Rata Share of the Refunded Swing Line Loan, in immediately
available funds, prior to 3:00 p.m. (New York time), on the Business Day next succeeding
the date the Swing Line Lender delivers the Swing Line Refunding Notice to such Lender.
Administrative Agent shall immediately remit such purchase price to the Swing Line Lender.
Whenever, at any time after the Swing Line Lender has received from any Lender such
Lender’s Swing Line Participation Amount, the Swing Line Lender receives any payment on
account of the Swing Line Loans, the Swing Line Lender will distribute to such Lender its
Swing Line Participation Amount (appropriately adjusted, in the case of interest payments,
to reflect the period of time during which such Lender’s participating interest was
outstanding and funded and, in the case of principal and interest payments, to reflect such
Lender’s pro rata portion of such payment if such payment is not sufficient
to pay the principal of and interest on all Swing Line Loans then due); provided,
however, that in the event that such payment received by the Swing Line Lender is
required to be returned, such Lender will return to the Swing Line Lender any portion
thereof previously distributed to it by the Swing Line Lender.

          (v) Each Lender’s obligation to make Revolving Credit Advances in accordance with
Section 1.1(b)(iii) and to purchase participation interests in accordance with
Section 1.1(b)(iv) shall be absolute and unconditional and shall not be affected by
any circumstance, including (A) any setoff, counterclaim, recoupment, defense or other
right that such Lender may have against the Swing Line Lender, Borrower or any other Person
for any reason whatsoever; (B) the occurrence or continuance of any Default or Event of
Default; (C) any inability of Borrower to satisfy the conditions precedent to borrowing set
forth in this Agreement at any time; or (D) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing. If any Lender does not make
available to Administrative Agent or the Swing

5

 

Line Lender, as applicable, the amount required pursuant to Sections 1.1(b)(iii)
or 1.1(b)(iv), as the case may be, the Swing Line Lender shall be entitled to recover
such amount on demand from such Lender, together with interest thereon for each day from
the date of non-payment until such amount is paid in full at the Federal Funds Effective
Rate for the first two Business Days and at the Index Rate thereafter.

     (c) Reliance on Notices. Administrative Agent shall be entitled to rely on, and shall
be fully protected in relying on, any Notice of Revolving Credit Advance, Notice of
Conversion/Continuation, Swing Line Refunding Notice or similar notice believed by Administrative
Agent to be genuine. Administrative Agent may assume that each Person executing and delivering any
notice in accordance herewith was duly authorized unless the responsible individual acting thereon
for Administrative Agent has actual knowledge to the contrary.

     (d) Request for Increase of Revolving Credit Commitments. The Borrower may on any
Business Day, so long as no Default or Event of Default has occurred and is continuing, deliver at
one or more times a written notice to Agents (an “Increase Notice”) requesting an increase in the
Revolving Credit Commitments in an aggregate amount for all such increases collectively of up to
$75,000,000 (a “Requested Revolver Increase”). Any Requested Revolver Increase shall first require
the written consent of each Agent (in each Agent’s sole discretion). If Agents shall have
consented to a Requested Revolver Increase, each Agent shall then have the option to participate in
such Requested Revolver Increase in an amount to be agreed upon between the Agents by delivering a
written notice to the other Agent and the Borrower. If the Agents shall elect not to participate
in the full amount of a Requested Revolving Increase to which each Agent has consented, then the
Agents shall grant, via written notice from Agents to the Lenders, each Lender the option to
participate in any remaining portion of such Requested Revolving Increase to the extent of such
Lender’s Pro Rata Share of the Revolving Loan Commitment. If there is less than full participation
by existing Lenders with Revolving Loan Commitments in a Requested Revolver Increase to which each
Agent has consented after the foregoing procedures, then one or more new Lenders acceptable to the
Borrower, subject to the reasonable satisfaction of the Agents, may be added as parties to this
Agreement for purposes of participating in such remaining portion. After giving effect to the
procedures described in this clause (d), each Lender participating in a Requested Revolver Increase
shall have its Revolving Loan Commitment increase to the extent of its participation and, upon the
request of such Lender, the Borrower will execute a replacement Revolving Note for such Lender (to
the extent that such Lender has an existing Revolver Note) reflecting the increased amount of its
Revolving Credit Commitment. The Borrower agrees to execute such amendments and supplements to the
Collateral Documents, the Current Asset Intercreditor Agreement and such other Loan Documents as
the Agents reasonably deem necessary in connection with a Requested Revolver Increase.

     1.2 Letters of Credit. Subject to and in accordance with the terms and
conditions contained herein and in Annex B, Borrower shall have the right to request, and
Lenders agree to incur, or purchase participations in, Letter of Credit Obligations in
respect of Borrower.

6

 

     1.3 Prepayments.

     (a) Voluntary Prepayments; Reductions in Revolving Loan Commitments. Borrower may
prepay Revolving Credit Advances at any time and on at least five (5) days’ prior written notice to
Administrative Agent permanently reduce (but not terminate) the Revolving Loan Commitment;
provided that (A) any such reductions shall be in a minimum amount of $5,000,000 and
integral multiples of $1,000,000 in excess of such amount, (B) the Revolving Loan Commitment shall
not be reduced to an amount less than the amount of the Revolving Loan outstanding, (C) after
giving effect to such reductions, Borrower shall comply with Section 1.3(b) and (D) in no
event may Borrower reduce the Revolving Loan Commitment to an amount less than $100,000,000 except
in connection with the permanent reduction of the Revolving Loan Commitment to $0. Borrower may at
any time on at least ten (10) days’ prior written notice to Administrative Agent terminate the
Revolving Loan Commitment, provided that upon such termination all Loans and other
Obligations shall be immediately due and payable in full and all Letter of Credit Obligations shall
be cash collateralized or otherwise satisfied in accordance with Annex B hereto. Any
voluntary prepayment and any reduction or termination of the Revolving Loan Commitment must be
accompanied by payment of the Fee set forth in Section 1.9(c), if any, plus payment of any
LIBOR funding breakage costs in accordance with Section 1.13(b). Upon any such reduction
or termination of the Revolving Loan Commitment, Borrower’s right to request Revolving Credit
Advances, or request that Letter of Credit Obligations be incurred on its behalf, or request Swing
Line Advances, shall simultaneously be permanently reduced or terminated, as the case may be;
provided that (i) any permanent reduction of the Revolving Loan Commitment shall require a
corresponding pro rata reduction in the Inventory Cap and (ii) if after giving effect to such
reduction or termination the Revolving Loan Commitment is less than $175,000,000, then the Swing
Line Commitment shall be reduced pro rata (it being understood that the amount of the first such
reduction in the Swing Line Commitment shall be calculated with respect to the aggregate amount of
all reductions of the Revolving Loan Commitment since the Restatement Date).

     (b) Mandatory Prepayments. If on any date Borrower shall not comply with paragraph
(a) of Annex G, Borrower shall immediately repay all or a portion of the aggregate
outstanding Revolving Credit Advances so that after giving effect to such repayment, Borrower shall
comply with paragraph (a) of Annex G. If after repayment in full of the aggregate
outstanding Revolving Credit Advances pursuant to the immediately preceding sentence, Borrower
shall still not comply with paragraph (a) of Annex G, Borrower shall, as provided in
paragraph (c) of Annex B, deliver cash or Cash Equivalents to Administrative Agent to hold
as provided in Annex B, in an amount equal to 105% of the amount by which Letter of Credit
Obligations exceed the maximum amount permitted for Borrower to comply with paragraph (a) of
Annex G. Notwithstanding the foregoing, any Overadvance made pursuant to Section
1.1(a)(iii) shall be repaid in accordance with Section 1.1(a)(iii).

     (c) Application of Prepayments from Asset Dispositions. Immediately upon receipt by
any Credit Party of cash proceeds in excess of (i) $250,000 from any Disposition of Inventory or
(ii) $2,000,000 from any Disposition or series of related Dispositions of assets of the Borrower
other than Inventory after all obligations under the Term Loan Agreement have been satisfied in
full, Borrower shall prepay the Loans in an amount equal to all such proceeds (in excess of the
amount set forth in either clause (i) or (ii) above, as applicable), net of (A)

7

 

commissions and other reasonable and customary transaction costs, fees and expenses properly
attributable to such transaction and payable by Borrower in connection therewith (in each case,
paid to non-Affiliates), (B) transfer taxes, (C) amounts payable to holders of senior Liens on such
asset (to the extent such Liens are permitted under Section 6.3), if any, and (D) an
appropriate reserve for income taxes in accordance with GAAP in connection therewith. Any such
prepayment shall be applied in accordance with Section 1.3(d). The following shall not be
subject to mandatory prepayment under this paragraph (c): (1) proceeds of sales pursuant
to paragraphs (a), (b), (c) or (d) of Section 6.5 and (2) asset Disposition proceeds that
are reinvested in Equipment, Fixtures or Real Estate within one hundred and eighty (180) days
following receipt thereof; provided that Borrower notifies Administrative Agent of its
intent to reinvest at the time such proceeds are received and when such reinvestment occurs.

     (d) Application of Certain Mandatory Prepayments. Any prepayments made by Borrower
pursuant to Section 1.3(c) above shall be applied as follows: first, to Fees and
reimbursable expenses of Agents then due and payable pursuant to any of the Loan Documents;
second, to interest then due and payable on the Swing Line Loan; third, to the
principal balance of the Swing Line Loan until the same has been repaid in full; fourth, to
interest then due and payable on the Revolving Credit Advances; fifth, to the outstanding
principal balance of Revolving Credit Advances until the same has been paid in full; and
sixth, to any Letter of Credit Obligations, to provide cash collateral therefor in the
manner set forth in Annex B, until all such Letter of Credit Obligations have been fully
cash collateralized in the manner set forth in Annex B. Neither the Revolving Loan
Commitment nor the Swing Line Commitment shall be permanently reduced by the amount of any such
prepayments.

     (e) Treatment of Insurance Proceeds. Borrower shall promptly notify Agents of any
loss, damage, or destruction to any Current Asset Collateral in an aggregate amount of $2,000,000
or more or to any other Collateral in an aggregate amount of $4,000,000 or more, whether or not
covered by insurance.

          (i) After deducting from insurance proceeds related to Current Asset Collateral (i)
the expenses incurred by Agents in the collection or handling thereof and (ii) amounts
required to be paid to creditors (other than Lenders) having senior encumbrances thereon
permitted by Section 6.3, Administrative Agent shall apply such proceeds to the
reduction of the Obligations in accordance with Section 1.3(f) (provided
that in the case of insurance proceeds pertaining to any Credit Party other than Borrower,
such insurance proceeds shall be applied to the Loans owing by Borrower).

          (ii) Unless and until all Term Loan Obligations have been satisfied in full and if
such use is permitted by the Term Loan Agreement or is consented to by the Required Term
Loan Lenders, Borrower or applicable Credit Party shall have the right to use proceeds of
Collateral, or any part thereof, other than Current Asset Collateral, to replace, repair,
restore or rebuild such Collateral in a diligent and expeditious manner with materials and
workmanship of substantially the same quality as existed before the loss, damage or
destruction.

          (iii) After all Term Loan Obligations have been satisfied in full, the Administrative
Agent, may in its discretion, permit Borrower or applicable Credit

8

 

Party to use proceeds of Collateral, or any part thereof to replace, repair, restore
or rebuild such Collateral in a diligent and expeditious manner with materials and
workmanship of substantially the same quality as existed before the loss, damage or
destruction.

          (iv) Notwithstanding the provisions of Section 1.3(e)(i) and (iii) to the contrary, if
the casualty giving rise to such insurance proceeds could not reasonably be expected to
have a Material Adverse Effect and such insurance proceeds do not exceed $5,000,000 in the
aggregate, Administrative Agent shall permit the applicable Credit Party to replace,
restore, repair or rebuild the property; provided that if such Credit Party has not
completed or entered into binding agreements to complete such replacement, restoration,
repair or rebuilding within 180 days of such casualty, Administrative Agent may apply such
insurance proceeds to the Obligations in accordance with Section 1.3(f). All
insurance proceeds received in respect of Collateral (other than Current Asset Collateral)
after the Term Loan Obligations have been satisfied in full and in respect of Current Asset
Collateral, in either case, that are to be made available to Borrower to replace, repair,
restore or rebuild the Collateral shall be applied by Administrative Agent to reduce the
outstanding principal balance of the Revolving Loan (which application shall not result in
a permanent reduction of the Revolving Loan Commitment) and upon such application,
Inventory and Receivables Security Agent shall establish a Reserve against the Borrowing
Base in an amount equal to the amount of such proceeds so applied. All insurance proceeds
received in respect of Collateral (other than Current Asset Collateral) after the Term Loan
Obligations have been satisfied in full and in respect of Current Asset Collateral that are
made available to any Credit Party that is not a Borrower to replace, repair, restore or
rebuild the Collateral shall be deposited in a cash collateral account. Thereafter, such
funds shall be made available to the Borrower or applicable Credit Party to provide funds
to replace, repair, restore or rebuild the Collateral as follows: (i) Borrower shall
request a Revolving Credit Advance or release from the cash collateral account be made to
the Borrower or applicable Credit Party in the amount requested to be released; (ii) so
long as the conditions set forth in Section 2.2 have been met, Lenders shall make
such Revolving Credit Advance or Administrative Agent shall release funds from the cash
collateral account; and (iii) the Reserve established with respect to such insurance
proceeds by the Inventory and Receivables Security Agent shall be reduced by the amount of
such Revolving Credit Advance. To the extent not used to replace, repair, restore or
rebuild the Collateral, insurance proceeds in respect of Collateral (other than Current
Asset Collateral) received after the Term Loan Obligations have been satisfied in full and
in respect of Current Asset Collateral shall be applied in accordance with Section
1.3(f).

     (f) Application of Prepayments from Insurance Proceeds and Condemnation Proceeds.
Payments from insurance or condemnation proceeds in accordance with Section 1.3(e) and the
Mortgage(s), respectively, shall be applied as follows: insurance proceeds from casualties or
losses to cash or Inventory shall be applied first, to the Swing Line Loans and, second, to the
Revolving Credit Advances. Neither the Revolving Loan Commitment nor the Swing Line Commitment
shall be permanently reduced by the amount of any such prepayments.

9

 

     (g) No Implied Consent. Nothing in this Section 1.3 shall be construed to
constitute any Agent’s or Lender’s consent to any transaction that is not permitted by other
provisions of this Agreement or the other Loan Documents.

     1.4 Use of Proceeds. Borrower shall utilize the proceeds of the Loans solely
for the financing of Borrower’s ordinary working capital, to repay certain existing
Indebtedness and for general corporate needs.

     1.5 Interest and Applicable Margins.

     (a) Borrower shall pay interest to Administrative Agent, for the ratable benefit of Lenders in
accordance with the various Loans being made by each Lender, in arrears on each applicable Interest
Payment Date, at the following rates: (i) with respect to the Revolving Credit Advances, the Index
Rate plus the Applicable Index Margin per annum or, at the election of Borrower, the applicable
LIBOR Rate plus the Applicable LIBOR Margin per annum; provided, that Revolving Credit
Advances with a LIBOR Period of less than one month shall be paid at the applicable LIBOR Rate plus
the Applicable LIBOR Margin plus 0.0625%; and (ii) with respect to the Swing Line Loan, the Index
Rate plus the Applicable Index Margin less the Applicable Unused Line Fee Margin per annum.

     As of the Restatement Date, the Applicable Margins are as follows:

	 	 	 	 	 
	Applicable Index Margin
	 	 	0.25	%
	 
	 	 	 	 
	Applicable LIBOR Margin
	 	 	1.50	%
	 
	 	 	 	 
	Applicable L/C Margin
	 	 	1.50	%
	 
	 	 	 	 
	Applicable Unused Line Fee Margin
	 	 	0.375	%

     The Applicable Margins (other than the Applicable Unused Line Fee Margin) may be adjusted by
reference to the following grids:

	 	 	 
	If Average Adjusted Borrowing	 	Level of
	Availability is:	 	Applicable Margin:
	3 $125,000,000

	 	Level V
	3 $100,000,000, but < $125,000,000
	 	Level IV
	3 $75,000,000, but < $100,000,000
	 	Level III
	3 $50,000,000, but < $75,000,000
	 	Level II
	< $50,000,000
	 	Level I

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Applicable Margins
	 	 		Level I		Level II		Level III	 	Level IV	 	Level V
	Applicable Index Margin
	 	 	1.25	%	 	1.00	%	 	0.75	%	 	0.50	%	 	0.25	%
	Applicable LIBOR Margin
	 	 	2.50	%	 	2.25	%	 	2.00	%	 	1.75	%	 	1.50	%
	Applicable L/C Margin
	 	 	2.50	%	 	2.25	%	 	2.00	%	 	1.75	%	 	1.50	%

10

 

; provided, (i) if the Consolidated Leverage Ratio set forth in the Applicable Margin
Certificate (as defined below), as calculated for the immediately preceding four (4) Fiscal
Quarters, shall be less than 2.00 to1.0, the Applicable Margins listed within Levels III and IV
above shall be reduced by an additional 0.25%, and (ii) if (A) the Consolidated Leverage Ratio set
forth in the Applicable Margin Certificate, as calculated for the immediately preceding four (4)
Fiscal Quarters, shall be less than 1.00 to 1.0 and (B) the Average Borrowing Availability is in
excess of $150,000,000, then (I) the Applicable Index Margin shall be 0.00% and (II) each of the
Applicable LIBOR Margin and the Applicable L/C Margin shall be 1.25%.

     The Applicable Unused Line Fee Margin may be adjusted by reference to the following grids:

	 	 	 
	 	 	Level of
	If Average Revolving Outstandings:	 	Applicable Margin:
	3 $75,000,000

	 	Level II
	< $75,000,000
	 	Level I

	 	 	 	 	 	 	 	 	 
	 	 	Applicable Margin:	 
	 	 	Level I	 	 	Level II	 
	Applicable Unused Line Fee Margin
	 	 	0.50	%	 	 	0.375	%

     Adjustments (including those adjustments set forth above) in the Applicable Margins commencing
with the calendar month ending June 30, 2005 shall be implemented monthly on a prospective basis,
commencing on the date which is two (2) Business Days after the date of delivery to the Agents of
the Borrowing Base Certificate dated and accurate as of the last day of the most recently completed
calendar month evidencing the need for an adjustment, together with a certificate, to the extent
applicable, signed by a Responsible Officer and substantially in the form of Exhibit 1.5(a)
attached hereto, setting forth in reasonable detail the basis for any change in the Applicable
Margins due solely as a result of the Consolidated Leverage Ratio calculations noted above (the
“Applicable Margin Certificate”). Following the delivery of such Borrowing Base
Certificate (and the Applicable Margin Certificate, to the extent applicable), Administrative Agent
shall notify Borrower, the other Agent and Lenders of any change in the Applicable Margins.
Failure by Borrower to timely deliver such month-end Borrowing Base Certificate shall, in addition
to any other remedy provided for in this Agreement, result in an increase in the Applicable Margins
to the highest level set forth in the foregoing grids until the first day of the calendar month
following the month in which a month-end Borrowing Base Certificate is delivered demonstrating that
such an increase is not required. If an Event of Default has occurred and is continuing at the
time any reduction in the Applicable Margins is to be implemented, that reduction shall be deferred
until the first day of the first calendar month following the month in which such Event of Default
is waived or cured.

     (b) If any payment on any Loan becomes due and payable on a day other than a Business Day, the
maturity thereof will be extended to the next succeeding Business Day (except as set forth in the
definition of LIBOR Period) and, with respect to payments of principal, interest thereon shall be
payable at the then applicable rate during such extension.

11

 

     (c) All computations of Fees calculated on a per annum basis and interest shall be made by
Administrative Agent on the basis of a 360-day year (except that, with respect to Index Rate Loans
the rate of interest on which is calculated on the basis of the Prime Rate, the interest thereon
shall be calculated on the basis of a 365-day or 366-day year, as the case may be), in each case
for the actual number of days elapsed in the period for which such interest and Fees are payable.
The Index Rate is a floating rate determined for each day. Each determination by Administrative
Agent of interest rates and Fees hereunder shall be presumptive evidence of the correctness of such
rates and Fees.

     (d) So long as an Event of Default has occurred and is continuing under Section 8.1(a) or
(f), or so long as any other Event of Default has occurred and is continuing and at the
election of the Administrative Agent or the Inventory and Receivables Security Agent (or upon the
written request of Requisite Lenders) confirmed by written notice from Administrative Agent to
Borrower, the interest rates applicable to the Loans and the Letter of Credit Fees shall be
increased by two percentage points (2%) per annum above the rates of interest or the rate of such
Fees otherwise applicable hereunder unless the Administrative Agent, the Inventory and Receivables
Security Agent or Requisite Lenders elect to impose a smaller increase (the “Default
Rate”), and all outstanding Obligations shall bear interest at the Default Rate applicable to
such Obligations. Interest and Letter of Credit Fees at the Default Rate shall accrue from the
initial date of such Event of Default until that Event of Default is cured or waived and shall be
payable upon demand.

     (e) Subject to the conditions precedent set forth in Section 2.2, Borrower shall have
the option to (i) request that any Revolving Credit Advance be made as a LIBOR Loan, (ii) convert
at any time all or any part of outstanding Loans (other than the Swing Line Loan) from Index Rate
Loans to LIBOR Loans, (iii) convert any LIBOR Loan to an Index Rate Loan, subject to payment of
LIBOR breakage costs in accordance with Section 1.13(b) if such conversion is made prior to
the expiration of the LIBOR Period applicable thereto, or (iv) continue all or any portion of any
Loan (other than the Swing Line Loan) as a LIBOR Loan upon the expiration of the applicable LIBOR
Period and the succeeding LIBOR Period of that continued Loan shall commence on the first day after
the last day of the LIBOR Period of the Loan to be continued. Any Loan or group of Loans having
the same proposed LIBOR Period to be made or continued as, or converted into, a LIBOR Loan must be
in a minimum amount of $5,000,000 and integral multiples of $1,000,000 in excess of such amount.
Any such election must be made by 2:00 p.m. (New York time) on the third Business Day prior to (1)
the date of any proposed Advance which is to bear interest at the LIBOR Rate, (2) the end of each
LIBOR Period with respect to any LIBOR Loans to be continued as such, or (3) the date on which
Borrower wishes to convert any Index Rate Loan to a LIBOR Loan for a LIBOR Period designated by
Borrower in such election. If no election is received with respect to a LIBOR Loan by 2:00 p.m.
(New York time) on the third Business Day prior to the end of the LIBOR Period with respect thereto
(or if a Default or an Event of Default has occurred and is continuing or the additional conditions
precedent set forth in Section 2.2 shall not have been satisfied), that LIBOR Loan shall be
converted to an Index Rate Loan at the end of its LIBOR Period. Borrower must make such election
by notice to Administrative Agent in writing, by telecopy or overnight courier. In the case of any
conversion or continuation, such election must be made pursuant to a written notice (a “Notice
of Conversion/Continuation”) in the form of Exhibit 1.5(e).

12

 

     (f) Notwithstanding anything to the contrary set forth in this Section 1.5, if a court
of competent jurisdiction determines in a final order that the rate of interest payable hereunder
exceeds the highest rate of interest permissible under law (the “Maximum Lawful Rate”),
then so long as the Maximum Lawful Rate would be so exceeded, the rate of interest payable
hereunder shall be equal to the Maximum Lawful Rate; provided, however, that if at
any time thereafter the rate of interest payable hereunder is less than the Maximum Lawful Rate,
Borrower shall continue to pay interest hereunder at the Maximum Lawful Rate until such time as the
total interest received by Administrative Agent, on behalf of Lenders, is equal to the total
interest that would have been received had the interest rate payable hereunder been (but for the

operation of this paragraph) the interest rate payable since the Restatement Date as otherwise
provided in this Agreement. In no event shall the total interest received by any Lender pursuant
to the terms hereof exceed the amount that such Lender could lawfully have received had the
interest due hereunder been calculated for the full term hereof at the Maximum Lawful Rate.

     1.6 Eligible Accounts. All of the Accounts owned by Borrower and reflected in
the most recent Borrowing Base Certificate delivered by Borrower to Agents shall be
“Eligible Accounts” for purposes of this Agreement, except any Account to which any
of the exclusionary criteria set forth below applies. Inventory and Receivables Security
Agent shall have the right to establish or modify Reserves against Eligible Accounts from
time to time in its reasonable credit judgment. In addition, Inventory and Receivables
Security Agent reserves the right, at any time and from time to time after the Restatement
Date, to adjust any of the criteria set forth below and to establish new criteria, and to
adjust advance rates with respect to Eligible Accounts, in its reasonable credit judgment,
reflecting changes in the collectibility or realization values of such Accounts arising or
discovered by Inventory and Receivables Security Agent after the Restatement Date subject
to the approval of (a) Supermajority Lenders in the case of adjustments or new criteria
which have the effect of making more credit available and (b) all Lenders in the case of
increases in the advance rate applicable to Eligible Accounts. Eligible Accounts shall not
include any Account of Borrower:

     (a) that does not arise from the sale of goods or the performance of services by Borrower in
the ordinary course of its business;

     (b) (i) upon which Borrower’s right to receive payment is not absolute or is contingent upon
the fulfillment of any condition whatsoever or (ii) as to which Borrower is not able to bring suit
or otherwise enforce its remedies against the Account Debtor through judicial process, or (iii) if
the Account represents a progress billing consisting of an invoice for goods sold or used or
services rendered pursuant to a contract under which the Account Debtor’s obligation to pay that
invoice is subject to Borrower’s completion of further performance under such contract or is
subject to the equitable lien of a surety bond issuer;

     (c) to the extent that any defense, counterclaim, setoff or dispute is asserted as to such
Account;

     (d) that is not a true and correct statement of bona fide indebtedness incurred in the amount
of the Account for merchandise sold to or services rendered and accepted by the applicable Account
Debtor;

13

 

     (e) with respect to which an invoice, reasonably acceptable to Inventory and Receivables
Security Agent in form and substance, has not been sent to the applicable Account Debtor;

     (f) that (i) is not owned by Borrower or (ii) is subject to any Lien of any other Person,
other than Liens in favor of Collateral Agent on behalf of certain secured parties granted pursuant
to the Junior Current Asset Security Agreement and Liens in favor of the Inventory and Receivables
Security Agent on behalf of the Agents and Lenders granted pursuant to the Senior Current Asset
Security Agreement;

     (g) that arises from a sale to any director, officer, other employee or Affiliate of any
Credit Party (other than arm’s length sales to Wheeling-Nisshin, Inc. or to any other Joint Venture
approved in writing by the Administrative Agent and the Inventory and Receivables Security Agent),
or to any entity that has any common officer or director with any Credit Party;

     (h) that is the obligation of an Account Debtor that is the United States government or a
political subdivision thereof, or any state, county or municipality or department, agency or
instrumentality thereof unless Inventory and Receivables Security Agent, in its sole discretion,
has agreed to the contrary in writing and Borrower, if necessary or desirable, has complied with
respect to such obligation with the Federal Assignment of Claims Act of 1940, or any applicable
state, county or municipal law restricting the assignment thereof with respect to such obligation;

     (i) that is the obligation of an Account Debtor located in a foreign country other than Canada
unless payment thereof is assured by a letter of credit assigned and delivered and satisfactory to
the Inventory and Receivables Security Agent as to form, amount and issuer;

     (j) to the extent Borrower or any Subsidiary thereof is liable for goods sold or services
rendered by the applicable Account Debtor to Borrower or any Subsidiary thereof but only to the
extent of the potential offset;

     (k) that arises with respect to goods that are delivered on a bill-and-hold, cash-on-delivery
basis or placed on consignment, guaranteed sale or other terms by reason of which the payment by
the Account Debtor is or may be conditional;

     (l) that is in default; provided, that, without limiting the generality of the
foregoing, an Account shall be deemed in default upon the occurrence of any of the following:

          (i) the Account is not paid within the earlier of sixty (60) days following its due
date or ninety (90) days following its original invoice date;

          (ii) the Account Debtor obligated upon such Account suspends business, makes a general
assignment for the benefit of creditors or fails to pay its debts generally as they come
due; or

          (iii) a petition is filed by or against any Account Debtor obligated upon such Account
under any bankruptcy law or any other federal, state or

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foreign (including any provincial) receivership, insolvency relief or other law or
laws for the relief of debtors;

     (m) that is the obligation of an Account Debtor if fifty percent (50%) or more of the Dollar
amount of all Accounts owing by that Account Debtor are ineligible under the other criteria set
forth in this Section 1.6;

     (n) is not subject to a first priority Lien in favor of Inventory and Receivables Security
Agent on behalf of Agents and Lenders;

     (o) as to which any of the representations or warranties in the Loan Documents are untrue;

     (p) to the extent such Account is evidenced by a judgment, Instrument or Chattel Paper;

     (q) to the extent such Account exceeds any credit limit established by Inventory and
Receivables Security Agent, in its reasonable credit judgment, following prior notice of such limit
by Inventory and Receivables Security Agent to Borrower;

     (r) to the extent that such Account, together with all other Accounts attributable to such
Account Debtor and its Affiliates as of any date of determination exceed 15% of all Eligible
Accounts; or

     (s) that is payable in any currency other than Dollars.

     1.7 Eligible Inventory. All of the Inventory owned by the Borrower and
reflected in the most recent Borrowing Base Certificate delivered by Borrower to Agents
shall be “Eligible Inventory” for purposes of this Agreement, except any Inventory
to which any of the exclusionary criteria set forth below applies. Inventory and
Receivables Security Agent shall have the right to establish, modify, or eliminate Reserves
against Eligible Inventory from time to time in its reasonable credit judgment. In
addition, Inventory and Receivables Security Agent reserves the right, at any time and from
time to time after the Restatement Date, to adjust any of the criteria set forth below and
to establish new criteria and to adjust the Advance Rate with respect to Eligible Inventory
in its reasonable credit judgment, subject to the approval of (a) Supermajority Lenders in
the case of adjustments or new criteria which have the effect of making more credit
available and (b) all Lenders in the case of increases in the Advance Rate, the Inventory
Cap or the Liquidation Percentage. Eligible Inventory shall not include any Inventory of
Borrower that:

     (a) is not owned by Borrower free and clear of all Liens and rights of any other Person
(including the rights of a purchaser that has made progress payments and the rights of a surety
that has issued a bond to assure Borrower’s performance with respect to that Inventory) other than
the Liens in favor of the Collateral Agent, on behalf of certain secured parties granted pursuant
to the Junior Current Asset Security Agreement and Liens in favor of the Inventory and Receivables
Security Agent on behalf of Agents and Lenders granted pursuant to the Senior Current Asset
Security Agreement;

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     (b) (i) is not located on premises owned, leased or rented by Borrower and set forth in
Schedule 1.2, (ii) is stored at a leased location, unless (x) Inventory and Receivables
Security Agent has given its prior consent thereto or (y) a reasonably satisfactory landlord waiver
has been delivered to Inventory and Receivables Security Agent, and in each case Reserves
satisfactory to Inventory and Receivables Security Agent have been established with respect
thereto, (iii) is stored with a bailee or warehouseman unless a reasonably satisfactory,
acknowledged bailee letter has been received by Inventory and Receivables Security Agent and
Reserves reasonably satisfactory to Inventory and Receivables Security Agent have been established
with respect thereto, (iv) is located at an owned location subject to a mortgage (other than
mortgages in favor of other secured parties evidenced by the Mortgages) in favor of a party other
than Collateral Agent, unless a reasonably satisfactory mortgagee waiver has been delivered to the
Inventory and Receivables Security Agent, or (v) is located at any site if the aggregate book value
of Inventory at any such location is less than $150,000;

     (c) is placed on consignment or is in transit, except for Inventory in transit between
domestic locations as to which the Liens of the Inventory and Receivables Security Agent have been
perfected at origin and destination;

     (d) is covered by a negotiable document of title, unless such document has been delivered to
the Inventory and Receivables Security Agent with all necessary endorsements, free and clear of all
other Liens except those in favor of Collateral Agent for the benefit of certain other secured
parties pursuant to the Junior Current Asset Security Agreement;

     (e) is obsolete, slow moving (in excess of one year’s supply measured by product group on a
consolidated basis), unsalable, shopworn, Seconds, damaged or unfit for sale;

     (f) consists of display items or packing or shipping materials, materials and operating
supplies or replacement parts;

     (g) consists of goods which have been returned by the buyer;

     (h) is not of a type held for sale in the ordinary course of Borrower’s business;

     (i) is not subject to a first priority Lien in favor of the Inventory and Receivables Security
Agent on behalf of Agents and Lenders, subject to permitted Liens set forth in Section
6.3(b) (subject to Reserves satisfactory to Inventory and Receivables Security Agent);

     (j) breaches any of the representations or warranties pertaining to Inventory set forth in the
Loan Documents;

     (k) consists of any costs associated with “freight-in” charges;

     (l) consists of Materials of Environmental Concern or goods that can be transported or sold
only with licenses that are not readily available;

     (m) is not covered by casualty insurance as required by the Loan Documents; or

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     (n) is subject to any patent or trademark license requiring the payment of royalties or fees
or requiring the consent of the licensor for a sale thereof by Inventory and Receivables Security
Agent.

     1.8 Cash Management Systems. On or prior to the Restatement Date, Borrower
will establish and will maintain until the Termination Date, the cash management systems
described in Annex C (the “Cash Management Systems”).

     1.9 Fees.

     (a) Borrower shall pay to Royal Bank of Canada and GE Capital, individually, the fees
specified in the Fee Letter.

     (b) As additional compensation for the Lenders, Borrower shall pay to Administrative Agent,
for the ratable benefit of the Lenders, in arrears, on the first Business Day of each calendar
quarter prior to the Commitment Termination Date and on the Commitment Termination Date, a Fee for
Borrower’s non-use of available funds in an amount equal to the Applicable Unused Line Fee Margin
per annum multiplied by the difference between (x) the Maximum Amount (as it may be reduced from
time to time) and (y) the average for the period of the daily closing balances of the Revolving
Loan (in any event, excluding the balances of the Swing Line Loan) outstanding during the period
for which such Fee is due.

     (c) If prior to the first anniversary of the Restatement Date, Borrower reduces or terminates
the Revolving Loan Commitment or if prior to such date the Revolving Loan Commitments are otherwise
terminated, Borrower shall pay to Administrative Agent, for the benefit of Lenders as liquidated
damages and compensation for the costs of being prepared to make funds available hereunder an
amount equal to 1.0% multiplied by the amount of the reduction of the Revolving Loan Commitment.
The Credit Parties agree that such fee is a reasonable calculation of Lenders’ lost profits in view
of the difficulties and impracticality of determining actual damages resulting from an early
reduction or termination of the Revolving Loan Commitments. Notwithstanding the foregoing, no
prepayment fee shall be payable by Borrower upon (i) a mandatory prepayment made pursuant to
paragraphs (b) through (f) of Section 1.3 or pursuant to Section 1.16(c);
provided that Borrower does not permanently reduce or terminate the Revolving Loan
Commitment upon any such prepayment or (ii) a sale of all of the Capital Stock of Holdings;
provided, that such sale (x) has not been preceded by an unsolicited tender offer, (y) shall be
consensual and (z) shall have been approved by the board of directors (or comparable governing
board) of Holdings, the Borrower and the purchaser thereof.

     (d) Borrower shall pay to Administrative Agent, for the ratable benefit of Lenders, the Letter
of Credit Fee as provided in Annex B.

     1.10 Receipt of Payments. Borrower shall make each payment under this
Agreement not later than 2:00 p.m. (New York time) on the day when due in immediately
available funds in Dollars to the Collection Account. For purposes of computing interest
and Fees and determining Borrowing Availability as of any date, all payments shall be
deemed received on the Business Day on which immediately available funds therefor are
received in the Collection Account prior to 2:00 p.m. New York time.

17

 

Payments received after 2:00 p.m. New York time on any Business Day or on a day that
is not a Business Day shall be deemed to have been received on the following Business Day.
Notwithstanding the above, if Borrower is relying on a permitted draw under this Agreement
to fund the above referenced payments, and the Administrative Agent fails to deliver such
funds prior to 2:00 p.m. New York time, then the payment by Borrower shall be deemed to
have been received on a timely basis on such current Business Day.

     1.11 Application and Allocation of Payments.

     (a) So long as no Event of Default has occurred and is continuing, (i) payments consisting of
proceeds of Accounts received in the ordinary course of business shall, subject to paragraph (f) of
Annex C, be applied, first, to the Swing Line Loan and, second, to the Revolving Loan; and
(ii) mandatory prepayments shall be applied as set forth in paragraphs (b) through (f) of
Section 1.3. All payments and prepayments applied to a particular Loan shall be applied
ratably to the portion thereof held by each Lender as determined by its Pro Rata Share. As to any
other payment, and as to all payments made when an Event of Default has occurred and is continuing
or following the Commitment Termination Date, Borrower hereby irrevocably waives the right to
direct the application of any and all payments received from or on behalf of Borrower, and Borrower
hereby irrevocably agrees that Administrative Agent shall have the continuing exclusive right to
apply any and all such payments against the Obligations as Administrative Agent may deem advisable
notwithstanding any previous entry by Administrative Agent in the Loan Account or any other books
and records. In the absence of a specific determination by Administrative Agent with respect
thereto, payments shall be applied to amounts then due and payable in the following order: (1) to
Fees and Agents’ expenses reimbursable hereunder; (2) to interest on the Swing Line Loan; (3) to
principal payments on the Swing Line Loan; (4) to interest on the Revolving Loans, ratably in
proportion to the interest accrued as to each Loan; (5) to principal payments on the Revolving
Loans and to provide cash collateral for Letter of Credit Obligations in the manner described in
Annex B, ratably to the aggregate, combined principal balance of the Revolving Loans and
outstanding Letter of Credit Obligations; and (6) to all other Obligations including expenses of
Lenders to the extent reimbursable under Section 11.3.

     (b) Administrative Agent is authorized to, and at its sole election may, charge to the
Revolving Loan balance on behalf of Borrower and cause to be paid all Fees, expenses, Charges,
costs (including expenses incurred in connection with payment of premiums on insurance policies
referred to in Section 5.8) and interest and principal, other than principal of the
Revolving Loan, owing by Borrower under this Agreement or any of the other Loan Documents if and to
the extent Borrower fails to pay promptly any such amounts as and when due, even if the amount of
such charges would exceed Borrowing Availability at such time. At Administrative Agent’s option
and to the extent permitted by law, any charges so made shall constitute part of the Revolving Loan
hereunder.

     1.12 Loan Account and Accounting. Administrative Agent shall maintain a loan
account (the “Loan Account”) on its books to record: all Advances, all payments
made by Borrower, and all other debits and credits as provided in this Agreement with
respect to the Loans or any other Obligations. All entries in the Loan Account shall be
made in accordance with Administrative Agent’s customary accounting

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practices as in effect from time to time. The balance in the Loan Account, as recorded
on Administrative Agent’s most recent printout or other written statement, shall, absent
manifest error, be presumptive evidence of the amounts due and owing to Agents and Lenders
by Borrower; provided that any failure to so record or any error in so recording
shall not limit or otherwise affect Borrower’s duty to pay the Obligations. Administrative
Agent shall render to Borrower a monthly accounting of transactions with respect to the
Loans setting forth the balance of the Loan Account for the immediately preceding month.
Unless Borrower notifies Administrative Agent in writing of any objection to any such
accounting (specifically describing the basis for such objection), within thirty (30) days
after the date thereof, each and every such accounting shall be presumptive evidence of all
matters reflected therein. Only those items expressly objected to in such notice shall be
deemed to be disputed by Borrower. Any Lender that does not request a Revolving Note or
Swing Line Note, as applicable, may rely on the Loan Account as evidence of the amount of
Obligations from time to time owing to it.

     1.13 Indemnity.

     (a) Each Credit Party that is a signatory hereto shall jointly and severally indemnify and
hold harmless each of Agents, Lenders and their respective Affiliates, and each such Person’s
respective officers, directors, employees, attorneys, agents and representatives (each, an
“Indemnified Person”), from and against any and all suits, actions, proceedings, claims,
damages, losses, liabilities and expenses (including reasonable attorneys’ fees and disbursements
and other costs of investigation or defense, including those incurred upon any appeal) that may be
instituted or asserted against or incurred by any such Indemnified Person as the result of credit
having been extended, suspended or terminated under this Agreement and the other Loan Documents and
the administration of such credit, and in connection with or arising out of the transactions
contemplated hereunder and thereunder and any actions or failures to act in connection therewith,
including any and all Environmental Liabilities and legal costs and expenses arising out of or
incurred in connection with disputes between or among any parties to any of the
Loan Documents (collectively, “Indemnified Liabilities”); provided, that no such
Credit Party shall be liable for any indemnification to an Indemnified Person to the extent that
any such suit, action, proceeding, claim, damage, loss, liability or expense results from that
Indemnified Person’s gross negligence or willful misconduct. NO INDEMNIFIED PERSON SHALL BE
RESPONSIBLE OR LIABLE TO ANY OTHER PARTY TO ANY LOAN DOCUMENT, ANY SUCCESSOR, ASSIGNEE OR THIRD
PARTY BENEFICIARY OF SUCH PERSON OR ANY OTHER PERSON ASSERTING CLAIMS DERIVATIVELY THROUGH SUCH
PARTY, FOR INDIRECT, PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES WHICH MAY BE ALLEGED AS A RESULT
OF CREDIT HAVING BEEN EXTENDED, SUSPENDED OR TERMINATED UNDER ANY LOAN DOCUMENT OR AS A RESULT OF
ANY OTHER TRANSACTION CONTEMPLATED HEREUNDER OR THEREUNDER.

     (b) To induce Lenders to provide the LIBOR Rate option on the terms provided herein, if (i)
any LIBOR Loans are repaid in whole or in part prior to the last day of any applicable LIBOR Period
(whether that repayment is made pursuant to any provision of this Agreement or any other Loan
Document or occurs as a result of acceleration, by operation of law or otherwise); (ii) Borrower
shall default in payment when due of the principal amount of or

19

 

interest on any LIBOR Loan; (iii) Borrower shall refuse to accept any borrowing of, or shall
request a termination of any borrowing, conversion into or continuation of LIBOR Loans after
Borrower has given notice requesting the same in accordance herewith; or (iv) Borrower shall fail
to make any prepayment of a LIBOR Loan after Borrower has given a notice thereof in accordance
herewith, then Borrower shall indemnify and hold harmless each Lender from and against all losses,
costs and expenses resulting from or arising from any of the foregoing. Such indemnification shall
include any loss (including loss of margin) or expense arising from the reemployment of funds
obtained by it or from fees payable to terminate deposits from which such funds were obtained. For
the purpose of calculating amounts payable to a Lender under this subsection, each Lender shall be
deemed to have actually funded its relevant LIBOR Loan through the purchase of a deposit bearing
interest at the LIBOR Rate in an amount equal to the amount of that LIBOR Loan and having a
maturity comparable to the relevant LIBOR Period; provided, that each Lender may fund each
of its LIBOR Loans in any manner it sees fit, and the foregoing assumption shall be utilized only
for the calculation of amounts payable under this subsection. This covenant shall survive the
termination of this Agreement and the payment of the Notes and all other amounts payable hereunder.
As promptly as practicable under the circumstances, each Lender shall provide Borrower with its
written calculation of all amounts payable pursuant to this Section 1.13(b), and such
calculation shall be binding on the parties hereto unless Borrower shall object in writing within
ten (10) Business Days of receipt thereof, specifying the basis for such objection in detail.

