<PAGE>
                                                                   EXHIBIT 10(i)


                                GERDAU STEEL INC.
                                   as Obligor

                                       and

                           GERDAU COURTICE STEEL INC.
                              GERDAU MRM STEEL INC.
                                 GUSAP PARTNERS
                                  as Borrowers

                                       and

                              CHASE SECURITIES INC.
                            SALOMON SMITH BARNEY INC.
                            THE TORONTO-DOMINION BANK
                    as Joint Arrangers and Joint Bookrunners

                                       and

                          THE INSTITUTIONS NAMED HEREIN
                                   as Lenders

                                       and

                            THE TORONTO-DOMINION BANK
                                    as Agent



================================================================================

                       AMENDED AND RESTATED LOAN AGREEMENT
                        INITIALLY DATED NOVEMBER 8, 1996
               AS FURTHER AMENDED AND RESTATED BY AGREEMENT DATED
                                OCTOBER 22, 2002

================================================================================


                          FASKEN MARTINEAU DUMOULIN LLP
                           TORONTO DOMINION BANK TOWER
                      P.O. BOX 20, TORONTO-DOMINION CENTRE
                                TORONTO, ONTARIO
                                     M5K 2N6


<PAGE>


                                TABLE OF CONTENTS

<TABLE>
<CAPTION>

                                                                                                     PAGE
                                                                                                     ----
<S>                                                                                                  <C>
ARTICLE 1   INTERPRETATION.........................................................................    6
     1.1    Definitions............................................................................    6
     1.2    Additional References..................................................................   42
     1.3    Gender and Number......................................................................   44
     1.4    Interest Act...........................................................................   44
     1.5    Invalidity, etc........................................................................   44
     1.6    Headings, etc..........................................................................   44
     1.7    Governing Law..........................................................................   45
     1.8    Attornment.............................................................................   45
     1.9    References.............................................................................   45
     1.10   Currency...............................................................................   46
     1.11   This Agreement to Govern...............................................................   46
     1.12   Generally Accepted Accounting Principles...............................................   46
     1.13   Computation of Time Periods............................................................   46
     1.14   Actions on days Other Than Banking Days................................................   46
     1.15   Verbal Instructions....................................................................   47

ARTICLE 2   FACILITY...............................................................................   47
     2.1    Establishment of Revolver Facility.....................................................   47
     2.2    Availability and Revolving Nature of Revolver Facility.................................   48
     2.3    Interest  and Acceptance Fees on Advances under the Revolver Facility..................   48
     2.4    Repayment under Revolver Facility......................................................   48
     2.5    Mandatory Repayment....................................................................   49
     2.6    Annual Review..........................................................................   49
     2.7    Prepayment and Cancellation of Revolver Facility.......................................   50
     2.8    Minimum Advance........................................................................   50
     2.9    Swing Line Advances....................................................................   51
     2.10   Advances...............................................................................   52

ARTICLE 3   FACILITY...............................................................................   52
     3.1    Establishment of Term Facility.........................................................   52
     3.2    Availability and Non-Revolving Nature of Term Facility.................................   53
     3.3    Repayment of Term Facility.............................................................   53
     3.4    Interest and Acceptance Fees on Advances under the Term Facility.......................   56
     3.5    Prepayment of Term Facility............................................................   56
     3.6    Minimum Advance........................................................................   56
     3.7    Consolidation of Loans.................................................................   57

ARTICLE 4   FACILITIES.............................................................................   57
     4.1    Existing Hedging Facility..............................................................   57

ARTICLE 5   PAYMENT................................................................................   58
</TABLE>

                                     - i -


<PAGE>

                                TABLE OF CONTENTS
                                  (continued)


<TABLE>
<CAPTION>

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<S>                                                                                                  <C>
     5.1    Place of Payment.......................................................................   58
     5.2    Application of Payments and Prepayments................................................   58
     5.3    Change in Circumstances................................................................   58
     5.4    Payments Generally.....................................................................   60
     5.5    Repayment Notice.......................................................................   60
     5.6    Netting of Payments....................................................................   60

ARTICLE 6   CONDITIONS PRECEDENT TO ADVANCES.......................................................   60
     6.1    Conditions Precedent to Advance........................................................   60
     6.2    Conditions Precedent to Effective Time.................................................   61
     6.3    Effective Time.........................................................................   64
     6.4    Effectiveness..........................................................................   64
     6.5    Provisions Taking Immediate Effect.....................................................   64
     6.6    Rights Unaffected......................................................................   65
     6.7    Date of Agreement......................................................................   65

ARTICLE 7   ADVANCES...............................................................................   65
     7.1    Advance and Interest Payment Dates.....................................................   65
     7.2    Payment of Interest....................................................................   66
     7.3    Conversions............................................................................   66
     7.4    Notice of Advances, Payments, Conversions and Rollovers................................   66
     7.5    Bankers' Acceptances...................................................................   67
     7.6    Standby Credits........................................................................   70
     7.7    LIBOR Loans - Market Disruption........................................................   74
     7.8    Illegality.............................................................................   75
     7.9    Facility Excesses by Reason of Foreign Currency Fluctuations...........................   75
     7.10   Evidence of Indebtedness...............................................................   76

ARTICLE 8   FEES AND EXPENSES......................................................................   76
     8.1    Commitment Fee.........................................................................   76
     8.2    Payment of Costs and Expenses..........................................................   77
     8.3    Indemnity..............................................................................   77
     8.4    Agency Fee.............................................................................   78

ARTICLE 9   SECURITY AND INSURANCE.................................................................   78
     9.1    Security...............................................................................   78
     9.2    Perfection.............................................................................   78
     9.3    Security Effective Notwithstanding Date of Advance.....................................   78
     9.4    No Merger..............................................................................   78
     9.5    Existing Security......................................................................   78
     9.6    Insurance..............................................................................   79
     9.7    Partial Discharges of Security.........................................................   80
     9.8    Obligations Secured....................................................................   80
     9.9    Additional Obligations Secured.........................................................   80
</TABLE>

                                     - ii -

<PAGE>

                                TABLE OF CONTENTS
                                  (continued)


<TABLE>
<CAPTION>

                                                                                                     PAGE
                                                                                                     ----
<S>                                                                                                  <C>

     9.10   Redemption of Security.................................................................   80
     9.11   Repayment in Full......................................................................   80

ARTICLE 10  REPRESENTATIONS AND WARRANTIES.........................................................   81
     10.1   Representations and Warranties.........................................................   81
     10.2   Survival of Representations and Warranties.............................................   89
     10.3   Environmental Indemnity................................................................   89

ARTICLE 11  COVENANTS..............................................................................   89
     11.1   Affirmative Covenants..................................................................   89
     11.2   Agent Entitled to Perform Covenants....................................................   97
     11.3   Negative Covenants.....................................................................   97

ARTICLE 12  EVENTS OF DEFAULT AND REMEDIES.........................................................  105
     12.1   Events of Default......................................................................  105
     12.2   Remedies Upon Default..................................................................  109
     12.3   Payment of Bankers' Acceptances........................................................  109
     12.4   Lenders' Right of Advance..............................................................  110
     12.5   Distributions..........................................................................  110

ARTICLE 13  THE AGENT AND ADMINISTRATION OF THE CREDIT FACILITIES..................................  110
     13.1   Appointment and Authorization..........................................................  110
     13.2   Declaration of Agency..................................................................  110
     13.3   Protection of Agent....................................................................  111
     13.4   Interest Holders.......................................................................  111
     13.5   Consultation with Professionals........................................................  111
     13.6   Documents..............................................................................  111
     13.7   Agent and its Subsidiaries and Affiliates..............................................  111
     13.8   Responsibility of the Agent............................................................  111
     13.9   Action by the Agent....................................................................  112
     13.10  Notice of Events of Default............................................................  113
     13.11  Responsibility Disclaimed..............................................................  113
     13.12  Indemnification........................................................................  114
     13.13  Protection of Employees, Etc...........................................................  114
     13.14  Credit Decision........................................................................  114
     13.15  Replacement Agent and Reference Lenders................................................  114
     13.16  Delegation.............................................................................  115
     13.17  Required Lender Decisions..............................................................  115
     13.18  Waivers and Amendments.................................................................  116
     13.19  Determination by Agent.................................................................  117
     13.20  Interlender Procedure for Making Advances..............................................  117
     13.21  Remittance of Payments.................................................................  119
     13.22  Redistribution of Payments.............................................................  119
</TABLE>


                                    - iii -

<PAGE>

                                TABLE OF CONTENTS
                                  (continued)


<TABLE>
<CAPTION>

                                                                                                     PAGE
                                                                                                     ----
<S>                                                                                                  <C>

     13.23  Prompt Notice to Lenders...............................................................  120
     13.24  Several Debts of the Lenders...........................................................  120
     13.25  Enforcement of Security................................................................  120
     13.26  Swing Line Loans.......................................................................  121

ARTICLE 14  GENERAL................................................................................  123
     14.1   Reliance and Non-Merger................................................................  123
     14.2   Amendment and Waiver...................................................................  123
     14.3   Set-Off or Compensation................................................................  123
     14.4   Notices................................................................................  124
     14.5   Binding Effect and Assignment..........................................................  124
     14.6   Confidentiality........................................................................  126
     14.7   Time...................................................................................  126
     14.8   Further Assurances.....................................................................  126
     14.9   Currency Conversion and Indemnity......................................................  127
     14.10  Taxes..................................................................................  127
     14.11  Joint Arrangers and Joint Bookrunners and Co-Syndication Agents........................  129
     14.12  Survival...............................................................................  129
     14.13  Entire Agreement.......................................................................  129
     14.14  Counterparts...........................................................................  130

SCHEDULE A  LENDERS, LENDING OFFICES AND COMMITMENTS...............................................  139

SCHEDULE B  DRAWDOWN NOTICE........................................................................  142

SCHEDULE C  FORM OF CONVERSION NOTICE..............................................................  145

SCHEDULE D  FORM OF ROLLOVER NOTICE................................................................  149

SCHEDULE E - PART I  SUBSIDIARIES BEFORE THE EFFECTIVE TIME........................................  153

SCHEDULE E - PART II  SUBSIDIARIES AFTER THE EFFECTIVE TIME........................................  154

SCHEDULE F  ADDRESSES FOR NOTICES..................................................................  155

SCHEDULE G  FORM OF BORROWING BASE REPORT..........................................................  157

SCHEDULE H  LOAN TRANSFER AGREEMENT................................................................  159

SCHEDULE I  BORROWER'S COMPLIANCE CERTIFICATE......................................................  165
</TABLE>

                                     - iv -

<PAGE>

                                TABLE OF CONTENTS
                                  (continued)


<TABLE>
<CAPTION>

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                                                                                                     ----
<S>                                                                                                  <C>
SCHEDULE J  LEGAL DESCRIPTION......................................................................  167

SCHEDULE K  THE REAL PROPERTY......................................................................  172

SCHEDULE L  SECURITY SCHEDULE......................................................................  181

SCHEDULE M  FORM OF REPAYMENT/CANCELLATION NOTICE..................................................  187

SCHEDULE N  ENVIRONMENTAL DISCLOSURE SCHEDULE......................................................  188

SCHEDULE O  INTELLECTUAL PROPERTY RIGHTS...........................................................  189

SCHEDULE P  CHIEF EXECUTIVE OFFICES................................................................  190
</TABLE>


                                     - v -

<PAGE>



                       AMENDED AND RESTATED LOAN AGREEMENT

          THIS AGREEMENT initially dated as of November 8, 1996 as further
amended and restated by agreement dated October 22, 2002 is made

A M O N G :

          GERDAU STEEL INC., a corporation incorporated pursuant to the laws of
          Canada

          - and -

          GERDAU COURTICE STEEL INC., a corporation continued pursuant to the
          laws of the Province of Saskatchewan

          - and -

          GERDAU MRM STEEL INC., a corporation continued pursuant to the laws of
          the Province of Saskatchewan

          - and -

          GUSAP PARTNERS, a partnership formed under the laws of the State of
          Delaware

          - and -

          THE INSTITUTIONS NAMED HEREIN AS LENDERS

          - and -

          THE TORONTO-DOMINION BANK, as Agent

RECITALS:

A.        By Letter of Offer and Term Sheet (collectively, the "1989 TERM
          SHEET") dated October 31, 1989, The Toronto-Dominion Bank ("TD")
          established certain term and operating facilities in favour of
          Courtice on and subject to the terms and conditions set out in the
          1989 Term Sheet;

B.        Each of Courtice and MRM subsequently requested TD to provide Courtice
          and MRM with certain additional financing relating to the purchase by
          Courtice of preference shares in the capital of MRM Holdings and in
          connection with the acquisition by MRM of the MRM Steel and the Mandak
          Metal divisions of The Canam Manac Group Inc.;

C.        TD agreed to provide such financing on and subject to the terms and
          conditions set out in a Letter of Offer and Term Sheet (the "1995 TERM
          SHEET") dated June 19, 1995 between TD and Courtice;

<PAGE>
                                     - 2 -


D.        Courtice, MRM, MRM Holdings, Gerdau Steel and TD amended the terms and
          conditions of the Original Facilities referred to and defined in the
          1989 Term Sheet and incorporated them, as amended, into an amended and
          restated loan agreement dated June 23, 1995 (the "ORIGINAL AMENDED AND
          RESTATED LOAN AGREEMENT" which expression includes the first amending
          agreement thereto dated as of September 26, 1995) which also sets out
          the terms and conditions relating to the Revolver Facility (as it then
          was) and the term facility established under the 1995 Term Sheet;

E.        On or about September 27, 1995 MRM arranged for Tellib to lend to MRM
          U.S.$38,000,000 (the "TELLIB ADVANCE") on the basis that the repayment
          of such Tellib Advance and payment of interest thereon would be
          postponed in favour of TD in form and substance satisfactory to TD;

F.        Each Gerdau Canada Group Member at that time subsequently requested TD
          to provide or arrange for additional credit facilities in the
          aggregate amount of Cdn.$35,000,000, reconstitute the Revolver
          Facility and the 1995 Term Facility, allow MRM to borrow
          U.S.$38,000,000 under such reconstituted facilities and permit MRM to
          repay the Tellib Advance (partly or wholly funded) from the proceeds
          of that borrowing;

G.        By letter of offer (the "SYNDICATION OFFER") dated September 25, 1996
          TD agreed to arrange the credit facilities requested by the Gerdau
          Canada Group at that time referred to above;

H.        The parties thereto amended the terms and conditions of the Original
          Amended and Restated Loan Agreement and incorporated them, as amended,
          into an agreement dated as of November 8, 1996 (the "FIRST SYNDICATED
          AMENDED AND RESTATED LOAN AGREEMENT") which also set out the terms and
          conditions relating to the reconstituted facilities established
          pursuant to the Syndication Offer;

I.        The Borrowers at that time (the "PRIOR BORROWERS") and Guarantors at
          that time requested the Lenders at that time (the "PRIOR LENDERS"),
          and the Prior Lenders agreed, to amend and restate the terms and
          conditions of the First Syndicated Amended and Restated Loan Agreement
          and in that regard the parties to the First Syndicated Amended and
          Restated Loan Agreement entered into an agreement dated as of December
          18, 1998 (the "SECOND SYNDICATED AMENDED AND RESTATED LOAN
          AGREEMENT").

J.        Pursuant to the Second Syndicated Amended and Restated Loan Agreement
          the Prior Lenders agreed to make loans and other credit available to
          the Prior Borrowers in the aggregate amount of up to Cdn.$85,000,000
          under the Revolver Facility (as defined therein) and up to
          Cdn.$65,000,000 under the Term Facility (as defined therein).

K.        Pursuant to a loan transfer agreement dated September 27, 1999, the
          Lenders party thereto as transferees became the only Lenders under the
          Second Syndicated


<PAGE>
                                     - 3 -


          Amended and Restated Loan Agreement entitled to be paid the entirety
          of the Advances (as defined in the Second Syndicated Amended and
          Restated Loan Agreement) payable under the Second Syndicated Amended
          and Restated Loan Agreement.

L.        The Prior Borrowers requested those Lenders to reallocate the amounts
          available under the then existing Revolver Facility and Term Facility
          (each as defined in the Second Syndicated Amended and Restated Loan
          Agreement) by reducing the Revolver Facility to Cdn.$75,000,000 and
          increasing the Term Facility to Cdn.$200,000,000 and allow Gerdau
          Steel to become a Borrower. The increase in the existing Credit
          Facilities (as defined in the Second Syndicated Amended and Restated
          Loan Agreement) was requested by the Prior Borrowers and Gerdau Steel
          to permit them to finance the acquisition of 176 issued and
          outstanding shares of common stock in FLS Holdings, Inc.
          (representing, at that time, 88% of all such issued and outstanding
          common stock), which in turn owned 9,000,000 issued and outstanding
          shares of common stock in AmeriSteel Corporation (representing, at
          that time, approximately 84% of all such issued and outstanding common
          stock).

M.        In response to the request from the Prior Borrowers and Gerdau Steel,
          the Lenders amended and restated the terms and conditions of the
          Second Syndicated Amended and Restated Loan Agreement to provide the
          Credit Facilities outlined in more detail in the Amended and Restated
          Loan Agreement dated as of September 27, 1999, as amended by agreement
          dated as of November 4, 1999, (together, the "THIRD SYNDICATED AMENDED
          AND RESTATED LOAN AGREEMENT").

N.        Gerdau Steel, MRM and Courtice (the "PRE-1999 BORROWERS") requested
          the Lenders to permit USP to become a party to the Third Syndicated
          Amended and Restated Loan Agreement as a Borrower and assume the
          obligations of MRM thereunder with respect to a U.S.$50,000,000
          portion of the U.S.$91,743,119.26 Base Rate Loan then owing by MRM to
          the Lenders.

O.        USP requested the Lenders to permit each of MRM and Courtice to
          transfer the shares in Gerdau USA owned by each of them (having an
          aggregate value of U.S.$20,000,000) to USP. These shares were subject
          to a share pledge made in favour of the Lenders and such transfer
          could not be made without the consent of the Lenders.

P.        USP also requested the Lenders to permit MRM to assign the existing
          U.S.$50,000,000 loan owing by Gerdau USA to MRM in consideration of
          its assumption referred to in Recital N above. This loan was subject
          to a security interest in favour of the Lenders and could not be
          assigned to USP without the consent of the Lenders.

Q.        The Lenders agreed to permit the transfer and assignment referred to
          in Recitals O and P above, in exchange for which USP agreed to become
          a Borrower under the


<PAGE>
                                     - 4 -


          Third Syndicated Amended and Restated Loan Agreement to the extent
          referred to in Recital N above.

R.        The amendments described in Recitals N to Q above were incorporated
          into an amendment and restatement of the Third Syndicated Amended and
          Restated Loan Agreement entered into among the Pre-1999 Borrowers and
          USP (the "EXISTING BORROWERS"), the Lenders, the Agent and others
          dated as of December 23, 1999 (the "FOURTH SYNDICATED AMENDED AND
          RESTATED LOAN AGREEMENT").

S.        The Existing Borrowers subsequently requested the Lenders to extend
          the term of the Revolver Facility.

T.        The Existing Borrowers also requested the Lenders to amend certain
          definitions and covenants in the Fourth Syndicated Amended and
          Restated Loan Agreement, to permit the repayment by the Pre-1999
          Borrowers of certain advances that may be made to them from time to
          time by Gerdau S.A. and its subsidiaries, and to make certain other
          amendments to the Fourth Syndicated Amended and Restated Loan
          Agreement.

U.        The Existing Borrowers also requested the Lenders' consent to borrow
          in a maximum amount equal to the principal amount of the Kyoei Steel
          Balance of Sale Notes by means of one or more subordinated loans.

V.        Accordingly the parties to the Fourth Syndicated Amended and Restated
          Loan Agreement entered into an amendment and restatement of the Fourth
          Syndicated Amended and Restated Loan Agreement among the Existing
          Borrowers, the Lenders, the Agent and others dated as of April 20,
          2001 (the "EXISTING LOAN AGREEMENT").