     1.14 Access. Each Credit Party that is a party hereto shall, during normal
business hours, from time to time upon two (2) Business Days’ prior notice as frequently as
any Agent reasonably determines to be appropriate: (a) provide such Agent and any of its
officers, employees and agents access to the properties, facilities, advisors, officers,
employees and Collateral of such Credit Party and each of its Subsidiaries and (b) permit
such Agent, and any of its officers, employees and agents, to inspect, audit and make
extracts from the books and records of such Credit Party and each of its Subsidiaries.
Each Credit Party that is a party hereto shall, during normal business hours, permit once
during each Fiscal Year, the Inventory and Receivables Security Agent, and its officers,
employees and agents, to inspect, review, evaluate and make test verifications and counts
of the Accounts, Inventory and other Collateral of such Credit Party and each of its
Subsidiaries; provided, that such access shall be permitted twice in each Fiscal Year
during which any Loans are outstanding. If an Event of Default has occurred and is
continuing, each such Credit Party shall provide the access set out in the two preceding
sentences, to each Agent and Lender at all times and without advance notice. Furthermore,
so long as any Event of Default has occurred and is continuing, Borrower shall provide each
Agent and Lender with access to its suppliers and customers. Each Credit Party shall make
available to each Agent and its counsel reasonably promptly originals or copies of all
books and records that such Agent may reasonably request. Each Credit Party shall deliver
any document or instrument necessary for any Agent, as such Agent may from time to time
request, to obtain records from any service bureau or other Person that maintains records
for such Credit Party, and shall maintain duplicate records or supporting documentation on
media, including computer tapes and discs owned by such Credit Party. Agents will give
Lenders at least five (5) days’ prior written notice of regularly scheduled audits.
Representatives of other Lenders may accompany an Agent’s representatives on regularly
scheduled audits at no charge to Borrower.

20

 

     1.15 Taxes.

     (a) Any and all payments by Borrower hereunder or under the Notes shall be made, in accordance
with this Section 1.15, free and clear of and without deduction for any and all present or
future Taxes. If Borrower shall be required by law to deduct any Taxes from or in respect of any
sum payable hereunder or under the Notes, (i) the sum payable shall be increased as much as shall
be necessary so that after making all required deductions (including deductions applicable to
additional sums payable under this Section 1.15) Agents or Lenders, as applicable, receive
an amount equal to the sum they would have received had no such deductions been made, (ii) Borrower
shall make such deductions, and (iii) Borrower shall pay the full amount deducted to the relevant
taxing or other authority in accordance with applicable law. Within thirty (30) days after the
date of any payment of Taxes, Borrower shall furnish to Administrative Agent the original or a
certified copy of a receipt evidencing payment thereof.

     (b) Each Credit Party that is a signatory hereto shall indemnify and, within ten (10) days of
demand therefor, pay each Agent and Lender for the full amount of Taxes (including any Taxes
imposed by any jurisdiction on amounts payable under this Section 1.15) paid by such Agent
or Lender, as appropriate, and any liability (including penalties, interest and expenses) arising
therefrom or with respect thereto, whether or not such Taxes were correctly or legally asserted.

     (c) Each Lender organized under the laws of a jurisdiction outside the United States (a
“Foreign Lender”) as to which payments to be made under this Agreement or under the Notes
are exempt from United States withholding tax under an applicable statute or tax treaty shall
provide to Borrower and Administrative Agent a properly completed and executed IRS Form W-8ECI or
Form W-8BEN or other applicable form, certificate or document prescribed by the IRS or the United
States certifying as to such Foreign Lender’s entitlement to such exemption (a “Certificate of
Exemption”). Any foreign Person that seeks to become a Lender under this Agreement shall
provide a Certificate of Exemption to Borrower and Administrative Agent prior to becoming a Lender
hereunder. No foreign Person may become a Lender hereunder if such Person fails to deliver a
Certificate of Exemption in advance of becoming a Lender.

     1.16 Capital Adequacy; Increased Costs; Illegality.

     (a) If any law, treaty, governmental (or quasi-governmental) rule, regulation, guideline or
order regarding capital adequacy, reserve requirements or similar requirements or compliance by any
Lender with any request or directive regarding capital adequacy, reserve requirements or similar
requirements (whether or not having the force of law), in each case, adopted after the Closing
Date, from any central bank or other Governmental Authority increases or would have the effect of
increasing the amount of capital, reserves or other funds required to be maintained by such Lender
and thereby reducing the rate of return on such Lender’s capital as a consequence of its
obligations hereunder, then Borrower shall from time to time upon demand by such Lender (with a
copy of such demand to Administrative Agent) pay to Administrative Agent, for the account of such
Lender, additional amounts sufficient to compensate such Lender for such reduction. A certificate
as to the amount of that reduction and showing the basis of the

21

 

computation thereof submitted by such Lender to Borrower and to Administrative Agent shall be
presumptive evidence of the matters set forth therein.

     (b) If, due to either (i) the introduction of or any change in any law or regulation (or any
change in the interpretation thereof) or (ii) the compliance with any guideline or request from any
central bank or other Governmental Authority (whether or not having the force of law), in each case
adopted after the Closing Date, there shall be any increase in the cost to any Lender of agreeing
to make or making, funding or maintaining any Loan, then Borrower shall from time to time, upon
demand by such Lender (with a copy of such demand to Administrative Agent), pay to Administrative
Agent for the account of such Lender additional amounts sufficient to compensate such Lender for
such increased cost. A certificate as to the amount of such increased cost, submitted to Borrower
and to Administrative Agent by such Lender, shall be presumptive evidence of the matters set forth
therein. Each Lender agrees that, as promptly as practicable after it becomes aware of any
circumstances referred to above which would result in any such increased cost, the affected Lender
shall, to the extent not inconsistent with such Lender’s internal policies of general application,
use reasonable commercial efforts to minimize costs and expenses incurred by it and payable to it
by Borrower pursuant to this Section 1.16(b).

     (c) Notwithstanding anything to the contrary contained herein, if the introduction of or any
change in any law or regulation (or any change in the interpretation thereof) shall make it
unlawful, or any central bank or other Governmental Authority shall assert that it is unlawful, for
any Lender to agree to make or to make or to continue to fund or maintain any LIBOR Loan, then,
unless that Lender is able to make or to continue to fund or to maintain such LIBOR Loan at another
branch or office of that Lender without, in that Lender’s reasonable opinion, materially adversely
affecting it or its Loans or the income obtained therefrom, on notice thereof and demand therefor
by such Lender to Borrower through Administrative Agent, (i) the obligation of such Lender to agree
to make or to make or to continue to fund or maintain LIBOR Loans shall terminate and (ii) Borrower
shall pay or convert in full all outstanding LIBOR Loans owing to such Lender at the end of the
applicable Interest Period (provided that if such Lender reasonably believes that it would be
unlawful or that any central bank or other Governmental Authority would assert that it is unlawful
to maintain such outstanding LIBOR Loans, Borrower shall forthwith prepay in full all outstanding
LIBOR Loans owing to such Lender, together with interest accrued thereon, unless Borrower,
within five (5) Business Days after the delivery of such notice and demand, converts all LIBOR
Loans into Index Rate Loans).

     (d) Within thirty (30) days after receipt by Borrower of written notice and demand from any
Lender (an “Affected Lender”) for payment of additional amounts or increased costs as
provided in Sections 1.15(a), 1.16(a) or 1.16(b), Borrower may, at its option, notify
Administrative Agent and such Affected Lender of its intention to replace the Affected Lender. So
long as no Default or Event of Default has occurred and is continuing, Borrower, with the consent
of Administrative Agent, may obtain, at Borrower’s expense, a replacement Lender (“Replacement
Lender”) for the Affected Lender, which Replacement Lender must be reasonably satisfactory to
Administrative Agent. If Borrower obtains a Replacement Lender within ninety (90) days following
notice of its intention to do so, the Affected Lender must sell and assign its Loans and Revolving
Loan Commitment to such Replacement Lender for an amount equal to the principal balance of all
Loans held by the Affected Lender and all accrued

22

 

interest and Fees with respect thereto through the date of such sale and such assignment shall
not require the payment of an assignment fee to Administrative Agent; provided, that
Borrower shall have reimbursed such Affected Lender for the additional amounts or increased costs
that it is entitled to receive under this Agreement through the date of such sale and assignment.
Notwithstanding the foregoing, Borrower shall not have the right to obtain a Replacement Lender if
the Affected Lender rescinds its demand for increased costs or additional amounts within 15 days
following its receipt of Borrower’s notice of intention to replace such Affected Lender.
Furthermore, if Borrower gives a notice of intention to replace and does not so replace such
Affected Lender within ninety (90) days thereafter, Borrower’s rights under this Section
1.16(d) shall terminate with respect to such Affected Lender in connection with such
circumstance and Borrower shall promptly pay all increased costs or additional amounts demanded by
such Affected Lender pursuant to Sections 1.15(a), 1.16(a) and 1.16(b).

     1.17 Single Loan. All Loans to Borrower and all of the other Obligations of
Borrower arising under this Agreement and the other Loan Documents shall constitute one
general obligation of Borrower secured, until the Termination Date, by all of the
Collateral.

     1.18 Availability Reserve. The parties hereto agree that in addition to any
other Reserves established pursuant to this Agreement, if, on or prior to January 31, 2008,
the maturity date of the Term Loan Obligations pursuant to the Term Loan Agreement has not
been extended to or beyond July 8, 2010 (the “Term Loan Extension”), the Inventory
and Receivables Security Agent shall establish: (i) on February 1, 2008, a Reserve on
Borrowing Availability equal to fifty percent (50%) of the Term Loan Obligations
outstanding on such date and (ii) beginning March 1, 2008, a monthly Reserve equal to 1/6
of the Term Loan Obligations outstanding on such date less the Reserve established in
clause (i) hereof, for the immediately succeeding six (6) month period; provided,
that any Reserve implemented pursuant to this Section 1.18 shall be released at
such time as the Term Loan Extension has been completed in a manner reasonably satisfactory
to the Inventory and Receivables Security Agent.

     1.19 Effect of Amendment and Restatement. Upon the execution and delivery of
this Agreement, the “Indebtedness”, “Obligations” and other “Liabilities” previously
governed by the Prior Loan Agreement (the “Prior Liabilities”) shall continue in full force
and effect, but shall be governed by the terms and conditions set forth in this Agreement.
The Prior Liabilities, together with any and all additional Obligations incurred hereunder
or under any of the other Loan Documents, shall continue to be secured by all of the
Collateral, whether now owned or hereafter acquired and wheresoever located, all as more
specifically set forth in the Loan Documents. The execution and delivery of this Agreement
shall not constitute a novation or repayment of the Prior Liabilities.

2. CONDITIONS PRECEDENT

     2.1 Conditions to the Initial Loans. No Lender shall be obligated to make any
Revolving Loan or incur any Letter of Credit Obligations, or to take, fulfill, or perform
any other action hereunder, until the following conditions have been satisfied or

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provided for in a manner reasonably satisfactory to Agents, or waived in writing by
Agents and Requisite Lenders:

     (a) Credit Agreement; Loan Documents. The Agents shall have received:

          (i) this Agreement, executed and delivered by the Administrative Agent, the Inventory
and Receivables Security Agent, Holdings, the Documentation Agent, the Borrower and each
Lender listed on Annex J;

          (ii) the Security Agreement, executed and delivered by Holdings, the Borrower, certain
of their subsidiaries, the Collateral Agent, the Inventory and Receivables Security Agent
and the other secured parties party thereto;

          (iii) the Senior Current Asset Security Agreement, executed and delivered by Holdings,
the Borrower, certain of their subsidiaries, and the Inventory and Receivables Security
Agent;

          (iv) the Junior Current Asset Security Agreement, executed and delivered by Holdings,
the Borrower, certain of their Subsidiaries, the Collateral Agent and the other secured
parties party thereto;

          (v) the Current Asset Intercreditor Agreement, executed and delivered by Holdings, the
Borrower, certain of their Subsidiaries, the Inventory and Receivables Security Agent and
the Collateral Agent;

          (vi) the PPE Access Agreement, executed and delivered by Holdings, the Borrower,
certain of their Subsidiaries and the other parties party thereto;

          (vii) the JV Pledge Agreements, executed and delivered by the Borrower, the Collateral
Agent, the Inventory and Receivables Security Agent and the other secured parties party
thereto;

          (viii) a mortgage with respect to each Mortgaged Property, executed and delivered by
the relevant Credit Party for the benefit of the Collateral Agent;

          (ix) the Guarantee Agreement executed by each of Holdings and WP Steel Venture;

          (x) the Environmental Indemnity executed and delivered by Holdings, the Borrower, and
the Agents; and

such other documents, instruments, agreements and legal opinions as Agents shall reasonably request
in connection with the transactions contemplated by this Agreement and the other Loan Documents,
including all those listed in the Closing Checklist attached hereto as Annex D, each in
form and substance reasonably satisfactory to Agents; provided, that Agents hereby
acknowledge their receipt of each of the items listed in clauses (ii) through (ix) above on terms
and conditions reasonably satisfactory to Agents.

24

 

     (b) Approvals. Agents shall have received (i) satisfactory evidence that the Credit
Parties have obtained all required consents and approvals of all Persons including all requisite
Governmental Authorities, to the execution, delivery and performance of this Agreement and the
other Loan Documents and the consummation of the Related Transactions or (ii) an officer’s
certificate in form and substance reasonably satisfactory to Agents affirming that no such consents
or approvals are required.

     (c) Opening Availability. The Eligible Accounts and Eligible Inventory supporting the
initial Revolving Credit Advance and the initial Letter of Credit Obligations incurred and the
amount of the Reserves to be established on the Restatement Date shall be sufficient in value, as
determined by Inventory and Receivables Security Agent, to provide Borrower with Borrowing
Availability, after giving effect to the initial Revolving Credit Advance and the incurrence of any
initial Letter of Credit Obligations (on a pro forma basis, with trade payables being paid
currently, and expenses and liabilities being paid in the ordinary course of business and without
acceleration of sales) of at least $50,000,000.

     (d) Payment of Fees. Borrower shall have paid the Fees required to be paid on the
Restatement Date in the respective amounts specified in Section 1.9 (including the Fees
specified in the Fee Letter), and shall have reimbursed Agents for all fees, costs and expenses of
closing presented as of the Restatement Date.

     (e) Capital Structure: Other Indebtedness. The capital structure of each Credit Party
and the terms and conditions of all Indebtedness of each Credit Party shall be acceptable to each
Agent in its sole discretion.

     (f) Due Diligence. Agents shall have completed their business and legal due
diligence, including a roll forward of Inventory and Receivables Security Agent’s previous
Collateral audit with results reasonably satisfactory to Inventory and Receivables Security Agent.

     2.2 Further Conditions to Each Loan. Except as otherwise expressly provided
herein, no Lender shall be obligated to fund any Advance, convert or continue any Revolving
Loan as a LIBOR Loan or incur or reinstate any Letter of Credit Obligation, if, as of the
date thereof:

     (a) any representation or warranty by any Credit Party contained herein or in any other Loan
Document is untrue or incorrect as of such date as determined by Administrative Agent or Requisite
Lenders, except to the extent that such representation or warranty expressly relates to an earlier
date and except for changes therein expressly permitted or expressly contemplated by this
Agreement, and Administrative Agent or Requisite Lenders have determined not to make such Advance,
convert or continue any Revolving Loan as a LIBOR Loan or incur such Letter of Credit Obligation as
a result of the fact that such warranty or representation is untrue or incorrect;

     (b) any Default or Event of Default has occurred and is continuing or would result after
giving effect to any Advance (or the incurrence of any Letter of Credit Obligation), and
Administrative Agent or Requisite Lenders shall have determined not to make any Advance,

25

 

convert or continue any Revolving Loan as a LIBOR Loan or incur any Letter of Credit
Obligation as a result of that Default or Event of Default; or

     (c) after giving effect to any Advance (or the incurrence of any Letter of Credit
Obligations), Borrower would not be in compliance with the Borrowing Availability requirements
contained in paragraphs (a) and (b) of Annex G.

The request and acceptance by Borrower of the proceeds of any Advance, the incurrence of any Letter
of Credit Obligations or the conversion or continuation of any Revolving Loan into, or as, a LIBOR
Loan shall be deemed to constitute, as of the date thereof, (i) a representation and warranty by
Borrower that the conditions in this Section 2.2 have been satisfied and (ii) a
reaffirmation by Borrower of the granting and continuance of the Liens of the Collateral Agent or
the Inventory and Receivables Security Agent, as applicable, in favor of the Agents and Lenders.

3. REPRESENTATIONS AND WARRANTIES

     To induce the Agents and the Lenders to enter into this Agreement and to make the Loans and
perform their obligations hereunder, the Credit Parties hereby jointly and severally represent and
warrant to the Administrative Agent and each Lender that:

     3.1 Financial Condition.

     (a) The audited consolidated balance sheets of Holdings as at December 31, 2002, December 31,
2003 and December 31, 2004, and the related consolidated statements of income and of cash flows for
the Fiscal Years ended on such dates, reported on by and accompanied by an unqualified report from
PricewaterhouseCoopers LLP, present fairly the consolidated financial condition of Holdings as at
such date, and the consolidated results of its operations and consolidated cash flows for the
respective Fiscal Years then ended. The unaudited consolidated balance sheet of Holdings as at
March 31, 2005, and the related unaudited consolidated statements of income and cash flows for the
three-month period ended on such date, present fairly the consolidated financial condition of
Holdings as at such date, and the consolidated results of its operations and its consolidated cash
flows for the three-month period then ended (subject to normal year end audit adjustments). All
such financial statements, including the related schedules and notes thereto, have been prepared in
accordance with GAAP applied consistently throughout the periods involved (except as approved by
the aforementioned firm of accountants and disclosed therein). None of Holdings, Borrower nor any
of their consolidated Subsidiaries has any material Guarantee Obligations, contingent liabilities
and liabilities for taxes, or any long term leases or unusual forward or long term commitments,
including any interest rate or foreign currency swap or exchange transaction or other obligation in
respect of derivatives, in each case that would be required to be disclosed in accordance with
GAAP, that are not reflected in the most recent financial statements referred to in this paragraph.
During the period from December 31, 2004 to and including the date hereof there has been no
Disposition by Holdings or Borrower or any of their consolidated Subsidiaries of any material part
of their business or property.

26

 

     (b) In the case of each Joint Venture, to the best of the Borrower’s knowledge (it being
understood that the Borrower has made no independent investigation thereof) the audited
consolidated balance sheets of such Joint Venture as at December 31, 2002, December 31, 2003 and
December 31, 2004, and the related consolidated statements of income and of cash flows for the
Fiscal Years ended on such dates, reported on by and accompanied by an unqualified report from an
independent certified public accountant, present fairly the consolidated financial condition of
such Joint Venture as at such date, and the consolidated results of its operations and its
consolidated cash flows for the respective Fiscal Years then ended. To the best of the Borrower’s
knowledge (it being understood that the Borrower has made no independent investigation thereof),
the unaudited consolidated balance sheet of such Joint Venture as at March 31, 2005, and the
related unaudited consolidated statements of income and cash flows for the three-month period ended
on such date, present fairly the consolidated financial condition of such Joint Venture as at such
date, and the consolidated results of its operations and its consolidated cash flows for the
three-month period then ended (subject to normal year end audit adjustments). To the best of the
Borrower’s knowledge (it being understood that the Borrower has made no independent investigation
thereof) all such financial statements, including the related schedules and notes thereto, have
been prepared in accordance with GAAP applied consistently throughout the periods involved (except
as approved by the aforementioned firm of accountants and disclosed therein). To the best of the
Borrower’s knowledge (it being understood that the Borrower has made no independent investigation
thereof), as of the Closing Date no Joint Venture has any material Guarantee Obligations,
contingent liabilities and liabilities for taxes, or any long term leases or unusual forward or
long term commitments, including any interest rate or foreign currency swap or exchange transaction
or other obligation in respect of derivatives, in each case that would be required to be disclosed
in accordance with GAAP and that are not reflected in the most recent financial statements referred
to in this paragraph. To the best of the Borrower’s knowledge (it being understood that the
Borrower has made no independent investigation thereof), during the period from December 31, 2004
to and including the date hereof there has been no Disposition by a Joint Venture of any material
part of its business or property.

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

     3.2 No Change. There has been no development or event that has had or could
reasonably be expected to have a Material Adverse Effect since December 31, 2004. As of
the Restatement Date, there has been no development or event that has had a

27

 

material adverse effect on the aggregate value of the “Collateral” as defined in the
Security Agreement or in the aggregate value of the “Collateral” as defined in the JV
Pledge Agreements relating to Ohio Coatings Company and Wheeling-Nisshin, Inc. (but in any
case excluding Current Asset Collateral) since the appraisals dated September 2002 and May
2003 received from Asset Recovery & Valuation and Conway del Genio, respectively.

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

     3.4 Power; Authorization; Enforceable Obligations. Each Credit Party has the
power and authority, and the legal right, to make, deliver and perform the Loan Documents
to which it is a party and, in the case of the Borrower, to obtain extensions of credit
hereunder. Each Credit Party has taken all necessary organizational action to authorize
the execution, delivery and performance of the Loan Documents to which it is a party and,
in the case of the Borrower, to authorize the extensions of credit on the terms and
conditions of this Agreement. No consent or authorization of, filing with, notice to or
other act by or in respect of, any Governmental Authority or any other Person is required
in connection with the Related Transactions and the extensions of credit hereunder or with
the execution, delivery, performance, validity or enforceability of this Agreement or any
of the Loan Documents, except (i) consents, authorizations, filings and notices described
in Disclosure Schedule 3.4, which consents, authorizations, filings and notices
have been obtained or made and are in full force and effect and (ii) the filings referred
to in Section 3.18. Each Loan Document has been duly executed and delivered on behalf of
each Credit Party party thereto. This Agreement constitutes, and each other Loan Document
upon execution will constitute, a legal, valid and binding obligation of each Credit Party
party thereto, enforceable against each such Credit Party in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights
generally and by general equitable principles (whether enforcement is sought by proceedings
in equity or at law).

     3.5 No Legal Bar.

     (a) The execution, delivery and performance of this Agreement and the other Loan Documents,
the borrowings hereunder and the use of the proceeds thereof will not violate

28

 

any Requirement of Law or any Contractual Obligation of any Group Member and will not result
in, or require, the creation or imposition of any Lien on any of their respective properties or
revenues pursuant to any Requirement of Law or any such Contractual Obligation (other than the
imposition of the Liens created by the Collateral Documents and the Junior Current Asset Security
Agreement).

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

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

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

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

     3.9 Intellectual Property. Each Group Member owns, or is licensed to use, all
Intellectual Property reasonably necessary for the conduct of its business as currently
conducted. No material claim has been asserted and is pending by any Person challenging or
questioning the use of any Intellectual Property or the validity or effectiveness of any
Intellectual Property, nor does Holdings or the Borrower know of any valid basis for any
such claim. The use of Intellectual Property by each Group Member does not infringe on the
rights of any Person in any material respect.

     3.10 Taxes. Each Group Member has filed or caused to be filed all Federal,
state and other material tax returns that are required to be filed and has paid all taxes
shown to be due and payable on said returns or on any assessments made against it or any of
its property and all other material taxes, fees or other Charges imposed on it or any of
its property by any Governmental Authority (other than any the amount or validity of which
are currently being contested in good faith by appropriate proceedings and with respect to
which reserves in conformity with GAAP have been provided on the books of

29

 

the relevant Group Member); no tax Lien has been filed, and, to the knowledge of
Holdings or the Borrower, no claim is being asserted, with respect to any such tax, fee or
other Charge. Other than tax indemnity agreements in leasing transactions entered into in
the ordinary course of business, no Group Member is a party to any tax sharing agreement
with any Person other than another Group Member. Disclosure Schedule 3.10 is a
true and complete list of each claim of a governmental unit of the kind entitled to
priority in payment as specified in Section 502(1) and 507(a)(8) of the Bankruptcy Code,
that Group Members will or expect to pay or to be required to pay during the six years
immediately following the Restatement Date.

     3.11 Federal Regulations. No part of the proceeds of any Loans, and no other
extensions of credit hereunder, will be used for “buying” or “carrying” any “margin stock”
within the respective meanings of each of the quoted terms under Regulation U as now and
from time to time hereafter in effect or for any purpose that violates the provisions of
the Regulations of the Board. If requested by any Lender or the Administrative Agent, the
Borrower will furnish to the Administrative Agent and each Lender a statement to the
foregoing effect in conformity with the requirements of FR Form G-3 or FR Form U 1, as
applicable, referred to in Regulation U.

     3.12 Labor Matters. Other than ordinary course employee grievances which are
not material, in the aggregate: (a) there are no strikes, boycotts, work stoppages,
walkouts or other labor disputes against any Group Member pending or, to the knowledge of
Holdings or the Borrower, threatened; (b) hours worked by and payment made to employees of
each Group Member have not been in violation of the Fair Labor Standards Act or any other
applicable Requirement of Law dealing with such matters; and (c) all payments due from any
Group Member on account of employee health and welfare insurance have been paid or accrued
as a liability on the books of the relevant Group Member.

     3.13 ERISA. Except as set forth in Disclosure Schedule 3.13, no
Reportable Event (within the meaning of Section 412 of the IRC or Section 302 of ERISA) has
occurred during the five-year period prior to the date on which this representation is made
or deemed made with respect to any Plan (other than a Multiemployer Plan). No “accumulated
funding deficiency” (within the meaning of Section 412 of the IRC or Section 302 of ERISA)
has occurred during the five-year period prior to the date on which this representation is
made or deemed made with respect to any Plan. Each Plan has complied in all material
respects with the applicable provisions of ERISA and the IRC except for such instances of
noncompliance which, individually or in the aggregate, would not reasonably be expected to
result in a material liability. Except as set forth on Disclosure Schedule 3.13
hereto, no termination of a Single Employer Plan has occurred, and no Lien in favor of the
PBGC or a Plan has arisen, during such five-year period. The present value of all accrued
benefits under each Single Employer Plan (based on those assumptions used to fund such
Plans) did not, as of the last annual valuation date prior to the date on which this
representation is made or deemed made, exceed the value of the assets of such Plan
allocable to such accrued benefits by a material amount. Neither the Borrower nor any
Commonly Controlled Entity has had a complete or partial withdrawal from any Multiemployer
Plan that has

30

 

resulted or could reasonably be expected to result in a material liability under
ERISA, and neither the Borrower nor any Commonly Controlled Entity would become subject to
any material liability under ERISA if the Borrower or any such Commonly Controlled Entity
were to withdraw completely from all Multiemployer Plans as of the valuation date most
closely preceding the date on which this representation is made or deemed made. Neither
the Borrower nor any Commonly Controlled Entity has been notified or is aware that any
Multiemployer Plan is in Reorganization or Insolvent.

     3.14 Investment Company Act; Other Regulations. No Credit Party is an
“investment company”, or a company “controlled” by an “investment company”, within the
meaning of the Investment Company Act of 1940, as amended. No Credit Party is subject to
regulation under any Requirement of Law (other than Regulation X of the Board) that limits
its ability to incur Indebtedness.

     3.15 Subsidiaries. Except as disclosed to the Agents by the Borrower in
writing from time to time after the Restatement Date, (a) Disclosure Schedule 3.15
sets forth the name and jurisdiction of incorporation of each direct or indirect Subsidiary
of Holdings and, as to each such Subsidiary, the percentage of each class of Capital Stock
owned by any Credit Party and (b) there are no outstanding subscriptions, options,
warrants, calls, rights or other agreements or commitments (other than stock options
granted to employees or directors and directors’ qualifying shares) of any nature relating
to any Capital Stock of any Subsidiary of Holdings, including the Borrower, except as
created by the Loan Documents.

     3.16 Environmental Matters. Except as could not reasonably be expected to
result in a Material Environmental Loss:

     (a) each Group Member: (i) is, and within the period of all applicable statutes of limitation
has been, in compliance with all applicable Environmental Laws; (ii) holds all Environmental
Permits (each of which is in full force and effect) required for any of its current or intended
operations or for any property owned, leased, or otherwise operated by it; (iii) is, and within the
period of all applicable statutes of limitation has been, in compliance with all of its
Environmental Permits; and (iv) reasonably believes that: each of its Environmental Permits will
be timely renewed and complied with, without expense; any additional Environmental Permits that
could reasonably be expected to be required of it will be timely obtained and complied with,
without expense; and compliance with any Environmental Law that is or could reasonably be expected
to become applicable to it will be timely attained and maintained, without expense.

     (b) to the knowledge of Holdings or the Borrower, Materials of Environmental Concern are not
present at, on, under, in, or about any real property now or formerly owned, leased or operated by
any Group Member or at any other location (including, without limitation, any location to which
Materials of Environmental Concern have been sent for re-use or recycling or for treatment,
storage, or disposal) which could reasonably be expected to (i) give rise to liability of any Group
Member under any applicable Environmental Law or otherwise result in costs (other than ordinary and
routine operating and maintenance costs consistent with historical expenditures) to any Group
Member, or (ii) interfere with any Group

31

 

Member’s continued operations, or (iii) impair the fair market value, based on current use, of
any real property owned by any Group Member.

     (c) there is no judicial, administrative, or arbitral proceeding (including any notice of
violation or alleged violation) under or relating to any Environmental Law to which any Group
Member is, or to the knowledge of any Group Member will be, named as a party that is pending or, to
the knowledge of the Borrower, threatened in writing.

     (d) no Group Member has received any written request for information, or been notified that it
is a potentially responsible party under or relating to the federal Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended, or any similar Environmental Law, or
with respect to any Materials of Environmental Concern.

     (e) no Group Member has entered into or agreed to any consent decree, order, or settlement or
other agreement, nor is subject to any judgment, decree, or order or other agreement, in any
judicial, administrative, arbitral, or other forum, relating to compliance with or liability under
any Environmental Law.

     (f) no Group Member has assumed or retained, by contract or operation of law, any liabilities
of any kind, fixed or contingent, under any Environmental Laws or with respect to any Materials of
Environmental Concern.

For purposes of Section 8 of this Agreement (Events of Default), each of the foregoing
representations and warranties contained in this Section 3.16 that are qualified by the knowledge
of Holdings or the Borrower shall be deemed not to be so qualified.

     3.17 Accuracy of Information, etc. No statement or information contained in
this Agreement, any other Loan Document or the Lender Presentation contains any untrue
statement of material fact or omits to state a material fact necessary to make the
statements contained herein or therein not misleading. No statement or information
contained in any other document, certificate or statement furnished by or on behalf of any
Credit Party to the Agents or the Lenders, or any of them, for use in connection with the
transactions contemplated by this Agreement or the other Loan Documents contained as of the
date such statement, information, document or certificate was so furnished, when taken in
the aggregate, any untrue statement of a material fact or omitted to state a material fact
necessary to make the statements contained therein not misleading. The projections and pro
forma financial information contained in the materials referenced above are based upon good
faith estimates and assumptions believed by management of Holdings and the Borrower to be
reasonable at the time made, it being recognized by the Lenders that such financial
information as it relates to future events is not to be viewed as fact and that actual
results during the period or periods covered by such financial information may differ from
the projected results set forth therein by a material amount. There is no fact known to
any Credit Party on the date hereof that could reasonably be expected to have a Material
Adverse Effect that has not been expressly disclosed herein, in the other Loan Documents,
in the Lender Presentation or in any other documents, certificates and statements furnished
to the Agents and the Lenders for use in connection with the transactions contemplated
hereby and by the other Loan Documents.

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     3.18 Collateral Documents.

     (a) The Collateral Documents are effective to create in favor of the Collateral Agent or
Inventory and Receivables Security Agent, as applicable, for the benefit of the Agents and Lenders,
a legal, valid and enforceable security interest in the Collateral described therein and proceeds
thereof. In the case of the pledged Capital Stock described in the Collateral Documents, when
stock certificates representing such pledged Capital Stock are delivered to the Collateral Agent,
and in the case of the other Collateral described in the Collateral Documents, when financing
statements and other filings specified on Disclosure Schedule 3.18(a) in appropriate form
are filed in the offices specified on Disclosure Schedule 3.18(a), the Collateral Documents
shall constitute a fully perfected Lien on, and security interest in, all right, title and interest
of the Credit Parties in such Collateral and the proceeds thereof that can be perfected by filing,
as security for the Obligations (as defined in each Collateral Document), in each case prior and
superior in right to any other Person (except Liens permitted by Section 6.3).

     (b) Each of the Mortgages is effective to create in favor of the Collateral Agent, for the
benefit of the Agents and Lenders and the other secured parties party to the Security Agreement, a
legal, valid and enforceable Lien on the Mortgaged Properties described therein and proceeds
thereof, and when the Mortgages are filed in the offices specified on Disclosure Schedule
3.18(b)-1, each such Mortgage shall constitute a fully perfected Lien on, and security interest
in, all right, title and interest of the Credit Parties in the Mortgaged Properties and the
proceeds thereof, as security for the Obligations (as defined in the relevant Mortgage), in each
case prior and superior in right to any other Person (except Liens permitted by Section 6.3).
Disclosure Schedule 3.18(b)-2 lists, as of the Restatement Date, each parcel of owned real
property and each leasehold interest in real property located in the United States and held by the
Borrower or any of its Subsidiaries.

     3.19 Solvency. Immediately after giving effect to the consummation of the
Related Transactions and the incurrence of all Indebtedness and obligations being incurred
in connection herewith and therewith, each Credit Party will be Solvent (giving effect to
undisputed rights of contribution from each Group Member which, following payment of such
contribution would itself continue to be Solvent).

     3.20 Regulation H. No Mortgage encumbers improved real property that is
located in an area that has been identified by the Secretary of Housing and Urban
Development as an area having special flood hazards and in which flood insurance has been
made available under the National Flood Insurance Act of 1968 except where flood insurance
has been obtained in compliance with such Act.

     3.21 Certain Documents. The Borrower has delivered to Agents complete and
correct copies of the Related Transactions Documents, including any amendments, supplements
or modifications with respect thereto.

     3.22 [Intentionally Omitted].

33

 

     3.23 Senior Indebtedness. The Obligations constitute senior indebtedness for
purposes of, and are entitled to the subordination provisions contained in, the WHX
Subordinated Note and the West Virginia Note.

     3.24 Insurance. Disclosure Schedule 3.24 lists all insurance policies of any
nature maintained, as of the Restatement Date, for current occurrences by each Credit
Party, as well as a summary of the terms of each such policy. Such policies are in full
force and effect and in such amounts, with such deductibles and covering such risks as are
insured against and carried in accordance with applicable law and prudent industry practice
by U.S. steel companies similarly situated with the Borrower and owning or operating
similar properties.

     3.25 Deposit and Disbursement Accounts. Disclosure Schedule 3.25
lists all banks and other financial institutions at which any Credit Party maintains
deposit or other accounts as of the Restatement Date, including any Disbursement Accounts,
and such Schedule correctly identifies the name, address and telephone number of each
depository, the name in which the account is held, a description of the purpose of the
account, and the complete account number therefor.

     3.26 Government Contracts. Except as set forth in Disclosure Schedule
3.26, as of the Restatement Date, no Credit Party is a party to any contract or
agreement with any Governmental Authority and no Credit Party’s Accounts are subject to the
Federal Assignment of Claims Act (31 U.S.C. Section 3727) or any similar state or local
law.

     3.27 Customer and Trade Relations. Except as set forth in Disclosure
Schedule 3.27, as of the Restatement Date, there exists no actual or, to the knowledge
of any Credit Party, threatened termination or cancellation of, or any material adverse
modification or change in: the business relationship of any Credit Party with any customer
or group of customers whose purchases during the preceding 12 months caused them to be
ranked among the ten largest customers of such Credit Party; or the business relationship
of any Credit Party with any supplier essential to its operations.

     3.28 Bonding; Licenses. Except as set forth on Disclosure Schedule
3.28, as of the Restatement Date, no Credit Party is a party to or bound by any surety
bond agreement or bonding requirement with respect to products or services sold by it or
any trademark or patent license agreement with respect to products sold by it.

     3.29 Brokers. No broker or finder acting on behalf of any Credit Party or
Affiliate thereof brought about the obtaining, making or closing of the Loans or the
Related Transactions, and no Credit Party or Affiliate thereof has any obligation to any
Person in respect of any finder’s or brokerage fees in connection therewith.

34

 

     3.30 Off Balance Sheet Transactions. None of the Credit Parties is a party to
any “off-balance sheet arrangement” (within the meaning of Item 303(a)(4) of Regulation S-K
under the Securities Act and the Exchange Act, as amended by SEC Release No. 33-8182
(January 28, 2003)) except as permitted pursuant to Section 6.12.

     3.31 Inactive Subsidiaries. As of the Restatement Date, each of Consumers
Mining and Monessen Southwestern Railway is an Inactive Subsidiary.

4. FINANCIAL STATEMENTS AND INFORMATION

     4.1 Reports and Notices.

     (a) Each Credit Party executing this Agreement hereby agrees that from and after the
Restatement Date and until the Termination Date, it shall deliver to Agents or to Agents and
Lenders, as required, the Financial Statements, notices, projections and other information at the
times, to the Persons and in the manner set forth in Annex E.

     (b) Each Credit Party executing this Agreement hereby agrees that from and after the
Restatement Date and until the Termination Date, it shall deliver to Agents or to Agents and
Lenders, as required, the various Collateral Reports (including Borrowing Base Certificates in the
form of Exhibit 4.1(b)) at the times, to the Persons and in the manner set forth in
Annex F.

     4.2 Communication with Accountants. Each Credit Party executing this
Agreement authorizes (a) each Agent and (b) so long as an Event of Default has occurred and
is continuing, each Lender, to communicate directly with its independent certified public
accountants, including PricewaterhouseCoopers, and authorizes and shall instruct those
accountants and advisors to communicate to each Agent and Lender information relating to
any Credit Party with respect to the business, results of operations and financial
condition of any Credit Party.

5. AFFIRMATIVE COVENANTS

     The Credit Parties hereby jointly and severally agree that, so long as any Loan or other
amount is owing to any Lender or Agent hereunder, each of the Credit Parties shall and shall cause
each of their Subsidiaries to:

     5.1 Payment of Obligations. Pay, discharge or otherwise satisfy at or before
maturity or before they become delinquent, as the case may be, all its material obligations
of whatever nature, except where the amount or validity thereof is currently being
contested in good faith by appropriate proceedings and reserves in conformity with GAAP
with respect thereto have been provided on the books of the relevant Group Member.

     5.2 Maintenance of Existence; Compliance. (a) (i) Preserve, renew and keep
in full force and effect its organizational existence and (ii) take all reasonable action
to maintain all rights, privileges and franchises necessary or desirable in the normal
conduct of its business, except, in each case, as otherwise permitted by Section 6.4 and
except, in the case of clause (ii) above, to the extent that failure to do so could not

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reasonably be expected to have a Material Adverse Effect; and (b) comply with all
Contractual Obligations and Requirements of Law except to the extent that failure to comply
therewith could not, in the aggregate, reasonably be expected to have a Material Adverse
Effect.

     5.3 Maintenance of Property. Keep all property useful and necessary in its
business in good working order and condition.

     5.4 Books and Records. (a) Keep proper books of records and account in which
full, true and correct entries in conformity with GAAP and all Requirements of Law shall be
made of all dealings and transactions in relation to its business and activities and (b)
permit representatives of any Lender to visit and inspect any of its properties and
examine, copy and make abstracts from any of its books and records at any reasonable time
and as often as may reasonably be desired and to discuss the business, operations,
properties and financial and other condition of the Credit Parties with officers and
employees of the Credit Parties.

     5.5 Notices. Promptly give notice to each Agent and Lender of:

     (a) the occurrence of any Default or Event of Default;

     (b) any (i) default or event of default under any Contractual Obligation of any Group Member
or (ii) litigation, investigation or proceeding that may exist at any time between any Group Member
and any Governmental Authority, that in either case, if not cured or if adversely determined, as
the case may be, could reasonably be expected to have a Material Adverse Effect;

     (c) as soon as possible, and in any event within two (2) Business Days after Borrower knows or
has reason to know thereof, notice of any matured or unmatured defaults with respect to any
Indebtedness or leases relating to locations at which Collateral is located;

     (d) any Litigation commenced or threatened against any Group Member that (i) seeks damages in
excess of $250,000, (ii) seeks injunctive relief in connection with any Plan, (iii) alleges
criminal misconduct by any Credit Party, (iv) alleges the violation of any law regarding, or seeks
remedies in connection with, any Environmental Liabilities; (v) involves any product recall; or
(vi) relates to any Loan Document;

     (e) the following events, as soon as possible and in any event within 30 days after the
Borrower knows thereof: (i) the occurrence of any Reportable Event not set forth on Disclosure
Schedule 3.13 with respect to any Plan (other than a Multiemployer Plan), a failure to make any
required contribution to a Plan, the creation of any Lien in favor of the PBGC or a Plan or any
withdrawal from, or the termination, Reorganization or Insolvency of, any Multiemployer Plan or
(ii) the institution of proceedings or the taking of any other action by the PBGC or the Borrower
or any Commonly Controlled Entity or any Multiemployer Plan with respect to the withdrawal from, or
the termination, Reorganization or Insolvency of, any Plan; or (iii) any judicial or regulatory
determination that the WHX Pension Plan is not a Single Employer Plan;

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     (f) any development or event that has had or could reasonably be expected to have a Material
Adverse Effect;

     (g) (i) any adverse change in any credit rating assigned by S&P, Moody’s or nationally
recognized rating agency to Holdings, any Subsidiary of Holdings or any obligations thereof or (ii)
any pending or threatened strike, boycott, work stoppage or other material labor dispute against
any Group Member;

     (h) the following events, as soon as possible and in any event within ten (10) days after any
Group Member knows or has reason to know thereof: (i) any development, event, or condition that,
individually or in the aggregate with other related developments, events or conditions, could
reasonably be expected to result in a Material Environmental Loss; (ii) any written notice that any
Governmental Authority may deny any application for a material Environmental Permit sought by, or
revoke or refuse to renew any material Environmental Permit held by any Group Member; and (iii) any
Governmental Authority has identified any Group Member as a potentially responsible party under any
Environmental Law for the cleanup of Materials of Environmental Concern at any location, whether or
not owned, leased or operated by any Group Member, which could result in a Material Environmental
Loss; and

     (i) such other notices required pursuant to Annex E.

Excluding notices given in accordance with paragraph (i), each notice pursuant to this Section
5.5 shall be accompanied by a statement of a Responsible Officer setting forth details of the
occurrence referred to therein and stating what action the relevant Group Member proposes to take
with respect thereto.

     5.6 Environmental Laws.

     (a) Comply in all material respects with, and undertake reasonable efforts ensure compliance
in all material respects by all tenants and subtenants, if any, with, all applicable Environmental
Laws, and obtain and comply in all material respects with and maintain, and undertake reasonable
efforts ensure that all tenants and subtenants obtain and comply in all material respects with and
maintain, any and all Environmental Permits necessary for their respective operations.

     (b) Conduct and complete all investigations, studies, sampling and testing, and all remedial,
removal and other actions required under Environmental Laws and promptly comply with all orders and
directives of all Governmental Authorities regarding Environmental Laws provided, however,
that Holdings and the Borrower shall not be deemed in violation of this Covenant if Holdings or the
Borrower promptly challenges in good faith any such order or directive of any Governmental
Authorities in a manner consistent with all applicable Environmental Laws and any applicable
Requirement of Law, and pursues such challenge or challenges diligently, and the outcome of such
challenges, in the aggregate, could not reasonably be expected to result in a Material Adverse
Effect.

     (c) Generate, use, treat, store, release, dispose of, and otherwise manage Materials of
Environmental Concern in a manner that would not reasonably be expected to result in a material
liability to the Borrower or any of its Subsidiaries or to materially affect any real

37

 

property owned or leased by any of them; and take reasonable efforts to prevent any other
Person from generating, using, treating, storing, releasing, disposing of, or otherwise managing
Materials of Environmental Concern in a manner that could reasonably be expected to result in a
material liability to, or materially affect any real property owned or operated by, the Borrower or
any of its Subsidiaries; provided, however, that Holdings and Borrower shall be deemed not to be in
violation of this 5.6(c) if Holdings and the Borrower effect a prompt response that is diligently
pursued, consistent with principles of prudent environmental management and all applicable
Environmental Laws, to any condition resulting from what would otherwise be a breach of this
covenant, and such conditions (including such response) could not reasonably be expected to result
in a Material Environmental Loss.

     5.7 Additional Collateral, etc.

     (a) With respect to any property acquired after the Restatement Date by any Group Member and
not subject to the Senior Current Asset Security Agreement (other than (x) any property described
in paragraph (b) or (c) below and (y) any property subject to a Lien expressly permitted by
Section 6.3(g)) as to which the Inventory and Receivables Security Agent, for the benefit
of the Agents and Lenders, does not have a perfected Lien, promptly (i) execute and deliver to the
Inventory and Receivables Security Agent such amendments to the Collateral Documents or such other
documents as the Inventory and Receivables Security Agent deems necessary or advisable to grant to
the Collateral Agent, for the benefit of the Agents and Lenders, a third priority security interest
in such property (ranking after the security interest granted in such property to the Collateral
Agent for the benefit of the Term Loan Lenders and the holders of Series A Notes) and (ii) take all
actions necessary or advisable to grant to the Collateral Agent, for the benefit of the Agents and
Lenders, a perfected third priority security interest in such property, including the filing of
Uniform Commercial Code financing statements in such jurisdictions as may be required by the
Collateral Documents or by law or as may be requested by the Inventory and Receivables Security
Agent.

     (b) With respect to any (i) of the leasehold interests in real property set forth on
Disclosure Schedule 5.7(b) (the “Leasehold Mortgaged Properties”) hereto where the
landlord under the applicable lease consents to the imposition of a mortgage Lien on such leasehold
interests, or (ii) fee interest in any real property having a value (together with improvements
thereof) of at least $250,000 acquired after the Restatement Date by any Group Member (other than
any such real property subject to a Lien expressly permitted by Section 6.3(g)), promptly
(i) execute and deliver a third priority Mortgage (ranking after any mortgage securing the
obligations of any Group Member in respect of Term Loan Obligations and obligations owed by the
Company with respect to the Series A Notes), in favor of the Collateral Agent, for the benefit of
the Agents and Lenders, covering such real property, (ii) if requested by the Inventory and
Receivables Security Agent, provide the Collateral Agent for the benefit of the Agents and Lenders
(x) title and extended coverage insurance covering such real property in an amount at least equal
to the purchase price of such real property (or such other amount as shall be reasonably specified
by the Inventory and Receivables Security Agent) as well as a current ALTA survey thereof, together
with a surveyor’s certificate and (y) any consents or estoppels reasonably deemed necessary or
advisable by the Inventory and Receivables Security Agent in connection with such Mortgage, each of
the foregoing in form and substance reasonably satisfactory to the Inventory and Receivables
Security Agent and (iii) if requested by the

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Inventory and Receivables Security Agent, deliver to the Collateral Agent for the benefit of
the Agents and Lenders legal opinions relating to the matters described above, which opinions shall
be in form and substance, and from counsel, reasonably satisfactory to the Inventory and
Receivables Security Agent. With respect to each of the Leasehold Mortgaged Properties, the
Borrower shall use commercially reasonable efforts to obtain the consent of the applicable landlord
to the Lien of a Mortgage within 30 days following the Restatement Date.

     (c) With respect to any new Subsidiary created or acquired after the Restatement Date by any
Group Member or to the extent either Consumers Mining or Monessen Southwestern Railway ceases after
the Restatement Date to be an Inactive Subsidiary, promptly (i) execute and deliver to the
Collateral Agent, such amendments to the Collateral Documents as the Inventory and Receivables
Security Agent deems necessary or advisable to grant to the Collateral Agent, for the benefit of
the Agents and Lenders, a perfected third priority security interest in the Capital Stock of such
Subsidiary that is owned by any Group Member (ranking after any security interest in such Capital
Stock securing the obligations of any Group Member in respect of Term Loan Obligations and
obligations owed by the Company with respect to the Series A Notes), (ii) deliver to the Collateral
Agent, the certificates representing such Capital Stock, together with undated stock powers, in
blank, executed and delivered by a duly authorized officer of the relevant Group Member, (iii)
cause such Subsidiary (A) to execute a Guarantee Agreement with respect to the Obligations and to
become a party to such other Collateral Documents as the Inventory and Receivables Security Agent
deems appropriate, (B) to take such actions necessary or advisable to grant to the Collateral Agent
or the Inventory and Receivables Security Agent, for the benefit of the Agents and Lenders a
perfected security interest in the Collateral described in the Collateral Documents with respect to
such Subsidiary, including the filing of Uniform Commercial Code financing statements in such
jurisdictions as may be required by the Collateral Documents or by law or as may be reasonably
requested by the Collateral Agent and (C) to deliver to the Inventory and Receivables Security
Agent a certificate of such Subsidiary, substantially in the form of Exhibit E, with
appropriate insertions and attachments, and (iv) if requested by the Inventory and Receivables
Security Agent, deliver to the Collateral Agent for the benefit of the Agents and Lenders legal
opinions relating to the matters described above, which opinions shall be in form and substance,
and from counsel, reasonably satisfactory to the Inventory and Receivables Security Agent.

     (d) With respect to any joint venture (including, without limitation, the Coke Plant Joint
Venture) entered into after the Restatement Date by any Group Member, execute and deliver to the
Collateral Agent such Collateral Documents as the Inventory and Receivables Security Agent deems
necessary or advisable to grant to the Collateral Agent, for the benefit of the Agents and Lenders,
a perfected third priority security interest in the Capital Stock of such joint venture that is
owned by any Group Member (ranking after any security interest in such Capital Stock securing the
obligations of any Group Member in respect of Term Loan Obligations and obligations owed by the
Company with respect to the Series A Notes), provided, that any pledge agreement executed
and delivered by any Group Member in connection herewith, with respect to its Capital Stock in such
joint venture, shall be on terms substantially similar to those JV Pledge Agreements previously
delivered hereunder.

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     5.8 Insurance.

     (a) The Credit Parties shall, at their sole cost and expense, maintain the policies of
insurance described on Disclosure Schedule (3.24) as in effect on the date hereof or
otherwise comparable coverage; provided, that such coverage offers the same or better
protection, taken as a whole, including with respect to such factors as coverage amounts,
deductible amounts, types of risks covered and quality of insurance provider. Such policies of
insurance (or the loss payable and additional insured endorsements delivered to Collateral Agent
and Inventory and Receivables Security Agent) shall contain provisions pursuant to which the
insurer agrees to provide thirty (30) days prior written notice to Collateral Agent and/or
Inventory and Receivables Security Agent in the event of any non-renewal, cancellation or amendment
of any such insurance policy. If any Credit Party at any time or times hereafter shall fail to
obtain or maintain any of the policies of insurance required above or to pay all premiums relating
thereto, the Agents may at any time or times thereafter obtain and maintain such policies of
insurance and pay such premiums and take any other action with respect thereto that the Agents deem
advisable. The Agents shall have no obligation to obtain insurance for any Credit Party or pay any
premiums therefor. By doing so, the Agents shall not be deemed to have waived any Default or Event
of Default arising from any Credit Party’s failure to maintain such insurance or pay any premiums
therefor. All sums so disbursed, including reasonable attorneys’ fees, court costs and other
charges related thereto, shall be payable on demand by Borrower to the Administrative Agent and
shall be additional Obligations hereunder secured by the Collateral.

     Notwithstanding the requirements stated above, in the event any insurance (including the
limits or deductible thereof) required to be maintained pursuant to the above shall not be
available and commercially feasible in the commercial insurance markets (taking into account in
determining “commercial feasibility” the Obligations under the Loan Documents and Borrower’s
ability to self-insure without impairing its ability to make scheduled payments on its
Indebtedness), the Requisite Lenders agree to waive such requirements to the extent the maintenance
thereof is not so available; provided, however, that (i) Borrower shall first
request any such waiver in writing, which request shall be accompanied by written reports prepared
by two independent insurance advisors of recognized national standing (one of which may be the
Borrower’s insurance advisor and one of which may be the Lenders’ insurance consultant) certifying
that such insurance is not reasonably available and commercially feasible in the commercial market
for similar steel mill operations (and, in any case where the required amount is not so available,
certifying as to the maximum amount which is so available) and explaining in detail the basis for
such conclusions, the form and substance of such reports to be reasonably satisfactory to the
Requisite Lenders; (ii) at anytime after the granting of any such waiver (but not more than twice
in each calendar year), the Administrative Agent may request, and Borrower shall furnish to the
Administrative Agent within 30 days after such request, supplemental reports reasonably acceptable
to the Requisite Lenders from such insurance advisors (or, if unavailable, such other independent
insurance advisors of recognized national standing as are reasonably acceptable to the Agents)
updating the prior reports and reaffirming such conclusions; and (iii) any such waiver shall be
effective only so long as such insurance shall not be available and commercially feasible in the
commercial insurance market, it being understood that the failure of Borrower to timely furnish
such supplemental reports shall be conclusive evidence that such

40

 

waiver is no longer effective because such condition no longer exists, but that such failure
is not the only way to establish such non-existence.

     (b) Each Credit Party shall deliver to the Agents, in form and substance reasonably
satisfactory to Agents, endorsements to (i) all “All Risk” and business interruption insurance
naming (A) Collateral Agent, on behalf of itself, the Agents and Lenders, as loss payee, to the
extent related to the Collateral (other than with respect to Inventory) and (B) Inventory and
Receivables Security Agent, on behalf of itself, the Administrative Agent and Lenders, as loss
payee, to the extent related to Inventory, and (ii) all general liability and other liability
policies naming Collateral Agent, on behalf of itself, the Agents and Lenders, as additional
insured. Each Credit Party irrevocably makes, constitutes and appoints Administrative Agent (and
all officers, employees or agents designated by Administrative Agent), so long as any Default or
Event of Default has occurred and is continuing or the anticipated insurance proceeds exceed
$5,000,000 or could reasonably be expected to have a Material Adverse Effect, as each Credit
Party’s true and lawful agent and attorney-in-fact for the purpose of making, settling and
adjusting claims under such “All Risk” policies of insurance, endorsing the name of each Credit
Party on any check or other item of payment for the proceeds of such “All Risk” policies of
insurance and for making all determinations and decisions with respect to such “All Risk” policies
of insurance. Administrative Agent shall have no duty to exercise any rights or powers granted to
it pursuant to the foregoing power-of-attorney.

     (c) Additional Insurance. The Inventory and Receivables Security Agent reserves the
right to require the provision of additional insurance over the terms of this Agreement, subject to
insurance being available on a commercially reasonable basis, as may be required from time to time
for insurable risks which may arise in the course of business operations.

     5.9 Supplemental Disclosure. From time to time as may be reasonably requested
by Administrative Agent (which request will not be made more frequently than once each year
absent the occurrence and continuance of an Event of Default) or at Credit Parties’
election, supplement each Disclosure Schedule hereto, or any representation herein or in
any other Loan Document, with respect to any matter hereafter arising that, if existing or
occurring at the date of this Agreement, would have been required to be set forth or
described in such Disclosure Schedule or as an exception to such representation or that is
necessary to correct any information in such Disclosure Schedule or representation which
has been rendered inaccurate thereby (and, in the case of any supplements to any Disclosure
Schedule, such Disclosure Schedule shall be appropriately marked to show the changes made
therein); provided that (a) except for updates to Disclosure Schedule 1.2
from time to time for purposes of Section 1.7(b), no such supplement to any such
Disclosure Schedule or representation shall amend, supplement or otherwise modify any
Disclosure Schedule or representation, or be or be deemed a waiver of any Default or Event
of Default resulting from the matters disclosed therein, except as consented to by Agents
and Requisite Lenders in writing, and (b) no supplement shall be required or permitted as
to representations and warranties that relate solely to the Restatement Date.

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     5.10 Intellectual Property. Conduct its business and affairs without
infringement of or interference with any Intellectual Property of any other Person in any
material respect and shall comply in all material respects with the terms of its Licenses.

     5.11 Landlord Agreements, Mortgagee Agreements, Bailee Letters and Real Estate
Purchases. Use commercially reasonable efforts to obtain a landlord’s agreement,
mortgagee agreement or bailee letter, as applicable, from the lessor of each leased
property, mortgagee of owned property or bailee with respect to any warehouse, processor or
converter facility or other location where Current Asset Collateral is stored or located,
which agreement or letter shall contain a waiver or subordination of all Liens or claims
that the landlord, mortgagee or bailee may assert against the Current Asset Collateral at
that location, and shall otherwise be reasonably satisfactory in form and substance to
Inventory and Receivables Security Agent. With respect to such locations or warehouse
space leased or owned as of the Restatement Date and thereafter, if Inventory and
Receivables Security Agent has not received a landlord or mortgagee agreement or bailee
letter as of the Restatement Date (or, if later, as of the date such location is acquired
or leased), Borrower’s Eligible Inventory at that location shall, in Inventory and
Receivables Security Agent’s discretion, be excluded from the Borrowing Base or be subject
to such Reserves as may be established by Inventory and Receivables Security Agent in its
reasonable credit judgment. After the Restatement Date, no real property or warehouse
space shall be leased by any Credit Party and no Inventory shall be shipped to processors,
converters or warehousemen in an aggregate amount at any one time exceeding $50,000 for any
single processor, converter or warehouseman or $250,000 in the aggregate for all such
processors, converters or warehousemen under arrangements established after the Restatement
Date without the prior written consent of Inventory and Receivables Security Agent (which
consent, in Inventory and Receivables Security Agent’s discretion, may be conditioned upon
the exclusion from the Borrowing Base of Eligible Inventory at that location or the
establishment of Reserves acceptable to Inventory and Receivables Security Agent) or,
unless and until a satisfactory landlord agreement or bailee letter, as appropriate, shall
first have been obtained with respect to such location. Each Credit Party shall timely and
fully pay and perform its obligations under all leases and other agreements with respect to
each leased location or public warehouse where any Current Asset Collateral is or may be
located.

     5.12 Further Assurances. Upon the reasonable request of any Agent, duly
execute and deliver, or cause to be duly executed and delivered, to such Agent such further
instruments and do and cause to be done such further acts as may be necessary or proper in
the reasonable opinion of such Agent to carry out more effectively the provisions and
purposes of this Agreement and each Loan Document.

6. NEGATIVE COVENANTS

     The Credit Parties hereby jointly and severally agree that, so long as any Loan or other
amount is owing to any Lender or Agent hereunder, each of the Credit Parties shall not, and shall
not permit any of their Subsidiaries to, directly or indirectly:

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     6.1 Financial Condition Covenants. Breach or fail to comply with any of the
Financial Covenants.

     6.2 Indebtedness. Create, issue, incur, assume, become liable in respect of
or suffer to exist any Indebtedness, except:

     (a) Indebtedness of any Credit Party pursuant to any Loan Document;

     (b) Indebtedness of the Borrower to any Wholly Owned Subsidiary Guarantor and of any Wholly
Owned Subsidiary Guarantor to the Borrower or any other Wholly Owned Subsidiary Guarantor;
provided, that prior to the making of the first such intercompany loan (i) Borrower shall
have executed and delivered to each such Wholly Owned Subsidiary Guarantor, and each such Wholly
Owned Subsidiary Guarantor shall have executed and delivered to Borrower or each other Wholly Owned
Subsidiary Guarantor a demand note (collectively, the “Intercompany Notes”) to evidence any
such intercompany Indebtedness owing at any time by Borrower to such Wholly Owned Subsidiary
Guarantor or by such Wholly Owned Subsidiary Guarantor to Borrower or such other Wholly Owned
Subsidiary Guarantor, which Intercompany Notes shall be in form and substance reasonably
satisfactory to the Administrative Agent and shall be pledged and delivered to the Collateral Agent
pursuant to the Security Agreement as additional collateral security for the Obligations and the
other obligations referred to therein; (ii) Borrower shall record all intercompany transactions on
its books and records in a manner reasonably satisfactory to the Administrative Agent; (iii) the
obligations of Borrower under any such Intercompany Notes shall be subordinated to the Obligations
of Borrower hereunder in a manner reasonably satisfactory to the Administrative Agent; (iv) at the
time any such intercompany loan or advance is made by Borrower, and after giving effect thereto,
Borrower shall be Solvent; (v) no Default or Event of Default would occur and be continuing after
giving effect to any such proposed intercompany loan; (vi) the aggregate amount of such
intercompany loans owing by Borrower to all such Wholly Owned Subsidiary Guarantors and between
Wholly Owned Subsidiary Guarantors shall not exceed $5,000,000 at any one time outstanding; and
(vii) the aggregate balance of all such intercompany loans owing to Borrower shall not exceed
$1,000,000 at any time.

     (c) Guarantee Obligations incurred in the ordinary course of business by the Borrower or any
of its Subsidiaries of obligations of any Wholly Owned Subsidiary Guarantor permitted by this
Agreement;

     (d) Indebtedness outstanding on the date hereof and listed on Disclosure Schedule
6.2(d) and any refinancings, refundings, renewals or extensions of any secured Indebtedness
listed therein (without (i) increasing the committed amount, (ii) shortening the maturity thereof
or (iii) containing annual cash debt service provisions (including, without limitation, those
relating to scheduled interest and principal payments, prepayments and repurchases and redemptions)
and other material provisions on terms less favorable to the Credit Parties and the Revolving
Lenders than those contained in the original documentation thereof, in each case in the sole
opinion of the Agents; provided further, it shall be agreed and understood that so
long as (x) the Agents shall be provided with the terms of such secured Indebtedness by such Credit
Party upon its receipt thereof and (y) the documentation for such secured Indebtedness shall be
delivered to the Agents in substantially final form no less than ten (10)

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Business Days prior to the execution thereof (with any material revisions thereto delivered to
Agents upon receipt by such Credit Party prior to such execution), Agents shall be deemed to have
agreed to such provisions unless either Agent shall have objected to such Credit Party prior to
such execution;

     (e) Indebtedness (including, without limitation, Capital Lease Obligations) secured by Liens
permitted by Section 6.3(g) in an aggregate principal amount not to exceed $10,000,000 at
any one time outstanding;

     (f) Indebtedness of the Borrower in respect of any Profit Sharing Notes;

     (g) Indebtedness of the Borrower or any of its Subsidiaries in connection with Swap Agreements
permitted pursuant to Section 6.12;

     (h) Indebtedness of any Credit Party in respect of the Term Loan Agreement;

     (i) Special Purpose Indebtedness of any Credit Party in an aggregate amount not to exceed
$125,000,000 at any one time outstanding;

     (j) unsecured Indebtedness of any Credit Party; provided that (i) the maturity date
for any such Indebtedness shall not occur on or prior to the first anniversary following the
Commitment Termination Date, (ii) such Indebtedness shall be used solely to replace, renew, extend
or refinance existing Indebtedness otherwise permitted under this Section 6.2, (iii) such
Indebtedness shall have annual cash debt service provisions (including, without limitation, those
relating to scheduled interest and principal payments, prepayments and repurchases and redemptions)
and other material provisions on terms no less favorable to the Credit Parties and the Revolving
Lenders than those contained in the original documentation for such Indebtedness, in each case in
the sole opinion of the Agents; provided further, it shall be agreed and understood
that so long as (x) the Agents shall be provided with the terms of such Indebtedness by such Credit
Party upon its receipt thereof and (y) the documentation for such Indebtedness shall be delivered
to the Agents in substantially final form no less than ten (10) Business Days prior to the
execution thereof (with any material revisions thereto delivered to Agents upon receipt by such
Credit Party prior to such execution), Agents shall be deemed to have agreed to such provisions
unless either Agent shall have objected to such Credit Party prior to such execution; and

     (k) additional Indebtedness of the Borrower or any of its Subsidiaries in an aggregate
principal amount (for the Borrower and all Subsidiaries) not to exceed $50,000,000 (or $100,000,000
with the prior written consent of both Agents or such larger amounts with the prior written consent
of Agents and the Requisite Lenders) at any one time outstanding.

     6.3 Liens. Create, incur, assume or suffer to exist any Lien upon any of its
property, whether now owned or hereafter acquired, except:

     (a) Liens for taxes not yet due or that are being contested in good faith by appropriate
proceedings, provided that adequate reserves with respect thereto are maintained on the
books of the Borrower or its Subsidiaries, as the case may be, in conformity with GAAP;

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     (b) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other like Liens
arising in the ordinary course of business that are not overdue for a period of more than 30 days
or that are being contested in good faith by appropriate proceedings;

     (c) pledges or deposits in connection with workers’ compensation, unemployment insurance and
other social security legislation;

     (d) deposits to secure the performance of bids, trade contracts (other than for borrowed
money), leases, statutory obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of business;

     (e) easements, rights-of-way, restrictions and other similar encumbrances incurred in the
ordinary course of business that, in the aggregate, are not substantial in amount and that do not
in any case materially detract from the value of the property subject thereto or materially
interfere with the ordinary conduct of the business of the Borrower or any of its Subsidiaries;

     (f) Liens in existence on the date hereof listed on Disclosure Schedule 6.3(f),
securing Indebtedness permitted by Section 6.2(d), provided that no such Lien is
spread to cover any additional property after the Restatement Date and that the amount of
Indebtedness secured thereby is not increased;

     (g) Liens securing Indebtedness of the Borrower or any other Subsidiary incurred pursuant to
Section 6.2(e) to finance the acquisition of fixed or capital assets, provided that
(i) such Liens shall be created substantially simultaneously with the acquisition of such fixed or
capital assets, (ii) such Liens do not at any time encumber any property other than the property
financed by such Indebtedness and (iii) the amount of Indebtedness secured thereby is not
increased;

     (h) Liens securing Indebtedness and other obligations incurred under this Agreement, the Loan
Documents, the Term Loan Agreement, the Series A Notes and the Series B Notes and granted pursuant
to the Collateral Documents and the Junior Current Asset Security Agreement;

     (i) any interest or title of a lessor under any lease entered into by the Borrower or any
other Subsidiary in the ordinary course of its business and covering only the assets so leased;

     (j) Liens (i) incurred pursuant to Permitted Acquisitions under Section 6.8 and (ii)
existing on any property or asset of the Borrower or any of its Subsidiaries prior to or incurred
in connection with its obtaining such property or asset (via project financing or otherwise, to the
extent permitted herein); provided that (A) such Liens shall not attach to any other
property or assets of the Borrower or its Subsidiaries, (B) such Liens shall conform at all times
to the subordination terms (with respect to the Current Asset Collateral) and/or access terms
existing in the Current Asset Intercreditor Agreement and (C) the aggregate outstanding amount of
the Indebtedness secured by such Liens shall not exceed (as to the Borrower and all its
Subsidiaries) $100,000,000 at any one time;

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     (k) Liens securing Project Debt; provided, that (i) such Liens shall be limited to the
assets that are acquired, constructed or exploited with the proceeds of Project Debt incurred in
connection with the Coke Refurbishment Project and (ii) the aggregate outstanding amount of the
Project Debt secured by such Liens shall not exceed $125,000,000 at any one time; provided,
further, that the outstanding amount of the Indebtedness secured by the Liens permitted
pursuant to clause (j) above and this clause (k), shall not, in the aggregate, exceed $175,000,000
at any one time; and

     (l) Liens not otherwise permitted by this Section so long as neither (i) the aggregate
outstanding principal amount of the obligations secured thereby nor (ii) the aggregate fair market
value (determined as of the date such Lien is incurred) of the assets subject thereto exceeds (as
to the Borrower and all Subsidiaries) $25,000,000 at any one time.

     6.4 Fundamental Changes. Enter into any merger, consolidation or
amalgamation, or liquidate, wind up or dissolve itself (or suffer any liquidation or
dissolution), or Dispose of all or substantially all of its property or business, except
that:

     (a) any Subsidiary of the Borrower may be merged or consolidated with or into the Borrower
(provided that the Borrower shall be the continuing or surviving corporation) or with or
into any Wholly Owned Subsidiary Guarantor other than WP Steel Venture (provided that the
Wholly Owned Subsidiary Guarantor shall be the continuing or surviving corporation);

     (b) any Subsidiary of the Borrower may Dispose of any or all of its assets (i) to the Borrower
or any Wholly Owned Subsidiary Guarantor other than WP Steel Venture (upon voluntary liquidation or
otherwise) or (ii) pursuant to a Disposition permitted by Section 6.5; and

     (c) any Investment expressly permitted by Section 6.7 may be structured as a merger,
consolidation or amalgamation.

     6.5 Disposition of Property. Dispose of any of its property, whether now
owned or hereafter acquired, or, in the case of any Subsidiary, issue or sell any shares of
such Subsidiary’s Capital Stock to any Person, except:

     (a) the Disposition of obsolete or worn out property in the ordinary course of business;

     (b) the sale of Inventory in the ordinary course of business;

     (c) Dispositions permitted by clause (i) of Section 6.4(b);

     (d) the sale or issuance of any Subsidiary’s Capital Stock to the Borrower or any Wholly Owned
Subsidiary Guarantor other than WP Steel Venture;

     (e) to the extent the Coke Plant Joint Venture is consummated, the transfer to the Coke Plant
Joint Venture of those assets set forth in Disclosure Schedule 6.5(e) so long as such
transfer is not prohibited pursuant to terms of the Term Loan Agreement; and

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     (f) the Disposition of other property having a fair market value not to exceed $30,000,000 in
the aggregate during the term of this Agreement.

     6.6 Restricted Payments. Declare or pay any dividend (other than dividends
payable solely in common stock of the Person making such dividend) on, or make any payment
on account of, or set apart assets for a sinking or other analogous fund for, the purchase,
redemption, defeasance, retirement or other acquisition of, any Capital Stock of any Group
Member, whether now or hereafter outstanding, or make any other distribution in respect
thereof, either directly or indirectly, whether in cash or property or in obligations of
any Group Member (collectively, “Restricted Payments”), except that:

     (a) any Subsidiary may make Restricted Payments to the Borrower or any Wholly Owned Subsidiary
Guarantor;

     (b) Holdings may purchase or otherwise acquire from any qualified participant in (i) the WHX
employee stock ownership plan (“WHX ESOP”), Capital Stock of WHX received by such individual in a
distribution from such WHX ESOP, provided that such purchase is made pursuant to a put option
contained in the governing documents for the WHX ESOP, and further provided that the aggregate
amount of all the Restricted Payments made under this clause (i) shall not exceed $3,000,000 in the
aggregate during the term of this Agreement and (ii) any other Holdings employee stock ownership
plan, Capital Stock of Holdings and Profit Sharing Notes received by such individual in a
distribution from such employee stock ownership plan provided that the aggregate amount of all
Restricted Payments made under this clause (ii) shall not exceed $500,000 in any Fiscal Year;

     (c) WP Steel Venture may make Restricted Payments to Holdings; and

     (d) the Borrower may make Restricted Payments to Holdings to permit Holdings to (i) pay
corporate overhead expenses incurred in the ordinary course of business (including expenses
incurred in connection with insurance, director compensation and legal and accounting services) not
to exceed $2,500,000 in any Fiscal Year and (ii) pay any taxes that are due and payable by Holdings
and the Borrower as part of a consolidated group.

     6.7 Capital Expenditures. Make or commit to make any Capital Expenditure,
except:

     (a) Capital Expenditures made on or after the Restatement Date relating to the construction of
the Automatic Roll Changer System in an aggregate amount not to exceed $17,000,000;

     (b) Capital Expenditures made on or after the Restatement Date relating to the construction of
the Allenport Cold Mill Improvements in an aggregate amount not to exceed $11,000,000;

     (c) To the extent the Coke Plant Joint Venture is not consummated, Capital Expenditures made
on or after the Restatement Date relating to the Coke Facility Refurbishment Project in an
aggregate amount not to exceed $69,000,000; and

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     (d) Capital Expenditures of the Borrower and its Subsidiaries in the ordinary course of
business and not exceeding $65,000,000 in the aggregate for any Fiscal Year (excluding, for
purposes of calculating the aggregate Capital Expenditures permitted under this Section
6.7(d), those Capital Expenditures permitted pursuant to clauses (a), (b) and (c) above for
such Fiscal Year); provided, that (i) up to 50% of such $65,000,000, if not so expended in
the Fiscal Year for which it is permitted, may be carried over for expenditure in the next
succeeding Fiscal Year (but not further), (ii) Capital Expenditures made pursuant to this
Section 6.7(d) during any Fiscal Year shall be deemed made, first, in respect of the
$65,000,000 permitted for such Fiscal Year as provided above and, second, in respect of amounts
carried over from the prior Fiscal Year pursuant to clause (i) above and (iii) Capital Expenditures
made with the proceeds of any asset dispositions or casualty events in accordance with Sections
1.3(c) and (e) shall not be counted in determining compliance with this Section 6.7.
For greater certainty, it is agreed that Capital Expenditures for projects described in clauses
(a), (b) and (c) above may be made under this Section 6.7(d) at such time as the amounts
permitted under clauses (a), (b) and (c) above, as applicable, have been expended.

     6.8 Investments. Make any advance, loan, extension of credit (by way of
guaranty or otherwise) or capital contribution to, or purchase any Capital Stock, bonds,
notes, debentures or other debt securities of, or any assets constituting a business unit
of, or make any other investment in, any Person (all of the foregoing,
“Investments”), except:

     (a) extensions of trade credit in the ordinary course of business in a manner consistent with
the Existing Credit Policies;

     (b) investments in Cash Equivalents;

     (c) Guarantee Obligations permitted by Section 6.2;

     (d) loans and advances to employees of any Group Member in the ordinary course of business
(including for travel, entertainment and relocation expenses) in an aggregate amount for all Group
Members not to exceed $1,000,000 at any one time outstanding;

     (e) Investments in assets useful in the business of the Borrower and its Subsidiaries made by
the Borrower or any of its Subsidiaries with the proceeds of any asset dispositions or casualty
events in accordance with Sections 1.3(c) and (e);

     (f) intercompany Investments by any Group Member in the Borrower or any Person other than WP
Steel Venture that, prior to such investment, is a Wholly Owned Subsidiary Guarantor;

     (g) Investments made in accordance with Section 6.6(b);

     (h) To the extent the Coke Plant Joint Venture is consummated, Investments by Borrower in the
Coke Plant Joint Venture consisting of (i) capital contributions in an aggregate amount not to
exceed $33,000,000 during the term of this Agreement, (ii) working capital advances in an aggregate
amount not to exceed $24,000,000 at any time outstanding during the term of this Agreement and
(iii) additional Investments (including loans, letters of

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credit and purchases of Capital Stock) in the Coke Plant Joint Venture in an aggregate amount
not to exceed $10,000,000 during the term of this Agreement; provided, that prior to the
making of any such loan or advance (x) Coke Plant Joint Venture shall have executed and delivered
to Borrower a note to evidence such Indebtedness owing by the Coke Plant Joint Venture to Borrower,
(A) which note shall be in form and substance reasonably satisfactory to the Administrative Agent,
(B) the obligations owing thereunder shall be secured by the current assets and all proceeds and
products therefrom of the Coke Plant Joint Venture and (C) such note shall be pledged and delivered
to the Collateral Agent pursuant to the Security Agreement as additional collateral security for
the Obligations and the other obligations referred to therein and (y) Borrower shall record all
such loans on its books and records in a manner reasonably satisfactory to the Administrative
Agent.

     (i) in addition to Investments otherwise expressly permitted by this Section, Investments by
the Borrower or any of its Subsidiaries in an aggregate amount (valued at cost) not to exceed (i)
$5,000,000 in any Fiscal Year or (ii) $25,000,000 in the aggregate during the term of this
Agreement; provided, that immediately after giving effect to any such Investment (including any
Indebtedness incurred or assumed in connection therewith), (A) the Borrower shall be in pro forma
compliance with the covenants set forth in Section 6.1 as of the end of the most recently completed
period of four Fiscal Quarters for which financial statements have been delivered pursuant to
Section 4.1 as if such Investment had been made (and such Indebtedness incurred) at the beginning
of such period and (B) in the case of an Investment in an amount equal to or greater than
$5,000,000, either (I) the business operations to be acquired shall have had positive EBITDA
(calculated in the same manner set forth in the definition “Consolidated EBITDA”) for the period of
12 months immediately prior to the consummation of the Investment or (II) after giving effect to
the Investment (and any Indebtedness incurred therewith) and any costs savings to be achieved or
other adjustments to Consolidated EBITDA to be made in connection therewith (in each case which are
approved by an independent third party reasonably satisfactory to the Administrative Agent), the
pro forma Consolidated EBITDA of Holdings as of the end of the most recently completed period of
four Fiscal Quarters for which financial statements have been delivered pursuant to Section 4.1
shall be greater than or equal to the actual Consolidated EBITDA of Holdings as reported to the
Administrative Agent and Lenders in accordance with Section 4.1; provided further,
that, notwithstanding clause (i) above but subject to the conditions set forth in clause (ii) above
and the preceding proviso, the Borrower may make Investments in any Fiscal Year in an aggregate
amount up to $10,000,000 (or, with the consent of the Agents, $20,000,000) if (i) after giving
effect to any Investment which would cause the aggregate Investments for such Fiscal Year to exceed
$5,000,000, Borrowing Availability shall exceed $75,000,000 and (ii) the Consolidated Fixed Charge
Coverage Ratio for the most recently completed period of four consecutive Fiscal Quarters for which
financial statements and a Ratio and Compliance Certificate have been delivered is at least 1.00 to
1.0.

     Notwithstanding the foregoing, Borrower or its Subsidiaries may acquire all or substantially
all of the assets or all of the Capital Stock of any Person (the “Target”) (in each case, a
“Permitted Acquisition”) in one or more Permitted Acquisitions in an aggregate
consideration amount (including assumed obligations) not to exceed $25,000,000 in any Fiscal Year
(or $90,000,000 with consent of both Agents) subject to the satisfaction of each of the following
conditions:

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          (i) With respect to any proposed Permitted Acquisition for which the aggregate consideration
(including assumed obligations) exceeds $5,000,000, Agents shall receive at least thirty (30) days’
prior written notice of such proposed Permitted Acquisition, which notice shall include a
reasonably detailed description of such proposed Permitted Acquisition;

          (ii) such Permitted Acquisition shall only involve assets located in the United States or
Canada and comprising a business, or those assets of a business, of the type engaged in by Borrower
as of the Restatement Date (or complementary or otherwise related to any such business), and which
business would not subject Agents or any Lender to regulatory or third party approvals in
connection with the exercise of its rights and remedies under this Agreement or any other Loan
Documents other than approvals applicable to the exercise of such rights and remedies with respect
to Borrower prior to such Permitted Acquisition;

          (iii) such Permitted Acquisition shall be consensual and shall have been approved by the
Target’s board of directors or similar body;

          (iv) no additional Indebtedness, Charges, contingent obligations or other liabilities shall be
incurred, assumed or otherwise be reflected on a consolidated balance sheet of Borrower and Target
after giving effect to such Permitted Acquisition, except as expressly permitted hereunder and
except for the Loans made hereunder;

          (v) the business and assets acquired in such Permitted Acquisition shall be free and clear of
all Liens (other than Permitted Encumbrances and Liens permitted by Section 6.3);

          (vi) at or prior to the closing of any Permitted Acquisition, Inventory and Receivables
Security Agent or Collateral Agent, as applicable, will be granted a first priority perfected Lien
(subject to the existence and priority of Permitted Encumbrances and Liens permitted by Section
6.3) in all assets acquired pursuant thereto which would thereupon constitute Collateral, and
Borrower shall have executed (or caused its applicable Subsidiaries to have executed) such
documents and taken such actions as may be reasonably required by Inventory and Receivables
Security Agent or Collateral Agent, as applicable, in connection therewith;

          (vii) concurrently with delivery of the notice referred to in clause (i) above,
Borrower shall have delivered to Agents, in form and substance reasonably satisfactory to Agents a
pro forma consolidated balance sheet, income statement and cash flow statement of Borrower and its
Subsidiaries (the “Acquisition Pro Forma”), based on recent financial statements, which
shall be complete and shall fairly present in all material respects the assets, liabilities,
financial condition and results of operations of Borrower and its Subsidiaries in accordance with
GAAP consistently applied, but taking into account such Permitted Acquisition and the funding of
all Loans in connection therewith. Such Acquisition Pro Forma shall reflect that Borrower would
have been in compliance with the Financial Covenants set forth in Annex G for the period of
four consecutive Fiscal Quarters reflected in the Compliance Certificate most recently delivered to
Administrative Agent pursuant to Annex E prior to the consummation of

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such Permitted Acquisition (after giving effect to such Permitted Acquisition and all Loans
funded in connection therewith as if made on the first day of such period);

          (viii) on or prior to the date of such Permitted Acquisition, Agents shall have received, in
form and substance reasonably satisfactory to Agents, copies of the acquisition agreement and
related agreements and instruments, and all opinions, certificates, lien search results and other
documents reasonably requested by Agents;

          (ix) at the time of such Permitted Acquisition and after giving effect thereto, no Default or
Event of Default has occurred and is continuing; and

          (x) after giving effect to such Permitted Acquisition (and all Loans funded in connection
therewith), Borrowing Availability at such time shall be no less than $50,000,000; and

          (xi) to the extent such Permitted Acquisition is an acquisition of all of the Capital Stock of
the Target, Borrower must own, prior to such Permitted Acquisition, at least 35% of the Capital
Stock of the Target.

Notwithstanding the foregoing, the Accounts and Inventory of the Target shall not be included in
Eligible Accounts and Eligible Inventory without the prior written consent of the Agents in their
reasonable credit judgment.

     6.9 Optional Payments and Modifications of Certain Agreements. (a) Directly
or indirectly, voluntarily purchase, redeem, defease or prepay any principal of, premium,
if any, interest or other amount payable in respect of any Plan of Reorganization
Indebtedness (except as permitted in accordance with Section 6.2(j)) or Profit
Sharing Note (except as permitted in accordance with Section 6.6(b)) prior to the
stated maturity thereof, provided that, if no Default or Event of Default shall
then exist and be continuing, Borrower may apply 50% of cash distributions received from
the Joint Ventures (excluding Feralloy-Wheeling Specialty Processing Co. and the Coke Plant
Joint Venture) during the first five years following the Restatement Date and 100%
thereafter to pay accrued and unpaid interest on the Series A Notes and, to the extent of
any excess after payment of such interest, to prepay principal thereon; (b) make cash
payments on account of accrued and unpaid interest on (i) the Series A Notes or Series B
Notes at a rate per annum in excess of 2% per annum of the principal amount thereof while
any Default or Event of Default shall exist and be continuing or (ii) the WHX Subordinated
Note or the West Virginia Note except from Excess Cash Flow (as defined in the Term Loan
Agreement as in effect on the date hereof) which is not required to be applied to the
prepayment of Term Loans and provided that no Default or Event of Default shall have
occurred and be continuing; or (c) amend, modify, waive or otherwise change, or consent or
agree to any amendment, modification, waiver or other change to, any of the terms of any of
the Plan of Reorganization Indebtedness, the Master Labor Agreement or the Constitutive
Documents in any manner which could reasonably be considered to be adverse to the interests
of the Lenders.

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     6.10 Transactions with Affiliates. Enter into any transaction, including any
purchase, sale, investment, lease or exchange of property, the rendering of any service or
the payment of any management, advisory or similar fees, with any Affiliate unless such
transaction is (a) otherwise permitted under this Agreement, (b) in the ordinary course of
business of the relevant Group Member, and (c) upon fair and reasonable terms no less
favorable to the relevant Group Member than it would obtain in a comparable arm’s length
transaction with a Person that is not an Affiliate. Excluding receipts in connection with
any JV Supply Agreement, if any affiliate transaction or series of related affiliate
transactions involves payments or receipts in excess of $5,000,000 in the aggregate, the
terms of these transactions must be disclosed in advance to the Agents. All such affiliate
transactions existing as of the date hereof are described in Disclosure Schedule
6.10.

     6.11 Sales and Leasebacks. Enter into any arrangement with any Person
providing for the leasing by any Group Member of real or personal property that has been or
is to be sold or transferred by such Group Member to such Person or to any other Person to
whom funds have been or are to be advanced by such Person on the security of such property
or rental obligations of such Group Member; provided, that to the extent permitted
by Section 6.2, the Borrower and any Subsidiary Guarantor may enter into such a
transaction to finance the acquisition of fixed or capital assets.

     6.12 Swap Agreements. Enter into any Swap Agreement, except (a) Swap
Agreements (i) entered into to hedge or mitigate commodity, energy or currency risks to
which the Borrower or any Subsidiary has actual exposure and (ii) not for speculative
purposes and (b) Swap Agreements entered into in order to effectively cap, collar or
exchange interest rates (from floating to fixed rates, from one floating rate to another
floating rate or otherwise) with respect to any interest-bearing liability or investment of
the Borrower or any Subsidiary in a notional amount of not more than $300,000,000.