W.        The Existing Borrowers have now requested the Lenders to consent to
          the indirect transfer by Gerdau Steel to Co-Steel of all of the issued
          Capital Stock in each of Courtice, MRM Holdings and Gerdau USA
          (collectively, the "GERDAU CANADA SUBGROUP SHARES").

X.        The indirect transfer of the Gerdau Canada Subgroup Shares by Gerdau
          Steel to Co-Steel would take place in accordance with the general
          terms outlined in the Information Circular and the following
          transactions (the "CO-STEEL COMBINATION TRANSACTIONS") in the
          following time sequence:

          (i)  Gerdau Steel incorporates a new Wholly-Owned Subsidiary (herein
               referred to as the Gerdau Canada Subgroup Interim Holding
               Company);

          (ii) the Gerdau Canada Subgroup Interim Holding Company incorporates a
               new Wholly-Owned Subsidiary (herein referred to as the Gerdau
               Canada Subgroup Holding Company);

          (iii) Gerdau Steel transfers the Gerdau Canada Subgroup Shares to the
                Gerdau Canada Subgroup Interim Holding Company, subject to the
                Security, for a


<PAGE>
                                     - 5 -


               consideration consisting entirely of shares in Gerdau Canada
               Subgroup Interim Holding Company;

          (iv) contemporaneously with the acquisition of the Gerdau Canada
               Subgroup Shares the Gerdau Canada Subgroup Interim Holding
               Company issues a guarantee of the Loan Obligations to the
               Syndicate;

          (v)  immediately following the receipt of the transfer of the Gerdau
               Canada Subgroup Shares from Gerdau Steel, the Gerdau Canada
               Subgroup Interim Holding Company transfers the Gerdau Canada
               Subgroup Shares to the Gerdau Canada Subgroup Holding Company,
               subject to the Security, for a consideration consisting entirely
               of shares in Gerdau Canada Subgroup Holding Company; and

          (vi) the Gerdau Canada Subgroup Interim Holding Company transfers all
               of the issued Capital Stock of the Gerdau Canada Subgroup Holding
               Company (the "GERDAU CANADA SUBGROUP HOLDING COMPANY SHARES") to
               Co-Steel, in exchange for such number of issued common shares in
               Co-Steel as will entitle Gerdau Steel to vote not less than 64.8%
               (assuming the AmeriSteel Merger Transactions take place) of the
               voting rights attributable to all of the Voting Capital Stock of
               Co-Steel on a fully diluted basis (the "EXCHANGED CO-STEEL
               SHARES").

Y.        Before the Co-Steel Combination Transactions could take place, Gerdau
          Steel agreed with Co-Steel to eliminate or combine various
          inter-corporate debts amongst MRM, USP, Gerdau Steel, Courtice, NSULC,
          Gerdau USA, Finco, GTL Netherlands and GTL Spain with the result that
          none of the Gerdau Canada Subgroup and their respective subsidiaries
          have any inter-corporate debt owing to GTL Spain, GTL Netherlands or
          Gerdau Steel, save for the remaining intercorporate debt contemplated
          by the Debt Reorganization Transactions (as defined below). The
          Security did not permit the Debt Reorganization Transactions and
          accordingly the Existing Borrowers requested the Lenders to consent to
          the transactions contemplated by the Debt Reorganization Transactions.

Z.        Gerdau Steel has also agreed with Co-Steel to cease to be a Borrower
          under the Existing Credit Agreement and accordingly, Gerdau Steel has
          requested the Lenders to amend the Existing Loan Agreement and delete
          Gerdau Steel as a Borrower thereunder.

AA.       Gerdau Steel has also agreed with Co-Steel to use commercially
          reasonable efforts to cause Gerdau USA and its Subsidiaries to approve
          a plan of merger with the effect that AmeriSteel will be the surviving
          corporation, the Capital Stock of AmeriSteel, other than the Capital
          Stock of AmeriSteel held by Gerdau USA, will be converted into
          Co-Steel shares based on the exchange ratio set out in the Information
          Circular and the Capital Stock of AmeriSteel owned by Gerdau USA will
          remain as the only issued Capital Stock of the surviving corporation
          (referred



<PAGE>
                                     - 6 -


          to herein as the AmeriSteel Merger Transactions). Following the
          AmeriSteel Merger Transactions, Gerdau USA will own 100% of the
          Capital Stock of AmeriSteel and Gerdau Steel will own approximately
          64.8% of the common shares of Co-Steel on a fully diluted basis. The
          Existing Borrowers have requested the Lenders to consent to the
          transactions contemplated by the AmeriSteel Merger Transactions
          because the Existing Loan Agreement does not permit such transactions.

BB.       The Lenders have agreed to amend the Existing Loan Agreement to delete
          Gerdau Steel as a Borrower thereunder and to consent to the
          Reorganization Transactions on the conditions, amongst others, that
          (i) the Co-Steel Combination Transactions take place on the Effective
          Date in the order set forth in Recital X of this Agreement, (ii) the
          Debt Reorganization Transactions takes place before the Effective Date
          in a manner satisfactory to the Agent, (iii) the AmeriSteel Merger
          Transactions take place before March 31, 2003 in a manner satisfactory
          to the Agent and (iv) the Gerdau Canada Subgroup Interim Holding
          Company amalgamates vertically with Gerdau Steel effective January 1,
          2003.

          Accordingly, subject to the terms and conditions set out below, the
parties have agreed to amend the Existing Loan Agreement so that it reads in its
entirety in the form of this Agreement.

          NOW THEREFORE THIS AGREEMENT WITNESSES that, in consideration of the
covenants and agreements herein contained and for other good and valuable
consideration (the receipt and sufficiency of which are hereby acknowledged),
the parties agree to amend and restate the terms of the Credit Facilities as
referred to and defined in the Existing Loan Agreement with effect as of and
from the Effective Time in the manner set out in this amended and restated loan
agreement, subject to the following terms and conditions:

                                    ARTICLE 1
                                 INTERPRETATION

1.1       DEFINITIONS

          For the purposes of this Agreement:

          "ACCEPTANCE DATE" means, with respect to any Bankers' Acceptance, the
          date upon which the Bankers' Acceptance is issued, being the first day
          of the relevant term for such Bankers' Acceptance;

          "ACCEPTANCE FEE" means the acceptance fee payable on the amount of
          each Bankers' Acceptance, calculated and payable in the manner
          provided for in Section 7.5.8;

          "ACCEPTANCE PROCEEDS" for any Lender means the net cash proceeds
          realized on the purchase by the Lender of its participation in an
          issue of Bankers' Acceptances pursuant to this Agreement after
          deduction of the applicable Acceptance Fee payable thereon;


<PAGE>
                                     - 7 -


          "ADVANCE" means any amount of credit advanced or to be advanced (as
          the context requires) by the Lenders to a Borrower pursuant to this
          Agreement, whether by way of cash advance, acceptance of drafts or
          issue of a Standby Credit, or any relevant portion thereof (as the
          context requires);

          "AFFECTED LENDER" has the defined meaning assigned to it in Section
          5.3, 7.7, 7.8 or 14.10.1, as applicable;

          "AFFILIATE" means any Person which is not a Gerdau Canada Group Member
          and (i) which, directly or indirectly, Controls, is Controlled by or
          is under common Control with, any Gerdau Canada Group Member, (ii)
          which beneficially owns or Controls 10% or more of the Voting Capital
          Stock, on a fully diluted basis, of any Gerdau Canada Group Member,
          (iii) of which 10% or more of the Voting Capital Stock, on a fully
          diluted basis, is beneficially owned or Controlled by any Gerdau
          Canada Group Member or (iv) any Senior Officer or director of any
          Person referred to in any of clauses (i), (ii) and (iii) of this
          definition and any Person that does not deal at arm's length with any
          such Senior Officer or director;

          "AGENCY FEE AGREEMENT" means the agency fee agreement between Gerdau
          Steel and the Agent dated as of September 27, 1999 providing for the
          payment of certain agency fees to the Agent;

          "AGENT" means TD acting for its own benefit and in its capacity as
          administration agent for the rateable benefit of the Lenders, or (as
          the context requires) any replacement administration agent that is a
          Lender and is appointed pursuant to the provisions of Section 13.15.1;

          "AGREEMENT" means this amended and restated loan agreement, or (as the
          context requires) the Existing Loan Agreement, as amended and restated
          by this amended and restated loan agreement; the expressions "HEREOF",
          "HEREIN", "HERETO", "HEREUNDER", "HEREBY" and similar expressions
          refer to this Agreement as a whole and not to any particular article,
          section, schedule or other portion hereof, and the expression
          "ARTICLE" and "SECTION" followed by a number or by a number and
          letter, and "SCHEDULE" followed by a letter, mean and refer to the
          specified article or Section of or schedule to this Agreement, except
          as otherwise specifically provided herein;

          "AMENDING AGREEMENT NO. 1" means the agreement dated June 27, 1995
          between Courtice and TD amending the Courtice Debenture;

          "AMENDING AGREEMENT NO. 2" means the agreement dated June 27, 1995
          between Courtice and TD amending the Courtice Supplemental Debenture;

          "AMENDING AGREEMENT NO. 3" means the agreement dated November 8, 1996
          between Courtice and TD amending the Courtice Debenture as amended by
          Amending Agreement No. 1;


<PAGE>
                                     - 8 -


          "AMENDING AGREEMENT NO. 4" means the agreement dated November 8, 1996
          between MRM and TD amending the MRM Debenture;

          "AMERISTEEL" means AmeriSteel Corporation, a corporation incorporated
          pursuant to the laws of the State of Florida as at the date hereof,
          and its successors, as the context requires;

          "AMERISTEEL BRIGHT BAR" means AmeriSteel Bright Bar, Inc., a
          corporation incorporated under the laws of the State of Ohio as at the
          date hereof, and its successors, as the context requires;

          "AMERISTEEL MERGER TRANSACTIONS" means the following transactions in
          the following order:

               (i)   Gerdau USA will incorporate a new subsidiary under the laws
                     of the State of Florida wholly-owned by Gerdau USA which
                     will be nominally capitalized and have only nominal assets
                     ("FLORIDACO");

               (ii)  Co-Steel will, immediately following the Co-Steel
                     Combination Transactions, file a registration statement
                     (the "REGISTRATION STATEMENT") with the United States
                     Securities and Exchange Commission containing a preliminary
                     version of the prospectus to be sent to minority
                     shareholders of AmeriSteel in connection with a plan of
                     merger which must be in form and substance not unacceptable
                     to the Agent acting reasonably (the "PLAN OF MERGER")
                     pursuant to which AmeriSteel and FloridaCo will merge;

               (iii) once the Registration Statement is effective (approximately
                     one to three months after filing), Gerdau USA will adopt
                     the Plan of Merger and Gerdau USA and Co-Steel will give 35
                     days' notice of the Plan of Merger to shareholders of
                     AmeriSteel and FloridaCo;

               (iv)  FloridaCo and AmeriSteel will merge, with AmeriSteel
                     surviving (the "SURVIVING CORPORATION"), pursuant to which
                     (A) the Capital Stock of the FloridaCo will be cancelled
                     without payment or other consideration, (B) the Capital
                     Stock of AmeriSteel held by shareholders other than Gerdau
                     USA will be exchanged for common shares in the capital
                     stock of Co-Steel based on the exchange ratio set out in
                     the Plan of Merger (which shall not result in Gerdau Steel
                     owning less than 64.8% of the issued and outstanding common
                     shares in the capital stock of Co-Steel on a fully diluted
                     basis) and (C) the Capital Stock of AmeriSteel held by
                     Gerdau USA shall be deemed to be and constitute all of the
                     issued Capital Stock of the Surviving Corporation;
<PAGE>
                                     - 9 -


               "APPLICABLE LAW" means, in respect of any Person, property,
               transaction or event, all applicable treaties, laws, statutes,
               codes, rules, by-laws and regulations, and all applicable
               official directives, orders, guidelines, policies, Permits,
               judgments and decrees of Governmental Bodies;

               "APPLICABLE MARGIN" means, at any time, the rate per annum
               (expressed as a percentage per annum on the basis of a 360 day
               year, in the case of LIBOR Loans, on the basis of a 365 day year,
               in the case of Bankers' Acceptances, and on the basis of a 365 or
               366 day year, as applicable, in each other case) determined in
               accordance with the table set forth below with reference to the
               Total Debt/EBITDA Ratio most recently certified to the Lenders
               pursuant to Section 6.2.3.12 or 11.1.1.10:


<TABLE>
<CAPTION>

                                             LIBOR LOAN,
                   PRIME RATE & BASE       STANDBY CREDIT &
TOTAL DEBT/            RATE LOAN         BANKERS' ACCEPTANCE        COMMITMENT FEE
EBITDA RATIO       APPLICABLE MARGIN      APPLICABLE MARGIN        APPLICABLE MARGIN
------------       -----------------     -------------------       -----------------
<S>                      <C>                     <C>                     <C>
<1.50:1                  1.25%                   2.25%                   0.50%
-

> 1.50:1 < 2.50:1        1.75%                   2.75%                   0.75%
         -

> 2.50:1                 2.25%                   3.25%                  0.875%
</TABLE>


               The Total Debt/EBITDA Ratio as at the Effective Time shall be
               deemed to be 2.44:1 and the Applicable Margin as from the
               Effective Time shall be determined accordingly. Changes in the
               Applicable Margin shall take effect as of the third Banking Day
               following the date Gerdau Steel delivers a Compliance Certificate
               to the Lenders pursuant to Section 11.1.1.10 which, when
               delivered, discloses a Total Debt/EBITDA Ratio giving rise to
               such changes. If Gerdau Steel fails to deliver a Compliance
               Certificate by the date required to do so under Section
               11.1.1.10, the Total Debt/EBITDA Ratio shall be deemed to be
               greater than 2.50:1 until such failure is cured;

               "AUDITORS" means Ernst & Young or such other firm of chartered
               accountants not unacceptable to the Agent, acting reasonably, as
               the Borrowers may designate to the Agent in writing from time to
               time;

               "AVAILABILITY PERIOD" means the period from and including the
               Term Drawdown Date to, but excluding the Revolver Facility Due
               Date;

               "AWARD" means any judgment, decree, injunction, rule, award or
               order of any Governmental Body or arbitrator;

               "BANKERS' ACCEPTANCE" means a draft (either a bill of exchange or
               depository bill) in Canadian dollars (in such form as a Lender
               may require) drawn by a
<PAGE>
                                     - 10 -


               Borrower and accepted by a Lender for delivery in accordance with
               this Agreement;

               "BANKING DAY" means a day on which banks are generally open for
               business and on which dealings in foreign currency and exchange
               between banks may be carried on in Toronto, Ontario and New York,
               New York and, in respect of LIBOR Loans, in London, England;

               "BA REFERENCE RATE" means (i) for each Lender that is a Schedule
               I Canadian chartered bank, the CDOR BA Rate and (ii) for each
               Lender that is not a Schedule I Canadian chartered bank, the CDOR
               BA Rate plus one-tenth percent (0.10%) per annum;

               "BASE RATE" means the rate determined by the Agent to be the
               greater of (i) the annual rate of interest (expressed as a
               percentage per annum on the basis of a 365 or 366 day year, as
               applicable) established by the Swing Line Lender as the reference
               rate of interest for the determination of interest rates that the
               Swing Line Lender charges to customers of varying degrees of
               creditworthiness for U.S. Dollar loans made by it in Canada and
               (ii) the sum of (A) the Federal Funds Rate plus (B) 1.00%. On
               request, the Agent shall determine and give notice to a Borrower
               of the Base Rate from time to time and such notice shall be
               conclusive and binding on the parties hereto for all purposes,
               absent manifest error;

               "BASE RATE LOAN" means an Advance made by way of loan in U.S.
               Dollars bearing interest based on the Base Rate;

               "BORROWERS" means Courtice, MRM and USP;

               "BORROWER'S COUNSEL" means (i) in the Province of Ontario, Torys,
               (ii) in the State of New York, Greenberg Traurig, (iii) in each
               other relevant jurisdiction, such firm of solicitors of
               recognized local standing as Gerdau Steel may select and (iv)
               each additional or replacement firm of solicitors of recognized
               local standing as Gerdau Steel may select from time to time;

               "BORROWING" means a Conversion, Drawdown or Rollover as the
               context requires;

               "BORROWING BASE" at any time means an amount equal to the sum of
               the Receivables Borrowing Base and the Inventories Borrowing
               Base, as determined from the most current Borrowing Base Report;

               "BORROWING BASE REPORT" at any time means a report of Gerdau
               Steel substantially in the form of Schedule G signed by a Senior
               Officer of Gerdau Steel setting out a statement as at such time
               of (i) the Receivables Borrowing Base, (ii) the Inventories
               Borrowing Base and (iii) the calculation of the Borrowing Base;


<PAGE>
                                     - 11 -


               "BORROWING DATE" means a Conversion Date, Drawdown Date or
               Rollover Date, as the context requires;

               "BORROWING NOTICE" means a Conversion Notice, Drawdown Notice or
               Rollover Notice, as the context requires;

               "BRANCH OF ACCOUNT" means (i) with respect to the Agent, such
               branch or office as the Agent shall designate in writing to
               Gerdau Steel and the other Lenders to be the Agent's Branch of
               Account for the purposes of this Agreement and (ii) with respect
               to the Issuing Bank, the Swing Line Lender or a Hedging Lender,
               such branch or office as such Lender shall designate in writing
               to Gerdau Steel and the Agent to be such Lender's Branch of
               Account for the purposes of this Agreement;

               "BUSINESS" means (i) in relation to Courtice or any Subsidiary of
               Courtice, the principal business carried on by it and its
               Subsidiaries which is comprised of the steel products
               manufacturing and fabricating business, (ii) in relation to MRM
               or any Subsidiary of MRM, the principal business carried on by it
               and its Subsidiaries which is comprised of the steel products
               manufacturing and fabricating business and the scrap metal
               recycling business, (iii) in relation to Gerdau Steel, the only
               business carried on by it which is the holding of Capital Stock
               in its Subsidiaries, (iv) in relation to USP, the only business
               carried on by it which is acting as a financial intermediary for
               the Gerdau Canada Group, NSULC, Finco and Gerdau USA, (v) in
               relation to Gerdau Canada Subgroup Interim Holding Company, the
               only business carried on by it which initially is the holding of
               the Gerdau Canada Subgroup Shares and the Gerdau Canada Subgroup
               Holding Company Shares and, following their disposition, the
               holding of the Exchanged Co-Steel Shares, (vi) in relation to the
               Gerdau Canada Subgroup Holding Company, the only business carried
               on by it which is the holding of the Gerdau Canada Subgroup
               Shares, (vii) in relation to the Intermediate Holding Company,
               the only business that may be carried on by it which will be the
               acquisition and holding of the issued Capital Stock of the Gerdau
               Canada Subgroup Holding Company, and (viii) in relation to any
               Subsidiary of Gerdau Steel (other than the Co-Steel Group) or any
               of the Gerdau Canada Subgroup, the applicable businesses
               identified in (i), (ii), (iii) or (v);

               "BUSINESS AFFAIRS" means the Business Assets, affairs,
               liabilities, financial condition, prospects and results of
               operations of a specified Person;

               "BUSINESS ASSETS" means the business, operations, undertaking,
               property and assets of a specified Person;

               "CANADIAN DOLLARS", "CDN.$", "DOLLARS" or "$" means lawful
               currency of Canada;

               "CANADIAN DOLLAR VALUE" means, in relation to any amount of money
               or any particular Advance at any time, the value thereof at such
               time in Canadian dollars, determined as follows:
<PAGE>
                                     - 12 -


               (b)  for an amount or Advance which is denominated in Canadian
                    dollars, the Canadian dollar amount thereof; and

               (c)  for an amount or Advance which is denominated in foreign
                    currency, the Equivalent Amount thereof in Canadian dollars;