     6.13 Changes in Fiscal Periods. Permit the Fiscal Year of Holdings or the
Borrower to end on a day other than December 31 or change Holdings’ or the Borrower’s
method of determining Fiscal Quarters.

     6.14 Clauses Restricting Subsidiary Distributions. Enter into or suffer to
exist or become effective any consensual encumbrance or restriction on the ability of any
Subsidiary of the Borrower to (a) make Restricted Payments in respect of any Capital Stock
of such Subsidiary held by, or pay any Indebtedness owed to, the Borrower or any other
Subsidiary of the Borrower, (b) make loans or advances to, or other Investments in, the
Borrower or any other Subsidiary of the Borrower or (c) transfer any of its assets to the
Borrower or any other Subsidiary of the Borrower, in each case except for such encumbrances
or restrictions (i) existing under or by reason of the Loan Documents or the Term Loan
Agreement as in effect on the date hereof and (ii) with respect to any Subsidiary, imposed
pursuant to an agreement that has been entered into in connection with the Disposition of
all or substantially all of the Capital Stock or assets of such Subsidiary.

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     6.15 Lines of Business. Enter into any business, either directly or through
any Subsidiary, except for those businesses in which the Borrower and its Subsidiaries are
engaged on the date of this Agreement or that are reasonably related thereto.

     6.16 Restrictions on WP Steel Venture. Allow WP Steel Venture to (i) create
or acquire any Subsidiary, (ii) engage in any Material Acquisition or (iii) enter into any
business or activity except for those businesses and activities in which WP Steel Venture
is engaged on the Restatement Date and are disclosed in Disclosure Schedule 6.16.

     6.17 Excluded Foreign Subsidiaries. Create, acquire or allow to exist any
Excluded Foreign Subsidiary.

7. TERM

     7.1 Termination. The financing arrangements contemplated hereby shall be in
effect until the Commitment Termination Date, and the Loans and all other Obligations shall
be automatically due and payable in full on such date.

     7.2 Survival of Obligations Upon Termination of Financing Arrangements.
Except as otherwise expressly provided for in the Loan Documents, no termination or
cancellation (regardless of cause or procedure) of any financing arrangement under this
Agreement shall in any way affect or impair the obligations, duties and liabilities of the
Credit Parties or the rights of Agents and Lenders relating to any unpaid portion of the
Loans or any other Obligations, due or not due, liquidated, contingent or unliquidated or
any transaction or event occurring prior to such termination, or any transaction or event,
the performance of which is required after the Commitment Termination Date. Except as
otherwise expressly provided herein or in any other Loan Document, all undertakings,
agreements, covenants, warranties and representations of or binding upon the Credit
Parties, and all rights of each Agent and Lender, all as contained in the Loan Documents,
shall not terminate or expire, but rather shall survive any such termination or
cancellation and shall continue in full force and effect until the Termination Date;
provided, that the provisions of Section 11, the payment obligations under
Sections 1.15 and 1.16 and the indemnities contained in the Loan Documents shall
survive the Termination Date.

8. EVENTS OF DEFAULT; RIGHTS AND REMEDIES

     8.1 Events of Default. If any of the following events shall occur and be
continuing:

     (a) the Borrower shall fail to pay any principal of any Loan when due (whether at stated
maturity, by acceleration, by mandatory prepayment or otherwise) or fail to pay any reimbursement
obligation with respect to any Letter of Credit when due in accordance with the terms hereof; or
the Borrower shall fail to pay any interest on any Loan, or any other amount payable hereunder or
under any other Loan Document, within two Business Days after any such interest or other amount
becomes due in accordance with the terms hereof; or

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     (b) any representation or warranty made or deemed made by any Credit Party herein or in any
other Loan Document or that is contained in any certificate, document or financial or other
statement furnished by it at any time under or in connection with this Agreement or any such other
document shall prove to have been inaccurate in any material respect on or as of the date made or
deemed made; or

     (c) (i) any Credit Party shall default in the observance or performance of any agreement
contained in Section 1.4, Section 1.8, Section 1.18, clause (i) or (ii) of
Section 5.2(a) (with respect to Holdings and the Borrower only), Section 5.5(a),
Section 5.8, Section 6 or any of the provisions set forth in Annexes C or G
of this Agreement or Sections 5.4 and 5.6(b) of the Senior Current Asset Security Agreement
or (ii) an “Event of Default” under and as defined in any Mortgage shall have occurred and be
continuing; or

     (d) (i) Borrower shall default in the performance of any agreement set forth in (A) Annex
F or paragraphs (a), (b), (c), (d), (i) or (j) of Annex E, and such default shall
continue unremedied for a period of three (3) days or (B) any other agreement set forth in
Section 4 or in Annex E, and such default shall continue unremedied for a period of
seven (7) Business Days; or (ii) any Credit Party shall default in the observance or performance of
any other agreement contained in this Agreement or any other Loan Document (other than as provided
in paragraphs (a) through (c) of this Section or clause (i) of this paragraph (d)), and such
default shall continue unremedied for a period of 30 days after (i) notice to the Borrower from the
Administrative Agent or the Requisite Lenders or (ii) knowledge of the Borrower, whichever is
earlier; or

     (e) any Group Member shall (i) default in making any payment of any principal of any
Indebtedness (including any Guarantee Obligation, but excluding the Loans) on the scheduled or
original due date with respect thereto; or (ii) default in making any payment of any interest on
any such Indebtedness beyond the period of grace, if any, provided in the instrument or agreement
under which such Indebtedness was created; or (iii) default in the observance or performance of any
other agreement or condition relating to any such Indebtedness or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event shall occur or condition
exist, the effect of which default or other event or condition is to cause, or to permit the holder
or beneficiary of such Indebtedness (or a trustee or agent on behalf of such holder or beneficiary)
to cause, with the giving of notice if required, such Indebtedness to become due prior to its
stated maturity or (in the case of any such Indebtedness constituting a Guarantee Obligation) to
become payable; provided, that a default, event or condition described in clause (i), (ii)
or (iii) of this paragraph (e) shall not at any time constitute an Event of Default unless, at such
time, one or more defaults, events or conditions of the type described in clauses (i), (ii) and
(iii) of this paragraph (e) shall have occurred and be continuing with respect to Indebtedness the
outstanding principal amount of which exceeds in the aggregate $5,000,000; or

     (f) (i) any Group Member shall commence any case, proceeding or other action (A) under any
existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy,
insolvency, reorganization or relief of debtors, seeking to have an order for relief entered with
respect to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with
respect to it or its debts, or (B) seeking appointment of a receiver, trustee,

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custodian, conservator or other similar official for it or for all or any substantial part of
its assets, or any Group Member shall make a general assignment for the benefit of its creditors;
or (ii) there shall be commenced against any Group Member any case, proceeding or other action of a
nature referred to in clause (i) above that (A) results in the entry of an order for relief or any
such adjudication or appointment or (B) remains undismissed, undischarged or unbonded for a period
of 60 days; or (iii) there shall be commenced against any Group Member any case, proceeding or
other action seeking issuance of a warrant of attachment, execution, distraint or similar process
against all or any substantial part of its assets that results in the entry of an order for any
such relief that shall not have been vacated, discharged, or stayed or bonded pending appeal within
60 days from the entry thereof; or (iv) any Group Member shall take any action indicating its
consent to, approval of, or acquiescence in, any of the acts set forth in clause (i), (ii), or
(iii) above; or (v) any Group Member shall generally not, or shall be unable to, or shall admit
publicly or in writing its inability to, pay its debts as they become due; or (vi) any Group Member
shall not be Solvent; or

     (g) (i) any Person shall engage in any “prohibited transaction” (as defined in Section 406 of
ERISA or Section 4975 of the IRC) involving any Plan, (ii) any “accumulated funding deficiency” (as
defined in Section 302 of ERISA), whether or not waived, shall exist with respect to any Plan or
any Lien in favor of the PBGC or a Plan shall arise on the assets of any Group Member or any
Commonly Controlled Entity, (iii) a Reportable Event shall occur with respect to, or proceedings
shall commence to have a trustee appointed, or a trustee shall be appointed, to administer or to
terminate, any Single Employer Plan, which Reportable Event or commencement of proceedings or
appointment of a trustee is, in the reasonable opinion of the Required Lenders, likely to result in
the termination of such Plan for purposes of Title IV of ERISA, (iv) any Single Employer Plan shall
terminate for purposes of Title IV of ERISA, (v) any Group Member or any Commonly Controlled Entity
shall, or in the reasonable opinion of the Required Lenders is likely to, incur any liability in
connection with a withdrawal from, or the Insolvency or Reorganization of, a Multiemployer Plan or
(vi) any other event or condition shall occur or exist with respect to a Plan; and in each case in
clauses (i) through (vi) above, such event or condition, together with all other such events or
conditions, if any, would, in the judgment of the Required Lenders, reasonably be expected to have
a Material Adverse Effect; or

     (h) one or more judgments or decrees shall be entered against any Group Member involving in
the aggregate a liability (in excess of amounts paid or insured as to which the relevant insurance
company has acknowledged coverage) of $5,000,000 or more, and all such judgments or decrees shall
not have been vacated, discharged, stayed or bonded pending appeal within 30 days from the entry
thereof; or

     (i) any of the Collateral Documents shall cease, for any reason, to be in full force and
effect, or any Credit Party or any Affiliate of any Credit Party shall so assert, or any Lien
created or purported to be created by any of the Collateral Documents shall cease to be enforceable
and of the same effect and priority purported to be created thereby with respect to any material
amount of the Collateral; or

     (j) the guarantee of any Credit Party contained in the Guarantee Agreement or any similar
agreement entered into guaranteeing payment of the Obligations shall cease, for any reason, to be
in full force and effect (except as a result of a disposition, liquidation or merger

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of a Credit Party permitted by Section 6.4) or any Credit Party or any Affiliate of any Credit
Party shall so assert; or

     (k) (i) (A) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of
the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) other than United
Steelworkers of America (together with any trustee or entity appointed thereby to hold common stock
of Holdings on its behalf, including the VEBA Trust, the “Union”) shall become, or obtain rights
(whether by means or warrants, options or otherwise) to become, the “beneficial owner” (as defined
in Rules 13(d)-3 and 13(d) 5 under the Exchange Act), directly or indirectly, of more than 30% of
the outstanding common stock of Holdings or (B) the Union shall (I) vote or have the ability to
vote more than 27% of the outstanding common stock of Holdings in any election of one or more
directors of Holdings or (II) become, or obtain rights (whether by means or warrants, options or
otherwise) to become, the beneficial owner, directly or indirectly, of more than 40% of the
outstanding common stock of Holdings, provided that it shall not be an Event of Default
hereunder if the Union shall become, or obtain rights (whether by means or warrants, options or
otherwise) to become, the beneficial owner, directly or indirectly, of more than 40% of the
outstanding common stock of Holdings so long as (I) the acquisition of Holdings common stock (or
rights to acquire Holdings common stock) which causes the Union’s beneficial ownership to exceed
40% (and each acquisition of Holdings common stock by the Union thereafter) is made directly from
Holdings and (II) the Union’s beneficial ownership does not at any time equal or exceed 50% of the
outstanding common stock of Holdings; (ii) the board of directors of Borrower shall cease to
consist of a majority of Continuing Directors; or (iii) Holdings shall cease to own and control, of
record and beneficially, directly, 100% of each class of outstanding Capital Stock of the Borrower
free and clear of all Liens (except Liens created by the Security Agreement); or

     (l) Holdings shall (i) conduct, transact or otherwise engage in, or commit to conduct,
transact or otherwise engage in, any business or operations other than those incidental to its
ownership of the Capital Stock of the Borrower and WP Steel Venture, (ii) incur, create, assume or
suffer to exist any Indebtedness or other liabilities or financial obligations, except (x)
nonconsensual obligations imposed by operation of law, (y) obligations pursuant to the Loan
Documents, the loan documents relating to the Term Loan Agreement to which it is a party, the
Series A Notes and the Series B Notes and (z) obligations with respect to its Capital Stock, or
(iii) own, lease, manage or otherwise operate any properties or assets (including cash (other than
cash received in connection with dividends made by the Borrower or WP Steel Venture in accordance
with Section 6.6 pending application in the manner contemplated by said Section) and cash
equivalents) other than the ownership of shares of Capital Stock of the Borrower or WP Steel
Venture; or

     (m) any information contained in any Borrowing Base Certificate is untrue or incorrect in any
respect (other than inadvertent, immaterial errors), or any representation or warranty herein or in
any Loan Document or in any written statement, report, financial statement or certificate (other
than a Borrowing Base Certificate) made or delivered to Agent or any Lender by any Credit Party is
untrue or incorrect in any material respect as of the date when made or deemed made; or

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     (n) any event occurs, whether or not insured or insurable, as a result of which
revenue-producing activities cease or are substantially curtailed at facilities (whether as a
result of strike, boycott, an event of force majeure or otherwise) of any Group Member generating
more than 10% of Holdings’ revenues for the Fiscal Year preceding such event and such cessation or
curtailment continues for more than thirty (30) days; or

     (o) assets of any Credit Party with a fair market value of $500,000 or more are attached,
seized, levied upon or subjected to a writ or distress warrant, or come within the possession of
any receiver, trustee, custodian or assignee for the benefit of creditors of any Credit Party and
such condition continues for thirty (30) days or more;

then, and in any such event, (A) if such event is an Event of Default specified in clause (i) or
(ii) of paragraph (f) above with respect to Holdings or the Borrower, automatically the Loans (with
accrued interest thereon) and all other amounts owing under this Agreement and the other Loan
Documents shall immediately become due and payable, and (B) if such event is any other Event of
Default, with the consent of the Requisite Lenders, the Administrative Agent may, or upon the
request of the Requisite Lenders, the Administrative Agent shall, by notice to the Borrower declare
the Loans (with accrued interest thereon) and all other amounts owing under this Agreement and the
other Loan Documents to be due and payable forthwith, whereupon the same shall immediately become
due and payable. Except as expressly provided above in this Section, presentment, demand, protest
and all other notices of any kind are hereby expressly waived by the Borrower.

9. ASSIGNMENT AND PARTICIPATIONS; APPOINTMENT OF AGENT

     9.1 Assignment and Participations.

     (a) Subject to the terms of this Section 9.1, any Lender may make an assignment to a
Qualified Assignee of, or sale of participations in, at any time or times, the Loan Documents,
Loans, Letter of Credit Obligations and any Revolving Loan Commitment or any portion thereof or
interest therein, including any Lender’s rights, title, interests, remedies, powers or duties
thereunder. Any assignment by a Lender shall: (i) require the consent of Administrative Agent
(which consent shall not be unreasonably withheld or delayed with respect to a Qualified Assignee)
and the execution of an assignment agreement (an “Assignment Agreement”) substantially in
the form attached hereto as Exhibit 9.1(a) and otherwise in form and substance reasonably
satisfactory to, and acknowledged by, Administrative Agent; (ii) be conditioned on such assignee
Lender representing to the assigning Lender and Administrative Agent that it is purchasing the
applicable Loans to be assigned to it for its own account, for investment purposes and not with a
view to the distribution thereof; (iii) after giving effect to any such partial assignment, the
assignee Lender shall have Commitments in an amount at least equal to $1,000,000 and the assigning
Lender shall have retained Commitments in an amount at least equal to $5,000,000; (iv) include a
payment to Administrative Agent of an assignment fee of $3,500 and (v) so long as no Event of
Default has occurred and is continuing, require the consent of Borrower, which shall not be
unreasonably withheld or delayed; provided that in no event shall the consent of the
Borrower or the Administrative Agent be required for an assignment to a Lender or to an affiliate
of a Lender. In the case of an assignment by a Lender under this Section 9.1, the assignee
shall have, to the extent of such assignment, the same rights, benefits and

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obligations as all other Lenders hereunder. The assigning Lender shall be relieved of its
obligations hereunder with respect to its Revolving Loan Commitments or assigned portion thereof
from and after the date of such assignment. Borrower hereby acknowledges and agrees that any
assignment shall give rise to a direct obligation of Borrower to the assignee and that the assignee
shall be considered to be a “Lender”. In all instances, each Lender’s liability to make Loans
hereunder shall be several and not joint and shall be limited to such Lender’s Pro Rata Share of
the applicable Revolving Loan Commitment. In the event Administrative Agent or any Lender assigns
or otherwise transfers all or any part of the Obligations, Administrative Agent or any such Lender
shall so notify Borrower and Borrower shall, upon the request of Administrative Agent or such
Lender, execute new Notes in exchange for the Notes, if any, being assigned. Notwithstanding the
foregoing provisions of this Section 9.1(a), any Lender may at any time pledge the
Obligations held by it and such Lender’s rights under this Agreement and the other Loan Documents
to a Federal Reserve Bank, and any Lender that is an investment fund may assign the Obligations
held by it and such Lender’s rights under this Agreement and the other Loan Documents to another
investment fund managed by the same investment advisor; provided, that no such pledge to a
Federal Reserve Bank shall release such Lender from such Lender’s obligations hereunder or under
any other Loan Document.

     (b) Any participation by a Lender of all or any part of its Revolving Loan Commitments shall
be made with the understanding that all amounts payable by Borrower hereunder shall be determined
as if that Lender had not sold such participation, and that the holder of any such participation
shall not be entitled to require such Lender to take or omit to take any action hereunder except
actions directly affecting (i) any reduction in the principal amount of, or interest rate or Fees
payable with respect to, any Loan in which such holder participates, (ii) any extension of the
scheduled amortization of the principal amount of any Loan in which such holder participates or the
final maturity date thereof, and (iii) any release of all or substantially all of the Collateral
(other than in accordance with the terms of this Agreement, the Collateral Documents or the other
Loan Documents). Solely for purposes of Sections 1.13, 1.15, 1.16 and 9.8,
Borrower acknowledges and agrees that a participation shall give rise to a direct obligation of
Borrower to the participant and the participant shall be considered to be a “Lender”. Except as
set forth in the preceding sentence neither Borrower nor any other Credit Party shall have any
obligation or duty to any participant. Neither Administrative Agent nor any Lender (other than the
Lender selling a participation) shall have any duty to any participant and may continue to deal
solely with the Lender selling a participation as if no such sale had occurred.

     (c) Except as expressly provided in this Section 9.1, no Lender shall, as between
Borrower and that Lender, or Administrative Agent and that Lender, be relieved of any of its
obligations hereunder as a result of any sale, assignment, transfer or negotiation of, or granting
of participation in, all or any part of the Loans, the Notes or other Obligations owed to such
Lender.

     (d) Each Credit Party executing this Agreement shall assist any Lender permitted to sell
assignments or participations under this Section 9.1 as reasonably required to enable the
assigning or selling Lender to effect any such assignment or participation, including the execution
and delivery of any and all agreements, notes and other documents and instruments as shall be
requested and the preparation of informational materials for, and the participation of management
in meetings with, potential assignees or participants. Each Credit Party executing

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this Agreement shall certify the correctness, completeness and accuracy of all descriptions of
the Credit Parties and their respective affairs contained in any selling materials provided by it
and all other information provided by it and included in such materials, except that any
projections delivered by Borrower shall only be certified by Borrower as having been prepared by
Borrower in compliance with the representations contained in Section 3.17.

     (e) A Lender may furnish any information concerning Credit Parties in the possession of such
Lender from time to time to assignees and participants (including prospective assignees and
participants); provided that such Lender shall obtain from assignees or participants
confidentiality covenants substantially equivalent to those contained in Section 11.8.

     (f) So long as no Event of Default has occurred and is continuing, no Lender shall assign or
sell participations in any portion of its Loans or Revolving Loan Commitments to a potential Lender
or participant, if, as of the date of the proposed assignment or sale, the assignee Lender or
participant would be subject to capital adequacy or similar requirements under Section
1.16(a), increased costs under Section 1.16(b), an inability to fund LIBOR Loans under
Section 1.16(c), or withholding taxes in accordance with Section 1.15(a).

     (g) Notwithstanding anything to the contrary contained herein, any Lender (a “Granting
Lender”), may grant to a special purpose funding vehicle (an “SPC”), identified as such
in writing by the Granting Lender to Administrative Agent and Borrower, the option to provide to
Borrower all or any part of any Loans that such Granting Lender would otherwise be obligated to
make to Borrower pursuant to this Agreement; provided that (i) nothing herein shall
constitute a commitment by any SPC to make any Loan; and (ii) if an SPC elects not to exercise such
option or otherwise fails to provide all or any part of such Loan, the Granting Lender shall be
obligated to make such Loan pursuant to the terms hereof. The making of a Loan by an SPC hereunder
shall utilize the Revolving Loan Commitment of the Granting Lender to the same extent, and as if
such Loan were made by such Granting Lender. No SPC shall be liable for any indemnity or similar
payment obligation under this Agreement (all liability for which shall remain with the Granting
Lender). Any SPC may (i) with notice to, but without the prior written consent of, Borrower and
Administrative Agent and without paying any processing fee therefor assign all or a portion of its
interests in any Loans to the Granting Lender or to any financial institutions (consented to by
Borrower and Agent) providing liquidity and/or credit support to or for the account of such SPC to
support the funding or maintenance of Loans and (ii) disclose on a confidential basis any
non-public information relating to its Loans to any rating agency, commercial paper dealer or
provider of any surety, guarantee or credit or liquidity enhancement to such SPC. This Section
9.1(g) may not be amended without the prior written consent of each Granting Lender, all or any
of whose Loans are being funded by an SPC at the time of such amendment. For the avoidance of
doubt, the Granting Lender shall for all purposes, including without limitation, the approval of
any amendment or waiver of any provision of any Loan Document or the obligation to pay any amount
otherwise payable by the Granting Lender under the Loan Documents, continue to be the Lender of
record hereunder.

     9.2 Appointment of Agents. Royal Bank of Canada and GE Capital are hereby
appointed to act on behalf of all Lenders as Administrative Agent and Inventory and
Receivables Security Agent, respectively, under this Agreement and the other Loan
Documents. The provisions of this Section 9.2 are solely for the benefit of

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Administrative Agent, the Inventory and Receivables Security Agent and Lenders and no
Credit Party nor any other Person shall have any rights as a third party beneficiary of any
of the provisions hereof. In performing its functions and duties under this Agreement and
the other Loan Documents, each Agent shall act solely as an agent of Lenders and does not
assume and shall not be deemed to have assumed any obligation toward or relationship of
agency or trust with or for any Credit Party or any other Person. No Agent shall have any
duties or responsibilities except for those expressly set forth in this Agreement and the
other Loan Documents. The duties of Agents shall be mechanical and administrative in
nature and no Agent shall have, or be deemed to have, by reason of this Agreement, any
other Loan Document or otherwise a fiduciary relationship in respect of any Lender. Except
as expressly set forth in this Agreement and the other Loan Documents, no Agent shall have
any duty to disclose, and shall not be liable for failure to disclose, any information
relating to any Credit Party or any of their respective Subsidiaries or any Account Debtor
that is communicated to or obtained by Royal Bank of Canada or GE Capital or any of their
Affiliates in any capacity. No Agent nor any of its Affiliates nor any of their respective
officers, directors, employees, agents or representatives shall be liable to any Lender for
any action taken or omitted to be taken by it hereunder or under any other Loan Document,
or in connection herewith or therewith, except for damages caused by its or their own gross
negligence or willful misconduct.

     If any Agent shall request instructions from Requisite Lenders, Supermajority Lenders or all
affected Lenders with respect to any act or action (including failure to act) in connection with
this Agreement or any other Loan Document, then such Agent shall be entitled to refrain from such
act or taking such action unless and until such Agent shall have received instructions from
Requisite Lenders, Supermajority Lenders, or all affected Lenders, as the case may be, and such
Agent shall not incur liability to any Person by reason of so refraining. Each Agent shall be
fully justified in failing or refusing to take any action hereunder or under any other Loan
Document (a) if such action would, in the opinion of such Agent, be contrary to law or the terms of
this Agreement or any other Loan Document, (b) if such action would, in the opinion of such Agent,
expose such Agent to Environmental Liabilities or (c) if such Agent shall not first be indemnified
to its satisfaction against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. Without limiting the foregoing, no Lender shall
have any right of action whatsoever against an Agent as a result of such Agent acting or refraining
from acting hereunder or under any other Loan Document in accordance with the instructions of
Requisite Lenders, Supermajority Lenders or all affected Lenders, as applicable.

     No Documentation Agent or Syndication Agent shall have any duties or responsibilities or incur
any liabilities hereunder in its capacity as such.

     9.3 Agent’s Reliance, Etc. No Agent nor any of their Affiliates nor any of
their respective directors, officers, agents or employees shall be liable for any action
taken or omitted to be taken by it or them under or in connection with this Agreement or
the other Loan Documents, except for damages caused by its own gross negligence or willful
misconduct. Without limiting the generality of the foregoing, each Agent: (a) may treat
the payee of any Note as the holder thereof until such Agent

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receives written notice of the assignment or transfer thereof signed by such payee and
in form reasonably satisfactory to such Agent; (b) may consult with legal counsel,
independent public accountants and other experts selected by it and shall not be liable for
any action taken or omitted to be taken by it in good faith in accordance with the advice
of such counsel, accountants or experts; (c) makes no warranty or representation to any
Lender and shall not be responsible to any Lender for any statements, warranties or
representations made in or in connection with this Agreement or the other Loan Documents;
(d) shall not have any duty to ascertain or to inquire as to the performance or observance
of any of the terms, covenants or conditions of this Agreement or the other Loan Documents
on the part of any Credit Party or to inspect the Collateral (including the books and
records) of any Credit Party; (e) shall not be responsible to any Lender for the due
execution, legality, validity, enforceability, genuineness, sufficiency or value of this
Agreement or the other Loan Documents or any other instrument or document furnished
pursuant hereto or thereto; and (f) shall incur no liability under or in respect of this
Agreement or the other Loan Documents by acting upon any notice, consent, certificate or
other instrument or writing (which may be by telecopy, telegram, cable or telex) believed
by it to be genuine and signed or sent by the proper party or parties.

     9.4 Royal Bank of Canada, GE Capital and Affiliates. With respect to its
Revolving Loan Commitments hereunder, each of Royal Bank of Canada and GE Capital shall
have the same rights and powers under this Agreement and the other Loan Documents as any
other Lender and each may exercise the same as though it were not an Agent; and the term
“Lender” or “Lenders” shall, unless otherwise expressly indicated, include each of Royal
Bank of Canada and GE Capital in its individual capacity. Royal Bank of Canada, GE Capital
and their Affiliates may lend money to, invest in, and generally engage in any kind of
business with, any Credit Party, any of their Affiliates and any Person who may do business
with or own securities of any Credit Party or any such Affiliate, all as if Royal Bank of
Canada or GE Capital, as appropriate, were not an Agent and without any duty to account
therefor to Lenders. Royal Bank of Canada, GE Capital and their Affiliates may accept fees
and other consideration from any Credit Party for services in connection with this
Agreement or otherwise without having to account for the same to Lenders. Each Lender
acknowledges the potential conflict of interest between each of Royal Bank of Canada and GE
Capital as a Lender holding disproportionate interests in the Loans and each of Royal Bank
of Canada and GE Capital as an Agent.

     9.5 Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon any Agent or any other Lender and based on the
Financial Statements referred to in Section 3.1 and such other documents and
information as it has deemed appropriate, made its own credit and financial analysis of the
Credit Parties and its own decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon any Agent or any other
Lender and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action under this
Agreement. Each Lender acknowledges the potential conflict of interest of each other
Lender as a result of Lenders holding disproportionate interests in the Loans, and
expressly consents to, and waives any claim based upon, such conflict of interest.

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     9.6 Indemnification. Lenders agree to indemnify each Agent (to the extent not
reimbursed by Credit Parties and without limiting the obligations of Credit Parties
hereunder), ratably according to the Lenders’ respective Pro Rata Shares, from and against
any and all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever that may be
imposed on, incurred by, or asserted against any Agent in any way relating to or arising
out of this Agreement or any other Loan Document or any action taken or omitted to be taken
by any Agent in connection therewith; provided, that no Lender shall be liable for
any portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from an Agent’s gross
negligence or willful misconduct. Without limiting the foregoing, each Lender agrees to
reimburse each Agent promptly upon demand for its ratable share of any out-of-pocket
expenses (including reasonable counsel fees) incurred by such Agent in connection with the
preparation, execution, delivery, administration, modification, amendment or enforcement
(whether through negotiations, legal proceedings or otherwise) of, or legal advice in
respect of rights or responsibilities under, this Agreement and each other Loan Document,
to the extent that such Agent is not reimbursed for such expenses by Credit Parties.

     9.7 Successor Agent. Any Agent may resign at any time by giving not less than
thirty (30) days’ prior written notice thereof to Lenders and Borrower. Upon any such
resignation, the Requisite Lenders shall have the right to appoint a successor
Administrative Agent or Inventory and Receivables Security Agent, as the case may be. If
no such successor Agent shall have been so appointed by the Requisite Lenders and shall
have accepted such appointment within thirty (30) days after the resigning Agent’s giving
notice of resignation, then the resigning Agent may, on behalf of Lenders, appoint a
successor Agent, which shall be a Lender, if a Lender is willing to accept such
appointment, or otherwise shall be a commercial bank or financial institution or a
subsidiary of a commercial bank or financial institution if such commercial bank or
financial institution is organized under the laws of the United States of America or of any
State thereof and has a combined capital and surplus of at least $300,000,000. If no
successor Agent has been appointed pursuant to the foregoing, within thirty (30) days after
the date such notice of resignation was given by the resigning Agent, such resignation
shall become effective and the Requisite Lenders shall thereafter perform all the duties of
the resigning Agent hereunder until such time, if any, as the Requisite Lenders appoint a
successor Agent as provided above. Any successor Agent appointed by Requisite Lenders
hereunder shall be subject to the approval of Borrower, such approval not to be
unreasonably withheld or delayed; provided that such approval shall not be required
if a Default or an Event of Default has occurred and is continuing. Upon the acceptance of
any appointment as an 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
resigning Agent. Upon the earlier of the acceptance of any appointment as an Agent
hereunder by a successor Agent or the effective date of the resigning Agent’s resignation,
the resigning Agent shall be discharged from its duties and obligations under this
Agreement and the other Loan Documents, except that any indemnity rights or other rights in
favor of such resigning Agent shall continue. After any resigning Agent’s resignation
hereunder, the provisions of this Section 9 shall inure

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to its benefit as to any actions taken or omitted to be taken by it while it was
acting as an Agent under this Agreement and the other Loan Documents.

     9.8 Setoff and Sharing of Payments. In addition to any rights now or
hereafter granted under applicable law and not by way of limitation of any such rights,
upon the occurrence and during the continuance of any Event of Default and subject to
Section 9.9(f), each Lender is hereby authorized at any time or from time to time,
without prior notice to any Credit Party or to any Person other than Administrative Agent,
any such notice being hereby expressly waived, to offset and to appropriate and to apply
any and all balances held by it at any of its offices for the account of Borrower or any
Guarantor (regardless of whether such balances are then due to Borrower or any Guarantor)
and any other properties or assets at any time held or owing by that Lender or that holder
to or for the credit or for the account of Borrower or any Guarantor against and on account
of any of the Obligations that are not paid when due; provided that the Lender
exercising such offset rights shall give notice thereof to the affected Credit Party
promptly after exercising such rights. Any Lender exercising a right of setoff or
otherwise receiving any payment on account of the Obligations in excess of its Pro Rata
Share thereof shall purchase for cash (and the other Lenders or holders shall sell) such
participations in each such other Lender’s or holder’s Pro Rata Share of the Obligations as
would be necessary to cause such Lender to share the amount so offset or otherwise received
with each other Lender or holder in accordance with their respective Pro Rata Shares,
(other than offset rights exercised by any Lender with respect to Sections 1.13, 1.15
or 1.16). Each Lender’s obligation under this Section 9.8 shall be in addition
to and not in limitation of its obligations to purchase a participation in an amount equal
to its Pro Rata Share of the Swing Line Loans under Section 1.1. Borrower and each
Guarantor agrees, to the fullest extent permitted by law, that (a) any Lender may exercise
its right to offset with respect to amounts in excess of its Pro Rata Share of the
Obligations and may sell participations in such amounts so offset to other Lenders and
holders and (b) any Lender so purchasing a participation in the Loans made or other
Obligations held by other Lenders or holders may exercise all rights of offset, bankers’
lien, counterclaim or similar rights with respect to such participation as fully as if such
Lender or holder were a direct holder of the Loans and the other Obligations in the amount
of such participation. Notwithstanding the foregoing, if all or any portion of the offset
amount or payment otherwise received is thereafter recovered from the Lender that has
exercised the right of offset, the purchase of participations by that Lender shall be
rescinded and the purchase price restored without interest.

     9.9 Advances; Payments; Non-Funding Lenders; Information; Actions in Concert.

     (a) Advances; Payments.

          (i) Administrative Agent shall notify Lenders, promptly after receipt of a Notice of Revolving
Advance and in any event prior to 3:00 p.m. (New York time) on the date such Notice of Revolving
Advance is received, by telecopy, telephone or other similar form of transmission. Each Lender
shall make the amount of such Lender’s Pro Rata Share of such Revolving Credit Advance available to
Administrative Agent in same day funds by wire transfer

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to Administrative Agent’s account as set forth in Annex H not later than 4:00 p.m.
(New York time) on the requested funding date in the case of an Index Rate Loan and not later than
11:00 a.m. (New York time) on the requested funding date in the case of a LIBOR Loan. After
receipt of such wire transfers (or, in the Administrative Agent’s sole discretion, before receipt
of such wire transfers), subject to the terms hereof, Administrative Agent shall make the requested
Revolving Credit Advance to Borrower. All payments by each Lender shall be made without setoff,
counterclaim or deduction of any kind.

          (ii) Not less than once during each calendar week or more frequently at Administrative Agent’s
election (each, a “Settlement Date”), Administrative Agent shall advise each Lender by
telephone, or telecopy of the amount of such Lender’s Pro Rata Share of principal, interest and
Fees paid for the benefit of Lenders with respect to each applicable Loan. Provided that
each Lender has funded all payments and Advances required to be made by it and purchased all
participations required to be purchased by it under this Agreement and the other Loan Documents as
of such Settlement Date, Administrative Agent shall pay to each Lender such Lender’s Pro Rata Share
of principal, interest and Fees paid by Borrower since the previous Settlement Date for the benefit
of such Lender on the Loans held by it. To the extent that any Lender (a “Non-Funding
Lender”) has failed to fund all such payments and Advances or failed to fund the purchase of
all such participations, Administrative Agent shall be entitled to set off the funding short-fall
against that Non-Funding Lender’s Pro Rata Share of all payments received from Borrower. Such
payments shall be made by wire transfer to such Lender’s account (as specified by such Lender in
Annex H or the applicable Assignment Agreement) not later than 2:00 p.m. (New York time) on
the next Business Day following each Settlement Date.

     (b) Availability of Lender’s Pro Rata Share. Administrative Agent may assume that
each Lender will make its Pro Rata Share of each Revolving Credit Advance available to
Administrative Agent on each funding date. If such Pro Rata Share is not, in fact, paid to
Administrative Agent by such Lender when due, Administrative Agent will be entitled to recover such
amount on demand from such Lender without setoff, counterclaim or deduction of any kind. If any
Lender fails to pay the amount of its Pro Rata Share forthwith upon Administrative Agent’s demand,
Administrative Agent shall promptly notify Borrower and Borrower shall immediately repay such
amount to Administrative Agent. Nothing in this Section 9.9(b) or elsewhere in this
Agreement or the other Loan Documents shall be deemed to require Administrative Agent to advance
funds on behalf of any Lender or to relieve any Lender from its obligation to fulfill its Revolving
Loan Commitments hereunder or to prejudice any rights that Borrower may have against any Lender as
a result of any default by such Lender hereunder. To the extent that Administrative Agent advances
funds to Borrower on behalf of any Lender and is not reimbursed therefor on the same Business Day
as such Advance is made, Administrative Agent shall be entitled to retain for its account all
interest accrued on such Advance until reimbursed by the applicable Lender.

     (c) Return of Payments.

          (i) If Administrative Agent pays an amount to a Lender under this Agreement in the belief or
expectation that a related payment has been or will be received by Administrative Agent from
Borrower and such related payment is not received by Administrative

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Agent, then Administrative Agent will be entitled to recover such amount from such Lender on
demand without setoff, counterclaim or deduction of any kind.

          (ii) If Administrative Agent determines at any time that any amount received by Administrative
Agent under this Agreement must be returned to Borrower or paid to any other Person pursuant to any
insolvency law or otherwise, then, notwithstanding any other term or condition of this Agreement or
any other Loan Document, Administrative Agent will not be required to distribute any portion
thereof to any Lender. In addition, each Lender will repay to Administrative Agent on demand any
portion of such amount that Administrative Agent has distributed to such Lender, together with
interest at such rate, if any, as Administrative Agent is required to pay to Borrower or such other
Person, without setoff, counterclaim or deduction of any kind.

     (d) Non-Funding Lenders. The failure of any Non-Funding Lender to make any Revolving
Credit Advance or any payment required by it hereunder, or to purchase any participation in any
Swing Line Loan to be made or purchased by it on the date specified therefor shall not relieve any
other Lender (each such other Lender, an “Other Lender”) of its obligations to make such
Advance or purchase such participation on such date, but neither any Other Lender nor
Administrative Agent shall be responsible for the failure of any Non-Funding Lender to make an
Advance, purchase a participation or make any other payment required hereunder. Notwithstanding
anything set forth herein to the contrary, a Non-Funding Lender shall not have any voting or
consent rights under or with respect to any Loan Document or constitute a “Lender” (or be included
in the calculation of “Requisite Lenders” or “Supermajority Lenders” hereunder) for any voting or
consent rights under or with respect to any Loan Document. At Borrower’s request, Administrative
Agent or a Person acceptable to Administrative Agent shall have the right with Administrative
Agent’s consent and in Administrative Agent’s sole discretion (but shall have no obligation) to
purchase from any Non-Funding Lender, and each Non-Funding Lender agrees that it shall, at
Administrative Agent’s request, sell and assign to Administrative Agent or such Person, all of the
Revolving Loan Commitments of that Non-Funding Lender for an amount equal to the principal balance
of all Loans held by such Non-Funding Lender and all accrued interest and fees with respect thereto
through the date of sale, such purchase and sale to be consummated pursuant to an executed
Assignment Agreement.

     (e) Dissemination of Information. Administrative Agent shall use reasonable efforts
to provide Lenders with any notice of Default or Event of Default received by Administrative Agent
from, or delivered by Administrative Agent to, any Credit Party, with notice of any Event of
Default of which Administrative Agent has actually become aware and with notice of any action taken
by Administrative Agent following any Event of Default; provided, that Administrative Agent
shall not be liable to any Lender for any failure to do so, except to the extent that such failure
is attributable to Administrative Agent’s gross negligence or willful misconduct. Lenders
acknowledge that Borrower is required to provide Financial Statements and Collateral Reports to
Lenders in accordance with Annexes E and F hereto and agree that Administrative Agent shall
have no duty to provide the same to Lenders.

     (f) Actions in Concert. Anything in this Agreement to the contrary notwithstanding,
each Lender hereby agrees with each other Lender that no Lender shall take any action to protect or
enforce its rights arising out of this Agreement or the Notes (including

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exercising any rights of setoff) without first obtaining the prior written consent of
Administrative Agent and Requisite Lenders, it being the intent of Lenders that any such action to
protect or enforce rights under this Agreement and the Notes shall be taken in concert and at the
direction or with the consent of Administrative Agent or Requisite Lenders.

10. SUCCESSORS AND ASSIGNS

     10.1 Successors and Assigns. This Agreement and the other Loan Documents
shall be binding on and shall inure to the benefit of each Credit Party, Agents, Lenders
and their respective successors and assigns (including, in the case of any Credit Party, a
debtor-in-possession on behalf of such Credit Party), except as otherwise provided herein
or therein. No Credit Party may assign, transfer, hypothecate or otherwise convey its
rights, benefits, obligations or duties hereunder or under any of the other Loan Documents
without the prior express written consent of Agents and Lenders. Any such purported
assignment, transfer, hypothecation or other conveyance by any Credit Party without the
prior express written consent of Agents and Lenders shall be void. The terms and
provisions of this Agreement are for the purpose of defining the relative rights and
obligations of each Credit Party, Agents and Lenders with respect to the transactions
contemplated hereby and no Person shall be a third party beneficiary of any of the terms
and provisions of this Agreement or any of the other Loan Documents.

11. MISCELLANEOUS

     11.1 Complete Agreement; Modification of Agreement. The Loan Documents
constitute the complete agreement between the parties with respect to the subject matter
thereof and may not be modified, altered or amended except as set forth in Section
11.2. Any letter of interest, commitment letter, fee letter or confidentiality
agreement, if any, between any Credit Party and Agent or any Lender or any of their
respective Affiliates, predating this Agreement and relating to a financing of
substantially similar form, purpose or effect shall be superseded by this Agreement.
Notwithstanding the foregoing, the Fee Letter shall survive the execution and delivery of
this Agreement and shall continue to be binding obligations of the parties.

     11.2 Amendments and Waivers.

     (a) Except for actions expressly permitted to be taken by an Agent, no amendment,
modification, termination or waiver of any provision of this Agreement or any other Loan Document,
or any consent to any departure by any Credit Party therefrom, shall in any event be effective
unless the same shall be in writing and signed by Administrative Agent and Borrower, and by
Requisite Lenders, Supermajority Lenders or all affected Lenders, as applicable. Except as set
forth in clauses (b) and (c) below, all such amendments, modifications, terminations or
waivers requiring the consent of any Lenders shall require the written consent of Requisite
Lenders.

     (b) No amendment, modification, termination or waiver of or consent with respect to any
provision of this Agreement that increases the percentage advance rates, Inventory Cap or
Liquidation Percentage set forth in the definition of the Borrowing Base, or that makes

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less restrictive the nondiscretionary criteria for exclusion from Eligible Accounts and
Eligible Inventory set forth in Sections 1.6 and 1.7, shall be effective unless the same
shall be made in accordance with Sections 1.6 and 1.7. No amendment, modification,
termination or waiver of or consent with respect to any provision of this Agreement that waives
compliance with the conditions precedent set forth in Section 2.2 to the making of any Loan
or the incurrence of any Letter of Credit Obligations shall be effective unless the same shall be
in writing and signed by the Administrative Agent, Requisite Lenders and Borrower. Notwithstanding
anything contained in this Agreement to the contrary, no waiver or consent with respect to any
Default or any Event of Default shall be effective for purposes of the conditions precedent to the
making of Loans or the incurrence of Letter of Credit Obligations set forth in Section 2.2
unless the same shall be in writing and signed by the Administrative Agent, the Borrower and the
Lenders which would otherwise be required to agree to such waiver or consent in accordance with the
applicable provisions of this Section 11.2.

     (c) No amendment, modification, termination or waiver shall, unless in writing and signed by
Administrative Agent and each Lender directly affected thereby: (i) increase the principal amount
of any Lender’s Revolving Loan Commitment; (ii) reduce the principal of, rate of interest on or
Fees payable with respect to any Loan or Letter of Credit Obligations of any affected Lender; (iii)
extend any scheduled payment date (other than payment dates of mandatory prepayments under
Section 1.3(b)-(f)) or final maturity date of the principal amount of any Loan of any
affected Lender; (iv) waive, forgive, defer, extend or postpone any payment of interest or Fees as
to any affected Lender; (v) release any material portion of the Guarantors from their guarantee
obligations under the Collateral Documents or release any material portion of the Collateral (which
action shall be deemed to directly affect all Lenders), except as otherwise permitted herein or in
the other Loan Documents; (vi) change the percentage of the Revolving Loan Commitments or of the
aggregate unpaid principal amount of the Loans that shall be required for Lenders or any of them to
take any action hereunder; (vii) reduce the minimum Borrowing Availability required by paragraph
(d) of Annex G (which action shall be deemed to directly affect all Lenders); (viii)
increase the aggregate amount of Revolving Loan Commitments (which action shall be deemed to
directly affect all Lenders); and (ix) amend or waive this Section 11.2 or the definitions
of the terms “Requisite Lenders” or “Supermajority Lenders” insofar as such definitions affect the
substance of this Section 11.2. Furthermore, no amendment, modification, termination or
waiver affecting the rights or duties of any Agent or the L/C Issuer under this Agreement or any
other Loan Document shall be effective unless in writing and signed by such Agent or the L/C
Issuer, as the case may be, in addition to Lenders required hereinabove to take such action. Each
amendment, modification, termination or waiver shall be effective only in the specific instance and
for the specific purpose for which it was given. No amendment, modification, termination or waiver
shall be required for Inventory and Receivables Security Agent to direct Collateral Agent to take
additional Collateral pursuant to any Loan Document. No amendment, modification, termination or
waiver of any provision of any Note shall be effective without the written concurrence of the
holder of that Note. No notice to or demand on any Credit Party in any case shall entitle such
Credit Party or any other Credit Party to any other or further notice or demand in similar or other
circumstances. Any amendment, modification, termination, waiver or consent effected in accordance
with this Section 11.2 shall be binding upon each holder of the Notes at the time
outstanding and each future holder of the Notes.

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     (d) If, in connection with any proposed amendment, modification, waiver or termination (a
“Proposed Change”):

          (i) requiring the consent of all affected Lenders, the consent of Requisite Lenders is
obtained, but the consent of other Lenders whose consent is required is not obtained (any
such Lender whose consent is not obtained as described in this clause (i) and in
clauses (ii), (iii) and (iv) below being referred to as “Non Consenting
Lender”);

          (ii) requiring the consent of Supermajority Revolving Lenders, the consent of
Requisite Lenders is obtained, but the consent of Supermajority Lenders is not obtained; or

          (iii) requiring the consent of Requisite Lenders, the consent of Lenders holding 51%
or more of the aggregate Revolving Loan Commitments is obtained, but the consent of
Requisite Lenders is not obtained;

then, so long as neither the Administrative Agent nor the Inventory and Receivables Security Agent
is a Non Consenting Lender, at Borrower’s request Administrative Agent, or a Person reasonably
acceptable to Administrative Agent, shall have the right with Administrative Agent’s consent and in
Administrative Agent’s sole discretion (but shall have no obligation) to purchase from such Non
Consenting Lenders, and such Non Consenting Lenders agree that they shall, upon Administrative
Agent’s request, sell and assign to Administrative Agent or such Person, all of the Revolving Loan
Commitments of such Non Consenting Lenders for an amount equal to the principal balance of all
Loans held by the Non Consenting Lenders and all accrued interest and Fees with respect thereto
through the date of sale, such purchase and sale to be consummated pursuant to an executed
Assignment Agreement.

     (e) Upon payment in full in cash and performance of all of the Obligations (other than
indemnification Obligations), termination of the Revolving Loan Commitments and a release of all
claims against Agents and Lenders, and so long as no suits, actions, proceedings, or claims are
pending or threatened against any Indemnified Person asserting any damages, losses or liabilities
that are Indemnified Liabilities, Inventory and Receivables Security Agent shall so inform
Collateral Agent after which date the Agents and the Lenders shall no longer have any interest in
the Collateral Documents.

     11.3 Fees and Expenses. Borrower shall reimburse (i) Agents for all fees,
costs and expenses (including the reasonable fees and expenses of all of its counsel,
advisors, consultants and auditors) and (ii) Agents (and, with respect to clauses (c)
and (d) below, all Lenders) for all fees, costs and expenses, including the reasonable
fees, costs and expenses of counsel or other advisors (including environmental and
management consultants and appraisers) incurred in connection with the negotiation,
preparation and filing and/or recordation of the Loan Documents and incurred in connection
with:

     (a) any amendment, modification or waiver of, or consent with respect to, or termination of,
any of the Loan Documents or Related Transactions Documents or advice in

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connection with the syndication and administration of the Loans made pursuant hereto or its
rights hereunder or thereunder;

     (b) any litigation, contest, dispute, suit, proceeding or action (whether instituted by any
Agent, any Lender, any Credit Party or any other Person and whether as a party, witness or
otherwise) in any way relating to the Collateral, any of the Loan Documents or any other agreement
to be executed or delivered in connection herewith or therewith, including any litigation, contest,
dispute, suit, case, proceeding or action, and any appeal or review thereof, in connection with a
case commenced by or against any or all of the Credit Parties or any other Person that may be
obligated to any Agent by virtue of the Loan Documents, including any such litigation, contest,
dispute, suit, proceeding or action arising in connection with any work-out or restructuring of the
Loans during the pendency of one or more Events of Default; provided that in the case of
reimbursement of counsel for Lenders other than any Agent, such reimbursement shall be limited to
one counsel for all such Lenders; provided, further, that no Person shall be entitled to
reimbursement under this clause (c) in respect of any litigation, contest, dispute, suit,
proceeding or action to the extent any of the foregoing results from such Person’s gross negligence
or willful misconduct;

     (c) any attempt to enforce any remedies of any Agent or any Lender against any or all of the
Credit Parties or any other Person that may be obligated to any Agent or any Lender by virtue of
any of the Loan Documents, including any such attempt to enforce any such remedies in the course of
any work-out or restructuring of the Loans during the pendency of one or more Events of Default;
provided, that in the case of reimbursement of counsel for Lenders other than Agent, such
reimbursement shall be limited to one counsel for all such Lenders;

     (d) any workout or restructuring of the Loans during the pendency of one or more Events of
Default; and

     (e) efforts to (i) monitor the Loans or any of the other Obligations, (ii) evaluate, observe
or assess any of the Credit Parties or their respective affairs, and (iii) verify, protect,
evaluate, assess, appraise, collect, sell, liquidate or otherwise dispose of any of the Collateral;

including, as to each of clauses (a) through (e) above, all reasonable attorneys’ and other
professional and service providers’ fees arising from such services and other advice, assistance or
other representation, including those in connection with any appellate proceedings, and all
expenses, costs, charges and other fees incurred by such counsel and others in connection with or
relating to any of the events or actions described in this Section 11.3, all of which shall
be payable, on demand, by Borrower to Administrative Agent. Without limiting the generality of the
foregoing, such expenses, costs, charges and fees may include: fees, costs and expenses of
accountants, environmental advisors, appraisers, investment bankers, management and other
consultants and paralegals; court costs and expenses; photocopying and duplication expenses; court
reporter fees, costs and expenses; long distance telephone charges; air express charges; telegram
or telecopy charges; secretarial overtime charges; and expenses for travel, lodging and food paid
or incurred in connection with the performance of such legal or other advisory services.

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     11.4 No Waiver. Any Agent’s or Lender’s failure, at any time or times, to
require strict performance by the Credit Parties of any provision of this Agreement or any
other Loan Document shall not waive, affect or diminish any right of such Agent or Lender
thereafter to demand strict compliance and performance herewith or therewith. Any
suspension or waiver of an Event of Default shall not suspend, waive or affect any other
Event of Default whether the same is prior or subsequent thereto and whether the same or of
a different type. Subject to the provisions of Section 11.2, none of the
undertakings, agreements, warranties, covenants and representations of any Credit Party
contained in this Agreement or any of the other Loan Documents and no Default or Event of
Default by any Credit Party shall be deemed to have been suspended or waived by any Agent
or Lender, unless such waiver or suspension is by an instrument in writing signed by an
officer of or other authorized employee of Administrative Agent, Inventory and Receivables
Security Agent and the applicable required Lenders and directed to Borrower specifying such
suspension or waiver.

     11.5 Remedies. Agents’ and Lenders’ rights and remedies under this Agreement
shall be cumulative and nonexclusive of any other rights and remedies that any Agent or
Lender may have under any other agreement, including the other Loan Documents, by operation
of law or otherwise. Recourse to the Collateral shall not be required.

     11.6 Severability. Wherever possible, each provision of this Agreement and
the other Loan Documents shall be interpreted in such a manner as to be effective and valid
under applicable law, but if any provision of this Agreement or any other Loan Document
shall be prohibited by or invalid under applicable law, such provision shall be ineffective
only to the extent of such prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Agreement or such other Loan Document.

     11.7 Conflict of Terms. Except as otherwise provided in this Agreement or any
of the other Loan Documents by specific reference to the applicable provisions of this
Agreement, if any provision contained in this Agreement conflicts with any provision in any
of the other Loan Documents, the provision contained in this Agreement shall govern and
control.

     11.8 Confidentiality. Each Agent and Lender agree to use commercially
reasonable efforts (equivalent to the efforts such Agent or Lender applies to maintain the
confidentiality of its own confidential information) to maintain as confidential all
confidential information provided to them by the Credit Parties and designated as
confidential for a period of two (2) years following receipt thereof, except that each
Agent and Lender may disclose such information (a) to Persons employed or engaged by such
Agent or Lender; (b) to any other Lender or any affiliate of a Lender; (c) to any bona fide
assignee or participant or potential assignee or participant that has agreed to comply with
the covenant contained in this Section 11.8 (and any such bona fide assignee or
participant or potential assignee or participant may disclose such information to Persons
employed or engaged by them as described in clause (a) above); (d) as required or
requested by any Governmental Authority or reasonably believed by

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such Agent or Lender to be compelled by any court decree, subpoena or legal or
administrative order or process; (e) as, on the advice of such Agent’s or Lender’s counsel,
is required by law; (f) in connection with the exercise of any right or remedy under the
Loan Documents or in connection with any Litigation to which such Agent or Lender is a
party; or (g) that ceases to be confidential through no fault of any Agent or Lender.
Notwithstanding anything to the contrary set forth herein or in any other Loan Document,
the obligations of confidentiality contained herein and therein, as they relate to the
transactions provided for or contemplated herein (collectively, the “Transaction”),
shall not apply to the tax structure or tax treatment of the Transaction, and each party
hereto (and any employee, representative, or agent of any party hereto) may disclose to any
and all persons, without limitation of any kind, the tax structure and tax treatment of the
Transaction. The preceding sentence is intended to cause the Transaction not to be treated
as having been offered under conditions of confidentiality for purposes of Section
1.6011-4(b)(3) (or any successor provision) of the Treasury regulations promulgated under
Section 6011 of the Internal Revenue Code of 1986, as amended, and shall be construed in a
manner consistent with such purpose. In addition, each party hereto acknowledges that it
has no proprietary or exclusive rights to any tax concept, tax matter or tax idea related
to the Transaction.

     11.9 GOVERNING LAW. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN ANY OF THE LOAN
DOCUMENTS, IN ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE, THE LOAN DOCUMENTS AND THE OBLIGATIONS SHALL BE GOVERNED BY, AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND PERFORMED IN THAT STATE AND ANY APPLICABLE LAWS OF THE UNITED STATES OF
AMERICA. EACH CREDIT PARTY HEREBY CONSENTS AND AGREES THAT THE STATE OR FEDERAL COURTS
LOCATED IN NEW YORK COUNTY, CITY OF NEW YORK, NEW YORK SHALL HAVE EXCLUSIVE JURISDICTION TO
HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN THE CREDIT PARTIES, AGENTS AND LENDERS
PERTAINING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR TO ANY MATTER ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS; PROVIDED,
THAT AGENTS, LENDERS AND THE CREDIT PARTIES ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS
MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF NEW YORK COUNTY AND; PROVIDED,
FURTHER THAT NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO PRECLUDE AGENT
FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION TO REALIZE ON THE
COLLATERAL OR ANY OTHER SECURITY FOR THE OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER
COURT ORDER IN FAVOR OF ANY AGENT; PROVIDED, FURTHER THAT IF FOR ANY REASON
THE STATE AND FEDERAL COURTS SITTING IN NEW YORK COUNTY, CITY OF NEW YORK, NEW YORK CANNOT
OR WILL NOT ACCEPT JURISDICTION OVER ANY SUCH SUIT, ACTION OR PROCEEDING, THEN

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THE EXCLUSIVITY OF JURISDICTION IN SUCH NEW YORK COURTS SHALL NOT APPLY. EACH CREDIT
PARTY EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUIT
COMMENCED IN ANY SUCH COURT, AND EACH CREDIT PARTY HEREBY WAIVES ANY OBJECTION THAT SUCH
CREDIT PARTY MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR
FORUM NON CONVENIENS AND HEREBY CONSENTS TO THE GRANTING OF SUCH
LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT. EACH CREDIT PARTY HEREBY
WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH
ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINTS AND OTHER PROCESS MAY BE
MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO SUCH CREDIT PARTY AT THE ADDRESS SET
FORTH IN ANNEX I OF THIS AGREEMENT AND THAT SERVICE SO MADE SHALL BE DEEMED
COMPLETED UPON THE EARLIER OF SUCH CREDIT PARTY’S ACTUAL RECEIPT THEREOF OR THREE (3) DAYS
AFTER DEPOSIT IN THE UNITED STATES MAILS, PROPER POSTAGE PREPAID.

     11.10 Notices. Except as otherwise provided herein, whenever it is provided
herein that any notice, demand, request, consent, approval, declaration or other
communication shall or may be given to or served upon any of the parties by any other
parties, or whenever any of the parties desires to give or serve upon any other parties any
communication with respect to this Agreement, each such notice, demand, request, consent,
approval, declaration or other communication shall be in writing and shall be deemed to
have been validly served, given or delivered (a) upon the earlier of actual receipt and
three (3) Business Days after deposit in the United States Mail, registered or certified
mail, return receipt requested, with proper postage prepaid, (b) upon transmission, when
sent by telecopy or other similar facsimile transmission (with such telecopy or facsimile
promptly confirmed by delivery of a copy by personal delivery or United States Mail as
otherwise provided in this Section 11.10); (c) one (1) Business Day after deposit
with a reputable overnight courier with all charges prepaid or (d) when delivered, if
hand-delivered by messenger, all of which shall be addressed to the party to be notified
and sent to the address or facsimile number indicated in Annex I or to such other
address (or facsimile number) as may be substituted by notice given as herein provided.
The giving of any notice required hereunder may be waived in writing by the party entitled
to receive such notice. Failure or delay in delivering copies of any notice, demand,
request, consent, approval, declaration or other communication to any Person (other than
Borrower or any Agent) designated in Annex I to receive copies shall in no way
adversely affect the effectiveness of such notice, demand, request, consent, approval,
declaration or other communication.

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     11.11 Section Titles. The Section titles and Table of Contents contained in
this Agreement are and shall be without substantive meaning or content of any kind
whatsoever and are not a part of the agreement between the parties hereto.

     11.12 Counterparts. This Agreement may be executed in any number of separate
counterparts, each of which shall collectively and separately constitute one agreement.

     11.13 WAIVER OF JURY TRIAL. BECAUSE DISPUTES ARISING IN CONNECTION WITH
COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN EXPERIENCED
AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND FEDERAL LAWS TO APPLY (RATHER
THAN ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR DISPUTES BE RESOLVED BY A JUDGE
APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS
OF THE JUDICIAL SYSTEM AND OF ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY
JURY IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER SOUNDING IN
CONTRACT, TORT OR OTHERWISE, AMONG AGENTS, LENDERS AND ANY CREDIT PARTY ARISING OUT OF,
CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN
CONNECTION WITH, THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS
RELATED THERETO.

     11.14 Press Releases and Related Matters. Each Credit Party executing this
Agreement agrees that neither it nor its Affiliates will in the future issue any press
releases or other public disclosure using the name of Royal Bank of Canada, GE Capital or
any of their affiliates or referring to this Agreement, the other Loan Documents or the
Related Transactions Documents without at least two (2) Business Days’ prior notice to such
party and without the prior written consent of such party unless (and only to the extent
that) such Credit Party or Affiliate is required to do so under law and then, in any event,
such Credit Party or Affiliate will consult with Royal Bank of Canada or GE Capital, as
applicable, before issuing such press release or other public disclosure. Each Credit
Party consents to the publication by any Agent or Lender of advertising material relating
to the financing transactions contemplated by this Agreement using Borrower’s name, product
photographs, logo or trademark. Such Agent or Lender shall provide a draft of any
advertising material to each Credit Party for review and comment prior to the publication
thereof. Agent reserves the right to provide to industry trade organizations information
necessary and customary for inclusion in league table measurements.

     11.15 Reinstatement. This Agreement shall remain in full force and effect and
continue to be effective should any petition be filed by or against any Credit Party for
liquidation or reorganization, should any Credit Party become insolvent or make an
assignment for the benefit of any creditor or creditors or should a receiver or trustee be
appointed for all or any significant part of any Credit Party’s assets, and shall continue
to be effective or to be reinstated, as the case may be, if at any time payment and

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performance of the Obligations, or any part thereof, is, pursuant to applicable law,
rescinded or reduced in amount, or must otherwise be restored or returned by any obligee of
the Obligations, whether as a “voidable preference,” “fraudulent conveyance,” or otherwise,
all as though such payment or performance had not been made. In the event that any
payment, or any part thereof, is rescinded, reduced, restored or returned, the Obligations
shall be reinstated and deemed reduced only by such amount paid and not so rescinded,
reduced, restored or returned.

     11.16 Advice of Counsel. Each of the parties represents to each other party
hereto that it has discussed this Agreement and, specifically, the provisions of
Sections 11.9 and 11.13, with its counsel.

     11.17 No Strict Construction.

     The parties hereto have participated jointly in the negotiation and drafting of this
Agreement. In the event an ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as if drafted jointly by the parties hereto and no presumption or
burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any
provisions of this Agreement.

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     IN WITNESS WHEREOF, this Agreement has been duly executed as of the date first written above.

	 	 	 	 	 	 	 
	 	 	WHEELING-PITTSBURGH CORPORATION
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Paul J. Mooney
	 	 	 	 	 
	 	 	Name:	 	Paul J. Mooney
	 	 	Title:	 	Executive Vice President and
Chief Financial Officer
	 
	 	 	 	 	 	 
	 	 	WHEELING-PITTSBURGH STEEL CORPORATION, as Borrower
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Michael P. DiClemente
	 	 	 	 	 
	 	 	Name:	 	Michael P. DiClemente
	 	 	Title:	 	Treasurer
	 
	 	 	 	 	 	 
	 	 	ROYAL BANK OF CANADA, as Administrative Agent
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Gail Watkin
	 	 	 	 	 
	 	 	Name:	 	Gail Watkin
	 	 	Title:	 	Manager, Agency
	 
	 	 	 	 	 	 
	 	 	GENERAL ELECTRIC CAPITAL

CORPORATION, as Inventory and Receivables Security Agent and
Documentation Agent
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Matthew N. McAlpine
	 	 	 	 	 
	 

	 	 	 	 	 	Duly Authorized Signatory

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ANNEX A (Recitals)

to

CREDIT AGREEMENT

DEFINITIONS

     Capitalized terms used in the Loan Documents shall have (unless otherwise provided elsewhere
in the Loan Documents) the following respective meanings and all references to Sections, Exhibits,
Schedules or Annexes in the following definitions shall refer to Sections, Exhibits, Schedules or
Annexes of or to the Agreement:

     “Account Debtor” means any Person who may become obligated to any Credit Party under,
with respect to, or on account of, an Account, Chattel Paper or General Intangibles (including a
payment intangible).

     “Accounting Changes” has the meaning ascribed thereto in Annex G.

     “Accounts” means all “accounts,” as such term is defined in the Code, now owned or
hereafter acquired by any Credit Party, including (a) all accounts receivable, other receivables,
book debts and other forms of obligations (other than forms of obligations evidenced by Chattel
Paper or Instruments), (including any such obligations that may be characterized as an account or
contract right under the Code), (b) all of each Credit Party’s rights in, to and under all purchase
orders or receipts for goods or services, (c) all of each Credit Party’s rights to any goods
represented by any of the foregoing (including unpaid sellers’ rights of rescission, replevin,
reclamation and stoppage in transit and rights to returned, reclaimed or repossessed goods), (d)
all rights to payment due to any Credit Party for property sold, leased, licensed, assigned or
otherwise disposed of, for a policy of insurance issued or to be issued, for a secondary obligation
incurred or to be incurred, for energy provided or to be provided, for the use or hire of a vessel
under a charter or other contract, arising out of the use of a credit card or charge card, or for
services rendered or to be rendered by such Credit Party or in connection with any other
transaction (whether or not yet earned by performance on the part of such Credit Party), (e) all
healthcare insurance receivables, and (f) all collateral security of any kind, now or hereafter in
existence, given by any Account Debtor or other Person with respect to any of the foregoing.

     “Acquisition Pro Forma” has the meaning ascribed to it in Section 6.8.

     “Adjusted Borrowing Availability” means as of any date of determination the lesser of
(i) $275,000,000 and (ii) the Borrowing Base, in each case, less the sum of the Revolving
Loan and Swing Line Loan then outstanding and, without duplication, any reserves established by the
Inventory and Receivables Security Agent.

     “Administrative Agent” means Royal Bank of Canada in its capacity as Administrative
Agent for Lenders or its successor appointed pursuant to Section 9.7.

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     “Advance” means any Revolving Credit Advance or Swing Line Advance, as the context may
require.

     “Advance Rate” has the meaning ascribed thereto in the definition “Borrowing Base”.

     “Affiliate” means, with respect to any Person, (a) each Person that, directly or
indirectly, owns or controls, whether beneficially, or as a trustee, guardian or other fiduciary,
10% or more of the Capital Stock having ordinary voting power in the election of directors of such
Person, (b) each Person that controls, is controlled by or is under common control with such
Person, (c) each of such Person’s officers, directors, joint venturers and partners and (d) in the
case of Borrower, the immediate family members, spouses and lineal descendants of individuals who
are Affiliates of Borrower. For the purposes of this definition, “control” of a Person
shall mean the possession, directly or indirectly, of the power to direct or cause the direction of
its management or policies, whether through the ownership of voting securities, by contract or
otherwise; provided, however, that the term “Affiliate” shall specifically
exclude Agent and each Lender.

     “Agents” means the collective reference to the Administrative Agent and the Inventory
and Receivables Security Agent.

     “Agreement” means this Revolving Loan Agreement by and among Holdings, Borrower, GE
Capital, as Inventory and Receivables Security Agent and Lender, Royal Bank of Canada, as
Administrative Agent and Lender and the other Lenders from time to time party hereto, as the same
may be amended, supplemented, restated or otherwise modified from time to time.

     “Allenport Cold Mill Improvements” means improvements relating to the stand-alone
inspection line, the planned coil handling upgrade on the temper mill and the addition of wet
tempering to the temper mill and a shape sensor to the exit end of the temper mill.

     “Appendices” has the meaning ascribed to it in the recitals to the Agreement.

     “Applicable Index Margin” means the per annum interest rate margin from time to time
in effect and payable in addition to the Index Rate applicable to the Revolving Loan, as determined
by reference to Section 1.5(a).

     “Applicable L/C Margin” means the per annum fee, from time to time in effect, payable
with respect to outstanding Letter of Credit Obligations as determined by reference to Section
1.5(a).

     “Applicable LIBOR Margin” means the per annum interest rate from time to time in
effect and payable in addition to the LIBOR Rate applicable to the Revolving Loan, as determined by
reference to Section 1.5(a).

     “Applicable Margin Certificate” has the meaning ascribed to it in Section
1.5(a).

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     “Applicable Margins” means collectively the Applicable L/C Margin, the Applicable
Unused Line Fee Margin, the Applicable Index Margin and the Applicable LIBOR Margin.

     “Applicable Unused Line Fee Margin” means the per annum fee, from time to time in
effect, payable in respect of Borrower’s non-use of committed funds pursuant to Section
1.9(b), which fee is determined by reference to Section 1.5(a).

     “Assignment Agreement” has the meaning ascribed to it in Section 9.1(a).

     “Automatic Roll Changer System” means the automatic change system to be constructed by
Danieli Corporation for the replacement of finishing rollers on the hot strip mill.

     “Average Adjusted Borrowing Availability” means as of any date of determination, an
amount equal to the quotient of (a) the sum of the end of day Adjusted Borrowing Availability for
each day during the most recently ended calendar month, divided by (b) the number of days in such
calendar month, all as determined by Agents based on the Borrowing Base Certificates previously
delivered by Borrower.

     “Average Borrowing Availability” means as of any date of determination, an amount
equal to the quotient of (a) the sum of the end of day Borrowing Availability for each day during
the most recently ended calendar month, divided by (b) the number of days in such calendar month,
all as determined by Agents based on the Borrowing Base Certificates previously delivered by
Borrower.

     “Average Revolving Outstandings” means as of any date of determination, an amount
equal to the quotient of (a) the sum of the end of day (i) Revolving Loans and (ii) Swing Line
Loans outstanding for each day during the most recently ended calendar month, divided by (b) the
number of days in such calendar month, all as determined by Agents based on Borrowing Base
Certificates previously delivered by Borrower.

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

     “Blocked Accounts” has the meaning ascribed to it in Annex C.

     “Borrower” has the meaning ascribed thereto in the preamble to the Agreement.

     “Borrowing Availability” means as of any date of determination the lesser of (i) the
Maximum Amount and (ii) the Borrowing Base, in each case, less the sum of the Revolving
Loan and Swing Line Loan then outstanding and, without duplication, any reserves established by the
Inventory and Receivables Security Agent.

     “Borrowing Base” means, as of any time of determination by Inventory and Receivables
Security Agent, an amount equal to the sum at such time of:

     (a) up to 85% of the book value of Eligible Accounts at such time; and

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     (b) the lesser of:

     (i) the sum of (A) the lesser of (I) 65% (the “Advance Rate”) of the
book value of Eligible Inventory (other than Seconds) valued at the lower of cost
(determined on a first-in, first-out basis) or market and (II) the product of 85%
(the “Liquidation Percentage”) times the net recovery rate most
recently determined to apply to Eligible Inventory (other than Seconds) by an
independent appraiser acceptable to the Inventory and Receivables Security Agent in
consultation with the Administrative Agent (for purposes of this definition, the
“Appraiser”) times the book value of Borrower’s Eligible Inventory
(other than Seconds) valued at the lower of cost (determined on a first-in,
first-out basis) or market, plus (B) Seconds in an amount equal to the
lesser of (i) $2,000,000 or (ii) the product of the Liquidation Percentage
times the net recovery rate most recently determined to apply to Seconds by
the Appraiser; and

     (ii) $150,000,000 (the “Inventory Cap”);

in each case, less any Reserves established by Inventory and Receivables Security Agent at such
time.

     “Borrowing Base Certificate” means a certificate to be executed and delivered from
time to time by Borrower in the form attached to the Agreement as Exhibit 4.1(b).

     “Business Day” means any day that is not a Saturday, a Sunday or a day on which banks
are required or permitted to be closed in the State of New York and in reference to LIBOR Loans
shall mean any such day that is also a LIBOR Business Day.

     “Capital Expenditure Deposit Account” means the cash collateral account established
pursuant to the Prior Loan Agreement into which the net cash proceeds from any offering of Capital
Stock of Holdings allocated for Capital Expenditures was deposited and held for the benefit of the
Lenders and the Term Loan Lenders.

     “Capital Expenditures” means, with respect to any Person, all expenditures (by the
expenditure of cash or the incurrence of Indebtedness) by such Person during any measuring period
for any fixed assets or improvements or for replacements, substitutions or additions thereto, that
have a useful life of more than one year and that are required to be capitalized under GAAP.

     “Capital Lease” means, with respect to any Person, any lease of any property (whether
real, personal or mixed) by such Person as lessee that, in accordance with GAAP, would be required
to be classified and accounted for as a capital lease on a balance sheet of such Person.

     “Capital Lease Obligation” means, with respect to any Capital Lease of any Person, the
amount of the obligation of the lessee thereunder that, in accordance with GAAP, would appear on a
balance sheet of such lessee in respect of such Capital Lease.

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

     “Cash Collateral Account” has the meaning ascribed to it in Annex B.

     “Cash Equivalents” means (a) marketable direct obligations issued by, or
unconditionally guaranteed by, the United States Government or issued by any agency thereof and
backed by the full faith and credit of the United States, in each case maturing within one year
from the date of acquisition; (b) certificates of deposit, time deposits, eurodollar time deposits
or overnight bank deposits having maturities of six months or less from the date of acquisition
issued by any Lender or by any commercial bank organized under the laws of the United States or any
state thereof having combined capital and surplus of not less than $500,000,000; (c) commercial
paper of an issuer rated at least A-1 by Standard & Poor’s Ratings Services (“S&P”) or P-1
by Moody’s Investors Service, Inc. (“Moody’s”), or carrying an equivalent rating by a
nationally recognized rating agency, if both of the two named rating agencies cease publishing
ratings of commercial paper issuers generally, and maturing within six months from the date of
acquisition; (d) repurchase obligations of any Lender or of any commercial bank satisfying the
requirements of clause (b) of this definition, having a term of not more than 30 days, with respect
to securities issued or fully guaranteed or insured by the United States government; (e) securities
with maturities of one year or less from the date of acquisition issued or fully guaranteed by any
state, commonwealth or territory of the United States, by any political subdivision or taxing
authority of any such state, commonwealth or territory or by any foreign government, the securities
of which state, commonwealth, territory, political subdivision, taxing authority or foreign
government (as the case may be) are rated at least A by S&P or A by Moody’s; (f) securities with
maturities of six months or less from the date of acquisition backed by standby letters of credit
issued by any Lender or any commercial bank satisfying the requirements of clause (b) of this
definition; (g) money market mutual or similar funds that invest exclusively in assets satisfying
the requirements of clauses (a) through (f) of this definition; or (h) money market funds that (i)
comply with the criteria set forth in SEC Rule 2a-7 under the Investment Company Act of 1940, as
amended, (ii) are rated AAA by S&P and Aaa by Moody’s and (iii) have portfolio assets of at least
$5,000,000,000.

     “Cash Management Systems” has the meaning ascribed to it in Section 1.8.

     “Charges” means all federal, state, county, city, municipal, local, foreign or other
governmental taxes (including taxes owed to the PBGC at the time due and payable), levies,
assessments, charges, liens, claims or encumbrances upon or relating to (a) the Collateral, (b) the
Obligations, (c) the employees, payroll, income or gross receipts of any Credit Party, (d) any
Credit Party’s ownership or use of any properties or other assets, or (e) any other aspect of any
Credit Party’s business.

     “Chattel Paper” means any “chattel paper,” as such term is defined in the Code,
including electronic chattel paper, now owned or hereafter acquired by any Credit Party, wherever
located.

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     “Closing Date” means the date on which the conditions precedent set forth in Section
2.1 of the Prior Loan Agreement shall have been satisfied, which date is August 1, 2003.

     “Closing Checklist” means the schedule, including all appendices, exhibits or
schedules thereto, listing certain documents and information to be delivered in connection with the
Agreement, the other Loan Documents and the transactions contemplated thereunder, substantially in
the form attached hereto as Annex D.

     “Code” means the Uniform Commercial Code as the same may, from time to time, be
enacted and in effect in the State of New York; provided, that to the extent that the Code
is used to define any term herein or in any Loan Document and such term is defined differently in
different Articles or Divisions of the Code, the definition of such term contained in Article or
Division 9 shall govern; provided further, that in the event that, by reason of mandatory
provisions of law, any or all of the attachment, perfection or priority of, or remedies with
respect to, the Lien of the Collateral Agent or Inventory and Receivables Security Agent, as
applicable, on any Collateral is governed by the Uniform Commercial Code as enacted and in effect
in a jurisdiction other than the State of New York, the term “Code” shall mean the Uniform
Commercial Code as enacted and in effect in such other jurisdiction solely for purposes of the
provisions thereof relating to such attachment, perfection, priority or remedies and for purposes
of definitions related to such provisions.

     “Coke Facility Refurbishment Project” means the refurbishment of the No. 8 coke
battery located in Follansbee, West Virginia to be undertaken and completed in accordance with the
project description set forth in Schedule 1.5.

     “Coke Plant Joint Venture” means Mountain State Carbon, LLC, a Delaware limited
liability company.

     “Collateral” means the Current Asset Collateral, the Non-Current Asset Collateral, the
JV Collateral and the Mortgaged Properties and any other property, real or personal, tangible or
intangible, now existing or hereafter acquired, that may at any time be or become subject to a
security interest or Lien in favor of the Inventory and Receivables Security Agent or the
Collateral Agent, for the benefit of the Agents and Lenders, to secure the Obligations.

     “Collateral Agent” means Wilmington Trust Company in its capacity as Collateral Agent
under the Security Agreement, the JV Pledge Agreements, the Junior Current Asset Security Agreement
and the Current Asset Intercreditor Agreement, or its successor appointed in accordance with the
terms thereof.

     “Collateral Documents” means the Security Agreement, the Senior Current Asset Security
Agreement, the JV Pledge Agreements, the Mortgages, and all similar agreements entered into
granting a Lien upon property as security for payment of the Obligations.

     “Collateral Reports” means the reports with respect to the Collateral referred to in
Annex F.

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     “Collection Account” means that certain account of Administrative Agent, account
number 920-1033363 in the name of Administrative Agent at JPMorgan Chase Bank in New York, New York
ABA No. 021-000021, or such other account as may be specified in writing by Administrative Agent as
the “Collection Account.”

     “Commitment Termination Date” means the earliest of (a) July 8, 2009, (b) the date of
termination of Lenders’ obligations to make Advances and to incur Letter of Credit Obligations or
permit existing Loans to remain outstanding pursuant to Section 8.1, and (c) the date of
indefeasible prepayment in full by Borrower of the Loans and the cancellation and return (or
stand-by guarantee) of all Letters of Credit or the cash collateralization of all Letter of Credit
Obligations pursuant to Annex B, and the permanent reduction of the Revolving Loan
Commitments to zero dollars ($0).

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

     “Compliance Certificate” has the meaning ascribed to it in Annex E.

     “Concentration Account” has the meaning ascribed to it in Annex C.

     “Confirmation Order” means the order of the Bankruptcy Court dated June 18, 2003
confirming the Plan of Reorganization.

     “Consolidated EBITDA” means, for any period, Consolidated Net Income for such period
plus, without duplication and to the extent reflected as a charge in the statement of such
Consolidated Net Income for such period, the sum of (a) income tax expense, (b) interest expense,
amortization or writeoff of debt discount and debt issuance costs and commissions, discounts and
other fees and charges associated with Indebtedness (including the Loans), (c) depreciation and
amortization expense, (d) amortization of intangibles (including, but not limited to, goodwill) and
organization costs, (e) non-cash deferred compensation (provided, that any cash payment
made in future periods on account of such deferred compensation expense shall be deducted from
Consolidated Net Income for such future periods), (f) any extraordinary unusual or nonrecurring
expenses or losses, and losses on sales outside of the ordinary course of business, (g) non-cash
charges in connection with buyout payments, VEBA Trust and profit sharing payments made to
employees, (h) compensation paid in Capital Stock of Holdings or any of its Subsidiaries, (i)
contributions by the Borrower to the VEBA Trust of Capital Stock of Holdings (including amounts
contributed on the Closing Date) and (j) any non-cash charges in connection with other
post-retirement employee benefits (OPEB) and minus, (a) to the extent included in the statement of
such Consolidated Net Income for such period, the sum of (i) interest income, (ii) any
extraordinary, unusual or non-recurring income or gains (including, whether or not otherwise
includable as a separate item in the statement of such Consolidated Net Income for such period,
gains on the sales of assets outside of the ordinary course of business) and (iii) any other
non-cash income (it being understood that non-cash income representing equity in the earnings of a
joint venture shall be calculated to be net of cash dividends received by Holdings and its
Subsidiaries on account of ownership interests in such joint venture), (b) any

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cash payments made during such period in respect of items described in clause (e) above
subsequent to the Fiscal Quarter in which the relevant non-cash expenses or losses were reflected
as a charge in the statement of Consolidated Net Income, (c) cash pension expenses in excess of
those included in the statement of Consolidated Net Income for such period and (d) cash expenses
relating to other post-retirement employee benefits (OPEB) to the extent not included in the
statement of Consolidated Net Income, all as determined on a consolidated basis. For the purposes
of calculating Consolidated EBITDA for any period of four consecutive Fiscal Quarters (each, a
“Reference Period”) pursuant to any determination of the Consolidated Leverage Ratio, (i) if at any
time during such Reference Period Holdings or any of its Subsidiaries shall have made any Material
Disposition, the Consolidated EBITDA for such Reference Period shall be reduced by an amount equal
to the Consolidated EBITDA (if positive) attributable to the property that is the subject of such
Material Disposition for such Reference Period or increased by an amount equal to the Consolidated
EBITDA (if negative) attributable thereto for such Reference Period and (ii) if during such
Reference Period Holdings or any of its Subsidiaries shall have made a Material Acquisition,
Consolidated EBITDA for such Reference Period shall be calculated after giving pro
forma effect thereto as if such Material Acquisition occurred on the first day of such
Reference Period. In connection with any Material Acquisition, Holdings shall provide the
Administrative Agent with (i) a certificate of a responsible officer of the selling Person, in form
and substance reasonably satisfactory to the Administrative Agent, certifying as to the
Consolidated EBITDA attributable to the property being sold by such Person during each of the
previous two Fiscal Years and any interim fiscal period and (ii) any other information reasonably
requested by the Administrative Agent in connection with the Material Acquisition.

     “Consolidated Fixed Charge Coverage Ratio” for any period, the ratio of (a) the sum
(without duplication) of Consolidated EBITDA for such period and Consolidated Lease Expense for
such period less the sum of (i) the aggregate amount actually paid by Holdings and its
Subsidiaries during such period on account of Capital Expenditures (excluding Capital Expenditures
funded from or reimbursed by (x) amounts on deposit in the Capital Expenditure Deposit Account or
the EAF Cash Collateral Account and (y) the Coke Plant Joint Venture), (ii) the amount, if any, by
which Investments made pursuant to Section 6.8(h) exceed repayments of principal and
returns of capital with respect to such Investments, and (iii) 50% of Capital Expenditures made
pursuant to Section 6.7(c) to the extent not financed from the proceeds of Special Purpose
Indebtedness to (b) Consolidated Fixed Charges for such period.

     “Consolidated Fixed Charges” means, for any period, the sum (without duplication) of
(a) Consolidated Interest Expense for such period, (b) Consolidated Lease Expense for such period,
(c) scheduled payments made during such period on account of principal of Indebtedness of Holdings
or any of its Subsidiaries (including scheduled principal payments in respect of the Loans), (d)
income taxes paid or payable in cash with respect to such period, (e) Restricted Payments made
during such period and (f) payments of Term Loans with Excess Cash Flow (as defined in the Term
Loan Agreement) made during such period.

     “Consolidated Interest Expense” means, for any period, total cash interest expense
(including that attributable to Capital Lease Obligations) of Holdings and its Subsidiaries for
such period with respect to all outstanding Indebtedness of Holdings and its Subsidiaries
(including all commissions, discounts and other fees and charges owed with respect

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to letters of credit and bankers’ acceptance financing and net costs and benefits under Swap
Agreements in respect of interest rates to the extent such net costs and benefits are allocable to
such period in accordance with GAAP).

     “Consolidated Lease Expense” means, for any period, the aggregate amount of fixed and
contingent rentals payable by Holdings and its Subsidiaries for such period with respect to leases
of real and personal property, determined on a consolidated basis in accordance with GAAP.

     “Consolidated Leverage Ratio” means, as at the last day of any period of four
consecutive Fiscal Quarters, the ratio of (a) Consolidated Test Debt on such day to (b)
Consolidated EBITDA for such period of four (4) consecutive Fiscal Quarters.

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

     “Consolidated Test Debt” means, at any date, the aggregate principal amount of all
Indebtedness of Holdings and its Subsidiaries at such date, determined on a consolidated basis in
accordance with GAAP, minus the sum of (i) the aggregate principal amount of their Indebtedness
attributable to documentary letters of credit which support trade obligations and (ii) the
aggregate principal amount of all Profit Sharing Notes. For the avoidance of doubt, the Coke Plant
Joint Venture shall be excluded from this calculation of “Consolidated Test Debt” until such time
as it shall be treated as a Subsidiary pursuant to the definition of “Subsidiary” in this
Agreement.

     “Constitutive Documents” has the meaning ascribed to it in Annex D.

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

     “Continuing Directors” means the directors of Holdings on the Restatement Date, after
giving effect to the transactions contemplated hereby, and each other director, if, in each case,
such other director’s nomination for election to the board of directors of Holdings is recommended
by at least a majority of the then Continuing Directors.

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

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     “Control Letter” means a letter agreement between Inventory and Receivables Security
Agent or Collateral Agent and (i) the issuer of uncertificated securities with respect to
uncertificated securities in the name of any Credit Party, (ii) a securities intermediary with
respect to securities, whether certificated or uncertificated, securities entitlements and other
financial assets held in a securities account in the name of any Credit Party, (iii) a futures
commission merchant or clearing house, as applicable, with respect to commodity accounts and
commodity contracts held by any Credit Party, whereby, among other things, the issuer, securities
intermediary or futures commission merchant limits any security interest in the applicable
financial assets in a manner reasonably satisfactory to Inventory and Receivables Security Agent,
acknowledges the Lien of Inventory and Receivables Security Agent or Collateral Agent, on behalf of
the Agents and Lenders, on such financial assets, and agrees to follow the instructions or
entitlement orders of Inventory and Receivables Security Agent or Collateral Agent without further
consent by the affected Credit Party.

     “Copyright License” means any and all rights now owned or hereafter acquired by any
Credit Party under any written agreement granting any right to use any Copyright or Copyright
registration.