               "CAPITAL EXPENDITURE LIMIT" means (i) for the 1999 Fiscal Year,
               Cdn.$45,000,000, (ii) for the 2000 Fiscal Year, the sum of (A)
               Cdn.$25,000,000 plus (B) the lesser of (1) Cdn.$10,000,000 or (2)
               the amount, if any, by which (x) Cdn.$45,000,000 exceeds (y) the
               actual aggregate amount of all Capital Expenditures made by the
               Gerdau Canada Group during the 1999 Fiscal Year or, if (x) does
               not exceed (y), nil and (iii) for any Fiscal Year subsequent to
               the 2000 Fiscal Year, the sum of (A) Cdn.$25,000,000 plus (B) the
               lesser of (1) Cdn.$10,000,000 or (2) the amount, if any, by which
               (x) Cdn.$25,000,000 exceeds (y) the actual aggregate amount of
               all Capital Expenditures made by the Gerdau Canada Group during
               the immediately prior Fiscal Year or, if (x) does not exceed (y),
               nil;

               "CAPITAL EXPENDITURES" means (without duplication) any
               expenditure (whether payable in cash or other property or accrued
               as a liability) that, in conformity with GAAP, would be required
               to be classified as a capital expenditure. For certainty, Capital
               Expenditures includes (i) the cost of assets acquired under
               capital leases and (ii) expenditures for equipment which is
               purchased simultaneously with the trade-in of existing equipment
               owned by any Gerdau Canada Group Member, to the extent the gross
               purchase price of the purchased equipment exceeds the book value
               of the equipment being traded in at such time. Capital
               Expenditures, however, excludes expenditures made in connection
               with the replacement or restoration of buildings, fixtures or
               equipment to the extent reimbursed or financed from insurance or
               expropriation proceeds;

               "CAPITAL STOCK" means common shares, preferred shares or other
               equivalent equity interests (howsoever designated) of capital
               stock of a body corporate, equity preferred or common interests
               in a limited liability company, limited or general partnership
               interests in a partnership or any other equivalent of such
               ownership interest;

               "CASH COLLATERAL ACCOUNT" has the defined meaning assigned to it
               in Section 7.6.10;

               "CASH EQUIVALENT INVESTMENTS" means (i) short-term obligations
               of, or fully guaranteed by, the government of the United States
               of America or Canada, (ii) commercial paper rated A-1 or better
               by S&P or P-1 or better by Moody's, (iii) demand deposit accounts
               maintained in the ordinary course of business, and (iv)
               certificates of deposit issued by and time deposits with
               commercial banks (whether domestic or foreign) having capital and
               surplus in excess of $1,000,000,000; provided in each case that
               the same provides for payment of both
<PAGE>
                                     - 13 -


               principal and interest (and not principal alone or interest
               alone) and is not subject to any contingency regarding the
               payment of principal or interest;

               "CASH INTEREST EXPENSE" for any Fiscal Quarter or period of
               successive Fiscal Quarters means the sum (without duplication) of
               (i) total interest expense of Gerdau Steel determined on a
               Combined Basis (including the total interest expense payable by
               USP on its Loan Obligations) plus (ii) all dividends payable on
               Preferred Shares of any Gerdau Canada Group Member to any Person
               that is not a Gerdau Canada Group Member, in each case, actually
               paid in respect of such Fiscal Quarter or period of consecutive
               Fiscal Quarters;

               "CDOR BA RATE" means the yearly rate of interest determined by
               the Agent to be equivalent to the average of the discount rates
               (rounded up to two decimal places) applicable to banker's
               acceptances denominated in Canadian Dollars for any specified
               maturity quoted on the Reuters Money Market CDOR page on the day
               of determination (or on the preceding day, if such day is not a
               Banking Day). If the Agent is unable to determine such an average
               rate, the CDOR BA Rate will be determined by the Agent with
               reference to such rate or the average of such rates (rounded up
               to two decimal places) quoted by such financial reporting service
               or Reference Lender or Reference Lenders as the Agent may select;

               "CERTIFICATE" from any Person means a written certificate of the
               Person signed by a Senior Officer;

               "CHANGE IN LAW" means the introduction of, any change in, or the
               coming into effect of, any Applicable Law (whether or not having
               the force of law), or any change in the interpretation,
               administration or application thereof by any Governmental Body,
               or compliance by any Lender (or any Holding Body Corporate of any
               Lender) with any Applicable Law or the request or direction of
               any Governmental Body (whether or not having the force of law);

               "CLEAN-UP" means the remediation, containment, removal,
               treatment, neutralization or inactivation of any Contaminant;

               "COMBINED BASIS" when used in relation to any computation of
               financial terms, tests or ratios relative to Gerdau Steel, means
               such computation determined on a consolidated basis and assuming
               that the Co-Steel Combination Transactions had not taken place
               and the corporate structure depicted in Schedule E - Part I
               remained true, accurate and complete in all material respects,
               and ignoring the Investments of the Gerdau Canada Group in all
               Non-Qualifying Subsidiaries and Non-Qualifying Investments, but
               including USP solely with respect to its Loan Obligations;

               "COMMITMENT" of any Lender means the Lenders' Revolver Commitment
               or Term Commitment, or both of them, as applicable;

               "COMMITMENT FEE" means the commitment fee payable pursuant to
               Section 8.1;


<PAGE>
                                     - 14 -


               "COMMITMENT LETTER" means the commitment letter dated September
               21, 1999 between the Joint Arrangers and Joint Bookrunners, the
               Agent, the Lenders and the Pre-1999 Borrowers pursuant to which
               the Third Syndicated Amended and Restated Loan Agreement was
               entered into;

               "COMPLIANCE CERTIFICATE" in respect of any Fiscal Quarter or
               period of successive Fiscal Quarters means a Certificate of
               Gerdau Steel substantially in the form attached as Schedule I
               setting out, among other things, a statement for such Fiscal
               Quarter or period of successive Fiscal Quarters of the
               calculations of the financial tests set out in Section 11.1.1.13;

               "CONFIRMED LOAN DOCUMENTS" means the Loan Documents (as defined
               in the Existing Loan Agreement);

               "CONTAMINANT" means any solid, liquid, gas, odour, heat, sound,
               vibration, radiation or combination of any of them that may (i)
               impair the quality of the environment for any use that can be
               made of it, (ii) injure or damage property or plant or animal
               life, (iii) harm or materially discomfort any Person, (iv)
               adversely affect the health of any individual, (v) impair the
               safety of any individual, (vi) render any property or plant or
               animal life unfit for use by man, (vii) cause loss of enjoyment
               of normal use of property, or (viii) interfere with the normal
               course of business, and includes any "Contaminant" within the
               meaning assigned to such term in any Environmental Law;

               "CONTROL", "CONTROLS" and "CONTROLLED" when used with respect to
               any Person means the power to direct the management and policies
               of such Person, directly or indirectly, whether through ownership
               of Voting Capital Stock, by contract or otherwise;

               "CONVERSION" means the conversion of the method for calculating
               interest or fees on an Advance from one Type to another, and
               includes a conversion to or from an issue of Bankers'
               Acceptances;

               "CONVERSION DATE" means, in respect of any Advance, the Banking
               Day on which a Conversion thereof is made;

               "CONVERSION NOTICE" means a notice substantially in the form of
               Schedule C given to the Agent in accordance with the terms
               hereof;

               "CORE RELATED BUSINESS" means an active business activity which
               in the opinion of the Majority Lenders acting reasonably, is of
               the same nature as a principal active business activity carried
               on by any of the Gerdau Canada Group, excluding the animal hide
               business of Porter, as of September 27, 1999 as part of their
               respective Businesses. For certainty, acting as a holding company
               is not a Core Related Business;

               "CORPORATE BORROWERS" means Courtice and MRM;


<PAGE>
                                     - 15 -


               "CO-STEEL" means Co-Steel Inc., a corporation incorporated
               pursuant to the laws of the Province of Ontario as at the date
               hereof, and any successor of it, as the context requires;

               "CO-STEEL COMBINATION TRANSACTIONS" has the defined meaning
               assigned to it in Recital X of this Agreement;

               "CO-STEEL GROUP CREDIT AGREEMENTS" means (i) the Credit Agreement
               dated as of April 30, 2002 between Co-Steel Inc. as Borrower, the
               companies therein named as Guarantors, the Lenders therein named,
               The Toronto-Dominion Bank as Administration Agent and The Bank of
               Nova Scotia as Syndication Agent, (ii) the Second Amended and
               Restated Credit Agreement dated as of April 30, 2002 between
               Co-Steel Sayreville, Inc. as Borrower and PNC Bank, National
               Association as Lender, (iii) the Second Amended and Restated
               Credit Agreement dated as of April 30, 2002 between Co-Steel
               Raritan, Inc. as Borrower and PNC Bank, National Association as
               Lender, (iv) the Second Amended and Restated Note Agreement dated
               as of April 30, 2002 between Co-Steel Inc. as Issuer and The
               Prudential Insurance Company of America and U.S. Private
               Placement Fund as Purchasers, (v) the Trust Indenture dated as of
               April 23, 1997 between Co-Steel Inc. as Issuer and The R-M Trust
               Company as Trustee, (vi) the Financing and Security Agreement
               dated as of March 31, 1999 among Gallatin Steel Company as
               Borrower, Bankamerica Business Credit, Inc. as Agent and
               Bankamerica Business Credit, Inc. and others as Lenders and (vii)
               the Intercreditor Agreement dated as of April 30, 2002 among
               State Street Bank and Trust Company and Computershare Trust
               Company of Canada as Security Agents, The Toronto-Dominion Bank
               as Administration Agent under the TD Credit Agreement (as therein
               defined), The Prudential Insurance Company of America and U.S.
               Private Placement Fund and PNC Bank, National Association;

               "CO-STEEL GROUP MEMBER" means any one of Co-Steel and its
               consolidated Subsidiaries, excluding the Gerdau Canada Subgroup
               Holding Company, the Intermediate Holding Company and the Gerdau
               Canada Subgroup and their respective Subsidiaries; and "CO-STEEL
               GROUP" means all of the Co-Steel Group Members;

               "CO-STEEL LENDERS" has the defined meaning assigned to it in the
               Status Quo Agreement;

               "CO-SYNDICATION AGENTS" means The Chase Manhattan Bank, NA,
               Canada Branch and Citibank Canada, and any of their respective
               successors;

               "COURTICE" means Gerdau Courtice Steel Inc., a corporation
               continued pursuant to the laws of the Province of Saskatchewan as
               at the date hereof, such corporation when it was a Canada
               corporation, and any successor of it, as the context requires;


<PAGE>
                                     - 16 -


               "COURTICE AMENDED AND RESTATED DEBENTURE DELIVERY AGREEMENT"
               means the agreement dated as of November 8, 1996 made between
               Courtice and the Agent confirming the delivery to the Agent of
               the Courtice Debenture, as amended by Amending Agreement No. 1
               and Amending Agreement No. 3, and the Courtice Supplemental
               Debenture, as amended by Amending Agreement No. 2, as amended and
               restated as of September 27, 1999;

               "COURTICE DEBENTURE" means the Cdn.$50,000,000 secured demand
               debenture dated October 31, 1989 granted by Courtice to TD;

               "COURTICE DEBENTURE PLEDGE AGREEMENT" means the pledge agreement
               relating to the Courtice Debenture dated October 31, 1989 made
               between Courtice and TD;

               "COURTICE/GERDAU STEEL GUARANTEE" means Courtice's guarantee of
               the obligations of Gerdau Steel to each Lender under or in
               respect of this Agreement, including under the Gerdau Steel
               Guarantees, initially given by Courtice to TD pursuant to a
               guarantee dated June 27, 1995, as amended and confirmed September
               26, 1995, as further amended and confirmed by amendment and
               confirmation of guarantee dated as of November 8, 1996 between
               Courtice and the Agent;

               "COURTICE GUARANTEES" means the Courtice/Gerdau Steel Guarantee
               and the Courtice/MRM Guarantee, and "COURTICE GUARANTEE" means
               one of them;

               "COURTICE/MRM GUARANTEE" means Courtice's guarantee of MRM's Loan
               Obligations to each Lender initially given by Courtice to TD
               pursuant to a guarantee dated July 20, 1995, as amended and
               confirmed September 26, 1995, as further amended and confirmed by
               amendment and confirmation of guarantee dated as of November 8,
               1996 between Courtice and the Agent;

               "COURTICE SUPPLEMENTAL DEBENTURE" means the Cdn.$50,000,000
               secured demand debenture dated June 21, 1990 granted by Courtice
               to TD;

               "CREDIT FACILITIES" means the Revolver Facility and the Term
               Facility;

               "CURRENCY" means Canadian dollars, U.S. Dollars or other foreign
               currency;

               "DEBENTURES" means the Courtice Debenture, the Courtice
               Supplemental Debenture and the MRM Debenture, and "DEBENTURE"
               means any of them;

               "DEBENTURE DELIVERY AGREEMENTS" means the Courtice Amended and
               Restated Debenture Delivery Agreement and the MRM Amended and
               Restated Debenture Delivery Agreement, collectively, and
               "DEBENTURE DELIVERY AGREEMENT" means one of them;

               "DEBT" of any Person at any time means liabilities of such Person
               and its Subsidiaries which, in accordance with GAAP, would be
               classified upon the


<PAGE>
                                     - 17 -


               consolidated balance sheet of such Person (or, in the case of
               Gerdau Steel, its balance sheet prepared on a Combined Basis)
               prepared as at such time as indebtedness for borrowed money,
               including bank indebtedness, long-term debt, capital lease
               obligations and indebtedness to affiliates or other financial
               indebtedness;

               "DEBT REORGANIZATION TRANSACTIONS" means the transactions
               described in the letter dated October 11, 2002 from Gerdau Steel
               to the Agent requesting the consent of the Lenders to the
               reorganization of certain intercorporate Gerdau S.A. Group Debt;

               "DEBT SERVICE COST" for any Fiscal Quarter or period of
               successive Fiscal Quarters means (i) the sum (without
               duplication) of the amounts for such Fiscal Quarter or period of
               successive Fiscal Quarters of (A) Cash Interest Expense, plus (B)
               all scheduled repayments of USP's Loan Obligations in respect of
               the Term Facility which USP is required to pay during such Fiscal
               Quarter or period of successive Fiscal Quarters plus (C) all
               scheduled repayments of other Indebtedness (except for repayments
               of Indebtedness owing to a bank which is repayable on demand or
               within one year from the date of borrowing, which for greater
               certainty includes repayments in respect of the Revolver Facility
               made during the relevant Fiscal Quarter or period of successive
               Fiscal Quarters) which any Gerdau Canada Group Member is required
               to make during such Fiscal Quarter or period of successive Fiscal
               Quarters plus (D) repayments of Gerdau S.A. Advances made during
               the relevant Fiscal Quarter or period of successive Fiscal
               Quarters minus (ii) the sum of (A) the aggregate amount of any
               sums actually received during such accounting period by any of
               the Borrowers, whether directly or indirectly (but without double
               counting), on account of a refund of or rebate in Taxes or any
               other benefit relating to Taxes received by AmeriSteel or FLS, or
               any of their respective Subsidiaries, and (B) the aggregate
               outstanding principal amount of Gerdau S.A. Advances made during
               or within 20 Banking Days after the end of the relevant Fiscal
               Quarter or period of successive Fiscal Quarters;

               "DEBT SERVICE COVERAGE RATIO" for any Fiscal Quarter or period of
               successive Fiscal Quarters means the ratio for such Fiscal
               Quarter or period of successive Fiscal Quarters of (i) the sum of
               (A) EBITDA minus (B) the aggregate amount of all Capital
               Expenditures incurred by Gerdau Steel minus (C) Income Taxes
               incurred and actually paid by Gerdau Steel, in each case
               determined on a Combined Basis, divided by (ii) Debt Service
               Cost;

               "DEFAULT" means any event which with the lapse of time, giving of
               notice, making of a determination, or any combination thereof,
               would constitute an Event of Default;

               "DERIVATIVE" means any transaction referred to in clause (a) or
               (b) of the definition of "Specified Transaction" contained in
               Section 14 of the Master ISDA Agreement;


<PAGE>
                                     - 18 -


               "DERIVATIVE EXPOSURE" for any Person at any time means the
               amount, if any, which would be payable by such Person to its
               counterparty (determined in accordance with customary market
               practices) pursuant to Section 6(e) of the Master ISDA Agreement
               governing such Derivatives in respect of all Derivatives entered
               into between such Person and such counterparty if an Early
               Termination Date (as defined in Section 14 of the Master ISDA
               Agreement) were to occur at such time as a result of that Person
               being a Defaulting Party (as defined in said Section 14) and such
               Derivatives were governed by a Master ISDA Agreement;

               "DESIGNATED ACCOUNT" means the Canadian dollar or U.S. Dollar
               current account maintained by the Relevant Borrower at the Branch
               of Account of the Swing Line Lender and designated by the Swing
               Line Lender as such for the purposes of this Agreement;

               "DRAWDOWN" means a fresh Advance which is not derived from a
               Conversion or Rollover;

               "DRAWDOWN DATE" means any Banking Day on which a Drawdown is
               made;

               "DRAWDOWN NOTICE" means a notice substantially in the form of
               Schedule B given to the Agent in accordance with the terms
               hereof;

               "DUE DATES" means the Final Term Facility Due Date and the
               Revolver Facility Due Date, and "DUE DATE" means the applicable
               one of them;

               "EBITDA" for any Fiscal Quarter or period of successive Fiscal
               Quarters means the sum (without duplication) for such Fiscal
               Quarter or period of successive Fiscal Quarters of (i) the net
               income of Gerdau Steel for such Fiscal Quarter or period of
               successive Fiscal Quarters before interest, income taxes,
               depreciation, amortization, and any non-cash gains or losses in
               the books of Gerdau Steel (or any other Gerdau Canada Group
               Member where such gains or losses would form part of the net
               income of Gerdau Steel determined on a Combined Basis) to the
               extent that such gains or losses result only from exchange rate
               fluctuations, excluding (for the avoidance of doubt) any gains or
               losses resulting from actual sales or purchases of one currency
               with another, whether upon a spot sale, a forward purchase or
               sale, the completion of a forward sale transaction or otherwise,
               and before extraordinary and unusual items, in each case,
               determined on a Combined Basis;

               "EFFECTIVE TIME" means the time the amendment and restatement of
               the Existing Credit Agreement contemplated by this Agreement
               becomes effective in accordance with Section 6.4 by delivery of
               the Implementation Notice by the Agent to the Borrowers;

               "ELIGIBLE HEDGING INSTRUMENT" has the defined meaning assigned to
               it in Section 4.1.3;


<PAGE>
                                     - 19 -


               "ELIGIBLE INVENTORY" of any Gerdau Canada Group Member means, at
               any time, that portion of that Gerdau Canada Group Member's
               inventories determined from the most recent balance sheet of
               Gerdau Steel prepared on a Combined Basis comprised of all raw
               materials, consumables, finished goods and billets; provided that
               any inventory that is not subject to the Security or is subject
               to a Lien in favour of any other Person, other than the
               Syndicate, shall not be taken into account in determining
               Eligible Inventory;

               "ELIGIBLE RECEIVABLES" of any Gerdau Canada Group Member means,
               at any time, the aggregate outstanding balances, net of allowance
               for credit losses, of all receivables owned by that Gerdau Canada
               Group Member representing unconditional obligations to pay,
               arising from sales, leases or rentals by that Gerdau Canada Group
               Member to any other Persons in the ordinary course of its
               business, existing at that time, and as determined from the most
               recent balance sheet of Gerdau Steel prepared on a Combined
               Basis; provided, however, that the outstanding balance of any
               receivable shall not be taken into account in determining
               Eligible Receivables if (i) at that time any amount owing in
               respect of the relevant receivable has been outstanding for more
               than 90 days, (ii) the relevant receivable is from an Affiliate,
               a Non-Qualifying Subsidiary or another Gerdau S.A. Group Member,
               (iii) the relevant receivable is subject to claims of off-set,
               set-off, counterclaim or cross-claim, in which event it shall not
               be taken into account to the extent of the amount so claimed,
               (iv) the relevant receivable is owed by a Person in receivership
               or bankruptcy or subject to insolvency proceedings, or (v) the
               relevant receivable is not subject to the Security or is subject
               to a Lien in favour of any other Person, other than the
               Syndicate;