     “Convertible Debt” means unsecured Indebtedness of any Person; provided, that
(i) the interest rate to be paid on such Indebtedness shall not exceed 6.0% at any time on or prior
to the Commitment Termination Date, (ii) the documentation evidencing or governing such
Indebtedness shall not contain any covenants with respect to maintenance of financial ratios for
such Person or its Subsidiaries, (iii) the maturity date for such Indebtedness shall occur no
earlier than the first anniversary following the Commitment Termination Date, (iv) any conversion
rights of debtholders pursuant to the documentation evidencing or governing such Indebtedness (A)
shall not be permitted to occur earlier than three months following the Commitment Termination
Date, unless such conversion results solely in the issuance of Capital Stock and such Capital Stock
contains no redemption feature with respect thereto and (B) shall not exceed cash obligations of
$175,000,000 in the aggregate, and (v) the documentation evidencing or governing such Indebtedness
shall otherwise be on terms and conditions satisfactory to both Agents; provided,
further, that the proceeds from such Indebtedness shall be used as follows: (x) to the
extent the Coke Plant Joint Venture is consummated, the proceeds shall be used (1) to refinance the
Series A Notes and the Series B Notes, to the extent permitted herein and (2) after the refinancing
of the Series A Notes and Series B Notes, for the general corporate needs of such Person and (y) to
the extent the Coke Plant Joint Venture is not consummated, the proceeds shall be used as Capital
Expenditures towards the Coke Facility Refurbishment Project.

     “Copyrights” means all of the following now owned or hereafter adopted or acquired by
any Credit Party: (a) all copyrights and General Intangibles of like nature (whether registered or
unregistered), all registrations and recordings thereof, and all applications in connection
therewith, including all registrations, recordings and applications in the United States Copyright
Office or in any similar office or agency of the United States, any state or territory thereof, or
any other country or any political subdivision thereof, and (b) all reissues, extensions or
renewals thereof.

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     “Credit Parties” means Holdings, Borrower, and each of their respective Subsidiaries.

     “Current Asset Collateral” has the meaning ascribed to the term “Collateral” in the
Senior Current Asset Security Agreement.

     “Current Asset Intercreditor Agreement” means the Current Asset Intercreditor
Agreement entered into on July 31, 2003 by and among Holdings, Borrower, certain of their
Subsidiaries, the Inventory and Receivables Security Agent and the Collateral Agent, substantially
in the form of Exhibit B-3.

     “Danieli Note” has the meaning ascribed to it in Annex D.

     “Default” means any event that, with the passage of time or notice or both, would,
unless cured or waived, become an Event of Default.

     “Default Rate” has the meaning ascribed to it in Section 1.5(d).

     “Disbursement Accounts” has the meaning ascribed to it in Annex C.

     “Disclosure Schedules” means the Schedules prepared by Borrower and denominated as
Disclosure Schedules 3.4 through 6.16 in the Index to the Agreement.

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

     “Dollars” or “$” means lawful currency of the United States of America.

     “EAF Cash Collateral Account” means the cash collateral account established pursuant
to the Term Loan Agreement into which $112,000,000 of the proceeds of the Term Loans were deposited
and held for the exclusive benefit of the Term Loan Lenders.

     “Electric Arc Furnace” means the electric arc furnace to be constructed with the
proceeds of Term Loans made under the Term Loan Agreement.

     “Eligible Accounts” has the meaning ascribed to it in Section 1.6 of the
Agreement.

     “Eligible Inventory” has the meaning ascribed to it in Section 1.7 of the
Agreement.

     “Environmental Indemnity” means the Amended and Restated Environmental Indemnity
Agreement entered into on the Restatement Date by and among Holdings, the Borrower and the Agents.

     “Environmental Laws” means any and all laws, rules, orders, regulations, statutes,
ordinances, codes, decrees, guidelines, agreements with or requirements of any Governmental

A-11

 

Authority or other Requirements of Law (including principles of common law) regulating,
relating to or imposing liability or standards of conduct concerning protection of the environment,
natural resources or of human health or employee health and safety, as has been, is now or may at
any time hereafter be, in effect.

     “Environmental Liabilities” means, with respect to any Person, all liabilities,
obligations, responsibilities, response, remedial and removal costs, investigation and feasibility
study costs, capital costs, operation and maintenance costs, losses, damages, punitive damages,
property damages, natural resource damages, consequential damages, treble damages, costs and
expenses (including all reasonable fees, disbursements and expenses of counsel, experts and
consultants), fines, penalties, sanctions and interest incurred as a result of or related to any
claim, suit, action, investigation, proceeding or demand by any Person, whether based in contract,
tort, implied or express warranty, strict liability, criminal or civil statute or common law,
including any arising under or related to any Environmental Laws, Environmental Permits, or in
connection with any Release or threatened Release or presence of a Material of Environmental
Concern whether on, at, in, under, from or about or in the vicinity of any real or personal
property.

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

     “Equipment” means all “equipment,” as such term is defined in the Code, now owned or
hereafter acquired by any Credit Party, wherever located and, in any event, including all such
Credit Party’s machinery and equipment, including processing equipment, conveyors, machine tools,
data processing and computer equipment, including embedded software and peripheral equipment and
all engineering, processing and manufacturing equipment, office machinery, furniture, materials
handling equipment, tools, attachments, accessories, automotive equipment, trailers, trucks,
forklifts, molds, dies, stamps, motor vehicles, rolling stock and other equipment of every kind and
nature, trade fixtures and fixtures not forming a part of real property, together with all
additions and accessions thereto, replacements therefor, all parts therefor, all substitutes for
any of the foregoing, fuel therefor, and all manuals, drawings, instructions, warranties and rights
with respect thereto, and all products and proceeds thereof and condemnation awards and insurance
proceeds with respect thereto.

     “ERISA” means the Employee Retirement Income Security Act of 1974, as amended from
time to time, and any regulations promulgated thereunder.

     “Event of Default” means any of the events specified in Section 8.1,
provided that any requirement for the giving of notice, the lapse of time, or both, has
been satisfied.

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

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     “Existing Credit Policies” has the meaning ascribed thereto in paragraph O of
Annex D.

     “Fair Labor Standards Act” means the Fair Labor Standards Act, 29 U.S.C. §201 et seq.

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

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

     “Fee Letter” means that certain letter, dated as of April 20, 2005, and as
supplemented as of July 8, 2005, between Royal Bank of Canada, GE Capital and the Borrower with
respect to certain fees to be paid on the Restatement Date and from time to time by the Borrower to
the Agents.

     “Fees” means any and all fees payable to any Agent or Lender pursuant to the Agreement
or any of the other Loan Documents.

     “Final Order” means an order or judgment of the Bankruptcy Court, or other court of
competent jurisdiction, as entered on the docket in any pending chapter 11 case or the docket of
any other court of competent jurisdiction, with respect to which 10 days have elapsed since the
entry of such order and which has not been reversed, stayed, modified or amended and is in full
force and effect.

     “Financial Covenants” means the financial covenants set forth in Annex G.

     “Financial Statements” means the consolidated income statements, statements of cash
flows and balance sheets of Holdings delivered in accordance with Section 3.1 and Annex
E.

     “Fiscal Month” means any of the monthly accounting periods of Holdings.

     “Fiscal Quarter” means any of the quarterly accounting periods of Holdings, ending on
March 31, June 30, September 30 and December 31 of each year.

     “Fiscal Year” means any of the annual accounting periods of Holdings ending on
December 31 of each year.

     “GAAP” means generally accepted accounting principles in the United States of America
consistently applied, as such term is further defined in Annex G to the Agreement.

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     “GE Capital” means General Electric Capital Corporation, a Delaware corporation.

     “General Intangibles” means “general intangibles,” as such term is defined in the
Code, now owned or hereafter acquired by any Credit Party, including all right, title and interest
that such Credit Party may now or hereafter have in or under any contract, all payment intangibles,
customer lists, Licenses, Copyrights, Trademarks, Patents, and all applications therefor and
reissues, extensions or renewals thereof, rights in Intellectual Property, interests in
partnerships, joint ventures and other business associations, licenses, permits, copyrights, trade
secrets, proprietary or confidential information, inventions (whether or not patented or
patentable), technical information, procedures, designs, knowledge, know-how, software, data bases,
data, skill, expertise, experience, processes, models, drawings, materials and records, goodwill
(including the goodwill associated with any Trademark or Trademark License), all rights and claims
in or under insurance policies (including insurance for fire, damage, loss and casualty, whether
covering personal property, real property, tangible rights or intangible rights, all liability,
life, key man and business interruption insurance, and all unearned premiums), uncertificated
securities, choses in action, deposit, checking and other bank accounts, rights to receive tax
refunds and other payments, rights to receive dividends, distributions, cash, Instruments and other
property in respect of or in exchange for pledged Capital Stock and Investment Property, rights of
indemnification, all books and records, correspondence, credit files, invoices and other papers,
including without limitation all tapes, cards, computer runs and other papers and documents in the
possession or under the control of such Credit Party or any computer bureau or service company from
time to time acting for such Credit Party.

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

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

     “Guarantee Agreements” means the collective reference to each of the guarantee
agreements executed by Holdings, WP Steel Venture and each other Subsidiary Guarantor,
substantially in the form of Exhibit D.

     “Guarantee Obligation” means as to any Person (the “guaranteeing person”), any
obligation of (a) the guaranteeing person or (b) another Person (including any bank under any
letter of credit) to induce the creation of which the guaranteeing person has issued a
reimbursement, counterindemnity or similar obligation, in either case guaranteeing or in effect
guaranteeing any Indebtedness, leases, dividends or other obligations (the “primary
obligations”) of any other third Person (the “primary obligor”) in any manner, whether
directly or indirectly, including any obligation of the guaranteeing person, whether or not
contingent, (i) to purchase any such primary obligation or any property constituting direct or
indirect security therefor, (ii) to advance or supply funds (1) for the purchase or payment of any
such primary obligation or

A-14

 

(2) to maintain working capital or equity capital of the primary obligor or otherwise to
maintain the net worth or solvency of the primary obligor, (iii) to purchase property, securities
or services primarily for the purpose of assuring the owner of any such primary obligation of the
ability of the primary obligor to make payment of such primary obligation or (iv) otherwise to
assure or hold harmless the owner of any such primary obligation against loss in respect thereof;
provided, however, that the term Guarantee Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary course of business. The
amount of any Guarantee Obligation of any guaranteeing person shall be deemed to be the lower of
(a) an amount equal to the stated or determinable amount of the primary obligation in respect of
which such Guarantee Obligation is made and (b) the maximum amount for which such guaranteeing
person may be liable pursuant to the terms of the instrument embodying such Guarantee Obligation,
unless such primary obligation and the maximum amount for which such guaranteeing person may be
liable are not stated or determinable, in which case the amount of such Guarantee Obligation shall
be such guaranteeing person’s maximum reasonably anticipated liability in respect thereof as
determined by the Borrower in good faith.

     “Guarantors” means the collective reference to Holdings, WP Steel Venture and the
Subsidiary Guarantors.

     “High-Yield Debt” means unsecured Indebtedness of any Person; provided, that
(i) the maturity date for such Indebtedness shall occur no earlier than the first anniversary
following the Commitment Termination Date, (ii) the interest rate to be paid on such Indebtedness
shall not exceed 9.0% at any time on or prior to the Commitment Termination Date and (iii) the
documentation evidencing or governing such Indebtedness shall not contain any covenants with
respect to maintenance of financial ratios for such Person or its Subsidiaries; provided,
further, that the proceeds of such Indebtedness shall be used as follows: (x) to the
extent the Coke Plant Joint Venture is consummated, the proceeds shall be used (1) to refinance the
Series A Notes and the Series B Notes, to the extent permitted herein and (2) after the refinancing
of the Series A Notes and the Series B Notes, for the general corporate needs of such Person and
(y) to the extent the Coke Plant Joint Venture is not consummated, the proceeds shall be used as
Capital Expenditures towards the Coke Facility Refurbishment Project.

     “Holdings” has the meaning ascribed thereto in the recitals to the Agreement.

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

     “Increase Notice” has the meaning ascribed to it in Section 1.1(d).

     “Indebtedness” of any Person at any date means, without duplication, (a) all
indebtedness of such Person for borrowed money, (b) all obligations of such Person for the deferred
purchase price of property or services (other than current trade payables incurred in the ordinary
course of such Person’s business), (c) all obligations of such Person evidenced by notes, bonds,
debentures or other similar instruments, (d) all indebtedness created or arising under any
conditional sale or other title retention agreement with respect to property acquired by such
Person (even though the rights and remedies of the seller or lender under such agreement in the
event of default are limited to repossession or sale of such property), (e) all Capital Lease

A-15

 

Obligations of such Person and the present value (discounted at the Index Rate as in effect on
the Closing Date) of future rental payments on all synthetic leases, (f) all obligations of such
Person, contingent or otherwise, as an account party or applicant under or in respect of
acceptances, letters of credit, surety bonds or similar arrangements, (g) the liquidation value of
all redeemable preferred Capital Stock of such Person, (h) all Guarantee Obligations of such Person
in respect of obligations of the kind referred to in clauses (a) through (g) above, (i) all
obligations of the kind referred to in clauses (a) through (h) above secured by (or for which the
holder of such obligation has an existing right, contingent or otherwise, to be secured by) any
Lien on property (including accounts and contract rights) owned by such Person, whether or not such
Person has assumed or become liable for the payment of such obligation, and (j) for the purposes of
Section 8.1(e) only, all obligations of such Person in respect of Swap Agreements. The
Indebtedness of any Person shall include the Indebtedness of any other entity (including any
partnership in which such Person is a general partner) to the extent such Person is liable therefor
as a result of such Person’s ownership interest in or other relationship with such entity, except
to the extent the terms of such Indebtedness expressly provide that such Person is not liable
therefor.

     “Indemnified Liabilities” has the meaning ascribed to it in Section 1.13.

     “Indemnified Person” has the meaning ascribed to it in Section 1.13.

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

     “Index Rate Loan” means a Loan or portion thereof bearing interest by reference to the
Index Rate.

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

     “Interest Payment Date” means (a) as to any Index Rate Loan, the first Business Day of
each month to occur while such Loan is outstanding (the interest payable on such date on account of
any Index Rate Loan to be calculated on the basis of the number of calendar days of the preceding
month for which such Index Rate Loan was outstanding), and (b) as to any LIBOR Loan, the last day
of the applicable LIBOR Period; provided, that in the case of any LIBOR Period greater than
three months in duration, interest shall be payable at three month intervals

A-16

 

and on the last day of such LIBOR Period; and provided further that, in
addition to the foregoing, each of (x) the date upon which all of the Revolving Loan Commitments
have been terminated and the Loans have been paid in full and (y) the Commitment Termination Date
shall be deemed to be an “Interest Payment Date” with respect to any interest that has then
accrued under the Agreement.

     “Inventory” means any “inventory,” as such term is defined in the Code, now owned or
hereafter acquired by any Credit Party, wherever located, and in any event including inventory,
merchandise, goods and other personal property that are held by or on behalf of any Credit Party
for sale or lease or are furnished or are to be furnished under a contract of service, or that
constitute raw materials, work in process, finished goods, returned goods, supplies or materials of
any kind, nature or description used or consumed or to be used or consumed in such Credit Party’s
business or in the processing, production, packaging, promotion, delivery or shipping of the same,
including all supplies and embedded software.

     “Inventory and Receivables Security Agent” means GE Capital in its capacity as
Inventory and Receivables Security Agent for Lenders or its successor appointed pursuant to
Section 9.7.

     “Inventory Cap” has the meaning ascribed to it in the definition of “Borrowing Base”.

     “Investment Property” means all “investment property” as such term is defined in the
Code now owned or hereafter acquired by any Credit Party, wherever located, including (i) all
securities, whether certificated or uncertificated, including stocks, bonds, interests in limited
liability companies, partnership interests, treasuries, certificates of deposit, and mutual fund
shares; (ii) all securities entitlements of any Credit Party, including the rights of such Credit
Party to any securities account and the financial assets held by a securities intermediary in such
securities account and any free credit balance or other money owing by any securities intermediary
with respect to that account; (iii) all securities accounts of any Credit Party; (iv) all commodity
contracts of any Credit Party; and (v) all commodity accounts held by any Credit Party.

     “Investments” has the meaning ascribed to it in Section 6.8.

     “IRC” means the Internal Revenue Code of 1986, as amended, and all regulations
promulgated thereunder.

     “IRS” means the Internal Revenue Service.

     “Joint Ventures” means Ohio Coatings Company, an Ohio corporation, Wheeling-Nisshin,
Inc., a Delaware corporation, and Feralloy-Wheeling Specialty Processing Company, a Delaware
partnership and, to the extent the Coke Plant Joint Venture is consummated, the Coke Plant Joint
Venture.

     “Junction Note” has the meaning ascribed to it in Annex D.

A-17

 

     “Junior Current Asset Security Agreement” means the Junior Current Asset Security
Agreement, dated as of July 31, 2003, by and among Holdings, Borrower, certain of their
Subsidiaries, the Collateral Agent and the other secured parties party thereto, substantially in
the form of Exhibit B-2.

     “JV Collateral” means the Borrower’s equity interest in the Joint Ventures and all
proceeds thereof.

     “JV Pledge Agreements” means the collective reference to the JV Pledge Agreements,
dated as of July 31, 2003, by and among Borrower, the Collateral Agent and the other secured
parties party thereto, for the benefit of Agents, Lenders and the other secured parties party
thereto with respect to the Borrower’s interests in each of the Joint Ventures, substantially in
the form of Exhibit C.

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

     “L/C Issuer” has the meaning ascribed to it in Annex B.

     “L/C Sublimit” has the meaning ascribed to in it Annex B.

     “Lender Presentation” means the Lender Presentation dated April 22, 2005 presented and
furnished to the Lenders, as amended, supplemented or modified from time to time prior to the
Restatement Date.

     “Lenders” means Royal Bank of Canada, GE Capital, the other Lenders named on the
signature pages of the Agreement, and, if any such Lender shall decide to assign all or any portion
of the Obligations, such term shall include any assignee of such Lender.

     “Letter of Credit Fee” has the meaning ascribed to it in Annex B.

     “Letter of Credit Obligations” means all outstanding obligations incurred by Agents
and Lenders at the request of Borrower, whether direct or indirect, contingent or otherwise, due or
not due, in connection with the issuance of Letters of Credit by Administrative Agent or another
L/C Issuer or the purchase of a participation as set forth in Annex B with respect to any
Letter of Credit. The amount of such Letter of Credit Obligations shall equal the maximum amount
that may be payable by Agents or Lenders thereupon or pursuant thereto.

     “Letters of Credit” means documentary or standby letters of credit issued for the
account of Borrower by any L/C Issuer, and bankers’ acceptances issued by Borrower, for which
Agents and Lenders have incurred Letter of Credit Obligations.

     “LIBOR Business Day” means a Business Day on which banks in the City of London are
generally open for interbank or foreign exchange transactions.

A-18

 

          “LIBOR Loan” means a Loan or any portion thereof bearing interest by reference to the
LIBOR Rate.

          “LIBOR Period” means, with respect to any LIBOR Loan, each period commencing on a
LIBOR Business Day selected by Borrower pursuant to the Agreement and ending one, two, three or six
or (if available to all Lenders) nine or twelve months or less than one month thereafter, as
selected by Borrower’s irrevocable notice to Administrative Agent as set forth in Section
1.5(e); provided, that the foregoing provision relating to LIBOR Periods is subject to
the following:

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

     (b) any LIBOR Period that would otherwise extend beyond the Commitment Termination Date
shall end two (2) LIBOR Business Days prior to such date;

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

     (d) Borrower shall select LIBOR Periods so as not to require a payment or prepayment of
any LIBOR Loan during a LIBOR Period for such Loan; and

     (e) Borrower shall select LIBOR Periods so that there shall be no more than 10 separate
LIBOR Loans in existence at any one time.

          “LIBOR Rate” means for each LIBOR Period, a rate of interest determined by
Administrative Agent equal to:

     (a) the offered rate for deposits in United States Dollars for the applicable LIBOR
Period that appears on Telerate Page 3750 as of 11:00 a.m. (London time), on the second full
LIBOR Business Day next preceding the first day of such LIBOR Period (unless such date is
not a Business Day, in which event the next succeeding Business Day will be used); divided
by

     (b) a number equal to 1.0 minus the aggregate (but without duplication) of the
rates (expressed as a decimal fraction) of reserve requirements in effect on the day that is
two (2) LIBOR Business Days prior to the beginning of such LIBOR Period (including basic,
supplemental, marginal and emergency reserves under any regulations of the Federal Reserve
Board or other Governmental Authority having jurisdiction with respect thereto, as now and
from time to time in effect) for Eurocurrency funding (currently referred to as
“Eurocurrency Liabilities” in Regulation D of the Federal Reserve Board that are required to
be maintained by a member bank of the Federal Reserve System.

A-19

 

     If such interest rates shall cease to be available from Telerate News Service (or its
successor to extent satisfactory to Administrative Agent), the LIBOR Rate shall be
determined by reference to such other comparable publicly available service for displaying
eurodollar rates as may be selected by the Administrative Agent (including Page LIBO 01) or,
in the absence of such availability, by reference to the rate at which the Administrative
Agent is offered Dollar deposits at or about 11:00 A.M., New York City time, two Business
Days prior to the beginning of such LIBOR Period in the interbank eurodollar market where
its eurodollar and foreign currency and exchange operations are then being conducted for
delivery on the first day of such LIBOR Period for the number of days comprised therein.

          “License” means any Copyright License, Patent License, Trademark License or other
license of rights or interests now held or hereafter acquired by any Credit Party.

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

          “Liquidation Percentage” has the meaning ascribed to it in the definition of
“Borrowing Base”.

          “Litigation” has the meaning ascribed to it in Section 3.6.

          “Loan Account” has the meaning ascribed to it in Section 1.12.

          “Loan Documents” means the Agreement, the Notes, the Collateral Documents, the PPE
Access Agreement and all other agreements, instruments, documents and certificates identified in
the Closing Checklist executed and delivered to, or in favor of, any Agent or Lender and including
all other pledges, powers of attorney, consents, assignments, contracts, notices, letter of credit
agreements and all other written matter whether heretofore, now or hereafter executed by or on
behalf of any Credit Party, or any employee of any Credit Party, and delivered to any Agent or
Lender in connection with the Agreement or the transactions contemplated thereby. Any reference in
the Agreement or any other Loan Document to a Loan Document shall include all appendices, exhibits
or schedules thereto, and all amendments, restatements, supplements or other modifications thereto,
and shall refer to the Agreement or such Loan Document as the same may be in effect at any and all
times such reference becomes operative.

          “Loans” means the Revolving Loan and the Swing Line Loan.

          “Lock Boxes” has the meaning ascribed to it in Annex C.

          “Master Documentary Agreement” means the Master Agreement for documentary Letters of
Credit dated as of the Closing Date between the Borrower, as applicant, and GE Capital, as Issuer.

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     “Master Labor Agreement” has the meaning ascribed to it in Annex D.

     “Master Standby Agreement” means the Master Agreement for standby Letters of Credit
dated as of the Closing Date between Borrower, as applicant, and GE Capital, as Issuer.

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

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

     “Material Disposition” means any Disposition of property or series of related
Dispositions of property that (a) constitutes assets comprising all or substantially all of an
operating unit of a business or constitutes all or substantially all of the common stock of a
Person and (b) yields gross proceeds to Holdings or any of its Subsidiaries in excess of
$1,000,000.

     “Material Environmental Loss” means the collective reference to the items set forth in
(a) and (b) below, to the extent arising out of any Environmental Law with respect to any Materials
of Environmental Concern that either (i) exceed $2,500,000 individually, or $5,000,000 in the
aggregate, or (ii) would have a Material Adverse Effect: (a) any costs to any Group Member
relating to investigative, removal, remedial or other response activities, compliance costs,
compensatory damages, natural resource damages, punitive damages, fines, penalties and any
associated engineering, legal and other professional fees (including without limitation, costs of
defending or asserting any claim) in connection with any of the foregoing and (b) any other losses
to any Group Member; provided that any costs expended for the environmental issues set
forth on the Environmental Reserves Table and Capital Expenditure Table attached as Attachment B of
the React Report up to the amounts set forth in such tables, and, to the extent not included in
such amounts, any costs incurred in any fiscal year up to the budgeted amount set forth in
Schedule 1.4 for such fiscal year, shall be excluded from the calculation of any Material
Environmental Loss.

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

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     “Maximum Amount” means, as of any date of determination, an amount equal to the
Revolving Loan Commitment of all Lenders as of that date.

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

     “Mortgaged Properties” means the real properties listed on Schedule 1.2, as to
which the Collateral Agent, for the benefit of the Agents and Lenders shall be granted a Lien
pursuant to the Mortgages.

     “Mortgages” means each of the mortgages, deeds of trust, leasehold mortgages,
leasehold deeds of trust, collateral assignments of leases or other real estate documents delivered
by any Credit Party to Collateral Agent for the benefit of the Agents and Lenders with respect to
the Mortgaged Properties, all in form and substance reasonably satisfactory to Agents.

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

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

     “Non-Current Asset Collateral” means, to the extent not included in Current Asset
Collateral or the JV Collateral, all the following property, whether now existing or hereafter
arising, of each Credit Party: all accounts, chattel paper, contracts, deposit accounts (subject to
customary exceptions), documents (other than title documents with respect to vehicles), equipment,
general intangibles, goods, instruments, intellectual property, investment property, real property,
letter-of-credit rights, money, cash or cash equivalents, commercial tort claims and all other
property not described above now owned or at any time hereafter acquired by such Credit Party or in
which such Credit Party now has or at any time in the future may acquire any right, title and
interest, all books and records pertaining to the foregoing and to the extent not otherwise
included in the foregoing, all proceeds, all supporting obligations and all products of any and all
of the foregoing and all security and guarantees given by any person with respect to any of the
foregoing.

     “Non-Funding Lender” has the meaning ascribed to it in Section 9.9(a)(ii).

     “Notes” means, collectively, the Revolving Notes and the Swing Line Note.

     “Notice of Conversion/Continuation” has the meaning ascribed to it in Section
1.5(e).

     “Notice of Revolving Credit Advance” has the meaning ascribed to it in Section
1.1(a).

     “Obligations” means all loans, advances, debts, liabilities and obligations, for the
performance of covenants, tasks or duties or for payment of monetary amounts (whether or not

A-22

 

such performance is then required or contingent, or such amounts are liquidated or
determinable) owing by any Credit Party to any Agent or Lender, and all covenants and duties
regarding such amounts, of any kind or nature, present or future, whether or not evidenced by any
note, agreement, letter of credit agreement or other instrument, arising under the Agreement or any
of the other Loan Documents. This term includes all principal, interest (including all interest
that accrues after the commencement of any case or proceeding by or against any Credit Party in
bankruptcy, whether or not allowed in such case or proceeding), Fees, hedging obligations under
swaps, caps and collar arrangements provided by any Lender, expenses, attorneys’ fees and any other
sum chargeable to any Credit Party under the Agreement or any of the other Loan Documents.

     “Ohio Note” has the meaning ascribed to it in Annex D.

     “Overadvance” has the meaning ascribed to it in Section 1.1(a)(iii).

     “Patent License” means rights under any written agreement now owned or hereafter
acquired by any Credit Party granting any right with respect to any invention on which a Patent is
in existence.

     “Patents” means all of the following in which any Credit Party now holds or hereafter
acquires any interest: (a) all letters patent of the United States or any other country, all
registrations and recordings thereof, and all applications for letters patent of the United States
or of any other country, including registrations, recordings and applications in the United States
Patent and Trademark Office or in any similar office or agency of the United States, any State or
any other country, and (b) all reissues, continuations, continuations-in-part or extensions
thereof.

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

     “Permitted Acquisition” has the meaning ascribed to it in Section 6.8.

     “Person” means any individual, sole proprietorship, partnership, joint venture, trust,
unincorporated organization, association, corporation, limited liability company, institution,
public benefit corporation, other entity or government (whether federal, state, county, city,
municipal, local, foreign, or otherwise, including any instrumentality, division, agency, body or
department thereof).

     “Plan” means, at a particular time after the effective date of the Plan of
Reorganization, any employee benefit plan that is covered by ERISA and in respect of which the
Borrower or a Commonly Controlled Entity is (or, if such plan were terminated at such time, would
under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.

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

A-23

 

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

     “PPE Access” means the right of the Inventory and Receivables Security Agent or any of
its agents or designees to use any and all Non-Current Asset Collateral of any Credit Party to take
possession of or fully process Inventory in any manner necessary or desirable for the Inventory and
Receivables Security Agent to realize the full value of such Inventory in connection with the sale
or other Disposition thereof.

     “PPE Access Agreement” means the PPE Collateral Access Agreement, dated as of July 31,
2003, by and among Royal Bank of Canada, as administrative agent under the Term Loan Agreement,
Bank One, N.A., as trustee under the Series A Indenture and Series B Indenture, Rio Doce Limited,
the Collateral Agent, Holdings, Borrower, WP Steel Venture and the Inventory and Receivables
Security Agent regarding PPE Access.

     “Prior Lenders” has the meaning ascribed to it in the recitals to the Agreement.

     “Prior Liabilities” has the meaning ascribed to it in Section 1.19.

     “Prior Loan Agreement” has the meaning ascribed to it in the recitals to the
Agreement.

     “Pro Rata Share” means with respect to all matters relating to any Lender (a) with
respect to the Revolving Loan, the percentage obtained by dividing the Revolving Loan Commitment of
that Lender by the aggregate Revolving Loan Commitments of all Lenders, and (b) with respect to all
Revolving Loans on and after the Commitment Termination Date, the percentage obtained by dividing
(i) the aggregate outstanding principal balance of the Revolving Loans held by that Lender, by (ii)
the outstanding principal balance of the Revolving Loans held by all Lenders.

     “Profit Sharing Notes” means the 6% profit sharing notes due 2011 to be issued after
the Closing Date to the United Steelworkers of America in payment of obligations incurred from time
to time by Holdings and the Borrower under the Master Labor Agreement and having the terms set
forth in Schedule 1.3 and such other terms as are acceptable to the Agents.

     “Project Debt” means Indebtedness of any Person with respect to the Coke Plant Joint
Venture, incurred in connection with the Coke Facility Refurbishment Project, that is secured by a
Lien in or upon the assets that are acquired, constructed or exploited with the proceeds of such
Indebtedness and where the rights and remedies of the holders of such Indebtedness do not extend to
any other assets of Borrower (whether on a secured or unsecured basis); provided, that (i)
the maturity date of such Indebtedness shall occur no earlier than the first anniversary following
the Commitment Termination Date; (ii) the interest rate to be paid on such Indebtedness shall not
exceed 10% at any time on or prior to the Commitment Termination Date; and (iii) the documentation
evidencing or governing such Indebtedness shall not contain any covenants with respect to
maintenance of financial ratios for such Person or its Subsidiaries;

A-24

 

provided, however, that such covenants shall be permitted, on terms reasonably
satisfactory to both Agents, with respect to any separate corporate entity created solely for the
purpose of incurring such Indebtedness).

     “Qualified Assignee” means (a) any Lender, any Affiliate of any Lender and, with
respect to any Lender that is an investment fund that invests in commercial loans, any other
investment fund that invests in commercial loans and that is managed or advised by the same
investment advisor as such Lender or by an Affiliate of such investment advisor, and (b) any
commercial bank, savings and loan association or savings bank or any other entity which is an
“accredited investor” (as defined in Regulation D under the Securities Act) which extends credit or
buys loans as one of its businesses, including insurance companies, mutual funds, lease financing
companies and commercial finance companies, in each case, which has a rating of BBB or higher from
S&P and a rating of Baa2 or higher from Moody’s at the date that it becomes a Lender and which,
through its applicable lending office, is capable of lending to Borrower without the imposition of
any withholding or similar taxes; provided that no Person proposed to become a Lender after
the Restatement Date and determined by Administrative Agent to be acting in the capacity of a
vulture fund or distressed debt purchaser shall be a Qualified Assignee, and no Person or Affiliate
of such Person proposed to become a Lender after the Restatement Date and that holds WHX
Subordinated Notes or Capital Stock issued by any Credit Party shall be a Qualified Assignee.

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

     “Refunded Swing Line Loan” has the meaning ascribed to it in Section
1.1(b)(iii).

     “Related Transactions” means the initial borrowing under the Agreement and under the
Term Loan Agreement on the Closing Date, the issuance of the Plan of Reorganization Indebtedness,
the consummation of the Plan of Reorganization, the payment of all fees, costs and expenses
associated with all of the foregoing and the execution and delivery of all of the Related
Transactions Documents.

     “Related Transactions Documents” means the Loan Documents, the Term Loan Agreement,
the Plan of Reorganization Indebtedness and the Master Labor Agreement.

     “Release” means any release, threatened release, spill, emission, leaking, pumping,
pouring, emitting, emptying, escape, injection, deposit, disposal, discharge, dispersal, dumping,
leaching or migration of Material of Environmental Concern in the indoor or outdoor environment,
including the movement of Material of Environmental Concern through or in the air, soil, surface
water, ground water or property.

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

A-25

 

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

     “Requested Revolver Increase” has the meaning ascribed to it in Section
1.1(d).

     “Required Term Loan Lenders” has the meaning ascribed to the term “Required Lenders”
in the Term Loan Agreement.

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

     “Requisite Lenders” means Lenders having (a) more than 66-2/3% of the Revolving Loan
Commitments of all Lenders, or (b) if the Revolving Loan Commitments have been terminated, more
than 66-2/3% of the aggregate outstanding amount of the Revolving Loan.

     “Reserves” means, with respect to the Borrowing Base of Borrower (a) reserves
established by Inventory and Receivables Security Agent from time to time against Eligible
Inventory pursuant to Section 5.11, (b) reserves established pursuant to Section
1.3(e) and Section 1.18, and (c) such other reserves against Eligible Accounts,
Eligible Inventory or Borrowing Availability of Borrower that Inventory and Receivables Security
Agent may, in its reasonable credit judgment, establish from time to time.

     “Responsible Officer” means the chief executive officer, president, chief financial
officer or treasurer; provided that (i) with respect to the information and reports required by
paragraph J of Annex D or paragraphs (b), (c) or (d) of Annex E, Responsible
Officer shall mean the chief financial officer and (ii) with respect to the report required by
paragraph (l) of Annex E, Responsible Officer shall mean Vice President, Engineering,
Technology and Metallurgy.

     “Restatement Date” means the date on which the conditions precedent set forth in
Section 2.1 shall have been satisfied, which date is July 8, 2005.

     “Restricted Payment” has the meaning ascribed to it in Section 6.6.

     “Revolving Credit Advance” has the meaning ascribed to it in Section
1.1(a)(i).

     “Revolving Loan” means, at any time, the sum of (i) the aggregate amount of Revolving
Credit Advances outstanding to Borrower plus (ii) the aggregate Letter of Credit
Obligations incurred on behalf of Borrower. Unless the context otherwise requires, references to
the outstanding principal balance of the Revolving Loan shall include the outstanding balance of
Letter of Credit Obligations.

A-26

 

     “Revolving Loan Commitment” means (a) as to any Lender, the aggregate commitment of
such Lender to make Revolving Credit Advances or incur Letter of Credit Obligations as set forth on
Annex J to the Agreement or in the most recent Assignment Agreement executed by such Lender
and (b) as to all Lenders, the aggregate commitment of all Lenders to make Revolving Credit
Advances or incur Letter of Credit Obligations, which aggregate commitment shall be two hundred
twenty-five million Dollars ($225,000,000) on the Restatement Date, as such amount may be adjusted,
if at all, from time to time in accordance with the Agreement.

     “Revolving Note” has the meaning ascribed to it in Section 1.1(a)(ii).

     “Royal Bank of Canada” means Royal Bank of Canada, a Canadian chartered bank.

     “Seconds” means Inventory that has been formally downgraded in both value and
identification to a “less than prime/greater than scrap” product.

     “Security Agreement” means the Security Agreement, dated as of July 31, 2003, by and
among Borrower, the Collateral Agent and the other secured parties party thereto, for the benefit
of Agents, Lenders and the other secured parties party thereto, substantially in the form of
Exhibit A.

     “Senior Current Asset Security Agreement” means the Senior Current Asset Security
Agreement, dated as of July 31, 2003, by and among Holdings, Borrower, certain of their
Subsidiaries and the Inventory and Receivables Security Agent for the benefit of the Agents and the
Lenders, substantially in the form of Exhibit B-1.

     “Series A Indenture” means the Indenture, dated as of August 1, 2003, among the
Borrower, the guarantors named therein and Bank One N.A., as trustee, governing the terms of the
Series A Notes.

     “Series A Notes” means the Series A Notes due 2011 in the aggregate original principal
amount of $40,000,000 secured by a Lien on substantially all of the property of the Credit Parties
pursuant to the Security Agreement, the Junior Current Asset Security Agreement, the JV Pledge
Agreements and the Mortgages.

     “Series B Indenture” means the Indenture, dated as of August 1, 2003, among the
Borrower, the guarantors named therein and Bank One N.A., as trustee, governing the terms of the
Series B Notes.

     “Series B Notes” means the Series B Notes due 2010 in the aggregate original principal
amount of $20,000,000 secured by a Lien on substantially all of the property of the Credit Parties
pursuant to the Security Agreement, the Junior Current Asset Security Agreement, the JV Pledge
Agreements and the Mortgages.

A-27

 

     “Single Employer Plan” means any Plan that is covered by Title IV of ERISA, but that
is not a Multiemployer Plan. As of the date of this Agreement, the WHX Pension Plan is deemed to be
a Single Employer Plan.

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

     “Special Purpose Indebtedness” shall mean one of (i) High-Yield Debt, (ii) Project
Debt or (iii) Convertible Debt.

     “Specified Swap Agreement” means any Swap Agreement entered into by the Borrower and
any Lender or Affiliate thereof in respect of interest rates.

     “Subsidiary” means, with respect to any Person, (a) any corporation of which an
aggregate of more than 50% of the outstanding Capital Stock having ordinary voting power to elect a
majority of the board of directors of such corporation (irrespective of whether, at the time,
Capital Stock of any other class or classes of such corporation shall have or might have voting
power by reason of the happening of any contingency) is at the time, directly or indirectly, owned
legally or beneficially by such Person or one or more Subsidiaries of such Person, or with respect
to which any such Person has the right to vote or designate the vote of 50% or more of such Capital
Stock whether by proxy, agreement, operation of law or otherwise, and (b) any partnership or
limited liability company in which such Person and/or one or more Subsidiaries of such Person shall
have an interest (whether in the form of voting or participation in profits or capital
contribution) of more than 50% or of which any such Person is a general partner or may exercise the
powers of a general partner. Unless the context otherwise requires, each reference to a Subsidiary
shall be a reference to a Subsidiary of the Borrower. For purposes hereof, the Coke Plant Joint
Venture shall not be treated as a Subsidiary of the Borrower until such time as Borrower and/or one
or more Subsidiaries of Borrower shall have affirmatively exercised any rights, including any
rights under the operating agreement of the Coke Plant Joint Venture, which would cause any of them
to possess the power to elect more than 50% of the managers of the Coke Plant Joint Venture;
provided, however, that for purposes of Sections 3.10, 3.13,
3.14 and 5.6 and for purposes of the definition of “Group Member”, the Coke Plant
Joint Venture

A-28

 

shall be treated as a Subsidiary of the Borrower at such time as Borrower and/or one or more
Subsidiaries of Borrower shall have the present power to make such election, regardless of whether
or not such power has been affirmatively exercised.

     “Subsidiary Guarantors” means the collective reference to all Subsidiaries of Holdings
other than the Borrower.

     “Supermajority Lenders” means Lenders having (a) 80% or more of the Revolving Loan
Commitments of all Lenders, or (b) if the Revolving Loan Commitments have been terminated, 80% or
more of the aggregate outstanding amount of the Revolving Loan (with the Swing Line Loan being
attributed to the Lender making such Loan) and Letter of Credit Obligations.

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

     “Swing Line Advance” has the meaning ascribed to it in Section 1.1(b)(i).

     “Swing Line Availability” has the meaning ascribed to it in Section 1.1(b)(i).

     “Swing Line Commitment” means, as to the Swing Line Lender, the agreement of the Swing
Line Lender to make Swing Line Advances in its discretion in accordance with Section 1.1(b)
and up to the amount set forth on Annex J to the Agreement, which agreement constitutes a
subfacility of the Revolving Loan Commitment.

     “Swing Line Lender” means Royal Bank of Canada.

     “Swing Line Loan” means at any time, the aggregate amount of Swing Line Advances
outstanding to Borrower.

     “Swing Line Note” has the meaning ascribed to it in Section 1.1(b)(ii).

     “Target” has the meaning ascribed to it in Section 6.8.

     “Taxes” means taxes, levies, imposts, deductions, Charges or withholdings, and all
liabilities with respect thereto, excluding taxes imposed on or measured by the net income of an
Agent or Lender by the jurisdictions under the laws of which Agents and Lenders are organized or
conduct business or any political subdivision thereof.

     “Term Loan” means “Loans” as defined in the Term Loan Agreement.

A-29

 

     “Term Loan Agreement” means the $250,000,000 Term Loan Agreement, dated as of July 31,
2003, among Holdings, the Borrower, the banks and other financial institutions from time to time
party thereto, Royal Bank of Canada, as administrative agent, and the other agents named therein,
as amended, restated, supplemented or otherwise modified from time to time or as refinanced with
the consent of the Required Lenders.

     “Term Loan Extension” has the meaning ascribed to it in Section 1.18.

     “Term Loan Lenders” means “Lenders” as defined in the Term Loan Agreement.

     “Term Loan Obligations” means “Obligations” as defined in the Term Loan Agreement.

     “Termination Date” means the date on which (a) the Loans have been indefeasibly repaid
in full, (b) all other Obligations under the Agreement and the other Loan Documents have been
completely discharged, (c) all Letter of Credit Obligations have been cash collateralized,
cancelled or backed by standby letters of credit in accordance with Annex B, and (d)
Borrower shall not have any further right to borrow any monies under the Agreement.

     “Trademark License” means rights under any written agreement now owned or hereafter
acquired by any Credit Party granting any right to use any Trademark.

     “Trademarks” means all of the following now owned or hereafter adopted or acquired by
any Credit Party: (a) all trademarks, trade names, corporate names, business names, trade styles,
service marks, logos, other source or business identifiers, prints and labels on which any of the
foregoing have appeared or appear, designs and general intangibles of like nature (whether
registered or unregistered), all registrations and recordings thereof, and all applications in
connection therewith, including registrations, recordings and applications in the United States
Patent and Trademark Office or in any similar office or agency of the United States, any state or
territory thereof, or any other country or any political subdivision thereof; (b) all reissues,
extensions or renewals thereof; and (c) all goodwill associated with or symbolized by any of the
foregoing.

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

     “Virginia IRB Supplemental Indenture” means the Supplemental Indenture of Trust, dated
as of August 1, 2003, by and between the Industrial Development Authority of Greenville County,
Virginia and Wachovia Bank.