               "ENVIRONMENTAL LAW" means, in relation to any Person, property,
               transaction or event, all treaties, federal, provincial or local
               laws, statutes, regulations, municipal by-laws, ordinances,
               rules, orders, requirements, guidelines or policies which apply
               to such Person, property, transaction or event and which relate
               to or otherwise impose liability or standards of conduct
               concerning health or safety, mining or reclamation of mined
               lands, discharges, emissions, releases or threatened releases of
               noises, odours, pollutants, Contaminants or Hazardous Substances
               whether as matter or energy, into ambient air, water or land, or
               otherwise relates to the manufacture, processing, generation,
               distribution, use, treatment, storage, disposal, Clean-Up,
               transport or handling of pollutants, Contaminants, or hazardous,
               toxic or other wastes, substances or materials, or other
               environmental matters, including The Canadian Environmental
               Protection Act (Canada), the Fisheries Act (Canada), The
               Transportation of Dangerous Goods Handling and Transportation Act
               (Canada), The Dangerous Goods Transportation Act (Ontario), The
               Environmental Protection Act (Ontario), the Ontario Water
               Resources Act, The Environment Act (Manitoba), The Dangerous
               Goods Handling and Transportation Act (Manitoba), The Ground
               Water & Water Well Act (Manitoba), The High-Level Radioactive
               Waste Act (Manitoba), The Ozone Depleting Substances Act
               (Manitoba), The Public Health Act (Manitoba), The Waste Reduction
               and Prevention Act (Manitoba), The Workplace Safety and Health
               Act (Manitoba), The United States Comprehensive Environmental


<PAGE>
                                     - 20 -


               Response, Compensation and Liability Act of 1980 and any similar
               law which applies to such Person, property, transaction or event
               in any jurisdiction in which any of the Business Assets of the
               Gerdau S.A. Group are situated or any of the Business of the
               Gerdau S.A. Group is conducted;

               "EQUIVALENT AMOUNT" on any date means the amount in a specified
               currency which would result from the conversion of a specified
               amount in another currency at the Spot Rate;

               "EXCHANGED CO-STEEL SHARES" has the defined meaning assigned to
               it in Recital X of this Agreement, and (where the context so
               admits) includes any Capital Stock in Co-Steel derived in the
               future therefrom;

               "EXISTING BORROWERS" has the defined meaning assigned to it in
               Recital R of this Agreement;

               "EXISTING LOAN AGREEMENT" has the defined meaning assigned to it
               in Recital V of this Agreement;

               "EXISTING SECURITY" means the Courtice Debenture, as amended by
               Amending Agreement No. 1 and Amending Agreement No. 3, the
               Courtice Supplemental Debenture, as amended by Amending Agreement
               No. 2, the MRM Debenture, as amended by Amending Agreement No. 4
               and the MRM Working Capital General Security Agreement and the
               other Security constituted by the other Confirmed Loan Documents;

               "EVENT OF DEFAULT" has the defined meaning assigned to it in
               Section 12.1;

               "FEDERAL FUNDS RATE" for any period means a fluctuating annual
               rate of interest (expressed as a percentage per annum on the
               basis of a 360 day year) equal for each day during such period to
               the weighted average of the rates on overnight federal funds
               transactions with members of the United States Federal Reserve
               System arranged by federal funds brokers, as published for such
               day (or, if such day is not a business day in New York, New York,
               for the next preceding such business day) in New York, New York
               by the Federal Reserve Bank of New York, or if such rate is not
               so published for any day which is a business day in New York, New
               York, the average of the quotations for such day on such
               transactions received by the Agent from three federal funds
               brokers of recognized standing selected by the Agent;

               "FINAL TERM FACILITY DUE DATE" means (i) January 15, 2004
               provided that, if such date is not a Banking Day, the Final Term
               Facility Due Date shall be the preceding Banking Day, or (ii)
               such earlier date as the entire balance of the Advances under the
               Term Facility may become due whether by acceleration or
               otherwise, whichever is first to occur;


<PAGE>
                                     - 21 -


               "FINCO" means PASUG LLC (formerly PASUG Inc.), a limited
               liability company organized pursuant to the laws of the State of
               Delaware as at the date hereof, and any successor of it, as the
               context requires;

               "FIRST SYNDICATED AMENDED AND RESTATED LOAN AGREEMENT" has the
               defined meaning assigned to it in Recital H of this Agreement;

               "FISCAL QUARTER" means one of Gerdau Steel's four three-month
               accounting periods comprising a Fiscal Year;

               "FISCAL YEAR" means the 12 month accounting period of Gerdau
               Steel ending December 31st of each calendar year;

               "FLS" means (i) before the FLS/Gerdau USA Merger took effect, FLS
               Holdings, Inc., a corporation incorporated pursuant to the laws
               of the State of Delaware and (ii) upon and after the FLS/Gerdau
               USA Merger took effect, Gerdau USA Inc., a corporation
               incorporated pursuant to the laws of the State of Delaware, the
               surviving corporation from the FLS/Gerdau USA Merger, and any
               successor of it, as the context requires;

               "FLS/GERDAU USA MERGER" means the merger of Gerdau USA Inc. with
               FLS Holdings, Inc. with FLS Holdings, Inc. (renamed Gerdau USA
               Inc.) as the surviving corporation which took place with effect
               immediately before the date hereof;

               "FOURTH SYNDICATED AMENDED AND RESTATED LOAN AGREEMENT" has the
               defined meaning assigned to it in Recital R of this Agreement;

               "FREE CASH FLOW" for any Fiscal Quarter or period of successive
               Fiscal Quarters means the sum determined as (i) EBITDA less (ii)
               Debt Service Cost less (iii) the Income Taxes incurred and
               actually paid by Gerdau Steel, less (iv) Capital Expenditures
               incurred, in each case, in respect of such Fiscal Quarter or
               period of successive Fiscal Quarters and determined on a Combined
               Basis;

               "GAAP" means generally accepted accounting principles determined
               in accordance with Section 1.11;

               "GERDAU CANADA GROUP FACILITIES" means all plants, mills and
               other facilities (including all real property on which such
               facilities are situated), containment ponds, containers,
               vehicles, pipelines, rail transportation systems, rail cars,
               motor vessels, trailers, storage or holding tanks, caverns and
               other machinery and equipment owned, leased, managed, controlled
               or operated by any Gerdau Canada Group Member;

               "GERDAU CANADA GROUP MEMBER" at any time means Gerdau Steel and
               its consolidated Subsidiaries, including any Gerdau Canada
               Subgroup Member, but excluding each Co-Steel Group Member and
               each Non-Qualifying Subsidiary; and "GERDAU CANADA GROUP" means
               all Gerdau Canada Group Members;


<PAGE>
                                     - 22 -


               "GERDAU CANADA SUBGROUP HOLDING COMPANY" means Gerdau Nova Scotia
               Holding Company, an unlimited liability company formed pursuant
               to the laws of the Province of Nova Scotia as at the date hereof,
               and any successor of it, as the context requires;

               "GERDAU CANADA SUBGROUP HOLDING COMPANY SHARES" has the defined
               meaning assigned to it in Recital X of this Agreement, and (where
               the context so admits) including any future Capital Stock in
               Gerdau Canada Subgroup Holding Company;

               "GERDAU CANADA SUBGROUP INTERIM HOLDING COMPANY" means 4104315
               Canada Limited, a corporation incorporated pursuant to the laws
               of Canada as at the date hereof, and any successor of it, as the
               context requires;

               "GERDAU CANADA SUBGROUP MEMBER" at any time means any one of
               Courtice, MRM Holdings, MRM and Gerdau USA and their respective
               consolidated Subsidiaries, but excluding each Non-Qualifying
               Subsidiary; and "GERDAU CANADA SUBGROUP" means all of the Gerdau
               Canada Subgroup Members;

               "GERDAU CANADA SUBGROUP SHARES" has the defined meaning assigned
               to it in Recital W of this Agreement, and (where the context so
               admits) includes any future Capital Stock in any Gerdau Canada
               Subgroup Member;

               "GERDAU S.A." means Gerdau S.A., a Brazilian corporation at the
               date hereof, and any successor of it, as the context requires;

               "GERDAU S.A. ADVANCE" means the advances made by Gerdau S.A. to
               Gerdau Steel on September 29, 2000, December 27, 2000 and March
               30, 2001 in the principal amounts of Cdn.$5,400,000,
               Cdn.$5,000,000 and Cdn.$7,500,000 respectively, and the principal
               amount of any other advance made by Gerdau S.A. to a Pre-1999
               Borrower pursuant to and in accordance with the terms of Section
               12.1.4 on not less than two Banking Days' prior notice by the
               relevant Pre-1999 Borrower to the Agent, specifying the amount
               and date of the advance;

               "GERDAU S.A. GROUP MEMBER" at any time means each Gerdau Canada
               Group Member, the Gerdau Canada Subgroup Holding Company, the
               Intermediate Holding Company, the Gerdau Canada Subgroup Interim
               Holding Company, each Gerdau USA Group Member and their
               respective Subsidiaries, but excluding each Co-Steel Group
               Member;

               "GERDAU S.A. GUARANTEE" means the guarantee of Gerdau S.A. listed
               in Schedule L;

               "GERDAU S.A. TRUST DEED" means the Indenture dated as of May 22,
               1996 (as amended and supplemented) among Metalurgica Gerdau S.A.,
               as issuer, Gerdau S.A., as the sole remaining guarantor, The
               Chase Manhattan Bank, New York, as trustee, registrar transfer
               agent, Chase Manhattan Bank Luxembourg S.A., as

<PAGE>
                                     - 23 -


               paying agent and transfer agent, and Chase Trust Bank (Japan) as
               principal paying agent, providing for the issue of
               U.S.$130,000,000 11.25% Notes due 2004;

               "GERDAU STEEL" means Gerdau Steel Inc., formerly known as Gerdau
               Canada Inc., a corporation incorporated pursuant to the laws of
               Canada as at the date hereof, and any successor of it, as the
               context requires;

               "GERDAU STEEL GUARANTEES" means the Gerdau Steel/Courtice
               Guarantee and the Gerdau Steel/MRM Guarantee, and "GERDAU STEEL
               GUARANTEE" means any one of them;

               "GERDAU STEEL/COURTICE GUARANTEE" means Gerdau Steel's guarantee
               of Courtice's Loan Obligations to each Lender initially given by
               Gerdau Steel to TD pursuant to a guarantee dated June 27, 1995,
               as amended and confirmed by amendment and confirmation of
               guarantee dated as of November 8, 1996 between Gerdau Steel and
               the Agent;

               "GERDAU STEEL/MRM GUARANTEE" means Gerdau Steel's guarantee of
               MRM's Loan Obligations to each Lender initially given by Gerdau
               Steel to TD pursuant to a guarantee dated June 27, 1995, as
               amended and confirmed by amendment and confirmation of guarantee
               dated as of November 8, 1996 between Gerdau Steel and the Agent;

               "GERDAU USA" means (i) before the FLS/Gerdau USA Merger took
               effect, Gerdau USA Inc., a corporation incorporated pursuant to
               the laws of the State of Delaware and (ii) upon and after the
               FLS/Gerdau USA Merger took effect, FLS;

               "GERDAU USA GROUP" means USP, NSULC, Finco, Gerdau USA,
               AmeriSteel and AmeriSteel Bright Bar and their respective
               Subsidiaries;

               "GOVERNMENTAL BODY" means any international tribunal, body or
               authority, government, parliament, legislature or local
               authority, or any regulatory authority, ministry, agency,
               commission, tribunal or board of any government, parliament,
               legislature or local authority, or any court or administrative
               tribunal or (without limitation to the foregoing) any other law,
               regulation or rulemaking entity (including any world, regional or
               central bank, fiscal or monetary authority or authority
               regulating banks), having or purporting to have jurisdiction in
               the relevant circumstances, or any Person acting or purporting to
               act under the authority of any of the foregoing;

               "GTL NETHERLANDS" means GTL Financial Corp. B.V., a corporation
               incorporated pursuant to the laws of the Netherlands as at the
               date hereof, and any successor of it, as the context requires;

               "GTL SPAIN" means Gerdau GTL Spain, S.L. (formerly GTL-Trade
               Corp., a corporation incorporated pursuant to the laws of the
               British Virgin Islands), a corporation continued under the laws
               of Spain as at the date hereof, and any successor of it, as the
               context requires;


<PAGE>
                                     - 24 -


               "HAZARDOUS SUBSTANCE" means any material, substance or matter
               which (i) constitutes a hazardous substance, hazardous waste,
               toxic substance, Contaminant, dangerous good, ozone depleting
               substance or pollutant within the meaning of any applicable
               Environmental Law or (ii) is regulated or controlled as a
               hazardous substance, hazardous waste, toxic substance, pollutant,
               Contaminant, dangerous good or other regulated or controlled
               material, substance or matter pursuant to any Environmental Law;

               "HEDGING LENDERS" means TD and each other Lender as may have
               agreed with any of the Borrowers to make Derivatives available to
               a Borrower in accordance with the provisions of Article 4, and
               "HEDGING LENDER" means any of them;

               "HOLDING BODY CORPORATE" means, in respect of any body corporate,
               any Person which, directly or indirectly, Controls such body
               corporate;

               "IMPLEMENTATION NOTICE" has the defined meaning assigned to it in
               Section 6.2;

               "INCOME TAXES" means taxes based on or measured by income or
               profit of any nature or kind, including Canadian federal and
               provincial income taxes and income taxes of any foreign
               jurisdiction;

               "INDEBTEDNESS" means, with respect to any Person at any
               particular time, (without duplication) obligations of such Person
               or any of its Subsidiaries (or in the case of Gerdau Steel, any
               Gerdau Canada Group Member) to pay (in whole or in part) any of
               the following amounts at such time:

               (a)  Debt;

               (b)  indebtedness, actual or contingent, arising under or in
                    respect of any note purchase, purchase of accounts,
                    factoring, securitization or discounting arrangement;

               (c)  the principal amount of, and premiums and capitalized
                    interest payable in respect of, indebtedness for the
                    deferred purchase price of property or services;

               (d)  the principal amount of, and premiums and capitalized
                    interest payable in respect of, indebtedness payable under
                    or in respect of any Lien upon any property acquired
                    (whether or not assumed);

               (e)  Derivative Exposure;

               (f)  the redemption or retraction price of any Preferred Shares;

               (g)  the capital portion of any other transaction that is not
                    Debt having the commercial effect of borrowing; or


<PAGE>
                                     - 25 -


               (h)  any amount payable under any direct or indirect guarantee of
                    any amount of the nature described in any of clauses (a) to
                    (g) above,

               and for greater certainty, trade payables, expenses (other than
               capital lease payments) accrued in the ordinary course of
               business and customer advance payments and deposits received in
               the ordinary course of business shall not constitute
               Indebtedness;

               "INFORMATION CIRCULAR" means the management information circular
               of Co-Steel dated August 26, 2002;

               "INITIAL TARGET SHARES" means the 88% of the 9,000,000 issued and
               outstanding shares in the capital stock of AmeriSteel owned by
               FLS as at September 27, 1999;

               "INTELLECTUAL PROPERTY RIGHTS" means any rights under any
               contract or Applicable Law, including the Patent Act (Canada),
               Copyright Act (Canada) and Trade-Mark Act (Canada), which
               provides a right to any Gerdau Canada Group Member in either (i)
               ideas, formulae, algorithms, concepts, inventions or know-how
               generally, including trade secret law, or (ii) the expression or
               use of such ideas, formulae, algorithms, concepts, inventions or
               know-how;

               "INTEREST PAYMENT DATE" means:

               (a)  with respect to each Prime Rate Loan and Base Rate Loan and
                    any period of time elapsed in any calendar month, each day
                    on which a principal payment of such Loan is due hereunder
                    and, in addition thereto, the first Banking Day of the
                    immediately following calendar month; and

               (b)  with respect to each LIBOR Loan, the last day of each
                    Interest Period applicable thereto and, with respect to each
                    LIBOR Loan with an Interest Period longer than three months,
                    the day which falls three months after the relevant
                    Borrowing Date of the LIBOR Loan and each day which falls
                    every three months thereafter (or the next following Banking
                    Day if any such day is not a Banking Day);

               "INTEREST PERIOD" means with respect to each LIBOR Loan, (i) each
               of the periods for which a LIBOR Loan is outstanding, being,
               subject to availability, one, two, three or six months, as
               selected by the Relevant Borrower, the first of which Interest
               Periods will start on and include the relevant Borrowing Date of
               the LIBOR Loan, and the remainder of which will start on and
               include the last day of the preceding Interest Period, (ii) any
               Interest Period which would otherwise end on a day which is not a
               Banking Day shall be extended until the next Banking Day unless
               such Banking Day falls in another calendar month, in which case
               it will end on the preceding Banking Day and (iii) the Agent may
               extend or shorten Interest Periods in accordance with its
               prevailing market practice for LIBOR Loans or to ensure that any
               scheduled repayment or mandatory prepayment of LIBOR Loans takes
               place on the last day of an Interest Period; provided that in any
               case the last day of each Interest Period shall also be the first
               day of the next



<PAGE>
                                     - 26 -


               Interest Period; and further provided that the last day of each
               Interest Period hereunder shall be on or prior to the applicable
               Due Date of such Loan;

               "INTERMEDIATE HOLDING COMPANY" has the defined meaning assigned
               to it in the Status Quo Agreement;

               "INVENTORIES BORROWING BASE" as at any time means the lesser of
               (i) Cdn.$40,000,000 or (ii) the amount equal to 50% of the
               Canadian Dollar Value (determined at the lower of cost on a
               first-in, first-out basis or market value) of Eligible Inventory,
               subject to adjustment in accordance with Section 2.1.4;

               "INVESTMENT" means any loan, advance (other than commission,
               travel and similar advances to officers and employees made in the
               ordinary course of business), extension of credit (other than
               accounts receivable arising in the ordinary course of business)
               or contribution of capital to any other Person or any acquisition
               of Capital Stock, deposit accounts, certificates of deposit,
               mutual funds, bonds, notes, debentures or other securities of any
               other Person or any structured notes or Derivatives;

               "ISSUING BANK" means TD or (as the context requires) any
               replacement of such issuing bank that is the Swing Line Lender
               appointed pursuant to the provisions of Section 13.15.3;

               "JOINT ARRANGERS AND JOINT BOOKRUNNERS" means Chase Securities
               Inc., Salomon Smith Barney Inc. and The Toronto-Dominion Bank,
               and any of their respective successors;

               "KYOEI STEEL BALANCE OF SALE NOTES" means (i) the promissory note
               dated December 23, 1999 in the principal amount of
               U.S.$3,484,536.85 maturing March 19, 2001, issued by USP to Kyoei
               Steel, Ltd., (ii) the three promissory notes dated December 23,
               1999 each in the principal amount of U.S.$43,786,666.66 and
               maturing March 17, 2000, September 18, 2000 and March 19, 2001,
               respectively, issued by USP to Kyoei Steel, Ltd., (iii) the
               promissory note dated December 23, 1999 in the principal amount
               of U.S.$523,397 maturing March 17, 2000 issued by USP to Kyoei
               Steel, Ltd. and (iv) the promissory note dated December 23, 1999
               in the principal amount of U.S.$2,171,088.89 maturing September
               18, 2000 issued by USP to Kyoei Steel, Ltd.;

               "KYOEI STEEL BALANCE OF SALE NOTES REFINANCING LOAN" means the
               principal amount of any loan made after the date hereof to a
               Pre-1999 Borrower on not less than ten Banking Days' notice to
               the Agent, provided that (i) no such loan shall be made prior to
               the repayment and discharge in full of the Kyoei Steel Balance of
               Sale Notes or at a time when a Default or Event of Default has
               occurred that is continuing, (ii) every such loan is fully
               postponed and subordinated to the Loan Obligations on terms
               satisfactory to the Agent (acting reasonably), except that
               interest on and fees and charges in respect of any such loan may
               be paid with the


<PAGE>
                                     - 27 -


               prior written consent of the Agent (acting on the instructions of
               the Majority Lenders), and (iii) the aggregate principal amount
               of such loans (not including any capitalized interest, fees and
               charges) does not exceed the aggregate principal amount of the
               Kyoei Steel Balance of Sale Notes as of the date of their issue;

               "LENDERS" means any one or more or all (as the context requires)
               of the financial institutions listed as such in Schedule A (as
               amended and replaced from time to time in accordance with Section
               14.5.5), and "LENDER" means any of them;

               "LENDERS' BRAZILIAN COUNSEL" means Veirano e Advogados Associados
               of Rio de Janeiro, Brazil or such other counsel as the Agent may
               designate;

               "LENDERS' COUNSEL" means Lenders' Brazilian Counsel, Lenders'
               Manitoba Counsel, Lenders' Ontario Counsel, Lenders' Quebec
               Counsel, Lenders' Saskatchewan Counsel, Lenders' U.S. Counsel and
               such other counsel in such other jurisdictions as the Agent may
               designate;

               "LENDER'S OWN TAXES" means Income Taxes or capital or franchise
               taxes imposed on a Lender by a Governmental Body of a
               jurisdiction in which the Lender is subject to taxation because
               the Lender is incorporated, has a permanent establishment or a
               fixed place of business in such jurisdiction or is resident or
               engaged in a trade or business in such jurisdiction for reasons
               other than it has executed, delivered, performed its obligations
               under, has received or is entitled to receive payments under, or
               has enforced any Loan Document;

               "LENDERS' MANITOBA COUNSEL" means Thompson Dorfman Sweatman or
               such other counsel as the Agent may designate;

               "LENDERS' ONTARIO COUNSEL" means Fasken Martineau DuMoulin LLP of
               Toronto, Ontario or such other counsel as the Agent may
               designate;

               "LENDERS' QUEBEC COUNSEL" means Fasken Martineau DuMoulin LLP of
               Montreal, Quebec or such other counsel as the Agent may
               designate;

               "LENDERS' SASKATCHEWAN COUNSEL" means McKercher, McKercher &
               Whitmore or such other counsel as the Agent may designate;

               "LENDERS' U.S. COUNSEL" means Winston & Strawn or such other
               counsel as the Agent may designate;

               "LENDING OFFICE" of a Lender means the office of the Lenders set
               out in Schedule A (as amended and replaced from time to time in
               accordance with Section 14.5.5);

               "LIBO RATE" means, for any Interest Period and LIBOR Loan, the
               rate of interest (expressed as a percentage per annum on the
               basis of a 360 day year) as determined by the Agent to be the
               average of the rates of interest (rounded up to the next higher
               multiple of one-sixteenth percent (0.0625%)) for deposits in U.S.
<PAGE>
                                     - 28 -


               Dollars in a representative amount which appears on the Page 3750
               of the Dow Jones Telerate Service (or any similar such reference
               service selected by the Agent) as of 11:00 a.m. (London time) on
               the second London Banking Day prior to the first day of such
               Interest Period and for a period similar to such Interest Period.
               If the Agent is unable to determine such an average rate, LIBO
               Rate will be determined by the Agent with reference to the rate
               or the average of the rates of interest (rounded up to the next
               higher multiple of one-sixteenth percent (0.0625%)) at which the
               Reference Lender or Reference Lenders selected by the Agent are
               offering U.S. Dollar deposits in a representative amount to prime
               banks in the London interbank market for such Interest Period;

               "LIBOR LOAN" means an Advance made by way of loan in U.S. Dollars
               bearing interest based on the LIBO Rate;

               "LIEN" means any mortgage, lien, pledge, assignment, charge,
               security interest, lease, trust or other arrangement intended as
               security, title retention agreement, conditional sale, rights
               reserved in any Governmental Body, registered lease of real
               property, hypothec, levy, execution, seizure, attachment,
               garnishment or other similar encumbrance and includes any
               contractual restriction which, if contravened, may give rise to
               an encumbrance;

               "LITIGATION" means any grievance, investigation, litigation,
               legal action, lawsuit or other proceeding (whether civil,
               administrative, quasi-criminal or criminal) by or before any
               Governmental Body or arbitrator;

               "LOAN" means a Prime Rate Loan, LIBOR Loan or Base Rate Loan, as
               the context requires;

               "LOAN DOCUMENTS" means the Existing Security, the Confirmed Loan
               Documents, the New Loan Documents, and each other agreement,
               document or instrument executed and delivered to any of the
               Lenders under or pursuant to any thereof, and "LOAN DOCUMENT"
               means any one of the Loan Documents;

               "LOAN OBLIGATIONS" means the Indebtedness and other obligations
               of each Borrower owing to the Syndicate incurred under or
               pursuant to this Agreement or any other Loan Document, and any
               item or part of any thereof;

               "LOAN TRANSFER AGREEMENT" has the defined meaning assigned in
               Section 14.5.4;

               "LONG TERM DEBT" means all Indebtedness of Gerdau Steel
               determined on a Combined Basis, other than (i) Indebtedness
               payable on demand or maturing within 12 months after the date as
               of which determination is made, but includes Indebtedness which
               is not payable on demand and which may at the option of the
               debtor be extended or renewed so as to mature 12 months or more
               from the date of determination and (ii) Subordinated Debt.
               Notwithstanding the foregoing, the current portion of Long Term
               Debt will not be included in Long Term Debt;


<PAGE>
                                     - 29 -


               "LONDON BANKING DAY" means a day on which dealings in U.S. Dollar
               deposits may be transacted in the London interbank market;

               "MAJORITY LENDERS" means Lenders whose Commitments amount to at
               least 66-2/3% of the Total Commitment, unless an Event of Default
               has occurred which has not been waived by the Required Lenders,
               in which event "MAJORITY LENDERS" means Lenders whose Rateable
               Shares in outstanding Advances under the Credit Facilities
               amounts to at least 66-2/3% of the total Outstanding Amount of
               such Advances;

               "MATERIAL ADVERSE CHANGE" means any change, effect, event,
               occurrence or change in the state of facts that has or could
               reasonably be expected to have a Material Adverse Effect;

               "MATERIAL ADVERSE EFFECT" means an effect which, in the judgment
               of the Majority Lenders, (i) impairs, in a material adverse way,
               any Gerdau S.A. Group Member's or any other Person's ability to
               perform its obligations under any Loan Document to which it is a
               party, (ii) prejudices, restricts or renders unenforceable or
               ineffective, in a material adverse way, any Security or any of
               the rights intended or purported to be granted under or pursuant
               to any Loan Document to or for the benefit of the Syndicate, or
               (iii) results in a material adverse change in any of the Business
               Affairs of Gerdau S.A. or the Gerdau Canada Group taken as a
               whole or (iv) results in a material loss, diminution or
               destruction of the Business or any substantial part of the
               Business Assets (either physically or in value) of Gerdau S.A. or
               the Gerdau Canada Group taken as a whole which is not
               substantially compensated for by insurance or expropriation
               proceeds;

               "MASTER ISDA AGREEMENT" has the defined meaning assigned to it in
               Section 4.1.4;

               "MATURITY DATE" means the last day of an Interest Period
               applicable to a LIBOR Loan or of the term of any Banker's
               Acceptance or the expiry date of a Standby Credit (as
               applicable);

               "MAXIMUM AMOUNT" in the case of the Revolver Facility, means the
               Revolver Amount and in the case of the Term Facility, means the
               Maximum Term Amount;

               "MAXIMUM TERM AMOUNT" means Cdn.$200,000,000, as such amount may
               be modified or reduced from time to time pursuant to the
               provisions of this Agreement;

               "MFT" means MFT Acquisition, Corp., a corporation incorporated
               under the laws of the State of Delaware as at the date hereof,
               and any successor of it, as the context requires;

               "MOODY'S" means Moody's Investors Service, Inc.;


<PAGE>
                                     - 30 -


               "MORTGAGED PROPERTY" means all of the property, assets and
               undertaking of each Gerdau S.A. Group Member of every nature and
               kind, both present and future, real and personal, tangible and
               intangible, including all proceeds of any such property, assets
               or undertaking to the extent the same is intended to be subject
               to the Liens constituted by the Security by the express terms of
               the Security or this Agreement, and any item or part thereof;

               "MRM" means Gerdau MRM Steel Inc., a corporation continued
               pursuant to the laws of the Province of Saskatchewan as at the
               date hereof, such corporation when it was a Canada corporation,
               and any successor of it, as the context requires;

               "MRM AMERICA" means Gerdau MRM America Holding Corp., a
               corporation incorporated under the laws of the State of Delaware
               as at the date hereof, and any successor of it, as the context
               requires;

               "MRM DEBENTURE" means the Cdn.$80,000,000 secured demand
               debenture dated June 27, 1995 granted by MRM to TD;

               "MRM DEBENTURE DELIVERY AGREEMENT" means the agreement dated as
               of November 8, 1996 made between MRM and the Agent confirming the
               delivery to the Agent of the MRM Debenture, as amended by
               Amending Agreement No. 4, as amended and restated as of September
               27, 1999;

               "MRM/COURTICE GUARANTEE" means MRM's guarantee of Courtice's Loan
               Obligations to each Lender initially given by MRM to TD pursuant
               to a guarantee dated June 27, 1995, as amended and confirmed
               September 26, 1995, as further amended and confirmed by amendment
               and confirmation of guarantee dated as of November 8, 1996
               between MRM and the Agent;

               "MRM/GERDAU STEEL GUARANTEE" means MRM's guarantee of the
               obligations of Gerdau Steel to each Lender under or in respect of
               this Agreement, including under the Gerdau Steel Guarantees,
               initially given by MRM to TD pursuant to a guarantee dated June
               27, 1995, as amended and confirmed September 26, 1995, as further
               amended and confirmed by amendment and confirmation of guarantee
               dated as of November 8, 1996 between MRM and the Agent;

               "MRM GUARANTEES" means the MRM/Courtice Guarantee and the
               MRM/Gerdau Steel Guarantee, and "MRM GUARANTEE" means any one of
               them;

               "MRM HOLDINGS" means Gerdau MRM Holdings Inc., a corporation
               incorporated pursuant to the laws of Canada as at the date
               hereof, and any successor of it, as the context requires;

               "MRM HOLDINGS/GERDAU STEEL GUARANTEE" means MRM Holdings'
               guarantee of the obligations of Gerdau Steel to each Lender under
               or in respect of this Agreement, including under the Gerdau Steel
               Guarantees, initially given by MRM Holdings to TD pursuant to a
               guarantee dated June 27, 1995, as amended and confirmed September
               26, 1995, as further amended and confirmed by amendment


<PAGE>
                                     - 31 -


               and confirmation of guarantee dated November 8, 1996 between MRM
               Holdings and the Agent;

               "MRM HOLDINGS/MRM GUARANTEE" means MRM Holdings' guarantee of
               MRM's Loan Obligations to each Lender initially given by MRM
               Holdings to TD pursuant to a guarantee dated June 27, 1995, as
               amended and confirmed September 26, 1995, as further amended and
               confirmed by amendment and confirmation of guarantee dated as of
               November 8, 1996 between MRM Holdings and the Agent;

               "MRM HOLDINGS GUARANTEES" means the MRM Holdings/Gerdau Steel
               Guarantee and the MRM Holdings/MRM Guarantee, and "MRM HOLDINGS
               GUARANTEE" means any one of them;

               "MRM WORKING CAPITAL GENERAL SECURITY AGREEMENT" means the
               general security agreement dated November 8, 1996 granted by MRM
               in favour of the Agent creating a security interest in the
               working capital of MRM securing MRM's Loan Obligations, but
               limited to the amount of the Canadian Dollar equivalent of
               U.S.$20,000,000;

               "NET ASSET DISPOSAL PROCEEDS" means with respect to any asset
               disposal, the sum of cash or Cash Equivalent Investments received
               from such asset disposal, net of (i) all costs and expenses
               incurred in effecting such disposal, including legal expenses and
               commissions payable to any Person that is not a Gerdau Canada
               Group Member, Gerdau S.A. Group Member or an Affiliate, (ii) all
               payments made on any Indebtedness which is secured by such asset
               pursuant to a Permitted Lien upon or with respect to such asset
               or which must, by the terms of such Lien, in order to obtain the
               necessary consent to such asset disposal, or by Applicable Law,
               be repaid out of the proceeds from such asset disposal and (iii)
               cash or Cash Equivalent Investments derived from such asset
               disposal that is reinvested in capital assets within 30 days of
               such disposal. Notwithstanding the foregoing, if any asset
               disposal is made to an Affiliate or if not made at arm's length,
               Net Asset Disposal Proceeds shall be the greater of (x) the fair
               market value of such asset disposed (net of disposal costs as
               determined above) as certified by Gerdau Steel's Auditors or (y)
               the amount determined in the preceding sentence of this
               definition;

               "NEW LOAN DOCUMENTS" means this Agreement and each agreement,
               document and instrument executed and delivered to the Agent
               pursuant to Article 6;

               "NON-QUALIFYING INVESTMENT" means (i) any Investment (whether by
               way of loan, investment in Capital Stock or otherwise) made by
               any Gerdau Canada Group Member in any Person that is not a Gerdau
               Canada Group Member and that is not principally engaged in a Core
               Related Business or more than 10% of its assets is not located in
               Canada or the United States (such as Siderurgica AZA S.A., a
               Chilean company as at the date hereof) or (ii) any purchase of
               (A) assets which are not used principally in a Core Related
               Business or 10% or more of


<PAGE>
                                     - 32 -


               which are not located in Canada or the United States or (B) a
               business that is not a Core Related Business or 10% or more of
               the assets of which are not located in Canada or the United
               States;

               "NON-QUALIFYING SUBSIDIARY" means any of (i) any Subsidiary of
               any of Gerdau Steel, MRM Holdings, Courtice or Gerdau USA that is
               a Non-Qualifying Investment, (ii) any of the Gerdau USA Group and
               (iii) Gerdau Canada Subgroup Interim Holding Company, the
               Intermediate Holding Company and Gerdau Canada Subgroup Holding
               Company;

               "NSULC" means 3038482 Nova Scotia Company, a Nova Scotia
               unlimited liability company as at the date hereof, or any
               successor of it, as the context requires;

               "1989 TERM SHEET" has the defined meaning assigned to it in
               Recital A of this Agreement;

               "1995 TERM SHEET" has the defined meaning assigned to it in
               Recital C of this Agreement;

               "OBLIGORS" means Gerdau Steel, the Borrowers, MRM Holdings,
               NSULC, Finco, Gerdau S.A., Gerdau USA, Porter, the Gerdau Canada
               Subgroup Interim Holding Company, the Intermediate Holding
               Company, the Gerdau Canada Subgroup Holding Company and any other
               Person that guarantees payment of the Loan Obligations, and
               "OBLIGOR" means any of them;

               "ORIGINAL AMENDED AND RESTATED LOAN AGREEMENT" has the defined
               meaning assigned to it in Recital D of this Agreement;

               "OUTSTANDING AMOUNT" when used in relation to any outstanding
               Advance at any time means (i) its aggregate face amount if it is
               an issue of Bankers' Acceptances, (ii) the maximum amount
               remaining available to be drawn under it if it is a Standby
               Credit denominated in Canadian dollars, (iii) the Canadian Dollar
               Value in Canadian dollars of the maximum amount remaining
               available to be drawn under it if it is a Standby Credit
               denominated in any Currency other than Canadian dollars, (iv) its
               outstanding principal balance if it is a Prime Rate Loan and (v)
               the Canadian Dollar Value in Canadian dollars of its outstanding
               principal balance if it is a LIBOR Loan or a Base Rate Loan; and
               when used in relation to a Lender's share in any outstanding
               Advance at any time it means such Lender's Rateable Share of the
               Outstanding Amount of such Advance;

               "PARTICIPANT" has the defined meaning assigned to it in Section
               14.5.3;

               "PERMITS" means authorizations, exemptions, permits, licences,
               approvals, franchises, no-action letters, rulings, filings and
               registrations;

               "PERMITTED LIENS" means, in relation to any Gerdau S.A. Group
               Member, the following:

<PAGE>
                                     - 33 -


               (a)  liens in respect of vacation pay, worker's compensation,
                    unemployment insurance, source deductions, unremitted sales
                    or goods and services taxes or similar statutory
                    obligations, but only if the obligations secured by such
                    liens are not overdue;

               (b)  liens for assessments or governmental charges or levies not
                    at the time overdue or, if overdue, the validity or amount
                    of which is being contested in good faith by appropriate
                    proceedings and in respect of which adequate steps have been
                    taken in the opinion of the Majority Lenders (which may
                    include cash being paid to or pledged with the relevant
                    Governmental Body) to prevent penalties, interest and
                    enforcement proceedings and adequate reserves in accordance
                    with GAAP have been recorded on the consolidated balance
                    sheet of Gerdau Steel;

               (c)  rights reserved to or vested in any governmental body by the
                    terms of any lease, licence, franchise, grant or permit, or
                    by any statutory provision, to terminate the same, to take
                    action which results in an expropriation, to designate a
                    purchaser of any property or to require annual or other
                    payments as a condition to the continuance thereof;

               (d)  construction, mechanics', carriers', warehousemen's and
                    materialmen's liens and liens in respect of vacation pay,
                    workers' compensation, unemployment insurance or similar
                    statutory obligations, provided the obligations secured by
                    such liens are not yet due and payable and, in the case of
                    construction liens, which have not yet been filed or for
                    which such Gerdau S.A. Group Member has not received written
                    notice of a lien;

               (e)  liens arising from court or arbitral proceedings, provided
                    that the claims secured thereby are being contested in good
                    faith by such Gerdau S.A. Group Member, execution thereon
                    has been stayed and continues to be stayed and such liens do
                    not, in the aggregate, materially detract from the value of
                    such Gerdau S.A. Group Member's property in the aggregate or
                    materially impair the use thereof in its Business;

               (f)  good faith deposits made in the ordinary course of business
                    to secure the performance of bids, tenders, contracts (other
                    than contracts of Indebtedness), leases, surety, customs,
                    performance bonds (relating to obligations that do not
                    constitute Indebtedness) and other similar obligations;

               (g)  deposits to secure public or statutory obligations or in
                    connection with any matter giving rise to a lien described
                    in (d) above;

               (h)  deposits of cash securities in connection with any appeal,
                    review or contestation of any security or lien, or any
                    matter giving rise to any security or lien, described in (c)
                    or (e) above;


<PAGE>
                                     - 34 -


               (i)  zoning restrictions, easements, rights of way, leases or
                    other similar encumbrances or privileges in respect of real
                    property which in the aggregate do not materially impair the
                    use of such property by such Gerdau S.A. Group Member in the
                    operation of its Business;

               (j)  Purchase Money Mortgages securing up to Cdn.$10,000,000, or
                    the Equivalent Amount in foreign currency, of Indebtedness
                    in the aggregate for the entire Gerdau Canada Group
                    outstanding at any time;

               (k)  security given by such Gerdau S.A. Group Member to a public
                    utility or any governmental body, when required by such
                    utility or governmental body in connection with the
                    operations of such Gerdau S.A. Group Member in the ordinary
                    course of its Business;

               (l)  the reservation in any original grants from the Crown or
                    other Governmental Body of any land or interest therein and
                    statutory exceptions to title;

               (m)  defects or irregularities of title to real property which
                    are of a minor nature and which will not in the aggregate
                    materially impair the value of the real property of such
                    Gerdau S.A. Group Member or interfere in any material
                    respect with the use of such real property for the purposes
                    for which it is held;

               (n)  the reversionary interests of landlords under leases of real
                    property that are not capital leases with a Gerdau S.A.
                    Group Member as tenant;

               (o)  the tenancy rights of tenants under leases of real property
                    with a Gerdau S.A. Group Member as landlord;

               (p)  the interests (including security interests in the personal
                    property leased, any proceeds thereof and any insurance
                    proceeds in respect thereof) of lessors under operating
                    leases of personal property which do not constitute
                    Indebtedness of a Gerdau S.A. Group Member;

               (q)  any security or lien, other than a construction lien,
                    payment of which has been provided for by deposit with the
                    Agent of an amount in cash, or the obtaining of a surety
                    bond or standby credit satisfactory to the Agent, sufficient
                    in either case to pay or discharge such security or lien or
                    upon other terms satisfactory to the Agent;

               (r)  any Lien granted to TD or the Agent in connection with the
                    Security;

               (s)  any other lien which the Agent approves in writing as a
                    Permitted Lien; and