     “West Virginia Note” has the meaning ascribed to it in Annex D.

     “Wheeling-Nisshin” means Wheeling-Nisshin, Inc., a Delaware corporation.

A-30

 

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

     “Wholly Owned Subsidiary Guarantor” means any Subsidiary Guarantor that is a Wholly
Owned Subsidiary of Holdings.

     “WHX” means WHX Corporation, a Delaware corporation.

     “WHX Subordinated Note” has the meaning ascribed to it in Annex D.

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

     Rules of construction with respect to accounting terms used in the Agreement or the other Loan
Documents shall be as set forth in Annex G. All other undefined terms contained in any of
the Loan Documents shall, unless the context indicates otherwise, have the meanings provided for by
the Code to the extent the same are used or defined therein; in the event that any term is defined
differently in different Articles or Divisions of the Code, the definition contained in Article or
Division 9 shall control. Unless otherwise specified, references in the Agreement or any of the
Appendices to a Section, subsection or clause refer to such Section, subsection or clause as
contained in the Agreement. The words “herein,” “hereof” and “hereunder” and other words of
similar import refer to the Agreement as a whole, including all Annexes, Exhibits and Schedules, as
the same may from time to time be amended, restated, modified or supplemented, and not to any
particular section, subsection or clause contained in the Agreement or any such Annex, Exhibit or
Schedule.

     Wherever from the context it appears appropriate, each term stated in either the singular or
plural shall include the singular and the plural, and pronouns stated in the masculine, feminine or
neuter gender shall include the masculine, feminine and neuter genders. The words “including”,
“includes” and “include” shall be deemed to be followed by the words “without limitation”; the word
“or” is not exclusive; references to Persons include their respective successors and assigns (to
the extent and only to the extent permitted by the Loan Documents) or, in the case of governmental
Persons, Persons succeeding to the relevant functions of such Persons; and all references to
statutes and related regulations shall include any amendments of the same and any successor
statutes and regulations. Whenever any provision in any Loan Document refers to the knowledge (or
an analogous phrase) of any Credit Party, such words are intended to signify that such Credit Party
has actual knowledge or awareness of a particular fact or circumstance or that such Credit Party,
if it had exercised reasonable diligence, would have known or been aware of such fact or
circumstance.

A-31

 

ANNEX B (Section 1.2)

to

CREDIT AGREEMENT

LETTERS OF CREDIT

     (a) Issuance. Subject to the terms and conditions of the Agreement, Agents and
Revolving Lenders agree to incur, from time to time prior to the Commitment Termination Date, upon
the request of Borrower and for Borrower’s account (or, as long as Borrower remains responsible for
the payment in full of all amounts drawn thereunder and all related fees, costs and expenses, for
the account of the Coke Plant Joint Venture, if consummated), Letter of Credit Obligations by
causing Letters of Credit to be issued by GE Capital or a Subsidiary thereof or a Lender (any such
issuer, a “L/C Issuer”); provided, that each Lender shall, subject to the terms and
conditions hereinafter set forth, purchase (or be deemed to have purchased) risk participations in
all such Letters of Credit issued with the written consent of Administrative Agent, as more fully
described in paragraph (b)(ii) below. The aggregate amount of all such Letter of Credit Obligations
shall not at any time exceed the least of (i) fifty million Dollars ($50,000,000) (the “L/C
Sublimit”), and (ii) the Maximum Amount less the aggregate outstanding principal balance of the
Revolving Credit Advances and the Swing Line Loan, and (iii) the Borrowing Base less the aggregate
outstanding principal balance of the Revolving Credit Advances and the Swing Line Loan;
provided, that any Letter of Credit Obligations for the account of the Coke Plant Joint
Venture shall not exceed at any time $10,000,000 less all outstanding Investments (other than such
Letter of Credit Obligations) made in accordance with Section 6.8(h)(iii). No such Letter
of Credit shall have an expiry date that is (a) more than one year following the date of issuance
thereof, unless otherwise determined by Administrative Agent in its sole discretion (including with
respect to customary evergreen provisions) or (b) less than five Business Days prior to the
Commitment Termination Date (provided that the interest reserve Letter of Credit issued on the
Closing Date, or any replacement letter thereof, for the benefit of certain Term Loan Lenders in
the face amount of $7,500,000 (or such lesser amount as agreed to by the applicable L/C Issuer)
shall expire no later than July 8, 2009.

     (b)(i) Advances Automatic; Participations. In the event that L/C Issuer shall make
any payment on or pursuant to any Letter of Credit Obligation, the Borrower shall reimburse the L/C
Issuer for the amount of (a) the draft so paid and (b) any taxes, fees, charges or other costs or
expenses incurred by the L/C Issuer in connection with such payment, not later than 12:00 Noon, New
York City time, on (i) the Business Day that the Borrower receives notice of such draft, if such
notice is received on such day prior to 10:00 A.M., New York City time, or (ii) if clause (i) above
does not apply, the Business Day immediately following the day that the Borrower receives such
notice. Each such payment shall be made to the L/C Issuer in Dollars and in immediately available
funds. Interest shall be payable on any such amounts from the date on which the relevant draft is
paid until payment in full at the rate set forth in (x) until the Business Day next succeeding the
date of the relevant notice, Section 1.5(a) (with respect to Index Rate Loans) and (y)
thereafter, Section 1.5(d) (with respect to Index Rate Loans).

     (ii) The L/C Issuer irrevocably agrees to grant and hereby grants to each Lender, and, to
induce the L/C Issuer to issue Letters of Credit, each Lender irrevocably agrees to accept

B-1

 

and purchase and hereby accepts and purchases from the L/C Issuer, on the terms and conditions
set forth below, for such Lender’s own account and risk an undivided interest equal to such
Lender’s Pro Rata Share in the L/C Issuer’s obligations and rights under and in respect of each
Letter of Credit and the amount of each draft paid by the L/C Issuer thereunder. Each Lender
agrees with the L/C Issuer that, if a draft is paid under any Letter of Credit for which the L/C
Issuer is not reimbursed in full by the Borrower in accordance with the terms of this Agreement,
such Lender shall pay to the L/C Issuer upon demand at the L/C Issuer’s address for notices
specified herein an amount equal to such Lender’s Pro Rata Share of the amount of such draft, or
any part thereof, that is not so reimbursed. Each Lender’s obligation to pay such amount shall be
absolute and unconditional and shall not be affected by any circumstance, including (i) any setoff,
counterclaim, recoupment, defense or other right that such Lender may have against the L/C Issuer,
the Borrower or any other Person (including the Coke Plant Joint Venture) for any reason
whatsoever, (ii) the occurrence or continuance of a Default or an Event of Default or the failure
to satisfy any of the other conditions specified in Section 2, (iii) any adverse change in
the condition (financial or otherwise) of the Borrower or the Coke Plant Joint Venture, if
applicable, (iv) any breach of this Agreement or any other Loan Document by the Borrower, any other
Credit Party or any other Lender or (v) any other circumstance, happening or event whatsoever,
whether or not similar to any of the foregoing; provided, that no L/C Issuer shall be
deemed to have granted, and no Lender shall be deemed to have accepted, any interest in any Letter
of Credit which on its date of issuance exceeded (i) together with all other Letter of Credit
Obligations then outstanding, $50,000,000 or (ii) together with the aggregate outstanding principal
balance of all Revolving Credit Advances and Swing Line Loans, the Maximum Amount or the Borrowing
Base (in each case, less applicable reserves).

     (iii) If any amount required to be paid by any Lender to the L/C Issuer pursuant to paragraph
(b)(ii) above in respect of any unreimbursed portion of any payment made by the L/C Issuer under
any Letter of Credit is paid to the L/C Issuer within three Business Days after the date such
payment is due, such Lender shall pay to the L/C Issuer on demand an amount equal to the product of
(i) such amount, times (ii) the daily average Federal Funds Effective Rate during the period from
and including the date such payment is required to the date on which such payment is immediately
available to the L/C Issuer, times (iii) a fraction the numerator of which is the number of days
that elapse during such period and the denominator of which is 360. If any such amount required to
be paid by any Lender pursuant to paragraph (b)(ii) above is not made available to the L/C Issuer
by such Lender within three Business Days after the date such payment is due, the L/C Issuer shall
be entitled to recover from such Lender, on demand, such amount with interest thereon calculated
from such due date at the rate per annum applicable to Index Rate Loans. A certificate of the L/C
Issuer submitted to any Lender with respect to any amounts owing under this paragraph (b) shall be
conclusive in the absence of manifest error.

     (iv) Whenever, at any time after the L/C Issuer has made payment under any Letter of Credit
and has received from any Lender its pro rata share of such payment in accordance
with clause (b)(ii) above, the L/C Issuer receives any payment related to such Letter of Credit
(whether directly from the Borrower or otherwise, including proceeds of collateral applied thereto
by the L/C Issuer), or any payment of interest on account thereof, the L/C Issuer will distribute
to such Lender its pro rata share thereof; provided, however, that
in the event that any such payment received by the L/C Issuer shall be required to be returned by
the L/C Issuer,

B-2

 

such Lender shall return to the L/C Issuer the portion thereof previously distributed by the
L/C Issuer to it.

     (c) Cash Collateral. (i) If Borrower is required to provide cash collateral for any
Letter of Credit Obligations pursuant to the Agreement, including Section 8 of the
Agreement, prior to the Commitment Termination Date, Borrower will pay to Administrative Agent for
the ratable benefit of itself and Lenders cash or Cash Equivalents acceptable to Administrative
Agent in an amount equal to 105% (or in the case of the interest reserve Letter of Credit to be
issued for the benefit of certain lenders party to the Term Loan Agreement, in an amount acceptable
to the L/C Issuer) of the maximum amount then available to be drawn under each applicable Letter of
Credit outstanding. Such funds or Cash Equivalents shall be held by Administrative Agent in a cash
collateral account (the “Cash Collateral Account”) maintained at a bank or financial
institution acceptable to Administrative Agent. The Cash Collateral Account shall be in the name
of Borrower and shall be pledged to, and subject to the control of, Administrative Agent, for the
benefit of Agents and Lenders, in a manner satisfactory to Administrative Agent. Borrower hereby
pledges and grants to Administrative Agent, on behalf of itself and Lenders, a security interest in
all such funds and Cash Equivalents held in the Cash Collateral Account from time to time and all
proceeds thereof, as security for the payment of all amounts due in respect of the Letter of Credit
Obligations and other Obligations, whether or not then due. The Agreement, including this
Annex B, shall constitute a security agreement under applicable law.

     (ii) If any Letter of Credit Obligations, whether or not then due and payable, shall for any
reason be outstanding on the Commitment Termination Date, Borrower shall either (A) provide cash
collateral therefor in the manner described above, or (B) cause all such Letters of Credit and
guaranties thereof, if any, to be canceled and returned, or (C) deliver a stand-by letter (or
letters) of credit in guarantee of such Letter of Credit Obligations, which stand-by letter (or
letters) of credit shall be of like tenor and duration (plus thirty (30) additional days) as, and
in an amount equal to 105% of the aggregate maximum amount then available to be drawn under, the
Letters of Credit to which such outstanding Letter of Credit Obligations relate and shall be issued
by a Person, and shall be subject to such terms and conditions, as are satisfactory to
Administrative Agent in its sole discretion.

     (iii) From time to time after funds are deposited in the Cash Collateral Account by Borrower,
whether before or after the Commitment Termination Date, Administrative Agent may apply such funds
or Cash Equivalents then held in the Cash Collateral Account to the payment of any amounts, and in
such order as Administrative Agent may elect, as shall be or shall become due and payable by
Borrower to Agents and Lenders with respect to such Letter of Credit Obligations of Borrower and,
upon the satisfaction in full of all Letter of Credit Obligations of Borrower, to any other
Obligations then due and payable.

     (iv) Neither Borrower nor any Person (including the Coke Plant Joint Venture) claiming on
behalf of or through Borrower shall have any right to withdraw any of the funds or Cash Equivalents
held in the Cash Collateral Account, except that upon the termination of all Letter of Credit
Obligations and the payment of all amounts payable by Borrower to Agents and Lenders in respect
thereof, any funds remaining in the Cash Collateral Account shall be applied to other Obligations
then due and owing and upon payment in full of such Obligations any

B-3

 

remaining amount shall be paid to Borrower or as otherwise required by law. Interest earned
on deposits in the Cash Collateral Account shall be held as additional collateral.

          (d) Fees and Expenses. Borrower agrees to pay to Administrative Agent for the benefit
of Lenders, as compensation to Lenders for Letter of Credit Obligations incurred hereunder, (i) all
costs and expenses incurred by Administrative Agent or any Lender on account of such Letter of
Credit Obligations, and (ii) for each calendar quarter during which any Letter of Credit Obligation
shall remain outstanding, a fee (the “Letter of Credit Fee”) in an amount equal to the
Applicable L/C Margin from time to time in effect multiplied by the maximum amount available from
time to time to be drawn under the applicable Letter of Credit. Such fee shall be paid to
Administrative Agent for the benefit of the Lenders in arrears, on the first day of each calendar
quarter and on the Commitment Termination Date. In addition, Borrower shall pay to any L/C Issuer,
on demand, such fees (including all per annum fees), charges and expenses of such L/C Issuer in
respect of the issuance, negotiation, acceptance, amendment, transfer and payment of such Letter of
Credit or otherwise payable pursuant to the application and related documentation under which such
Letter of Credit is issued.

          (e) Request for Incurrence of Letter of Credit Obligations. Borrower shall give
Administrative Agent and L/C Issuer at least two (2) Business Days’ prior written notice requesting
the incurrence of any Letter of Credit Obligation. The notice shall be accompanied by the form of
the Letter of Credit (which shall be acceptable to the L/C Issuer). Notwithstanding anything
contained herein to the contrary, Letter of Credit applications by Borrower and approvals by
Administrative Agent and the L/C Issuer may be made and transmitted pursuant to electronic codes
and security measures mutually agreed upon and established by and among Borrower, Administrative
Agent and the L/C Issuer.

          (f) Obligation Absolute. The obligation of Borrower to reimburse Administrative
Agent, L/C Issuer and Lenders for payments made with respect to any Letter of Credit Obligation
shall be absolute, unconditional and irrevocable, without necessity of presentment, demand, protest
or other formalities, and the obligations of each Lender to make payments to Administrative Agent
and the L/C Issuer with respect to Letters of Credit shall be unconditional and irrevocable. Such
obligations of Borrower and Lenders shall be paid strictly in accordance with the terms hereof
under all circumstances including the following:

     (i) any lack of validity or enforceability of any Letter of Credit or the Agreement or
the other Loan Documents or any other agreement;

     (ii) the existence of any claim, setoff, defense or other right that Borrower or any of
its Affiliates (including the Coke Plant Joint Venture) or any Lender may at any time have
against a beneficiary or any transferee of any Letter of Credit (or any Persons or entities
for whom any such transferee may be acting), Administrative Agent, any Lender, or any other
Person, whether in connection with the Agreement, the Letter of Credit, the transactions
contemplated herein or therein or any unrelated transaction (including any underlying
transaction between Borrower or any of its Affiliates (including the Coke Plant Joint
Venture) and the beneficiary for which the Letter of Credit was procured);

B-4

 

     (iii) any draft, demand, certificate or any other document presented under any Letter
of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect;

     (iv) payment by Administrative Agent (except as otherwise expressly provided in
paragraph (g)(ii)(C) below) or any L/C Issuer under any Letter of Credit or guaranty thereof
against presentation of a demand, draft or certificate or other document that does not
comply with the terms of such Letter of Credit or such guaranty;

     (v) any other circumstance or event whatsoever, that is similar to any of the
foregoing; or

     (vi) the fact that a Default or an Event of Default has occurred and is continuing.

          (g) Indemnification; Nature of Lenders’ Duties.

          (i) In addition to amounts payable as elsewhere provided in the Agreement, Borrower hereby
agrees to pay and to protect, indemnify, and save harmless each Agent and Lender from and against
any and all claims, demands, liabilities, damages, losses, costs, charges and expenses (including
reasonable attorneys’ fees and allocated costs of internal counsel) that any Agent or Lender may
incur or be subject to as a consequence, direct or indirect, of (A) the issuance of any Letter of
Credit or guaranty thereof, or (B) the failure of any Agent or Lender seeking indemnification or of
any L/C Issuer to honor a demand for payment under any Letter of Credit or guaranty thereof as a
result of any act or omission, whether rightful or wrongful, of any present or future de jure or de
facto government or Governmental Authority, in each case other than to the extent as a result of
the gross negligence or willful misconduct of such Agent or Lender (as finally determined by a
court of competent jurisdiction).

          (ii) As between Agents and any Lender and Borrower, Borrower assumes all risks of the acts and
omissions of, or misuse of any Letter of Credit by beneficiaries of any Letter of Credit. In
furtherance and not in limitation of the foregoing, to the fullest extent permitted by law neither
Agents nor any Lender shall be responsible for: (A) the form, validity, sufficiency, accuracy,
genuineness or legal effect of any document issued by any party in connection with the application
for and issuance of any Letter of Credit, even if it should in fact prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent or forged; (B) the validity or sufficiency
of any instrument transferring or assigning or purporting to transfer or assign any Letter of
Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, that may
prove to be invalid or ineffective for any reason; (C) failure of the beneficiary of any Letter of
Credit to comply fully with conditions required in order to demand payment under such Letter of
Credit; provided, that in the case of any payment by L/C Issuer under any Letter of Credit,
L/C Issuer shall be liable to the extent such payment was made solely as a result of its gross
negligence or willful misconduct (as finally determined by a court of competent jurisdiction) in
determining that the demand for payment under such Letter of Credit or guaranty thereof complies on
its face with any applicable requirements for a demand for payment under such Letter of Credit or
guaranty thereof; (D) errors, omissions, interruptions or delays in transmission or delivery of any
messages, by mail, cable, telegraph, telex or otherwise, whether or not they may be in cipher; (E)

B-5

 

errors in interpretation of technical terms; (F) any loss or delay in the transmission or
otherwise of any document required in order to make a payment under any Letter of Credit or
guaranty thereof or of the proceeds thereof; (G) the credit of the proceeds of any drawing under
any Letter of Credit or guaranty thereof; and (H) any consequences arising from causes beyond the
control of any Agent or Lender. None of the above shall affect, impair, or prevent the vesting of
any of any Agent’s or Lender’s rights or powers hereunder or under the Agreement.

     (iii) Nothing contained herein shall be deemed to limit or to expand any waivers, covenants or
indemnities made by Borrower in favor of any L/C Issuer in any letter of credit application,
reimbursement agreement or similar document, instrument or agreement between Borrower and such L/C
Issuer.

B-6

 

ANNEX C (Section 1.8)

to

CREDIT AGREEMENT

CASH MANAGEMENT SYSTEM

     Borrower shall, and shall cause its Subsidiaries to, establish and maintain the Cash
Management Systems described below:

     (a) On or before the Restatement Date and until the Termination Date, Borrower shall (i)
establish lock boxes (“Lock Boxes”) or, at Administrative Agent’s discretion, blocked
accounts (“Blocked Accounts”) at one or more of the banks set forth in Disclosure
Schedule 3.25, and shall request in writing and otherwise take such reasonable steps to ensure
that all Account Debtors forward payment directly to such Lock Boxes, and (ii) deposit and cause
its Subsidiaries to deposit or cause to be deposited promptly, and in any event no later than the
first Business Day after the date of receipt thereof, all cash, checks, drafts or other similar
items of payment relating to or constituting payments made in respect of any and all Current Asset
Collateral (whether or not otherwise delivered to a Lock Box) into one or more Blocked Accounts in
Borrower’s name or any such Subsidiary’s name and at a bank identified in Disclosure Schedule
3.25 (each, a “Relationship Bank”). On or before the Restatement Date, Borrower shall
have established a concentration account in its name (the “Concentration Account”) at the
bank that shall be designated as the Concentration Account bank for Borrower in Disclosure
Schedule 3.25 (the “Concentration Account Bank”) which bank shall be reasonably
satisfactory to the Agents.

     (b) Borrower may maintain, in its name, an account (each a “Disbursement Account” and
collectively, the “Disbursement Accounts”) at a bank acceptable to Administrative Agent
into which Administrative Agent shall, from time to time, deposit proceeds of Revolving Credit
Advances and Swing Line Advances made to Borrower pursuant to Section 1.1 for use by
Borrower in accordance with the provisions of Section 1.4.

     (c) On or before the Restatement Date (or such later date as Administrative Agent shall
consent to in writing), the Concentration Account Bank, each bank where a Disbursement Account is
maintained and all other Relationship Banks (other than the Collateral Agent with respect to the
collateral account established by the Collateral Agent pursuant to Section 8.1 of the Security
Agreement and Section 8.1 of the JV Pledge Agreements or any similar account established by the
Collateral Agent pursuant to any Mortgage), shall have entered into tri-party blocked account
agreements with Administrative Agent, for the benefit of itself and Lenders, and Borrower and
Subsidiaries thereof, as applicable, in form and substance reasonably acceptable to Administrative
Agent, which shall become operative on or prior to the Restatement Date. Each such blocked account
agreement shall provide, among other things, that (i) all items of payment deposited in such
account and proceeds thereof deposited in the Concentration Account are held by such bank as agent
or bailee-in-possession for Administrative Agent, on behalf of itself and Lenders, (ii) the bank
executing such agreement has no rights of setoff or recoupment or any other claim against such
account, as the case may be, other than for payment of its service fees and other charges directly
related to the administration of such

C-1

 

account and for returned checks or other items of payment, and (iii) from and after the
Restatement Date (A) with respect to banks at which a Blocked Account is maintained, such bank
agrees to forward immediately all amounts in each Blocked Account to the Concentration Account Bank
and to continue the process of daily sweeps from such Blocked Account into the Concentration
Account and (B) with respect to the Concentration Account Bank, from and after receipt of a notice
(an “Activation Notice”) from the Administrative Agent (which Activation Notice shall be
given by the Administrative Agent at such time as (1) an Event of Default has occurred and is
continuing or (2) Borrowing Availability falls below $50,000,000), such bank agrees to immediately
forward all amounts received in the Concentration Account to the Collection Account through daily

sweeps from such Concentration Account into the Collection Account. Borrower shall not, and shall
not cause or permit any Subsidiary thereof to, accumulate or maintain cash in Disbursement Accounts
or payroll accounts as of any date of determination in excess of checks outstanding against such
accounts as of that date and amounts necessary to meet minimum balance requirements.

     (d) So long as no Event of Default has occurred and is continuing, Borrower may amend
Disclosure Schedule 3.25 to add or replace a Relationship Bank, Lock Box or Blocked Account
or to replace any Concentration Account or any Disbursement Account; provided, that (i)
Administrative Agent shall have consented in writing in advance to the opening of such account or
Lock Box with the relevant bank and (ii) prior to the time of the opening of such account or Lock
Box, Borrower or its Subsidiaries, as applicable, and such bank shall have executed and delivered
to Administrative Agent a tri-party blocked account agreement, in form and substance reasonably
satisfactory to Administrative Agent. Borrower shall close any of its accounts (and establish
replacement accounts in accordance with the foregoing sentence) promptly and in any event within
thirty (30) days following notice from Administrative Agent that the creditworthiness of any bank
holding an account is no longer acceptable in Administrative Agent’s reasonable judgment, or as
promptly as practicable and in any event within sixty (60) days following notice from
Administrative Agent that the operating performance, funds transfer or availability procedures or
performance with respect to accounts or Lock Boxes of the bank holding such accounts or
Administrative Agent’s liability under any tri-party blocked account agreement with such bank is no
longer acceptable in Administrative Agent’s reasonable judgment.

     (e) The Lock Boxes, Blocked Accounts, Disbursement Accounts and the Concentration Account
shall be cash collateral accounts, with all cash, checks and other similar items of payment in such
accounts securing payment of the Loans and all other Obligations, and in which Borrower and each
Subsidiary thereof shall have granted a Lien to Inventory and Receivables Security Agent, on behalf
of the Agents and Lenders.

     (f) All amounts deposited in the Collection Account shall be deemed received by Administrative
Agent in accordance with Section 1.10. The Administrative Agent shall allocate funds
applied to the Collection Account in accordance with Section 1.11. In no event shall any
amount be so applied unless and until such amount shall have been credited in immediately available
funds to the Collection Account.

     (g) Borrower shall and shall cause its Affiliates, officers, employees, agents, directors or
other Persons acting for or in concert with Borrower (each a “Related Person”) to (i)

C-2

 

hold
in trust for Inventory and Receivables Security Agent, for the benefit of itself and Lenders, all
checks, cash and other items of payment received by Borrower or any such Related Person, and (ii)
within one (1) Business Day after receipt by Borrower or any such Related Person of any checks,
cash or other items of payment, deposit the same into a Blocked Account. Borrower on behalf of
itself and each Related Person acknowledges and agrees that all cash, checks or other items of
payment constituting proceeds of Collateral (as defined in the Senior Current Asset Security
Agreement) are part of the Collateral (as defined in the Senior Current Asset Security Agreement).
All proceeds of the sale or other disposition of any Collateral (as defined in the Senior Current
Asset Security Agreement), shall be deposited directly into Blocked Accounts.

     (h) Notwithstanding anything to the contrary contained in the foregoing paragraphs of this
Annex C, the provisions of this Annex C shall not apply to (i) the collateral
accounts established by the Collateral Agent pursuant to Section 8.1 of the Security Agreement and
Section 8.1 of the JV Pledge Agreements or any similar account established by the Collateral Agent
pursuant to any Mortgage or (ii) any deposit account opened for the sole purpose of holding
proceeds of Non-Current Asset Collateral in accordance with Section 2.6(b) of the Term Loan
Agreement.

C-3

 

ANNEX D (Section 2.1(a))

to

CREDIT AGREEMENT

CLOSING CHECKLIST

     I. In addition to, and not in limitation of, the conditions described in Section 2.1
of the Agreement, pursuant to Section 2.1(a), the following items must be received by
Administrative Agent in form and substance satisfactory to Administrative Agent on or prior to the
Restatement Date (each capitalized term used but not otherwise defined herein shall have the
meaning ascribed thereto in Annex A to the Agreement):

          A. Appendices. All Appendices to the Agreement, in form and substance satisfactory to
Agent.

          B. Revolving Notes and Swing Line Note. Duly executed originals of an Amended and
Restated Revolving Note and Amended and Restated Swing Line Note for each requesting Lender, dated
the Restatement Date.

          C. Insurance. Satisfactory evidence that the insurance policies described in
Disclosure Schedule 3.24 and required by Section 5.8 are in full force and effect,
together with appropriate evidence showing loss payable and/or additional insured clauses or
endorsements, as reasonably requested by any Agent, in favor of Collateral Agent, on behalf of
Agents and Lenders.

          D. Security Interests and Code Filings. (a) Evidence satisfactory to Administrative
Agent that Inventory and Receivables Security Agent (for the benefit of Agents and Lenders) has a
valid and perfected first priority security interest in the Current Asset Collateral, including (i)
such documents duly executed or authorized by each Credit Party (including financing statements
under the Code and other applicable documents under the laws of any jurisdiction with respect to
the perfection of Liens) as Inventory and Receivables Security Agent may request in order to
perfect the Inventory and Receivables Security Agent’s security interests in the Current Asset
Collateral and (ii) copies of Code search reports listing all effective financing statements that
name any Credit Party as debtor, together with copies of such financing statements, none of which
shall cover the Current Asset Collateral, except for those terminated in connection with the
consummation of the Plan of Reorganization and those permitted by Section 6.3.

          (b) Control Letters from (i) all issuers of uncertificated securities and financial assets
held by Borrower, (ii) all securities intermediaries with respect to all securities accounts and
securities entitlements of Borrower, and (iii) all futures commission agents and clearing houses
with respect to all commodities contracts and commodities accounts held by Borrower.

          E. Initial Borrowing Base Certificate. Duly executed originals of an initial
Borrowing Base Certificate from Borrower, dated the Restatement Date; provided, that the
parties hereto agree that such Borrowing Base Certificate shall be a restatement of the Borrowing

D-1

 

Base Certificate most recently delivered pursuant to Annex F to the Prior Loan
Agreement and shall contain such terms and conditions as required pursuant to the terms of the
Agreement.

          F. Initial Notice of Revolving Credit Advance. Duly executed originals of a Notice of
Revolving Credit Advance, dated the Restatement Date, with respect to the initial Revolving Credit
Advance to be requested by Borrower on the Restatement Date.

          G. Letter of Direction. Duly executed originals of a letter of direction from
Borrower addressed to Administrative Agent, on behalf of itself and Lenders, with respect to the
disbursement on the Restatement Date of the proceeds of the initial Revolving Credit Advance.

          H. Cash Management System; Blocked Account Agreements. Evidence satisfactory to
Agents that, as of the Restatement Date, Cash Management Systems complying with Annex C to
the Agreement have been established and are currently being maintained in the manner set forth in
such Annex C, together with copies of duly executed tri-party blocked account and lock box
agreements, reasonably satisfactory to Agents, with the banks as required by Annex C.

          I. Closing Certificate; Certified Certificate of Incorporation; Good Standing
Certificates. The Administrative Agent shall have received (i) a certificate of each Credit
Party, dated the Restatement Date, substantially in the form of Exhibit E, with appropriate
insertion and attachments, including (a) the certificate of incorporation of each Credit Party that
is a corporation certified by the relevant authority of the jurisdiction of organization of such
Credit Party, (b) the bylaws of each Credit Party (the certificate of incorporation and bylaws,
collectively, the “Constitutive Documents”), (c) the resolutions of each Credit Party
approving and authorizing the execution, delivery and performance of the Loan Documents to which
such Person is a party and the transactions to be consummated in connection therewith and (d) a
signature and incumbency certificate of the officers of each Credit Party executing any of the Loan
Documents, each certified by such Credit Party’s corporate secretary or assistant secretary as
being true, accurate, correct and complete as of the Restatement Date and (ii) a long form good
standing certificate for each Credit Party from (A) its jurisdiction of organization and (B) each
other jurisdiction where its ownership, lease or operation of property or the conduct of its
business requires it to be qualified except to the extent that the failure to be in good standing
could not, in the aggregate, reasonably be expected to have a Material Adverse Effect.

          J. Officer’s Certificate. Agents shall have received duly executed originals
of a certificate of a Responsible Officer of Borrower, dated the Restatement Date, stating
that (a) since December 31, 2004, no event or condition has occurred or is existing which
could reasonably be expected to have a Material Adverse Effect; (b) there has been no
development or event that has had a material adverse effect on the aggregate value of the
“Collateral” as defined in the Security Agreement or in the aggregate value of the
“Collateral” as defined in the JV Pledge Agreements relating to Ohio Coatings Company and
Wheeling-Nisshin, Inc. (but in any case excluding Current Asset Collateral) since the
appraisals dated September 2002 and May 2003 received from Asset Recovery & Valuation and
Conway del Genio, respectively; (c) since December 31, 2004, no Litigation has been
commenced which, if successful, would have a Material
Adverse Effect or could challenge any of the transactions contemplated by the
Agreement

D-2

 

and the other Loan Documents; and (d) since December 31, 2004, there has been no
material increase in liabilities, liquidated or contingent, and no material decrease in
assets of Borrower or any of its Subsidiaries.

          K. Opinions of Counsel. Duly executed originals of opinions of Kirkpatrick & Lockhart
Nicholson Graham LLP, counsel for the Credit Parties, together with any local counsel opinions
reasonably requested by Administrative Agent, each in form and substance reasonably satisfactory to
Administrative Agent and its counsel, dated the Restatement Date, and each accompanied by a letter
addressed to such counsel from the Credit Parties, authorizing and directing such counsel to
address its opinion to Administrative Agent, on behalf of Lenders, and to include in such opinion
an express statement to the effect that Administrative Agent and Lenders are authorized to rely on
such opinion.

          L. Fee Letter. Duly executed originals of the Fee Letter.

          M. Waivers. Inventory and Receivables Security Agent, for the benefit of the Agents
and Lenders and the other secured parties party to the Collateral Documents, shall have received
landlord waivers and consents, bailee letters and mortgagee agreements in form and substance
satisfactory to Agents, in each case as required pursuant to Section 5.11.

          N. Audited Financials; Financial Condition; Solvency Certificate. Agent shall have
received the Financial Statements, Projections and other materials set forth in Section
3.1, certified by Holdings’ Chief Financial Officer, in each case in form and substance
satisfactory to each Agent, and each Agent shall be satisfied, in its sole discretion, with all of
the foregoing. Agents shall have further received a certificate of the Chief Executive Officer
and/or the Chief Financial Officer of Holdings, based on such projections, to the effect that (a)
Holdings and Borrower will be Solvent upon the consummation of the transactions contemplated
herein; (b) the projections are based upon estimates and assumptions stated therein, all of which
Holdings believes to be reasonable and fair in light of current conditions and current facts known
to Borrower and, as of the Restatement Date, reflect Holdings’ good faith and reasonable estimates
of its future financial performance and of the other information projected therein for the period
set forth therein; and (c) containing such other statements with respect to the solvency of
Borrower and matters related thereto as Agents shall request.

          O. Existing Credit Policies. The Agents shall have received a copy of the credit
policies and procedures of the Borrower as in effect on the Restatement Date in form and substance
satisfactory to each of them (the “Existing Credit Policies”).

          P. Reaffirmation of Guaranties. Duly executed originals of a reaffirmation of
guaranty for each of the Guarantee Agreements entered into by Holdings and WP Steel Venture.

          Q. Other Documents. Such other certificates, documents and agreements respecting any
Credit Party as Administrative Agent may reasonably request.

D-3

 

     II. The Administrative Agent hereby acknowledges its receipt prior to the Restatement Date of
the following items in form and substance satisfactory to the Administrative Agent:

          A. Mortgages. Mortgages covering all of the Mortgaged Properties together with: (a)
title insurance policies, current as-built surveys, zoning letters and certificates of occupancy,
in each case reasonably satisfactory in form and substance to Agents; (b) evidence that
counterparts of the Mortgages have been recorded in all places to the extent necessary or
desirable, in the judgment of Inventory and Receivables Security Agent, to create a valid and
enforceable third priority lien ranking after the encumbrances granted to secure the Term Loan
Obligations (and subject to the encumbrances permitted by Section 6.3) and the Series A
Notes on each Mortgaged Property in favor of Collateral Agent (or in favor of such other trustee as
may be required or desired under local law) for the benefit of the Agents and Lenders; and (c) an
opinion of counsel in each state in which any Mortgaged Property is located in form and substance
and from counsel reasonably satisfactory to Inventory and Receivables Security Agent.

          B. Environmental Reports. The Agents shall have received the React Report, which in
form, scope and substance is satisfactory to the Agents.

          C. Pension Plan. The Administrative Agent shall have received satisfactory evidence
of (i) the termination of Holdings’ and the Borrower’s participation in the benefit plans of WHX,
(ii) the release from past and future liabilities relating to the WHX benefit plans, (iii) the
inclusion of Holdings and the Borrower in the Steelworker Pension Trust and (iv) resolution of all
outstanding matters regarding Holdings and the Borrower with the PBGC.

          D. WHX Capital Contributions. The Administrative Agent shall have received
satisfactory evidence of (i) the forgiveness by WHX of approximately $39,000,000 in Indebtedness
and other amounts owing to WHX and (ii) the receipt by the Borrower from WHX of $10,000,000 in cash
in the form of a capital contribution and $10,000,000 in cash in exchange for the WHX Subordinated
Note.

          E. Labor Agreement. The Borrower shall have entered into a master labor agreement
(the “Master Labor Agreement”) with the United Steelworkers of America in form and
substance reasonably satisfactory to the Administrative Agent.

          F. Indebtedness Documents. The Administrative Agent shall have received duly executed
copies of the following and all amendments or other modifications thereof, each in form and
substance reasonably satisfactory to it:

          (i) the Series A Indenture;

          (ii) the Series B Indenture;

          (iii) the subordinated note due 2011 in the aggregate original principal amount of
$10,000,000 originally issued to WHX Corporation (the “WHX Subordinated Note”);

          (iv) the 7% Note in the aggregate principal amount of $3,000,000 issued to Junction
Industries, Inc. and due in ten consecutive semi-annual payments of $300,000 each

D-4

 

beginning on the
date which is six months after the date of final acceptance of the Electric Arc Furnace (the
“Junction Note”);

          (v) the Note due 2007 in the aggregate original principal amount of $1,210,526 issued to
Danieli Corporation (the “Danieli Note”);

          (vi) the 3% Note due 2005 in the original aggregate principal amount of $6,985,000 issued to
the State of Ohio (the “Ohio Note”);

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

          (viii) the Nevada IRB Supplemental Indenture (or in lieu of such delivery, the claims of the
Director of the State of Nevada Department of Business and Industry against Borrower to be
evidenced by the Nevada IRB Supplemental Indenture, shall have been modified as set forth in, and
pursuant to, Section 5.3 of the Plan of Reorganization, to the reasonable satisfaction of the
Administrative Agent);

          (ix) the Virginia IRB Supplemental Indenture (or in lieu of such delivery, the claims of the
Industrial Development Authority of Greensville County, Virginia against Borrower to be evidenced
by the Virginia IRB Supplemental Indenture, shall have been modified as set forth in, and pursuant
to, Section 5.3 of the Plan of Reorganization, to the reasonable satisfaction of the Administrative
Agent); and

          (x) the Term Loan Agreement.

          G. Master Standby Agreement. A Master Agreement for Standby Letters of Credit between
Borrower and GE Capital.

          H Master Documentary Agreement. A Master Agreement for Documentary Letters of Credit
between Borrower and GE Capital.

          I. PPE Access Agreement. The PPE Access Agreement duly executed by the parties
thereto.

          J. Accountants’ Letter. A letter from the Credit Parties to their independent
auditors authorizing the independent certified public accountants of the Credit Parties to
communicate with Agents and Lenders in accordance with Section 4.2.

D-5

 

ANNEX E (Section 4.1(a))

to

CREDIT AGREEMENT

FINANCIAL STATEMENTS AND PROJECTIONS — REPORTING

     Holdings shall deliver or cause to be delivered to Administrative Agent or to Administrative
Agent and Lenders, as indicated, the following:

     (a) Monthly Financials. To Administrative Agent and Lenders, within thirty (30) days
after the end of each Fiscal Month, financial information regarding Holdings and its Subsidiaries,
certified by a Responsible Officer of Holdings, consisting of consolidated and consolidating (i)
unaudited balance sheets as of the close of such Fiscal Month and the related statements of income
and cash flows for that portion of the Fiscal Year ending as of the close of such Fiscal Month;
(ii) unaudited statements of income and cash flows for such Fiscal Month, setting forth in
comparative form the figures for the corresponding period in the prior year, all prepared in
accordance with GAAP (subject to normal year-end adjustments); and (iii) a summary of the
outstanding balance of all Intercompany Notes as of the last day of that Fiscal Month. Such
financial information shall be accompanied by the certification of a Responsible Officer of
Holdings that (i) such financial information presents fairly in accordance with GAAP (subject to
normal year-end adjustments) the financial position and results of operations of Borrower and its
Subsidiaries, on a consolidated and consolidating basis, in each case as at the end of such Fiscal
Month and for that portion of the Fiscal Year then ended and (ii) any other information presented
is true, correct and complete in all material respects and that there was no Default or Event of
Default in existence as of such time or, if a Default or Event of Default shall have occurred and
be continuing, describing the nature thereof and all efforts undertaken to cure such Default or
Event of Default.

     (b) Quarterly Financials. To Administrative Agent and Lenders, within forty-five (45)
days after the end of each of the first three Fiscal Quarters of each Fiscal Year, consolidated and
consolidating financial information regarding Holdings and its Subsidiaries, certified by a
Responsible Officer of Holdings, including (i) unaudited balance sheets as of the close of such
Fiscal Quarter and the related statements of income and cash flow for that portion of the Fiscal
Year ending as of the close of such Fiscal Quarter and (ii) unaudited statements of income and cash
flows for such Fiscal Quarter, in each case setting forth in comparative form the figures for the
corresponding period in the prior year and the figures contained in the Projections for such Fiscal
Year, all prepared in accordance with GAAP (subject to normal year-end adjustments). Such
financial information shall be accompanied by (A) a statement in reasonable detail (each, a
“Compliance Certificate”) showing the calculations used in determining the Consolidated
Fixed Charge Coverage Ratio for the four consecutive Fiscal Quarters then ended (regardless of
whether Financial Covenants are applicable with respect to such calculations during such period)
and (B) the certification of a Responsible Officer of Holdings that (i) such financial information
presents fairly in accordance with GAAP (subject to normal year-end adjustments) the financial
position, results of operations and statements of cash flows of Holdings and its Subsidiaries on a
consolidated and consolidating basis as at the end of such Fiscal Quarter and for that portion of
the Fiscal Year then ended, (ii) any other information

E-1

 

presented is true, correct and complete in all material respects and that there was no Default
or Event of Default in existence as of such time or, if a Default or Event of Default has occurred
and is continuing, describing the nature thereof and all efforts undertaken to cure such Default or
Event of Default. In addition, Holdings shall deliver to Administrative Agent and Lenders, within
forty-five (45) days after the end of each Fiscal Quarter, a management discussion and analysis
that includes a comparison to budget for that Fiscal Quarter and a comparison of performance for
that Fiscal Quarter to the corresponding period in the prior year.

     (c) Operating Plan. To the Administrative Agent and each Lender, as soon as
available, but not later than the start of each Fiscal Year of Holdings, an annual operating plan
for Holdings and its Subsidiaries, approved by the board of directors of Holdings, for the
following Fiscal Year, which (i) includes a statement of all of the material assumptions on which
such plan is based, (ii) includes quarterly balance sheets and a quarterly budget for the following
year and (iii) integrates sales, gross profits, operating expenses, operating profit, cash flow
projections and Borrowing Availability projections, all prepared on the same basis and in similar
detail as that on which operating results are reported (and in the case of cash flow projections,
representing management’s good faith estimates of future financial performance based on historical
performance), and including plans for personnel (which shall be limited to disclosure of the head
count of Holdings and its Subsidiaries for such period), Capital Expenditures and facilities
(collectively, the “Projections”), which Projections shall in each case be accompanied by a
certificate of a Responsible Officer stating that such Projections are based on reasonable
estimates, information and assumptions and that as of such date such Responsible Officer has no
reason to believe that such Projections are incorrect or misleading in any material respect.

     (d) Annual Audited Financials. To Administrative Agent and Lenders, within forty-five
(45) days after the end of each Fiscal Year, (i) a Compliance Statement prepared in reasonable
detail showing the calculations used in determining the Consolidated Fixed Charge Coverage Ratio
for the Fiscal Year then ended (regardless of whether Financial Covenants are applicable with
respect to such calculations during such period) (subject to normal year-end adjustments) and (ii)
the certification of a Responsible Officer of Holdings that as at the end of such Fiscal Year there
was no Default or Event of Default in existence or, if a Default or Event of Default has occurred
and is continuing, describing the nature thereof and all efforts undertaken to cure such Default or
Event of Default.