               (t)  any Lien granted by a Gerdau S.A. Group Member to an Obligor
                    in respect of Indebtedness owing by such Gerdau S.A. Group
                    Member to
<PAGE>
                                     - 35 -


                    such Obligor provided that such Indebtedness and Lien is
                    subject to a first ranking perfected Lien in favour of the
                    Lenders pursuant to such documentation as the Agent may
                    require;

               "PERSON" means any individual, partnership, limited partnership,
               joint venture, syndicate, sole proprietorship, limited or
               unlimited liability company, corporation or other body corporate
               with or without share capital, unincorporated association, trust,
               estate, trustee, executor, administrator or other legal personal
               representative or Governmental Body;

               "PORTER" means Porter Bros. Corporation, a corporation
               incorporated pursuant to the laws of North Dakota as at the date
               hereof, and any successor of it, as the context requires;

               "PORTER GUARANTEE" means the guarantee of MRM's Loan Obligations
               to each Lender initially given by Porter in favour of the Agent,
               dated June 27, 1995, as amended September 26, 1995, as amended
               and confirmed by amendment and confirmation of guarantee dated as
               of November 8, 1996 between Porter and the Agent;

               "PREFERRED SHARES" means Capital Stock of a specified Person that
               may be redeemed on or before the Due Date of either Credit
               Facility or that are retractable at the option of the holder at
               any time on or before either such Due Date;

               "PRE-1999 BORROWERS" has the defined meaning assigned in Recital
               N of this Agreement;

               "PRIME RATE" means the rate determined by the Agent (rounded up
               to two decimal places) to be the greater of (i) the annual rate
               of interest (expressed as a percentage per annum on the basis of
               a 365 or 366 day year, as applicable) established by the Swing
               Line Lender from time to time as the reference rate of interest
               for determination of interest rates that the Swing Line Lender
               charges to customers of varying degrees of creditworthiness in
               Canada for Canadian dollar loans made by it in Canada and (ii)
               the sum of (A) the yearly rate of interest to which the one month
               CDOR Rate is equivalent plus (B) 1.00%. On request, the Agent
               shall give notice to the Borrowers of the Prime Rate from time to
               time and such notice shall be conclusive and binding on the
               parties hereto for all purposes absent manifest error;

               "PRIME RATE LOAN" means an Advance made by way of loan which
               bears interest based upon the Prime Rate;

               "PRIOR BORROWER" has the defined meaning assigned to it in
               Recital I of this Agreement;

               "PRIOR LENDERS" has the defined meaning assigned to it in the
               Recital I of this Agreement;


<PAGE>
                                     - 36 -


               "PURCHASE MONEY MORTGAGE" means any Lien created, issued or
               assumed by any Gerdau Canada Group Member to secure Indebtedness
               assumed by such Gerdau Canada Group Member as part of or issued
               or incurred to provide funds to pay the purchase price (including
               installation cost) of, any real or personal property that is
               limited to the property so acquired and is created, issued or
               assumed substantially concurrently with the acquisition of such
               property (or in connection with the refinancing of an existing
               Purchase Money Mortgage, if the amount secured has not increased
               and the Lien continues to be limited to such property);

               "RATEABLE SHARE" of any Lender means:

               (a)  in relation to any outstanding Advance, the proportion borne
                    by such Lender's share of the Advance to the full amount of
                    such Advance;

               (b)  in relation to the Revolver Facility, the proportion of such
                    Lender's Revolver Commitment to the Total Revolver
                    Commitment;

               (c)  in relation to the Term Facility, the proportion of such
                    Lender's Term Commitment to the Total Term Commitment; and

               (d)  in relation to any other matter, the proportion borne by (A)
                    the sum of (1) such Lender's Term Commitment plus (2) such
                    Lender's Revolver Commitment divided by (B) the sum of (1)
                    the Total Term Commitment plus (2) the Total Revolver
                    Commitment;

               "REAL ESTATE" means, in relation to any Person, all real property
               at any time owned, leased, managed, controlled or operated by the
               Person, including the Gerdau Canada Group Facilities and Third
               Party Facilities and appurtenances comprising or used in
               connection therewith, and any item or part thereof. For greater
               certainty, Real Estate does not include any Real Estate of any
               Co-Steel Group Member;

               "REAL PROPERTY" means the real property owned by Courtice more
               particularly described in Schedule J and the real property owned
               by MRM and more particularly described in Schedule K;

               "RECEIVABLES BORROWING BASE" at any time means an amount equal to
               80% of the face amount of all Eligible Receivables. In
               determining the Receivables Borrowing Base, receivables
               denominated in foreign currency will be calculated at their
               Equivalent Amount in Canadian Dollars at the date of
               determination and any receivable may be excluded in accordance
               with Section 2.1.4;

               "REFERENCE LENDER" means TD acting in its capacity as reference
               lender under this Agreement, or (as the context requires) any
               replacement of such reference lender appointed pursuant to the
               provisions of Section 13.15.2;


<PAGE>
                                     - 37 -


               "REGISTRATION" means any notice to or filing, recording or
               registration with any Governmental Body having jurisdiction with
               respect to any specified Person, transaction or event, or any of
               such Person's Business Affairs;

               "REGULATION D" means Regulation D of the Board of Governors of
               the U.S. Federal Reserve System as from time to time in effect
               and any successor thereto or other regulation or official
               interpretation of said Board of Governors relating to reserve
               requirements applicable to member banks of the U.S. Federal
               Reserve System;

               "REGULATION U" means Regulation U of the Board of Governors of
               the U.S. Federal Reserve System as from time to time in effect
               and any successor or other regulation or official interpretation
               of said Board of Governors relating to the extension of credit by
               banks for the purpose of purchasing or carrying margin stocks
               applicable to member banks of the U.S. Federal Reserve System;

               "RELEVANT BORROWER" (i) in relation to any Borrowing, other than
               the portion of the Borrowing referred to in (ii) below, means the
               Borrower that delivered the Borrowing Notice for such Borrowing
               to the Agent and to whom such Borrowing has been or is to be made
               (as the context requires) by the Lenders pursuant to this
               Agreement and (ii) and in relation to the U.S.$50,000,000 portion
               of the U.S.$91,743,119.26 Base Rate Loan owing by MRM which was
               assumed by USP, means each of USP and MRM;

               "REORGANIZATION TRANSACTIONS" means the Co-Steel Combination
               Transactions, the Debt Reorganization Transactions and the
               AmeriSteel Merger Transactions;

               "REPAYMENT NOTICE" means a notice in the form of or to
               substantially similar effect as Schedule M, given to the Agent by
               the Relevant Borrower pursuant to any relevant provision of this
               Agreement;

               "REQUIRED LENDERS" means the Majority Lenders or all Lenders (as
               the context requires);

               "REVOLVER AMOUNT" means Cdn.$75,000,000, as such amount may be
               reduced from time to time pursuant to the provisions of this
               Agreement;

               "REVOLVER COMMITMENT" of any Lender means the proportion of the
               Revolver Facility set forth opposite the Lenders' name in
               Schedule A (as amended and replaced from time to time in
               accordance with Section 14.5.5) which such Lender has severally
               agreed to make available to the Borrowers pursuant to this
               Agreement, and "TOTAL REVOLVER COMMITMENTS" of Lenders means the
               total sum of them for such Lenders;

               "REVOLVER FACILITY" means the revolving credit facility made
               available to the Corporate Borrowers pursuant to Article 2;


<PAGE>
                                     - 38 -


               "REVOLVER FACILITY DUE DATE" in respect of any Lender means
               September 22, 2003 or any extension of such date made pursuant to
               Section 2.6 provided that, if any such day is not a Banking Day,
               the Revolver Facility Due Date shall be the preceding Banking
               Day;

               "ROLLOVER" means the continuation of a LIBOR Loan (or any portion
               thereof) for a succeeding Interest Period, or a new issue of
               Bankers' Acceptances on the Maturity Date of a maturing issue of
               Bankers' Acceptances, in accordance with the provisions hereof;

               "ROLLOVER DATE" means a Banking Day on which a Rollover of all or
               a portion of an Advance is made;

               "ROLLOVER NOTICE" means a notice substantially in the form of
               Schedule D given to the Agent in accordance with the terms
               hereof;

               "S&P" means Standard and Poor's Ratings Services, a division of
               The McGraw Hill Companies, Inc.;

               "SALES TAXES" means sales, transfer, turnover or value added
               taxes of any nature or kind, including Canadian goods and
               services taxes and state and provincial sales taxes;

               "SECOND SYNDICATED AMENDED AND RESTATED LOAN AGREEMENT" has the
               defined meaning assigned to it in Recital I of this Agreement;

               "SECURITY" means the Liens and guarantees held from time to time
               by the Syndicate securing or intended to secure the payment or
               performance of the Loan Obligations (including any guarantee
               thereof) pursuant to the Security Documents, including the
               security constituted by the Existing Security;

               "SECURITY CO-ORDINATION AGREEMENT" means the amended and restated
               security co-ordination agreement initially made as of December
               23, 1999 among Gerdau Steel, Courtice, MRM and USP as borrowers
               and Gerdau Steel, Courtice, MRM, USP, MRM Holdings, Porter,
               Gerdau USA, Gerdau S.A., FLS, NSULC and Finco as guarantors and
               The Toronto-Dominion Bank as administration agent;

               "SECURITY DOCUMENTS" at any time means the agreements, documents
               and instruments listed in Schedule L and each additional
               agreement, document and instrument delivered to or for the
               benefit of the Syndicate at or before such time to secure or
               guarantee, directly or indirectly, the payment or performance of
               any of the Loan Obligations;

               "SENIOR OFFICER" of any Person means the Chief Executive Officer,
               the Chief Operating Officer, the President, the Chief Financial
               Officer, the Treasurer, a Senior Vice President, a Vice
               President, the Secretary or the Controller of such Person, or any
               other Person who performs the function normally expected of an
               individual holding any of the aforesaid offices;


<PAGE>
                                     - 39 -


               "SOLVENT" means, when used with respect to a Person, that (i) the
               fair saleable value of the assets of such Person is in excess of
               the total amount of the present value of its liabilities
               (including for purposes of this definition all liabilities
               (including loss reserves as determined by such Person), whether
               or not reflected on a balance sheet prepared in accordance with
               GAAP and whether direct or indirect, fixed or contingent, secured
               or unsecured, disputed or undisputed), (ii) such Person is able
               to pay its debts or obligations in the ordinary course as they
               mature and (iii) such Person does not have unreasonably small
               capital to carry out its business as conducted and as proposed to
               be conducted; and "SOLVENCY" shall have a correlative meaning;

               "SPOT RATE" as at any date with respect to the conversion of an
               amount in one currency (the "original currency") to another
               currency (the "other currency") means the Bank of Canada noon
               rate of exchange on the immediately preceding date for the
               purchase of such original currency with such other currency (and
               if neither currency is Canadian Dollars, purchasing Canadian
               Dollars first with such other currency and using the Canadian
               Dollars purchased to purchase the original currency);

               "STANDBY CREDIT" means a documentary credit, letter of guarantee
               or standby letter of credit, as the context requires;

               "STANDBY CREDIT DISBURSEMENT" means any amount paid by the
               Issuing Bank under or otherwise in respect of any Standby Credit,
               including all amounts which the Relevant Borrower is obligated to
               indemnify the Issuing Bank against pursuant to Section 7.6.4.2;

               "STATUS QUO AGREEMENT" means the status quo agreement of even
               date herewith among, inter alia, Gerdau Steel, Courtice, MRM
               Holdings, Gerdau USA, Gerdau Canada Subgroup Holding Company,
               Co-Steel, the Co-Steel Security Agents, the Agent and the
               Intermediate Holding Company;

               "SUBORDINATED DEBT" means Debt of any Gerdau S.A. Group Member
               (including the Kyoei Steel Balance of Sale Notes, any Kyoei Steel
               Balance of Sale Notes Refinancing Loans, any Gerdau S.A. Advances
               and any loans made pursuant to Section 11.3.1.5.6), the payment
               and performance of which have been postponed and subordinated to
               the payment of the Loan Obligations pursuant to a postponement
               and subordination agreement with the Syndicate in form and
               substance satisfactory to the Agent (acting on instructions of
               the Majority Lenders acting reasonably), save only as expressly
               otherwise provided in this Agreement;

               "SUBSIDIARY" of any Person means any Person (i) which is
               Controlled by such first Person or (ii) a majority of whose
               Voting Capital Stock, on a fully diluted basis, is owned
               beneficially or Controlled by such first Person;

               "SUBSTANTIAL PORTION" means, with respect to the assets of any
               Gerdau S.A. Group Member, assets which (i) represents more than
               10% of the consolidated


<PAGE>
                                     - 40 -


               assets of the Gerdau S.A. Group Member as would be shown in the
               consolidated financial statements of the Gerdau S.A. Group Member
               (or, in the case of Gerdau Steel, the financial statements of
               Gerdau Steel prepared on a Combined Basis) as at the beginning of
               the twelve-month period ending with the month in which such
               determination is made, or (ii) are responsible for more than 10%
               of the consolidated net sales or of the consolidated net income
               of the Gerdau S.A. Group Member (or, in the case of Gerdau Steel,
               the financial statements of Gerdau Steel prepared on a Combined
               Basis) as reflected in the financial statements referred to in
               clause (i) above;

               "SUPPLEMENTAL DEBENTURE PLEDGE AGREEMENT" means the pledge
               agreement relating to the Courtice Supplemental Debenture dated
               June 21, 1990 between Courtice and TD;

               "SWING LINE" means the portion of the Revolver Facility made
               available to the Corporate Borrowers pursuant to Section 2.9;

               "SWING LINE ADVANCE" means an Advance made pursuant to the Swing
               Line;

               "SWING LINE AMOUNT" means Cdn.$10,000,000 as such amount may be
               reduced from time to time pursuant to the provisions of this
               Agreement;

               "SWING LINE COMMITMENT" means the portion of the Swing Line
               Lender's Revolver Commitment which the Swing Line Lender has
               agreed to make available to the Corporate Borrowers pursuant to
               the Swing Line in the Swing Line Amount;

               "SWING LINE LENDER" means TD acting in its capacity as the swing
               line lender or (as the context requires) any replacement of such
               swing line lender that is a Lender and is appointed pursuant to
               Section 13.15.3;

               "SWING LINE LOAN" means a Loan owing to the Swing Line Lender
               pursuant to Section 2.9 under the Swing Line;

               "SYNDICATE" means the Agent and the Lenders, or (as the context
               so admits) each and any of them;

               "SYNDICATION OFFER" has the defined meaning assigned to it in
               Recital G of this Agreement;

               "TANGIBLE NET WORTH" means the sum of (1) the paid up share
               capital of Gerdau Steel plus (2) the retained earnings of Gerdau
               Steel plus (3) the amount of any deferred translation gain of
               Gerdau Steel plus (4) the principal amount of all Subordinated
               Debt of Gerdau Steel minus (5) any retained earnings deficit of
               Gerdau Steel minus (6) the amount of any deferred translation
               loss of Gerdau Steel minus (7) the amount of all intangibles of
               Gerdau Steel minus (8) the amount of all deferred charges
               (including deferred income taxes) of Gerdau Steel minus (9) the
               amount of all Indebtedness owing to any Gerdau Canada Group


<PAGE>
                                     - 41 -


               Member by an Affiliate minus (10) all Non-Qualifying Investments;
               as each such amount (to the extent applicable) would be expressed
               on a balance sheet of Gerdau Steel prepared on a Combined Basis;

               "TAXES" means all taxes of any kind or nature whatsoever
               including federal large corporation taxes, provincial capital
               taxes, realty taxes (including utility charges which are
               collectible like realty taxes), business taxes, property transfer
               taxes, Income Taxes, Sales Taxes, levies, stamp taxes, royalties,
               duties, and all fees, deductions, compulsory loans and
               withholdings imposed, levied, collected, withheld or assessed as
               of September 27, 1999 or at any time thereafter, by any
               Governmental Body of or within Canada, or any other jurisdiction
               whatsoever having power to tax, together with penalties, fines,
               additions to tax and interest thereon;

               "TD" means The Toronto-Dominion Bank, or any successor of it, as
               the context requires;

               "TELLIB" means Tellib Trade Corp. Ltd., a company incorporated
               under the laws of the British Virgin Islands as at the date
               hereof, and any successor of it, as the context requires;

               "TELLIB ADVANCE" has the defined meaning assigned to it in
               Recital E of this Agreement;

               "TERM COMMITMENT" of any Lender means the proportion of the Term
               Facility set forth opposite the Lender's name in Schedule A (as
               amended and replaced from time to time pursuant to Section
               14.5.5) which such Lender has severally agreed to make available
               to the Borrowers pursuant to this Agreement, and "TOTAL TERM
               COMMITMENTS" of Lenders means the total sum of them for such
               Lenders;

               "TERM DRAWDOWN DATE" means September 27, 1999;

               "TERM FACILITY" means the term credit facility made available to
               the Borrowers pursuant to Article 3;

               "THIRD PARTY FACILITIES" means all plants, mills and other
               facilities (including all real property on which such facilities
               are situated), containers, vehicles, rail cars, motor vessels,
               trailers, storage or holding tanks and other machinery and
               equipment owned, leased, managed, controlled or operated by any
               agent of any Gerdau Canada Group Member or any third party
               contracting with any Gerdau Canada Group Member in which
               inventory, Hazardous Materials or Waste owned, managed or
               controlled by any Gerdau Canada Group Member is manufactured,
               processed, generated, received, stored, treated, transported,
               otherwise handled or disposed of;

               "THIRD SYNDICATED AMENDED AND RESTATED LOAN AGREEMENT" has the
               defined meaning assigned to it in Recital M of this Agreement;


<PAGE>
                                     - 42 -


               "TOTAL COMMITMENT" means the sum of the Total Term Commitment and
               the Total Revolver Commitment;

               "TOTAL DEBT/EBITDA RATIO" for any Fiscal Quarter or period of
               successive Fiscal Quarters ending after September 27, 1999 means
               the ratio of (i) the sum of (A) the total amount of all Debt of
               Gerdau Steel as at the end of such Fiscal Quarter or period of
               successive Fiscal Quarters less (B) all Subordinated Debt of
               Gerdau Steel as at the end of such Fiscal Quarter or period of
               successive Fiscal Quarters divided by (ii) EBITDA for such Fiscal
               Quarter or period of successive Fiscal Quarters determined on a
               Combined Basis;

               "TRANSFEREE" has the defined meaning assigned in Section 14.5.4;

               "TYPE" means, with respect to any Advance, other than a Standby
               Credit, its nature as a Prime Rate Loan, LIBOR Loan, Base Rate
               Loan or an issue of Bankers' Acceptances;

               "UNITED STATES" means the continental United States of America,
               Alaska and Hawaii;

               "U.S. DOLLAR EQUIVALENT" means, in relation to any particular
               amount of money in Canadian dollars at any particular time, the
               value thereof at such time in U.S. Dollars determined at the Spot
               Rate;

               "U.S. DOLLARS" or "U.S. $" means lawful money of the United
               States of America;

               "USP" means GUSAP Partners, a Delaware general partnership as at
               the date hereof, or any successor of it, as the context requires;

               "VOTING CAPITAL STOCK" means Capital Stock of a Person which
               carries voting rights or the right to Control such Person under
               any circumstances, provided that Capital Stock which carries the
               right to vote or Control conditionally upon the happening of an
               event shall not be considered Voting Capital Stock until the
               occurrence of such event and then only during the continuance of
               such event;

               "WASTE" means ashes, garbage and refuse and includes domestic
               waste, industrial waste, municipal refuse or such other wastes as
               are designated as such under any Environmental Law;

               "WHOLLY-OWNED SUBSIDIARY" of a Person means any Subsidiary, all
               of the outstanding Capital Stock of which, shall at the time be
               owned or Controlled, directly or indirectly, by such Person or
               one or more Wholly-Owned Subsidiaries of such Person, or by such
               Person and one or more Wholly-Owned Subsidiaries of such Person;
               and

               "$" means Cdn.$ or U.S.$, as the context requires.