     To Administrative Agent and Lenders, within ninety (90) days after the end of each Fiscal
Year, audited Financial Statements for Holdings and its Subsidiaries on a consolidated and
consolidating basis, consisting of balance sheets and statements of income and retained earnings
and cash flows, setting forth in comparative form in each case the figures for the previous Fiscal
Year, which Financial Statements shall be prepared in accordance with GAAP and, with respect to the
consolidated Financial Statements, certified without qualification (except for qualifications
relating to changes in accounting principles with which such accountants concur), by an independent
certified public accounting firm of national standing or otherwise acceptable to Administrative
Agent. Such Financial Statements shall be accompanied by (i) a Compliance Statement prepared in
reasonable detail showing the calculations used in determining the Consolidated Fixed Charge
Coverage Ratio for the four consecutive Fiscal Quarters then ended (regardless of whether Financial
Covenants are applicable with respect to

E-2

 

such calculations during such period), (ii) a report from such accounting firm to the effect
that, in connection with their audit examination, nothing has come to their attention to cause them
to believe that a Default or Event of Default has occurred with respect to the Financial Covenants
(or specifying those Defaults and Events of Default that they became aware of), it being understood
that such audit examination extended only to accounting matters and that no special investigation
was made with respect to the existence of Defaults or Events of Default, (iii) the annual letters
to such accountants in connection with their audit examination detailing contingent liabilities and
material litigation matters, and (iv) the certification of a Responsible Officer of Holdings that
all such Financial Statements present fairly in accordance with GAAP the financial position,
results of operations and statements of cash flows of Borrower and its Subsidiaries on a
consolidated and consolidating basis, as at the end of such Fiscal Year and for the period then
ended, and that there was no Default or Event of Default in existence as of such time or, if a
Default or Event of Default has occurred and is continuing, describing the nature thereof and all
efforts undertaken to cure such Default or Event of Default.

     (e) Joint Venture Financial Statements. Borrower shall also furnish to the
Administrative Agent and Lenders, as soon as available but in any event no later than fifteen (15)
days after receipt thereof, a copy of all annual and quarterly financial statements received with
respect to the Joint Ventures.

     (f) Management Letters. To Administrative Agent and Lenders, within five (5) Business
Days after receipt thereof by any Credit Party, copies of all management letters, exception reports
or similar letters or reports received by such Credit Party from its independent certified public
accountants.

     (g) SEC Filings and Press Releases. To Administrative Agent and Lenders, promptly
upon their becoming available, but in no event later than five (5) days thereafter, copies of: (i)
all Financial Statements, reports, notices and proxy statements made publicly available by any
Credit Party to its security holders; (ii) all regular and periodic reports and all registration
statements and prospectuses, if any, filed by any Credit Party with any securities exchange or with
the Securities and Exchange Commission or any governmental or private regulatory authority; and
(iii) all press releases and other statements made available by any Credit Party to the public
concerning material changes or developments in the business of any such Person.

     (h) Debt and Equity Notices. To Administrative Agent, as soon as practicable, copies
of all material written notices given or received by any Credit Party with respect to the Term Loan
Agreement, any Plan of Reorganization Indebtedness or any Capital Stock of such Person.

     (i) Supplemental Schedules. To each Agent, supplemental disclosures, if any, required
by Section 5.9.

     (j) Insurance Notices. To each Agent, disclosure of losses or casualties required by
Section 1.3(e).

     (k) Amendment of Indebtedness, Certain Agreements. To Administrative Agent, (i) 15
days prior to the effectiveness of any proposed amendment, supplement, waiver or

E-3

 

other modification with respect to any Plan of Reorganization Indebtedness, the Master Labor
Agreement or the Constitutive Documents, notice and a description of such proposed amendment,
supplement, waiver or modification and (ii) 5 days prior to the effectiveness thereof, a copy of a
substantially final draft of such proposed amendment, supplement, waiver or other modification.

     (l) Annual Environmental Report. To Administrative Agent, no later than 30 days after
the end of each Fiscal Year, a certificate of a Responsible Officer of the Borrower, with such
supporting information as may be reasonably requested by the Administrative Agent, certifying
whether the Borrower is in compliance with Section 5.6 (and, if the Borrower is not in
compliance with Section 5.6 at such time, such certificate shall include a statement as to
the nature of such non-compliance and the steps being taken by the Borrower to remedy the same).

     (m) Evidence of Lease Payments. To each Agent, (i) monthly within three (3) Business
Days after payment thereof, evidence of payment of lease or rental payments as to each leased or
rented location for which (A) a landlord or bailee waiver has not been obtained and (B) the value
of the Current Asset Collateral located thereat exceeds $50,000 and (ii) such other notices or
documents as any Agent may reasonably request.

     (n) Hedging Agreements. To Administrative Agent, at such time as Borrower shall
deliver the month-end Borrowing Base Certificate pursuant to clause (a) of Annex F, copies
of all interest rate, commodity or currency hedging agreements or amendments thereto entered into
by any Credit Party during such period.

     (o) Other Documents. To Agents and Lenders, such other financial and other
information respecting any Credit Party’s business or financial condition as any Agent or Lender
shall, from time to time, reasonably request.

E-4

 

ANNEX F (Section 4.1(b))

to

CREDIT AGREEMENT

COLLATERAL REPORTS

          Borrower shall deliver or cause to be delivered the following:

          (a) To each Agent, upon the request of either Agent, and in any event no less frequently than
fifteen (15) Business Days after the end of each Fiscal Month (together with a copy of all or any
part of the following reports requested by any Lender in writing after the Restatement Date), each
of the following reports, each of which shall be prepared by the Borrower as of the last day of the
immediately preceding fiscal month or the date two (2) days prior to the date of any such request:

     (i) an actual Borrowing Base Certificate with respect to Borrower, accompanied by such
supporting detail and documentation as shall be requested by any Agent in its reasonable
discretion;

     (ii) with respect to Borrower, an actual summary of Inventory by location and type with
a supporting perpetual Inventory report, in each case accompanied by such supporting detail
and documentation as shall be requested by any Agent in its reasonable discretion; and

     (iii) with respect to Borrower, an actual monthly trial balance showing Accounts
outstanding aged from due date as follows: 1 to 30 days, 31 to 60 days, 61 to 90 days and
91 days or more, accompanied by such supporting detail and documentation as shall be
requested by any Agent in its reasonable discretion.

Notwithstanding the foregoing, Borrower shall deliver a Borrowing Base Certificate to each Agent
(i) by noon New York time on Wednesday of each week during any period when either (A) the
Consolidated Fixed Charge Coverage Ratio indicated in the most recently delivered Compliance
Certificate is less than 1.00 to 1.0 or (B) Borrowing Availability is less than $50,000,000, and
(ii) at such other times as any Agent shall request. Borrowing Base Certificates delivered
pursuant to clause (i) of the preceding sentence shall include updated valuations of Eligible
Inventory and Eligible Accounts.

          (b) To each Agent, on a monthly basis or at such more frequent intervals as any Agent may
request from time to time (together with a copy of all or any part of such delivery requested by
any Lender in writing after the Restatement Date), collateral reports as at such date with respect
to Borrower, including all additions and reductions (cash and non-cash) with respect to Accounts of
Borrower, in each case accompanied by such supporting detail and documentation as shall be
requested by any Agent in its reasonable discretion each of which shall be prepared by the Borrower
as of the last day of the immediately preceding month or the date two (2) days prior to the date of
any request;

F-1

 

          (c) To each Agent, at the time of delivery of each of the monthly Financial Statements
delivered pursuant to Annex E:

     (i) a reconciliation of the most recent Borrowing Base, general ledger and month-end
Inventory reports of Borrower to Borrower’s general ledger and monthly Financial Statements
delivered pursuant to such Annex E, in each case accompanied by such supporting
detail and documentation as shall be requested by Agent in its reasonable discretion;

     (ii) a reconciliation of the perpetual inventory by location to Borrower’s most recent
Borrowing Base Certificate, general ledger and monthly Financial Statements delivered
pursuant to Annex E, in each case accompanied by such supporting detail and
documentation as shall be requested by any Agent in its reasonable discretion;

     (iii) an aging of accounts payable by due date and a reconciliation of that accounts
payable aging to Borrower’s general ledger and monthly Financial Statements delivered
pursuant to Annex E, in each case accompanied by such supporting detail and
documentation as shall be requested by any Agent in its reasonable discretion;

     (iv) a reconciliation of the outstanding Loans as set forth in the monthly Loan Account
statement provided by Administrative Agent to Borrower’s general ledger and monthly
Financial Statements delivered pursuant to Annex E, in each case accompanied by such
supporting detail and documentation as shall be requested by Agent in its reasonable
discretion;

          (d) To each Agent, at the time of delivery of each of the quarterly Financial Statements
delivered pursuant to Annex E, (i) a listing of government contracts of Borrower subject
to the Federal Assignment of Claims Act of 1940; and (ii) a list of any applications for the
registration of any Patent, Trademark or Copyright filed by any Credit Party with the United States
Patent and Trademark Office, the United States Copyright Office or any similar office or agency in
the prior Fiscal Quarter;

          (e) Borrower, at its own expense, shall deliver to each Agent the results of each physical
verification, if any, that Borrower or any of its Subsidiaries may in their discretion have made,
or caused any other Person to have made on their behalf, of all or any portion of their Inventory
(and, if a Default or an Event of Default has occurred and be continuing, Borrower shall, upon the
request of any Agent, conduct, and deliver the results of, such physical verifications as such
Agent may require);

          (f) Borrower, at its own expense, shall deliver to each Agent such appraisals of its assets as
any Agent may request at any time after the occurrence and during the continuance of a Default or
an Event of Default, such appraisals to be conducted by an appraiser, and in form and substance
reasonably satisfactory to the requesting Agent; and

          (g) Borrower, at its own expense, shall deliver to each Agent semi-annual audits of the
accounts receivable, in each case performed by parties acceptable to the Agents,

F-2

 

provided that audits shall be conducted for each Fiscal Quarter in which, at any time
during such Fiscal Quarter, (i) prior to delivery of Financial Statements for the Fiscal Year ended
December 31, 2005, Borrowing Availability is less than $75,000,000 or (ii) from and after delivery
of Financial Statements for the Fiscal Year ended December 31, 2005, either (A) Borrowing
Availability is less than $75,000,000 and the Consolidated Fixed Charge Coverage Ratio indicated in
the most recently delivered Compliance Certificate is less than 1.00 to 1.0 or (B) Borrowing
Availability is less than $50,000,000.

          (h) Borrower, at its own expense, shall deliver to each Agent annual appraisals of the
inventory, in each case performed by parties acceptable to the Agents; provided that appraisals
shall be conducted semi-annually in any Fiscal Year during which the Loans outstanding exceed
$50,000,000 at any time.

          (i) Such other reports, statements and reconciliations with respect to the Borrowing Base or
Collateral or Obligations of any or all Credit Parties as any Agent shall from time to time request
in its reasonable discretion.

F-3

 

ANNEX G (Section 6.1)

to

CREDIT AGREEMENT

FINANCIAL COVENANTS

     The Credit Parties hereby jointly and severally agree that, so long as any Loan or other
amount is owing to any Lender or Agent hereunder, each of the Credit Parties shall not:

     (a) Consolidated Fixed Charge Coverage Ratio. If on any date the Borrowing
Availability shall be less than $50,000,000, permit the Consolidated Fixed Charge Coverage Ratio
for the period of the four most recently completed Fiscal Quarters to be less than 1.00 to 1.0.

     (b) Accounting Terms. Unless otherwise specifically provided herein, any accounting
term used in the Agreement shall have the meaning customarily given such term in accordance with
GAAP, and all financial computations hereunder shall be computed in accordance with GAAP
consistently applied. That certain items or computations are explicitly modified by the phrase “in
accordance with GAAP” shall in no way be construed to limit the foregoing. If any “Accounting
Changes” (as defined below) occur and such changes result in a change in the calculation of the
financial covenants, standards or terms used in the Agreement or any other Loan Document, then
Holdings, Agents and Lenders agree to enter into negotiations in order to amend such provisions of
the Agreement so as to equitably reflect such Accounting Changes with the desired result that the
criteria for evaluating Holdings’ and its Subsidiaries’ financial condition shall be the same after
such Accounting Changes as if such Accounting Changes had not been made; provided, however,
that the agreement of Requisite Lenders to any required amendments of such provisions shall be
sufficient to bind all Lenders. “Accounting Changes” means (i) changes in accounting
principles required by the promulgation of any rule, regulation, pronouncement or opinion by the
Financial Accounting Standards Board of the American Institute of Certified Public Accountants (or
successor thereto or any agency with similar functions), (ii) changes in accounting principles
concurred in by Holdings’ certified public accountants; (iii) purchase accounting adjustments under
A.P.B. 16 or 17 and EITF 88-16, and the application of the accounting principles set forth in FASB
109, including the establishment of reserves pursuant thereto and any subsequent reversal (in whole
or in part) of such reserves; and (iv) the reversal of any reserves established as a result of
purchase accounting adjustments. All such adjustments resulting from expenditures made subsequent
to the Restatement Date (including capitalization of costs and expenses or payment of
pre-Restatement Date liabilities) shall be treated as expenses in the period the expenditures are
made and deducted as part of the calculation of EBITDA in such period. If Agents, Holdings and
Requisite Lenders agree upon the required amendments, then after appropriate amendments have been
executed and the underlying Accounting Change with respect thereto has been implemented, any
reference to GAAP contained in the Agreement or in any other Loan Document shall, only to the
extent of such Accounting Change, refer to GAAP, consistently applied after giving effect to the
implementation of such Accounting Change. If Agents, Holdings and Requisite Lenders cannot agree
upon the required amendments within thirty (30) days following the date of implementation of any
Accounting Change, then all Financial Statements delivered and all

G-1

 

calculations of financial covenants and other standards and terms in accordance with the
Agreement and the other Loan Documents shall be prepared, delivered and made without regard to the
underlying Accounting Change. For purposes of Section 8.1, a breach of a Financial
Covenant contained in this Annex G shall be deemed to have occurred as of any date of
determination by Administrative Agent or as of the last day of any specified measurement period,
regardless of when the Financial Statements reflecting such breach are delivered to Administrative
Agent.

G-2

 

ANNEX H (Section 9.9(a))

to

CREDIT AGREEMENT

LENDERS’ WIRE TRANSFER INFORMATION

	 	 	 
	Name:

	 	Royal Bank of Canada
	Bank:

	 	JPMorgan Chase Bank
	 

	 	New York, New York
	ABA #:

	 	021-000021
	Swift Code:

	 	ROYCUS3X
	Account #:

	 	920-1033363
	For further credit to:

	 	Account #: 2937464, Transit 1269
	 

	 	RBCCM Agency Services, New York

Ref: Wheeling-Pittsburgh Steel
	 
	 	 
	Name:

	 	General Electric Capital Corporation
	Bank:

	 	DeutscheBank Trust Company Americas
	 

	 	New York, New York
	ABA #:

	 	021001033
	Account #:

	 	50232854
	 

	 	Ref: Wheeling-Pittsburgh POR-ATTN: CFN5230
	 
	 	 
	Name:

	 	The CIT Group/Business Credit, Inc.
	Bank:

	 	JP Morgan Chase
	 

	 	Tampa, Florida
	ABA #:

	 	02100021
	Account #:

	 	144-0-64425
	 

	 	Ref: Wheeling-Pittsburgh Steel Corporation
	 
	 	 
	Name:

	 	Fleet Capital Corp.
	Bank:

	 	Fleet National Bank
	 

	 	Hartford, Connecticut
	ABA #:

	 	011900571
	Account #:

	 	936-033-7579
	 

	 	Ref: Wheeling-Pittsburgh Steel Corporation
	 
	 	 
	Name:

	 	Wachovia Bank, National Association
	Bank:

	 	First Union National Bank
	 

	 	Charlotte, North Carolina
	ABA #:

	 	053000219
	Account #:

	 	5000000030279
	 

	 	Ref: RBC-Wheeling Pittsburgh

H-1

 

	 	 	 
	Name:

	 	JPMorgan Chase Bank, N.A.
	Bank:

	 	JPMorgan Chase Bank, N.A.
	 

	 	Chicago, Illinois
	ABA #:

	 	0210000021
	Account #:

	 	9008110755
	Attention:

	 	Syndication Services
	 

	 	Ref: Wheeling-Pittsburgh Steel Corporation
	 
	 	 
	Name:

	 	UBS Loan Finance LLC
	Bank:

	 	UBS Loan Finance
	ABA #:

	 	026-007-993
	Account Name:

	 	BPS
	Account #:

	 	WA-101-894001-001
	 

	 	Ref: Wheeling-Pittsburgh Steel

H-2

 

ANNEX I (Section 11.10)

to

CREDIT AGREEMENT

NOTICE ADDRESSES

	(A)	 	  If to Administrative Agent, at

Royal Bank of Canada

Agency Services Group

Royal Bank Plaza

P.O. Box 50, 200 Bay Street

12th Floor, South Tower

Toronto Ontario M5J 2W7

Attention: Manager

Telecopier No.: (416) 842-4023

Telephone No.: (416) 842-3901

	(B)	 	  If to Inventory and Receivables Security Agent or GE Capital, at

General Electric Capital Corporation

500 West Monroe Street, 12th Floor

Chicago, Illinois 60661

Attention: Wheeling-Pittsburgh Steel Corporation, Account Manager

Telecopier No.: (312) 463-3840

Telephone No.: (312) 463-2300

with a copy to:

General Electric Capital Corporation

201 High Ridge Road

Stamford, Connecticut 06927-5100

Attention: Corporate Counsel-Commercial Finance

Telecopier No.: (203) 316-7889

Telephone No.: (203) 316-7552

	(C)	 	  If to Borrower, at

1134 Market Street

Wheeling, West Virginia 26003

Attention: Paul J. Mooney

Telecopier No.: (304) 234-2261

Telephone No.: (304) 234-2340

I-1

 

With copies to:

Kirkpatrick & Lockhart Nicholson Graham LLP

Oliver Building

535 Smithfield Street

Pittsburgh, PA 15222-2313

Telecopier No.: (412) 355-6501

Telephone No.: (412) 355-6730

I-2

 

ANNEX J (from Annex A
– Commitments definition)

to

CREDIT AGREEMENT

	 	 	 	 	 
	Lender(s):	 	Revolving Loan Commitment	 
	 	 	(including a Swing Line	 
	 	 	Commitment of	 
	 	 	$25,000,000)	 
	Royal Bank of Canada
	 	$	20,000,000	 
	General Electric Capital Corporation
	 	$	75,000,000	 
	CIT Group/Business Credit, Inc.
	 	$	30,000,000	 
	Fleet Capital Corporation
	 	$	30,000,000	 
	Wachovia Bank, National Association
	 	$	30,000,000	 
	JPMorgan Chase Bank,N.A.
	 	$	25,000,000	 
	UBS Loan Finance LLC
	 	$	15,000,000	 
	Total
	 	$	225,000,000	 

J-1Exhibit 10.1

 

Exhibit No. 10.1

EMPLOYMENT AGREEMENT

     EMPLOYMENT AGREEMENT, entered into on July 13, 2005 and effective as of May 19, 2005 (the
“Agreement Date”), between Monro Muffler Brake, Inc. (the “Company”) and Joseph Tomarchio, Jr. (the
“Executive”).

     WHEREAS, the Company and the Executive wish for the Executive to continue to be employed by
the Company upon the terms and conditions hereinafter provided; and

     WHEREAS, the Company and the Executive have agreed to enter into this Employment Agreement.

     NOW, THEREFORE, in consideration of the mutual covenants and promises herein contained, and
other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

     1.     Employment and Duties.

            1.1    Employment by the Company. The Company hereby agrees to employ the Executive for
the Term (as herein defined), to render exclusive and full-time services in the capacity of
Divisional Vice President — Tire Stores of the Company, subject to the control and direction of the
Company’s President and Board of Directors.

            1.2    Duties/Authority. The Executive shall have responsibility for the conduct of the
business of the Company’s Tire Stores and the general supervision of and control over the assets,
business interests, and agents of the Company’s Tire Stores, in each case subject to the control
and direction of the President. The Executive’s duties hereunder shall be consistent with the
duties, responsibilities, and authority generally recognized for the office of Divisional Vice
President.

     2.     Term of Employment. The term of the Executive’s employment under this Agreement
(the “Term”) shall continue beginning on the Agreement Date and ending on June 30, 2008, unless
sooner terminated as provided herein.

     3.     Compensation.

            3.1    Salary. As compensation for all services to be rendered pursuant to this
Agreement, the Company shall pay the Executive during the Term a salary of $300,000 per annum (the
“Base Salary”) effective April 1, 2005, payable not less frequently than monthly, less such amounts
as shall be required to be withheld by applicable law and regulations. The Executive’s Base Salary
will be reviewed annually by the Compensation Committee of the Board of Directors (the “Committee”)
and may be adjusted upward (but not downward) to reflect the Executive’s performance and
responsibilities.

            3.2    Annual Bonus. Pursuant to the Company’s bonus plan (the “Bonus Plan”), the
Company shall pay the Executive, within 120 days of its fiscal year end, a bonus in respect of each
prior fiscal year during the Term beginning with the fiscal year ending in March 2006, of 25% of
Base Salary if the Company achieves its performance targets set by the Board of Directors with
respect to such year, increased up to a maximum of 62.5% of Base Salary if the Company exceeds such

 

 

performance targets by amounts to be determined by the Committee (the “Annual Bonus”), less
such amounts as shall be required to be withheld by applicable law and regulations. If this
Agreement terminates other than at the end of a fiscal year and if the Executive is entitled to a
pro rata bonus for such partial year pursuant to Section 4.5, such pro rata bonus shall be equal to
the bonus the Executive would have received under the Bonus Plan had he been employed by the
Company for the entire fiscal year multiplied by a fraction, the numerator of which shall be the
number of days during such fiscal year he was so employed and the denominator of which shall be
365.

            3.3    Participation in Employee Benefit Plans. The Executive shall be permitted during
the Term, if and to the extent eligible, to participate in any group life, hospitalization or
disability insurance plan, health program, or any pension plan or similar benefit plan of the
Company, which is available generally to other senior executives of the Company.

            3.4    Expenses. Subject to such policies generally applicable to senior executives of
the Company, as may from time to time be established by the Board of Directors, the Company shall
pay or reimburse the Executive for all reasonable expenses (including travel expenses) actually
incurred or paid by the Executive during the Term in the performance of the Executive’s services
under this Agreement (“Expenses”) upon presentation of expense statements or vouchers or such other
supporting information as it may require.

            3.5    Vacation. The Executive shall be entitled to such amount of vacation which is
available generally to other senior executives of the Company.

            3.6    Additional Benefits. The Executive shall be entitled to the following additional
benefits under this Agreement:

                    (a)     An annual car allowance of $12,000, payable in equal monthly increments. Such allowance
shall be made in addition to actual expenses incurred by the Executive on behalf of Company
business such as gas, tolls, repairs (incurred in the course of company business), etc. which shall
be paid by the Company pursuant to Section 3.4 above.

                    (b)     On May 19, 2005, the Executive was granted a non-qualified stock option (the “Option”) to
purchase 60,000 shares of the Company’s $.01 par value Common Stock (the “Shares”) pursuant to the
Company’s 1998 Employee Stock Option Plan (the “Plan”). The Option to purchase each Share was
granted at an exercise price equal to the fair market value of the Company’s Common Stock on the
date of the grant and shall have a five (5) year term from the date of grant. The Option to
purchase one-half of the Shares (30,000) shall be exercisable immediately upon issuance and the
remaining one-half shall become fully vested and exercisable on March 19, 2006, provided that the
Executive continues to be employed by the Company on such date. The Option shall be subject to the
terms of, and is intended to conform in all respects with, the Plan and pursuant to the Stock
Option Contract(s) issued to the Executive in connection therewith.

     4.     Termination, Removal from Duties or Resignation.

            4.1    Termination Upon Death. If the Executive dies during the Term, this Agreement
shall terminate and the Company shall have no further obligations under this Agreement except as to
the Company’s obligations as set forth in the Stock Option Contract(s) issued to the Executive in
connection with Section 3.6 (b). All other obligations of the Company shall be pro-rated through
the date of death.

 

 

            4.2    Removal from Position Upon Disability. If during the Term the Executive becomes
physically or mentally disabled, whether totally or partially, so that the Executive is unable to
perform the essential functions of his job with or without reasonable accommodation for a period or
periods aggregating 90 days during any twelve month period, the Company may at any time after such
90th day of disability, by written notice to the Executive, remove him from his position for the
remainder of the Term of the Executive’s employment hereunder. The Executive’s employment status
with the Company will continue after such removal for a period of time so that the Executive may
receive certain benefits as outlined in Section 4.6. The Company shall have no obligation to
reinstate or otherwise continue the Executive’s employment if he should recover from his disability
and such termination shall not constitute a termination without Cause (as defined in Section 4.3).

            4.3    Termination for Cause. The Company may at any time, by written notice to the
Executive, terminate the Term of the Executive’s employment hereunder for Cause and the Executive
shall have no right to receive any compensation or benefits hereunder on and after the effective
date of such notice, except for the payment of any Base Salary earned, and any Expenses incurred
but not yet paid to the Executive and benefits in accordance with Section 4.5 hereof. For purposes
hereof, the term “Cause” shall mean: (a) conviction of, or a plea of nolo contendere or guilty by,
the Executive for any crime constituting a felony in the jurisdiction in which committed or for any
other criminal act against the Company; (b) failure or refusal of the Executive in any material
respect (i) to perform the duties of his employment or to follow the lawful and proper directives
of the Board of Directors, provided such duties or directives are consistent with this Agreement
and such duties or directives have been given to the Executive in writing, or (ii) to comply with
the reasonable and substantial written policies, practices, standards or regulations of the Company
(so long as same are not inconsistent with this Agreement) as may be established from time to time,
if such failure or refusal under either clause (i) or clause (ii) continues uncured for a period of
10 days after written notice thereof, specifying the nature of such failure or refusal and
requesting that it be cured, is given by the Company to the Executive; (c) any willful or
intentional act of the Executive committed for the purpose, or having the reasonably foreseeable
effect, of injuring the Company, its business or reputation or of improperly or unlawfully
converting for the Executive’s own personal benefit any property of the Company; or (d) any
violation or breach of the provisions of Section 6 of this Agreement.

            4.4    Termination Without Cause. During the Term, the Company may terminate the
Executive’s employment without Cause upon 30 days’ written notice. If the Company terminates the
Executive’s employment without Cause, upon the Executive’s execution of a general release of the
Company’s officers, directors, employees and agents from any and all liability arising from the
Executive’s employment relationship with the Company (which release shall include an agreement
between both parties not to disparage the other), the Executive shall receive (i) his Base Salary,
payable in accordance with the provisions of Section 3.1 hereof, for one year from the date of such
termination, (ii) the Annual Bonus for the year prior to the year in which the Executive is
terminated, to the extent not yet paid (the “Preceding Bonus”); and (iii) the Annual Bonus for the
fiscal year in which the Executive is terminated, pro rata to the date of termination (the “Pro
Rata Bonus”). The Executive shall be entitled to receive the Preceding Bonus or the Pro Rata
Bonus, as applicable: (i) at the same time the annual bonuses for the same periods are paid to
other senior-level executives of the Company; and (ii) only to the extent the Company’s Board of
Directors or any Committee designated by the Board determines to pay such bonus to the
executive-level employees of the Company. Termination by the Company any time prior to June 21,
2008 will require payments in accordance with the preceding sentence. All stock options that have
been granted to the Executive through the termination date shall be deemed fully vested and
exercisable on such termination date and for a period of 90 days following such date, all in
accordance with the other terms of any such plan or grant.

 

 

            4.5    Benefits upon Termination. Notwithstanding termination of this Agreement pursuant
to Section 4.1, the Executive shall continue to be entitled to compensation and benefits accrued
through the date of death. Except as provided in Sections 4.4 and 5 hereof, all of the Executive’s
rights to bonuses and fringe benefits accruing after any termination of this Agreement, if any,
shall cease upon such termination; provided, however, that (i) the Executive shall
be entitled to any amounts payable to the Executive under any Company profit sharing or other
employee benefit plan up to the date of termination; (ii) nothing contained in this Agreement is
intended to limit or otherwise restrict the availability of any benefits to the Executive required
to be provided pursuant to Section 4980B of the Code; (iii) if the employment of the Executive
terminates pursuant to Section 4.1 or 4.4 other than at the end of a fiscal year, he shall be
entitled to a pro rata bonus under the Bonus Plan in respect of such year as provided in Section
3.2; and (iv) the Executive’s ability to exercise any stock options granted to him by the Company
during the course of his employment shall continue to be subject to the terms of the Plan and the
Stock Option Contract(s) issued to him pursuant thereto.

            4.6    Benefits upon Removal. If the Executive is removed from his position pursuant to
Section 4.2, the Executive, for a period of time (a) during which his disability continues, and (b)
consistent with the then-current policy of the Company applicable to the Executive, shall continue
to participate in certain of the employee benefit plans in which he participated immediately prior
to his removal. These benefits would include participation in, as applicable and to the extent
defined in the Company’s applicable plans, group life, medical/dental and disability insurance
plans, each at the same ratio of employer/employee contribution as applicable to the Executive
immediately prior to his removal. In addition, the Executive shall be entitled to compensation and
benefits accrued through the date of his removal from his duties. However, the Executive’s rights
to bonuses and fringe benefits accruing after his removal, if any, shall cease upon such removal;
provided, however that (i) the Executive shall be entitled to any amounts payable to the Executive
under any Company profit sharing or other employee benefit plan up to the date of termination; (ii)
nothing contained in this Agreement is intended to limit or otherwise restrict the availability of
any benefits to the Executive required to be provided pursuant to Section 4980B of the Code; and
(iii) if the employment of the Executive terminates pursuant to Section 4.2 other than at the end
of a fiscal year, he shall be entitled to a pro rata bonus under the Bonus Plan in respect of such
year as provided in Section 3.2, to the date of such removal.

            4.7    Termination upon Resignation. Notwithstanding anything stated in this Agreement
to the contrary, with fifteen (15) days prior written notice, the Executive may resign from his
position for the remainder of the Term of the Executive’s employment hereunder. Such notice shall
explicitly state in reasonable detail the reason(s) for such resignation. Upon receipt of such
written notice, the Company, in its sole discretion, may shorten the fifteen (15) day prior notice
requirement. Upon a resignation by the Executive pursuant to this Section, the Executive shall be
entitled to compensation and benefits accrued through the effective date of his resignation and all
other rights and obligations of the parties shall be determined as follows:

                    (a)     If the Executive is able to document, to the reasonable satisfaction of the
Company’s outside counsel, that the reason for such resignation is as a direct result of
either: (i) the Company’s material breach of this Agreement; or (ii) the Board of Directors
or any superior officer requiring the Executive to act, or omit to act, in a way that the
Executive reasonably believes is illegal, then such resignation shall be treated as a
termination without Cause pursuant to Section 4.4;

                    (b)     If the Company requires the Executive, as a condition of continued employment under
the terms of this Agreement, that the Executive be based anywhere beyond fifty (50) miles
from the Company’s current offices in Lansdowne, Maryland except for

 

 

required travel on Company business, such resignation shall be treated as a termination
without Cause pursuant to Section 4.4;

                    (c)     If the Executive resigns following a Change in Control as a direct result of the
occurrence of one of the circumstances enumerated in Section 5, such resignation shall be
treated pursuant to the terms of Section 5; or

                    (d)     If the Executive resigns for any other reason or for no reason, such resignation
shall be treated as a termination for Cause pursuant to the terms of Section 4.3.

     Any resignation pursuant to the terms of this Section shall not constitute a breach of this
Agreement by either party.

     5.     Change in Control. In the event of the occurrence of a Change in Control of the
Company, the Executive shall remain employed by the Company, pursuant to the terms and conditions
of this Agreement. If, after the Change in Control, the Executive’s employment is terminated
without Cause, the Executive resigns following: (a) a material diminution in his duties as set
forth in Section 1.2 of this Agreement or, (b) in the case of the sale of the Company or the Tire
Stores, the Executive either: (i) is not offered a comparable position by the buyer; or (ii) is
required by the buyer to be based anywhere beyond fifty (50) miles from the Company’s current
offices in Lansdowne, Maryland except for required travel on Company business to an extent
substantially consistent with that preceding the Change in Control, then the Executive shall
continue to receive his Base Salary for one year, and the stock options granted to the Executive
shall become fully vested and exercisable as of the date of termination or resignation, as the case
may be. The options will remain exercisable for a period of 90 days following such date, all in
accordance with the other terms of the stock option plan under which they were granted. For
purposes of this Agreement, a “Change in Control” shall mean any of the following: (i) any person
who is not an “affiliate” (as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as
amended) of the Company as of the date of this Agreement becomes the beneficial owner, directly or
indirectly, of 50% or more of the combined voting power of the then outstanding securities of the
Company except pursuant to a public offering of securities of the Company; (ii) the sale of the
Company substantially as an entity or the sale of the Tire Stores (whether by sale of stock, sale
of assets, merger, consolidation, or otherwise) to a person who is not an affiliate of the Company
as of the date of this Agreement; or (iii) there occurs a merger, consolidation or other
reorganization of the Company with a person who is not an affiliate of the Company as of the date
of this Agreement, and in which shareholders of the Company immediately preceding the merger hold
less than 50% (the voting and consent rights of Class C Preferred Stock shall be disregarded in
this calculation) of the combined voting power for the election of directors of the Company
immediately following the merger. A change of Control shall not be deemed to occur because of the
sale or conversion of any or all of Class C Preferred Stock of the Company unless there is a
simultaneous change described in clauses (i), (ii) or (iii) of the preceding sentence.

     6.     Non-Competition and Confidentiality.

            6.1    Non-Disclosure. The Executive will not, during the period of the Executive’s
employment with the Company or at any time thereafter, regardless of the reason for the cessation
of the Executive’s employment: (i) use any Confidential Information for the Executive’s own benefit
or for the benefit of any person or entity other than the Company; (ii) disclose to any person or
entity any Confidential Information; or (iii) remove from the Company’s premises or make copies of
any Confidential Information, in any form; except, in each case, as may be required within the
scope of the Executive’s duties during the Executive’s employment by the Company. Upon termination
of the Executive’s employment, or at any such time as the Company may request, the Executive will
deliver to

 

 

the Company all copies in the Executive’s possession of any Confidential Information, in any
form. The Executive will not at any time assert any rights as against the Company in or with
respect to any Confidential Information.

     For purposes of this Agreement, “Confidential Information” means any and all technical,
research, operational, manufacturing, marketing, sales and financial information, customer lists
and trade secrets of the Company or of any vendor, supplier, distributor or customer of the
Company, regardless of how acquired or developed by the Company or any such vendor, supplier,
distributor or customer, concerning any of their respective businesses. Confidential Information
does not include information, knowledge or data which the Executive can prove was in the
Executive’s possession prior to the commencement of the Executive’s employment with the Company or
information, knowledge or data which was or is in the public domain by reason other than the
wrongful acts of the Executive.

            6.2    Non-Competition. The Executive will not, during the period of the Executive’s
employment with the Company, and for (i) a period of one year after the termination of the
Executive’s employment with the Company for any reason other than termination by the Company
without Cause, or (ii) if for termination by the Company without Cause, for the period he continues
to receive his Base Salary pursuant to Section 4.4, directly or indirectly, on the Executive’s
behalf or on behalf of any other person or entity, in any way, whether as an individual proprietor,
partner, stockholder, officer, employee, consultant, director, joint venturer, investor, lender
(other than as an employee of a bank or other financial institution) or in any other capacity with
any entity materially engaged in the business of the Company, compete within the territory served,
or contemplated to be entered, by the Company on the date of such termination of employment.
Nothing contained herein shall be construed as preventing the Executive from owning beneficially or
of record not more than five percent (5%) of the outstanding equity security of any entity whose
equity securities are registered under the Securities Act of 1933, as amended, or are listed for
trading on any recognizable United States or foreign stock exchange or market. The business of the
Company shall be defined to include the undercar service and repair of automobile and light truck
brake, exhaust and suspension systems, and related activities, as well as the sale and service of
tires and related accessories.

            6.3    Non-Solicitation of Employees. The Executive will not, during the period of the
Executive’s employment with the Company, and for a period of one year after the termination of the
Executive’s employment with the Company for any reason, directly or indirectly, recruit, solicit or
otherwise induce or attempt to induce any employee of the Company to leave the employment of the
Company, nor hire any such employee at any enterprise with which the Executive is then affiliated.

            6.4    Enforceability of Provisions. If any restriction set forth in this Section 6 is
found by any court of competent jurisdiction to be unenforceable because it extends for too long a
period of time or over too great a range of activities or in too broad a geographic area, it shall
be interpreted to extend only over the maximum period of time, range of activities or geographic
area as to which it may be enforceable, it being understood and agreed that by the execution of
this Agreement, the parties hereto regard the restrictions herein as reasonable and compatible with
their respective rights.

            6.5    Remedy for Breach. The Executive hereby acknowledges that the provisions of this
paragraph 6 are reasonable and necessary for the protection of the Company and its respective
subsidiaries and affiliates. In addition, the Executive further acknowledges that the Company and
its respective subsidiaries and affiliates will be irrevocably damaged if such covenants are not
specifically enforced. Accordingly, the Executive agrees that, in addition to any other relief to
which the Company may be entitled, the Company will be entitled to seek and obtain injunctive
relief (without the

 

 

requirement of any bond) from a court of competent jurisdiction for the purposes of
restraining the Executive from an actual or threatened breach of such covenants. In addition, and
without limiting the Company’s other remedies, in the event of any breach by the Executive of such
covenants, the Company will have no obligation to pay any of the amounts that remain payable by the
Company under paragraphs 4 and 5 of this Agreement, as applicable.

     7.     Executive Representations.

                    (a)     The Executive hereby represents and warrants to the Company that (i) the execution,
delivery and performance of this Agreement by the Executive does not and will not conflict with,
breach, violate or cause a default under any contract, agreement, instrument, order, judgment or
decree to which the Executive is a party or by which he is bound, (ii) the Executive is not a party
to or bound by any employment agreement, noncompete agreement or confidentiality agreement with any
other person or entity, (iii) upon the execution and delivery of this Agreement by the Company,
this Agreement shall be the valid and binding obligation of the Executive, enforceable in
accordance with its terms, and (iv) the Executive is under no physical or mental disability that
would hinder him in the performance of his duties hereunder.

                    (b)     The Executive shall indemnify and hold harmless the Company from and against any and all
claims, liabilities, damages and reasonable costs of defense and investigation arising out of any
breach or inaccuracy in any of the foregoing representations and warranties.

     8.     Other Provisions.

            8.1    Notices. Any notice or other communication required or which may be given
hereunder shall be in writing and shall be delivered personally, telecopied, or sent by certified,
registered or express mail, postage prepaid, to the parties at the following addresses or at such
other addresses as shall be specified by the parties by like notice, and shall be deemed given when
so delivered personally, telecopied or if mailed, two days after the date of mailing, as follows:

                    (a)     if to the Company, to it at:

                             Monro Muffler Brake, Inc.
                             200 Holleder Parkway
                             Rochester, New York 14615
                             Attention: Robert G. Gross

                    (b)     if to the Executive, to him at:

                             12619 Golden Oak Drive

                             Ellicott City, Maryland 21042

            8.2    Entire Agreement. This Agreement contains the entire agreement between the
parties with respect to the subject matter hereof and supersedes all prior agreements, written or
oral, with respect thereto except (a) such Stock Option Contracts written or otherwise extended to
the Executive including those referenced herein and those extended to the Executive prior hereto
and (b) and the Monro Muffler Employee Handbook, to the extent same provides additional benefits to
the Executive as a senior executive-level employee of the Company.

 

 

            8.3    Waivers and Amendments. This Agreement may be amended, modified, superseded,
canceled, renewed or extended, and the terms and conditions hereof may be waived, only by a written
instrument signed by the parties or, in the case of a waiver, by the party waiving compliance. No
delay on the part of any party in exercising any right, power or privilege hereunder shall operate
as a waiver thereof, nor shall any waiver on the part of any party of any right, power or privilege
hereunder, nor any single or partial exercise of any right, power or privilege hereunder preclude
any other or further exercise thereof or the exercise of any other right, power or privilege
hereunder. Notwithstanding the foregoing, Executive agrees to any changes made by the Company to
the terms of this Agreement if the Company determines, in its sole reasonable good faith
discretion, that such changes are reasonably necessary to comply with Section 409A of the Code, and
any regulations and other guidance of general applicability that are issued thereunder.

            8.4    Governing Law; Jurisdiction. This Agreement shall be governed by and construed
and enforced in accordance with and subject to, the laws of the State of New York applicable to
agreements made and to be performed entirely within such state. The courts of New York and the
United States District Courts for New York shall have jurisdiction over the parties with respect to
any dispute or controversy between them arising under or in connection with this Agreement.

            8.5    Assignment. This Agreement shall inure to the benefit of and shall be binding
upon the Company and its successors and permitted assigns and upon the Executive and his heirs,
executors, legal representatives, successors and permitted assigns. However, neither party may
voluntarily assign, transfer, pledge, encumber, hypothecate or otherwise dispose of this Agreement
or any of its or his rights hereunder without the prior written consent of the other party, and any
such attempted assignment, transfer, pledge, encumbrance, hypothecation or other disposition
without such consent shall be null and void without effect.

            8.6    Counterparts. This Agreement may be executed in two counterparts, each of which
shall be deemed an original but both of which together shall constitute one and the same
instrument.

            8.7    Headings. The headings in this Agreement are for reference purposes only and
shall not in any way affect the meaning or interpretation of this Agreement.

            8.8    Severability. If any term, provision, covenant or restriction of this Agreement,
or any part thereof, is held by a court of competent jurisdiction of any foreign, federal, state,
county or local government or any other governmental, regulatory or administrative agency or
authority to be invalid, void, unenforceable or against public policy for any reason, the remainder
of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force
and effect and shall in no way be affected, impaired or invalidated.

 

 

     IN WITNESS WHEREOF, the parties have executed this Employment Agreement on July 13, 2005.

	 	 	 	 	 
	 	MONRO MUFFLER BRAKE, INC.

 	 
	 	By:  	/s/ Robert G. Gross
 	 
	 	 	Robert G. Gross
 	 
	 	 	President and Chief Executive Officer 	 
	 

	 	 	 	 	 
	 	 	 
	 	                                           /s/ Joseph Tomarchio, Jr.
 	 
	 	Joseph Tomarchio, Jr.

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