<PAGE>
                                     - 43 -


1.2            ADDITIONAL REFERENCES

               To the extent the context so admits, any reference in this
               Agreement to:

               "AFFILIATE" shall be construed in the same manner it is used in
               the Business Corporations Act (Ontario);

               "ARM'S LENGTH" shall be construed in the same manner it is used
               in the Income Tax Act (Canada);

               "DISPOSE" shall be construed as lease, sell, transfer, license or
               otherwise dispose of any property, or the commercial benefits of
               use or ownership of (including the right to profit or gain from)
               any property, whether in a single transaction or in a series of
               related transactions (other than the payment of money), and
               "DISPOSED", "DISPOSITION" and "DISPOSAL" shall be construed in
               like manner;

               "FAIR MARKET VALUE" shall be construed as the highest price,
               expressed in terms of money and moneys worth, available in an
               open and unrestricted market between informed and prudent
               parties, each acting at arm's length, where neither party is
               under any compulsion to act;

               "GUARANTEE" shall be construed as any guarantee, indemnity,
               letter of comfort or other assurance made in respect of any
               Indebtedness, other obligation or financial condition of another,
               including (i) any purchase or repurchase agreement, (ii) any
               obligation to supply funds or services or invest in such other,
               or (iii) any keep-well, take-or-pay, through-put or other
               arrangement having the effect of assuring or holding harmless
               another against loss, or maintaining another's solvency or
               financial viability; but excluding endorsements on notes, bills
               and cheques presented to financial institutions for collection or
               deposit in the ordinary course of business, and "GUARANTEED" and
               "GUARANTEES" shall be construed in like manner;

               "INCLUDE", "INCLUDES" and "INCLUDING" shall be construed to be
               followed by the statement "without limitation" and none of such
               terms shall be construed to limit any word or statement which it
               follows to the specific or similar items or matters immediately
               following it;

               "LOSSES AND EXPENSES" shall be construed as losses, costs,
               expenses, damages, penalties, causes of action, actions,
               judgments, suits, proceedings, claims, claims over, demands and
               liabilities, including any applicable court costs and legal fees
               and disbursements on a substantial indemnity scale, and "LOSS AND
               EXPENSE" shall be construed in like manner;

               "OBLIGATIONS" shall be construed as indebtedness, obligations,
               responsibilities, duties and liabilities (actual or contingent,
               direct or indirect, matured or not, now existing or arising
               hereafter), whether arising by contract or statute, at law, in
               equity or otherwise, and "obliged", "OBLIGATION" and "OBLIGATED"
               shall be construed in like manner; and


<PAGE>
                                     - 44 -


               "RATE OF EXCHANGE" shall be construed so as to include any
               premiums or costs payable in connection with any currency
               conversion being effected;

               "RIGHTS" shall be construed as rights, title, benefits,
               interests, powers, authorities, discretions, privileges,
               immunities and remedies (actual or contingent, direct or
               indirect, matured or not, now existing or arising hereafter),
               whether arising by contract or statute, at law, in equity or
               otherwise, and "RIGHT" shall be construed in like manner;

               "SUCCESSOR" of any Person (the "RELEVANT PARTY") shall be
               construed so as to include (i) any amalgamated or other
               corporation of which the relevant party or any of its successors
               is one of the amalgamating or merging corporations, (ii) any
               Person to whom all or substantially all of the Business Assets of
               the relevant party are transferred, (iii) any corporation
               resulting from any court approved arrangement of which the
               relevant party or any of its successors is party, (iv) any
               corporation resulting from the continuance of the relevant party
               or any successor of it under the laws of another jurisdiction of
               incorporation and (v) any successor (determined as aforesaid or
               in any similar or comparable procedure under the laws of any
               other jurisdiction) of any Person referred to in clause (i),
               (ii), (iii) or (iv).

1.3            GENDER AND NUMBER

               In this Agreement, words importing the singular (including
defined terms) include the plural and vice versa (the necessary changes being
made to fit the context) and words importing gender include all genders.

1.4            INTEREST ACT

               For purposes of the Interest Act (Canada): (i) where in any Loan
Document a rate of interest is calculated on a basis other than a full calendar
year, the yearly rate of interest to which that rate is equivalent may be
determined by multiplying such rate by a fraction, the numerator of which is the
actual number of days in the relevant year and the denominator of which is the
number of days comprising such other basis; (ii) the annual rate of interest to
which each Acceptance Fee, CDOR BA Rate or BA Reference Rate or other rate of
interest calculated with reference to bankers' acceptances referred to in this
Agreement is equivalent is such Acceptance Fee, CDOR BA Rate or BA Reference
Rate or other rate multiplied by a fraction, the numerator of which is the
actual number of days in the relevant year and the denominator of which is 365
and (iii) the annual rate of interest to which each LIBO Rate or Federal Funds
Rate referred to in this Agreement is equivalent, is such LIBO Rate or Federal
Funds Rate multiplied by a fraction, the numerator of which is the actual number
of days in the relevant year and the denominator of which is 360.

1.5            INVALIDITY, ETC.

               Each of the provisions contained in any Loan Document is distinct
and severable and a declaration of invalidity, illegality or unenforceability of
any such provision or part thereof by a court of competent jurisdiction shall
not affect the validity or enforceability of any other provision of such Loan
Document or of any other Loan Document.

<PAGE>
                                     - 45 -


1.6            HEADINGS, ETC.

               The division of this Agreement into articles and sections, the
inclusion of a table of contents and the insertion of headings are for
convenience of reference only and shall not affect the construction or
interpretation of this Agreement.

1.7            GOVERNING LAW

               This Agreement shall be governed by and construed in accordance
with the laws of the Province of Ontario and the laws of Canada applicable
therein.

1.8            ATTORNMENT

               Each of Gerdau Steel and the Borrowers irrevocably submits and
attorns to the non-exclusive jurisdiction of the courts of the Provinces of
Ontario, Manitoba and Saskatchewan for all matters arising out of or in
connection with any of this Agreement and the other Loan Documents. Each of
Gerdau Steel and the Borrowers irrevocably waives (i) any objection which it may
have at any time to the laying of venue of any suit, action or proceeding
arising out of or relating to any Loan Document brought in any such court
("LOCAL PROCEEDING"), (ii) any claim that any Local Proceeding has been brought
in an inconvenient forum and (iii) the right to object, with respect to any
Local Proceeding that such court does not have jurisdiction over such party.
Nothing in any Loan Document will be interpreted or applied to preclude any
Lender from bringing a suit, action or proceeding in respect of any Loan
Document in any other jurisdiction. Each of Gerdau Steel and the Borrowers
irrevocably designates and appoints each of Courtice and MRM as its agent
("PROCESS AGENT") to accept and acknowledge on its behalf any and all process
which may be served in connection any Local Proceeding, such service being
conclusively acknowledged by it to be effective and binding service on it in
every respect whether or not it shall be doing or shall have at any time done
business in Ontario, Manitoba or Saskatchewan. Each of Gerdau Steel and the
Borrowers conclusively acknowledges and agrees that service of process in any
Local Proceeding by leaving a copy of such process with an officer, director or
agent of the Process Agent or with any person who appears to be in control or
management of any place of business of the Process Agent shall be good and
sufficient personal service of such process on it. Each of Gerdau Steel and the
Borrowers further irrevocably consents to the service of process out of the
Ontario, Manitoba or Saskatchewan courts by mailing a copy thereof, by
registered mail, postage prepaid to it at the address, or by sending a telecopy
thereof to it at the telecopier number, for the time being prescribed by Section
14.4. Each of Gerdau Steel and the Borrowers confirms to the Syndicate that it
has accepted its appointment to act as process agent on behalf of each other
Gerdau S.A. Group Member contained in any Loan Document to which each such other
Gerdau S.A. Group Member is party which may be served in connection with any
Local Proceeding arising out of or relating to any such other Loan Document. So
long as any Loan Obligations remain payable or any Borrower may be or become
entitled to any Drawdown, each of Gerdau Steel and the Borrowers covenants and
agrees to maintain each such appointment as such process agent.


<PAGE>
                                     - 46 -


1.9            REFERENCES

               Except as otherwise specifically provided, reference in this
Agreement to any contract, agreement or any other instrument shall be deemed to
include references to the same as amended, supplemented, restated, amended and
restated or novated from time to time provided that, in the case of any Loan
Document, the Agent or Required Lenders party thereto have given their written
consent to each such amendment, supplement, restatement, amendment and
restatement or novation. Reference in this Agreement to any enactment, including
any statute, law, by-law, regulation, ordinance, code or order, shall be deemed
to include references to such enactment as re-enacted, amended or extended from
time to time.

1.10           CURRENCY

               Except as otherwise specifically provided herein, all monetary
amounts in this Agreement are stated in Canadian dollars.

1.11           THIS AGREEMENT TO GOVERN

               If there is any inconsistency between the terms of this Agreement
and the terms of any other Loan Document, the provisions hereof shall govern and
apply to the extent of the inconsistency. Notwithstanding the foregoing, this
Section 1.11 shall not apply to limit, restrict, prejudice or otherwise affect
or impair in any way the rights of any of the Syndicate under the terms of any
of the Security after the Liens thereby constituted shall have become
enforceable in accordance with the terms thereof. For greater certainty,
notwithstanding that any other Loan Document may provide for payment on demand,
the Loan Obligations shall only be payable as stipulated herein.

1.12           GENERALLY ACCEPTED ACCOUNTING PRINCIPLES

               Except as otherwise specifically provided herein, all accounting
terms shall be applied and construed in accordance with generally accepted
accounting principles consistently applied. References herein to "GENERALLY
ACCEPTED ACCOUNTING PRINCIPLES" and "GAAP" mean, for all principles stated from
time to time in the Handbook of the Canadian Institute of Chartered Accountants,
such principles so stated; save and except that, for the purposes of all
computations required to be made pursuant to this Agreement to determine each of
the financial terms, tests or ratios relative to Gerdau Steel, including those
contained in Section 11.1.1.13 including each defined term and component item
taken into account in determining such financial terms, tests or ratios, shall
be computed on a Combined Basis.

1.13           COMPUTATION OF TIME PERIODS

               Except as otherwise specifically provided herein, in the
computation of a period of time from a specified date to a later specified date,
the word "FROM" means "FROM AND INCLUDING" and the words "TO" and "UNTIL" each
mean "TO BUT EXCLUDING".


<PAGE>
                                     - 47 -


1.14           ACTIONS ON DAYS OTHER THAN BANKING DAYS

               Except as otherwise specifically provided herein, where any
payment is required to be made or any other action is required to be taken on a
particular day and such day is not a Banking Day and, as a result, such payment
cannot be made or action cannot be taken on such day, then this Agreement shall
be deemed to provide that such payment shall be made or such action shall be
taken on the first Banking Day after such day; provided that if such deferral
would cause such payment to be made or such action to be taken during the
following calendar month, such payment shall be made or such action shall be
taken on the next preceding Banking Day. If the payment of any amount is
deferred for any period under this Section 1.14, then such period shall, unless
otherwise provided herein, be included for purposes of the computation of any
interest or fees payable hereunder.

1.15           VERBAL INSTRUCTIONS

               Notwithstanding any other provision herein regarding the delivery
of notices by a Borrower, the Agent shall in its sole discretion be entitled to
act upon the verbal instructions of the Relevant Borrower, or any Person
reasonably believed by the Agent to be a Person authorized by the Relevant
Borrower to give instructions, regarding any request for a Drawdown, Conversion
or Rollover. All such verbal instructions shall be at the risk of the Relevant
Borrower and must be confirmed in writing by the Relevant Borrower forthwith
after the verbal instruction is given. The Agent shall not be responsible for
any error or omission in such instructions or in the performance thereof except
in the case of gross negligence or willful misconduct by the Agent.

                                    ARTICLE 2
                                    FACILITY

2.1            ESTABLISHMENT OF REVOLVER FACILITY

2.1.1          The Lenders severally confirm, on the terms and conditions set
               out herein, the establishment of a revolving credit facility (the
               "REVOLVER FACILITY") in favour of the Corporate Borrowers in the
               amount equal to the lesser of (a) the Borrowing Base or (b) the
               Revolver Amount, to be used by each Corporate Borrower to finance
               in part the indirect acquisition of the Initial Target Shares, as
               well as for other general corporate purposes of the Gerdau Canada
               Group. Each Lender agrees to participate in each Drawdown,
               Conversion and Rollover under the Revolver Facility in accordance
               with its Rateable Share. However, except for temporary excesses
               arising from the Agent's allocation of Bankers' Acceptances
               comprised in any issue of Bankers' Acceptances made in accordance
               with Section 13.20.1, the aggregate Outstanding Amount of a
               Lender's participation in all Advances under the Revolver
               Facility shall not exceed its Revolver Commitment.

2.1.2          The Revolver Facility is available, at the option of a Corporate
               Borrower, by way of: (i) Prime Rate Loans in Canadian dollars;
               (ii) Bankers' Acceptances in Canadian dollars; (iii) Base Rate
               Loans in U.S. Dollars; (iv) LIBOR Loans in U.S.


<PAGE>
                                     - 48 -


               Dollars; and (v) subject to the provisions of Section 7.5.10,
               Standby Credits in Canadian dollars or U.S. Dollars.

2.1.3          At the Effective Time, (i) the Revolver Facility will be treated
               as having been drawn by the Relevant Borrower by way of all
               "Advances" outstanding under the "Revolver Facility" (as each
               such expression is referred to and defined in the Existing Loan
               Agreement) and (ii) each such "Advance" shall be treated as an
               Advance made by the Lenders to the Relevant Borrower under this
               Agreement, of the same Type and tenor, under the Revolver
               Facility. Gerdau Steel shall repay in full to the Lenders all
               "Advances" outstanding to it under the "Revolver Facility" (as
               each such expression is referred to and defined in the Existing
               Loan Agreement) before the Effective Time and shall ensure that
               it has no such "Advances" outstanding at the Effective Time.

2.1.4          Following receipt of a Borrowing Base Report, the Majority
               Lenders may disallow any particular receivable or inventory
               included in the calculation of the Borrowing Base, which in the
               credit judgment of the Majority Lenders, does not qualify as an
               Eligible Receivable or Eligible Inventory and the Borrowing Base
               shall be adjusted accordingly. If the Borrowing Base (whether by
               reason of any such adjustment or otherwise) is less than the
               Outstanding Amount of all Advances under the Revolver Facility,
               the Corporate Borrowers shall immediately pay to the Lenders an
               amount (or the Equivalent Amount in Canadian Dollars) which is
               greater than or equal to such excess to be applied by the Lenders
               in the order stipulated in Section 2.5.2.

2.2            AVAILABILITY AND REVOLVING NATURE OF REVOLVER FACILITY

               During the Availability Period, a Corporate Borrower may borrow,
repay and reborrow Advances under the Revolver Facility on a revolving basis,
subject to the terms and conditions set out herein; provided that Gerdau Steel
shall ensure that the aggregate Outstanding Amount of all Advances under the
Revolver Facility does not exceed the Revolver Amount at any time and the
aggregate Outstanding Amount of all outstanding Standby Credits does not exceed
Cdn.$4,000,000.

2.3            INTEREST AND ACCEPTANCE FEES ON ADVANCES UNDER THE REVOLVER
               FACILITY

               Interest on Prime Rate Loans shall be payable in Canadian dollars
on each Interest Payment Date applicable thereto on the outstanding principal
amount of all Prime Rate Loans made under the Revolver Facility at a rate per
annum equal to the Prime Rate in effect from time to time plus the Applicable
Margin. Acceptance Fees shall be payable in Canadian dollars on the relevant
Borrowing Date based on the face amount of the Bankers' Acceptance issued under
the Revolver Facility at a rate per annum equal to the Applicable Margin.
Interest on Base Rate Loans shall be payable in U.S. Dollars on each Interest
Payment Date applicable thereto on the outstanding principal amount of all Base
Rate Loans made under the Revolver Facility at a rate per annum equal to the
Base Rate plus the Applicable Margin. Interest on LIBOR Loans shall be payable
in U.S. Dollars on each Interest Payment Date applicable thereto on each LIBOR
Loan


<PAGE>
                                     - 49 -


made under the Revolver Facility at a rate per annum equal to the LIBO Rate for
each applicable Interest Period plus the Applicable Margin.

2.4            REPAYMENT UNDER REVOLVER FACILITY

               Subject to Section 12.2, all Advances remaining outstanding under
the Revolver Facility are due and payable on the Due Date of the Revolver
Facility, together with all interest and other amounts accrued and unpaid
thereon.

2.5            MANDATORY REPAYMENT

2.5.1          In the event the Outstanding Amount of all Advances outstanding
               under the Revolver Facility at any time exceeds the lesser of (i)
               the Revolver Amount or (ii) the Borrowing Base, (the "FACILITY
               LIMIT"), the Corporate Borrowers, without the Agent being
               required to make demand therefor, shall forthwith make the
               necessary payments or repayments to the Lenders to reduce the
               Outstanding Amount of the Advances outstanding under the Revolver
               Facility to an amount equal to or less than the Facility Limit.

2.5.2          On the date of each reduction of each Lender's Revolver
               Commitment pursuant to Section 2.8, each Corporate Borrower shall
               repay to such Lender such amount on account of such Lender's
               Rateable Share of Advances made to such Corporate Borrower under
               the Revolver Facility as may be required to ensure that the
               Outstanding Amount of such Lender's Rateable Share of all
               Advances under the Revolver Facility does not exceed its Revolver
               Commitment at that time after giving effect to that reduction.
               Such Lender shall apply any such amount so repaid as follows:

               (a)  first, to repay its Rateable Share of Loans under the
                    Revolver Facility;

               (b)  second, to prepay to the Lender the obligations of each
                    Relevant Borrower under Section 7.5.9 in respect of Bankers'
                    Acceptances issued for such Relevant Borrower's account
                    under the Revolver Facility; and

               (c)  third, to be credited to the Cash Collateral Account and
                    held as cash collateral by the Agent to secure the payment
                    and performance of the Relevant Borrower's obligations under
                    Section 7.6 in respect of outstanding Standby Credits until
                    such Standby Credits expire or are drawn upon, whereupon the
                    amounts so credited will be applied by the Agent to pay such
                    obligations in respect of such drawing or (if not so
                    required by the Majority Lenders), subject to Section 12.2,
                    returned to the Relevant Borrower.

2.6            ANNUAL REVIEW

               Provided that no Event of Default shall have occurred and be
continuing, Gerdau Steel may, by notice in writing to the Agent given no more
than 60 days but no less than 30 days before the then effective Due Date for the
Revolver Facility (the "CURRENT MATURITY DATE"),


<PAGE>
                                     - 50 -


request an extension of the Current Maturity Date by a period of up to 364 days.
Promptly upon receipt of an Extension Request the Agent shall notify each Lender
and shall request each Lender to approve the Extension Request within 30 days.
Each Lender may, within 30 days from the date of receipt of such notice from the
Agent, notify the Agent in writing of its election to extend or not extend the
Current Maturity Date as requested by Gerdau Steel, which election shall be in
the sole and absolute discretion of each Lender. If a Lender agrees to an
extension of the Current Maturity Date requested by Gerdau Steel, the Revolver
Facility Due Date for that Lender shall automatically and without any further
action by any Person be extended as of and from the Current Maturity Date by the
period of extension so requested by Gerdau Steel, except in the circumstances
described below. If, within such 30 days a Lender does not approve in writing
the extension of the Current Maturity Date (a "NON-EXTENDING LENDER"), the
Revolver Facility Due Date shall not be so extended for that Lender, but shall
remain as the Current Maturity Date then in effect for that Lender. Any other
Lender or new Lender selected by the Corporate Borrowers (in consultation with
the Agent) may, subject to Section 14.5, take up the Revolver Commitment of a
Non-Extending Lender effective from the Current Maturity Date. Notwithstanding
the foregoing, if in relation to any extension request less than the Majority
Lenders agree to extend the Revolver Facility Due Date, then the then Current
Maturity Date for all Lenders shall not be extended, but shall remain as the
Revolver Facility Due Date then in effect.

2.7            PREPAYMENT AND CANCELLATION OF REVOLVER FACILITY

2.7.1          Prepayment. Subject to the terms and conditions of this
               Agreement, each Corporate Borrower may from time to time by
               giving not less than three Banking Days express written notice to
               the Agent, prepay Advances (other than Bankers' Acceptances and
               Standby Credits) outstanding under the Revolver Facility, without
               penalty, except that LIBOR Loans may not be prepaid prior to the
               end of their applicable Interest Periods unless that Corporate
               Borrower compensates the Lenders in accordance with Section 8.3.

2.7.2          Cancellation. Gerdau Steel shall have the right at any time and
               from time to time to cancel all or any portion of the Revolver
               Commitment. Such right may only be exercised by Gerdau Steel
               delivering a notice to the Agent specifying the proposed
               effective date of such cancellation (which must be no less than
               30 days thereafter) and the amount of the Total Revolver
               Commitment to be cancelled (which must be in a principal amount
               of Cdn.$5,000,000 or a multiple of Cdn.$1,000,000 in excess
               thereof). The Revolver Commitment shall be permanently reduced on
               the effective date of each such cancellation in the amount so
               cancelled.

2.8            MINIMUM ADVANCE

               Unless the Agent otherwise agrees, an Advance (or any portion
thereof) by way of Prime Rate Loan under the Revolver Facility (other than any
Swing Line Advance) shall be for a minimum principal amount of Cdn.$5,000,000 or
a higher principal amount which is a whole number multiple of Cdn.$1,000,000. An
Advance (or any portion thereof) by way of an issue of Bankers' Acceptances
under the Revolver Facility shall be in a minimum aggregate face amount (subject
to availability) of Cdn.$5,000,000 and in whole number multiples of
Cdn.$1,000,000.


<PAGE>
                                     - 51 -


An Advance (or any portion thereof) by way of Base Rate Loan (other than any
Swing Line Advance) or LIBOR Loan shall be in a minimum principal amount
(subject to availability) of U.S.$5,000,000. Each Advance under the Revolver
Facility (other than any Swing Line Advance) will be made pursuant to a notice
received from a Corporate Borrower complying with the provisions of Section 7.4.

2.9            SWING LINE ADVANCES

2.9.1          Commitment. The Swing Line Lender establishes a committed
               revolving operating credit facility in favour of the Corporate
               Borrowers to finance the day-to-day working capital requirements
               for the Corporate Borrowers and other Gerdau Canada Group Members
               arising in the ordinary course of their operations, as well as
               for other general corporate purposes of the Gerdau Canada Group.
               Each Corporate Borrower shall so apply all amounts borrowed by it
               under the Swing Line Facility.

2.9.2          Overdrafts. Each Advance (other than a Standby Credit) under the
               Swing Line shall be made by the Swing Line Lender on an overdraft
               basis by debiting the Canadian dollar or U.S. Dollar Designated
               Account of the Relevant Borrower. The amount of such overdraft
               from time to time shall be deemed to be a Prime Rate Loan (to the
               extent of the debit balance in the Canadian dollar Designated
               Account) and a Base Rate Loan (to the extent of the debit balance
               in the U.S. Dollar Designated Account). The Corporate Borrowers
               shall ensure that the aggregate Outstanding Amount of all
               outstanding Advances made by the Swing Line Lender under this
               Section 2.9.2 does not exceed the Swing Line Amount at any time.

2.9.3          Standby Credit Disbursements. Upon making any Standby Credit
               Disbursement, the Swing Line Lender will promptly notify the
               Agent and the Relevant Borrower of the Swing Line Loan resulting
               from that payment pursuant to Section 7.6.6.

2.9.4          Relationship to Revolver Commitment. Except as otherwise provided
               in Section 13.26, for the purposes of each other Section of this
               Agreement, the amount of the Revolver Commitment of the Swing
               Line Lender and the Total Revolver Commitment shall be reduced by
               the Swing Line Amount and the Rateable Shares of the Lenders in
               each Borrowing made under the Revolver Facility (excluding the
               Swing Line) shall be adjusted proportionately.

2.9.5          Reduction of Swing Line Amount. If the Revolver Commitment of the
               Swing Line Lender determined in accordance with Section 2.9.4 is
               reduced to nil, each further reduction of the Revolver Commitment
               of the Swing Line Lender determined without regard for Section
               2.9.4 will reduce the Swing Line Amount by the amount of such
               reduction.

2.9.6          Transitional Provision: At the Effective Time, (i) the Swing Line
               will be treated as having been drawn by the Relevant Borrower by
               each outstanding Swing Line Loan and Standby Credit (each as
               referred to and defined in the Existing Loan


<PAGE>
                                     - 52 -


               Agreement), (ii) each such Swing Line Loan shall be treated as a
               Swing Line Advance made by the Swing Line Lender to the Relevant
               Borrower of the same Type and tenor under this Agreement and
               (iii) each such Standby Credit shall be treated as a Standby
               Credit issued by the Issuing Bank under this Agreement.

2.10           ADVANCES

               Any Advance from the Lenders requested by a Corporate Borrower in
accordance with Section 2.8 will, subject to the terms and conditions herein, be
made by the Lenders pursuant to this Section 2.10 and shall be made up of any
combination of any of the following Advances:

2.10.1         by way of Prime Rate Loans, each in a minimum principal amount of
               Cdn.$5,000,000;

2.10.2         by way of Bankers' Acceptances, each issue in a minimum aggregate
               face amount (subject to availability) of Cdn.$5,000,000;

2.10.3         by way of Base Rate Loans, each in a minimum principal amount of
               U.S.$5,000,000; and

2.10.4         by way of LIBOR Loans, each in a minimum principal amount
               (subject to availability) of U.S.$5,000,000.

                                    ARTICLE 3
                                    FACILITY

3.1            ESTABLISHMENT OF TERM FACILITY

3.1.1          The Lenders severally confirm, on the terms and conditions set
               out herein, the establishment of a non-revolving term credit
               facility (the "TERM FACILITY") in favour of the Borrowers in the
               amount of the Maximum Term Amount which shall be used by each
               Corporate Borrower to finance, directly or indirectly, in part
               the acquisition of the Initial Target Shares. Each Lender agrees
               to participate in each Drawdown, Conversion and Rollover under
               the Term Facility in accordance with its Rateable Share. However,
               except for temporary excesses arising from the Agent's allocation
               of Bankers' Acceptances comprised in any issue of Bankers'
               Acceptances made in accordance with Section 13.20.1, the
               aggregate Outstanding Amount of a Lender's participation in all
               Advances under the Term Facility shall not exceed its Term
               Commitment.

3.1.2          The Term Facility is available, at the option of a Borrower, by
               way of (i) Prime Rate Loans in Canadian dollars, (ii) Bankers'
               Acceptances in Canadian dollars, (iii) Base Rate Loans in U.S.
               Dollars and (iv) LIBOR Loans in U.S. Dollars.

3.1.3          At the Effective Time, (i) the Term Facility will be treated as
               having been drawn by the Relevant Borrower by way of all
               "Advances" outstanding under the Term "Facility" (as each such
               expression is referred to and defined in the Existing Loan


<PAGE>
                                     - 53 -


               Agreement) and (ii) each such "Advance" shall be treated as an
               Advance made by the Lenders to the Relevant Borrower under this
               Agreement of the same Type and tenor under the Term Facility.

3.1.4          With effect as of and from December 23, 1999, USP assumes, and
               shall be deemed to be the Relevant Borrower of, a U.S.$50,000,000
               portion of the U.S.$91,743,119.26 Base Rate Loan owing by MRM to
               the Lenders on that date (such portion being designated by the
               Agent and referred to as the "Assumed Base Rate Loan") and USP
               agrees to pay such Assumed Base Rate Loan, and all related Loan
               Obligations, (collectively, the "Assumed Loan Obligations") to
               the Lenders as if USP were named in the Existing Loan Agreement
               as an original party in substitution for MRM in respect of such
               Assumed Loan Obligations in accordance with the provisions of
               this Agreement. Notwithstanding such assumption, MRM shall remain
               obliged as guarantor under the MRM Guarantees in respect of such
               Assumed Loan Obligations.

3.2            AVAILABILITY AND NON-REVOLVING NATURE OF TERM FACILITY

               Each Borrower may, subject to the terms and conditions of this
Agreement, borrow Advances under the Term Facility on the Term Drawdown Date on
a non-revolving basis having an initial Outstanding Amount which, when added to
the Outstanding Amount of all other Advances referred to in Section 3.1.3, does
not exceed the Maximum Term Amount. Any part of an Advance under the Term
Facility which is repaid may not be reborrowed and (other than any such
repayment pursuant to Section 7.9) shall constitute a permanent reduction of the
Term Facility. Each such repayment shall, to the extent thereof, reduce the Term
Commitments of the Lenders pro rata.

3.3            REPAYMENT OF TERM FACILITY

               Subject to Section 12.2, all Loans outstanding under the Term
Facility shall be repaid by the Borrowers making the following instalment
payments to the Agent for the account of the Lenders:

3.3.1          Reductions. The Total Term Commitment shall permanently reduce at
               the end of the Term Drawdown Date by the amount, if any, by which
               the Total Term Commitment exceeds the Outstanding Amount of all
               Advances outstanding under the Term Facility on such date. The
               Borrowers shall not be entitled to any further Drawdowns under
               the Term Facility after the Term Drawdown Date.

3.3.2          Scheduled Instalments. Subject to Section 12.2, the Relevant
               Borrowers with Advances under the Term Facility shall repay all
               Advances outstanding under the Term Facility in consecutive
               semi-annual instalments on each day falling 12, 18, 24, 30 and 36
               months after the Term Drawdown Date in the following Outstanding
               Amounts (and the Total Term Commitment shall permanently reduce
               on each such date by each such amount):


<PAGE>
                                     - 54 -


<TABLE>
<CAPTION>
                                                            OUTSTANDING AMOUNT
INSTALMENT                                               OF REPAYMENT INSTALMENT
----------                                               -----------------------
<S>                                                              <C>
    1                                                        Cdn.$30,000,000
    2                                                        Cdn.$17,500,000
    3                                                        Cdn.$17,500,000
    4                                                        Cdn.$17,500,000
    5                                                        Cdn.$17,500,000
    6                                                        Cdn.$17,500,000
    7                                                        Cdn.$17,500,000
</TABLE>

               The Relevant Borrowers with Advances under the Term Facility
               shall repay the balance of all Advances outstanding under the
               Term Facility on the Final Term Facility Due Date (and the Total
               Term Commitment shall permanently reduce to nil on the Final Term
               Facility Due Date).

3.3.3          Free Cash Flow Reductions. On the 30th Banking Day falling after
               the day Gerdau Steel delivers the audited annual financial
               statements of Gerdau Steel to the Agent for each Fiscal Year
               starting with the 2000 Fiscal Year pursuant to Section
               11.1.1.10.1, the Relevant Borrowers with Advances under the Term
               Facility shall repay Advances in the Outstanding Amount equal to
               (i) seventy-five percent (75%) of Free Cash Flow if such Fiscal
               Year is the 2000 Fiscal Year and (ii) fifty percent (50%) of Free
               Cash Flow if such Fiscal Year is after the 2000 Fiscal Year, and
               the Total Term Commitment shall be permanently reduced on such
               date in like amount.

3.3.4          Capital Asset Dispositions. The Total Term Commitment shall
               permanently reduce on each day on which any Gerdau Canada Group
               Member disposes of any capital assets having a book value
               exceeding Cdn.$5,000,000 by an amount equal to the Net Asset
               Disposal Proceeds of such disposal. If the Gerdau Canada Group
               disposes of capital assets having an aggregate book value
               exceeding Cdn.$5,000,000 during any period of four consecutive
               Fiscal Quarters, then on the thirtieth day after the end of the
               last Fiscal Quarter in such period, the Total Term Commitment
               shall permanently reduce by the amount, if any, by which Net
               Asset Disposal Proceeds derived from such disposals exceeds the
               aggregate amount, if any, of each prior reduction to the Total
               Term Commitment made pursuant to this Section 3.3.4 in respect of
               capital asset disposals made during such four consecutive Fiscal
               Quarter period. The Borrowers shall promptly notify the Agent of
               full particulars pertaining to any capital asset disposal
               contemplated by this Section 3.3.4 and of any required repayment
               under this Section 3.3.4.

3.3.5          Indebtedness Reductions. The Total Term Commitment shall
               permanently reduce on each day on which any Gerdau Canada Group
               Member incurs new Indebtedness (other than (i) Indebtedness
               referred to in clause (x) of the definition of "Permitted Liens",
               (ii) Indebtedness to any Person that is either Gerdau S.A. or
               another Gerdau Canada Group Member, (iii) Indebtedness in respect
               of Kyoei Steel Balance of Sale Notes Refinancing Loans, and (iv)
               Indebtedness in respect

<PAGE>
                                     - 55 -


               of loans made under Section 11.3.1.5.6) by an amount equal to the
               sum of all cash and Cash Equivalent Investments received from
               such Indebtedness net of all costs and expenses incurred in
               effecting such Indebtedness, including legal expenses and
               underwriting fees and commissions payable to any Person that is
               not a Gerdau Canada Group Member or an Affiliate.

3.3.6          Rights Offering Reductions. The Total Term Commitment shall
               permanently reduce on each day on which any Gerdau Canada Group
               Member issues Capital Stock, or any rights to acquire Capital
               Stock, (a "RIGHTS OFFERING") to any Person that is not either
               Gerdau S.A. or another Gerdau Canada Group Member by an amount
               equal to the sum of all cash and Cash Equivalent Investments
               received from such Rights Offering net of all costs and expenses
               incurred in effecting such Rights Offering, including legal
               expenses and underwriting fees and commissions payable to any
               Person that is not a Gerdau Canada Group Member, Gerdau S.A.
               Group Member or an Affiliate.

3.3.7          Voluntary Reductions. The Borrowers shall have the right at any
               time and from time to time to prepay and permanently cancel,
               without premium or penalty, all or any portion of the Total Term
               Commitment. Such right may only be exercised by Gerdau Steel
               delivering a notice to the Agent specifying the proposed
               effective date of prepayment and cancellation (which must be no
               less than three Banking Days thereafter) and the amount of the
               Total Term Commitment to be cancelled (which must be in a
               principal amount of Cdn.$5,000,000 or a multiple of
               Cdn.$1,000,000 in excess thereof). The Total Term Commitment
               shall be permanently reduced on the effective date of each such
               cancellation in the amount so cancelled.

3.3.8          Prepayment of Affected Lenders. The Corporate Borrowers shall
               have the right to permanently cancel without premium or penalty
               all, but not part, of the Revolver Commitment and Term Commitment
               of each Affected Lender provided that no Default or Event of
               Default has occurred. Such right may only be exercised by the
               Corporate Borrowers delivering a notice to the Agent advising of
               such cancellation and specifying the effective date of
               cancellation which must be no less than five Banking Days after
               and no later than 30 days after the relevant Lender became an
               Affected Lender. Each Relevant Borrower shall prepay the Affected
               Lender's Rateable Share of all outstanding Advances on such
               effective date of cancellation, such Affected Lender's Commitment
               shall be reduced to nil on such effective date and such Affected
               Lender shall be released from its obligations to lend hereunder.

3.3.9          Mandatory Prepayments. On the date of each reduction of each
               Lender's Term Commitment pursuant to the foregoing provisions of
               this Article 3, each Relevant Borrower shall repay to each Lender
               such amount on account of such Lender's Rateable Share of
               Advances made to such Borrower under the Term Facility as may be
               required to ensure that the Outstanding Amount of such Lender's
               Rateable Share of all Advances under the Term Facility does not
               exceed its Term

<PAGE>
                                     - 56 -


               Commitment at that time after giving effect to that reduction.
               Such Lender shall apply any such amount so repaid as follows:

               (a)  first, to repay its Rateable Share of Loans under the Term
                    Facility; and

               (b)  second, to prepay to the Lender the obligations of each
                    Relevant Borrower under Section 7.5.9 in respect of Bankers'
                    Acceptances issued for such Borrower's account under the
                    Term Facility.

3.4            INTEREST AND ACCEPTANCE FEES ON ADVANCES UNDER THE TERM FACILITY

               Interest on Prime Rate Loans shall be payable in Canadian dollars
on each Interest Payment Date applicable thereto on the outstanding principal
amount of all Prime Rate Loans made under the Term Facility at a rate per annum
equal to the Prime Rate in effect from time to time plus the Applicable Margin.
Acceptance Fees shall be payable in Canadian dollars on the relevant Borrowing
Date based on the face amount of Bankers' Acceptances under the Term Facility at
a rate per annum equal to the Applicable Margin. Interest on Base Rate Loans
shall be payable in U.S. Dollars on each Interest Payment Date applicable
thereto on the outstanding principal amount of all Base Rate Loans made under
the Term Facility at a rate per annum equal to the Base Rate plus the Applicable
Margin. Interest on LIBOR Loans shall be payable in U.S. Dollars on each
Interest Payment Date applicable thereto on the outstanding principal amount of
each LIBOR Loan made under the Term Facility at a rate per annum equal to the
LIBO Rate for each applicable Interest Period plus the Applicable Margin.

3.5            PREPAYMENT OF TERM FACILITY

               Subject to the terms and conditions of this Agreement, each
Borrower may from time to time by giving not less than three Banking Days
express written notice to the Agent, prepay Prime Rate Loans and Base Rate Loans
(but not Bankers' Acceptances) outstanding under the Term Facility, without
penalty or prepay LIBOR Loans outstanding under the Term Facility, except that
LIBOR Loans may not be prepaid prior to the end of their respective Interest
Periods unless the Borrower compensates the Lenders in accordance with Section
8.3.

3.6            MINIMUM ADVANCE

               Each Advance under the Term Facility shall be for a minimum
aggregate amount of $10,000,000 (Canadian or U.S., as applicable) made up of any
combination of the following Advances:

3.6.1          by way of Prime Rate Loans, each in a minimum principal amount of
               Cdn.$5,000,000;

3.6.2          by way of Bankers' Acceptances, each issue in a minimum aggregate
               face amount (subject to availability) of Cdn.$5,000,000 and in
               whole number multiples of Cdn.$100,000;

3.6.3          by way of Base Rate Loans, each in a minimum principal amount of
               U.S.$5,000,000; and


<PAGE>
                                     - 57 -


3.6.4          by way of LIBOR Loans, each in a minimum principal amount
               (subject to availability) of U.S.$10,000,000.

3.7            CONSOLIDATION OF LOANS

               If for any reason (including payments and prepayments) the
principal or aggregate face amount of any Advance made pursuant to the Term
Facility falls below the minimum prescribed in Section 3.6 (a "SMALL TERM
LOAN"), the Borrowers will co-operate with the Agent in consolidating such Small
Term Loan with such other Advance under the Term Facility as the Agent may
designate to form one Advance having an aggregate principal or face amount
satisfying the requirements for Advances imposed under Section 3.6.
Alternatively, the Relevant Borrower will immediately prepay Small Term Loans
pursuant to Section 3.5.

                                    ARTICLE 4
                                   FACILITIES

4.1            EXISTING HEDGING FACILITY

4.1.1          TD has established a discretionary hedging facility in favour of
               the Borrowers to be used by each of the Borrowers for hedging its
               interest rate and Currency exposures on Advances under the Credit
               Facilities and for foreign exchange contracts, and for any other
               purpose permitted under this Agreement. TD was the only Hedging
               Lender as at September 27, 1999.

4.1.2          Any other Lender may establish a discretionary hedging facility
               in favour of the Borrowers to be used by each Borrower for
               hedging its interest rate and Currency exposures on Advances
               under the Credit Facilities and for foreign exchange contracts,
               and for any other purpose permitted under this Agreement. Upon
               such establishment, the Lender concerned shall forthwith notify
               the Agent, whereupon it will become a Hedging Lender for the
               purposes of this Agreement.

4.1.3          Each Hedging Instrument entered into between a Borrower and a
               Hedging Lender for a purpose permitted under this Agreement is
               referred to in this Agreement as an "ELIGIBLE HEDGING
               INSTRUMENT".

4.1.4          Each Hedging Instrument must be governed by a master netting
               agreement in the form published by the International Swaps and
               Derivatives Association, Inc. under which the Full Two Way
               Payments (as referred to and defined therein) method of
               termination applies, or in such other form as the Agent may
               approve (a "MASTER ISDA AGREEMENT").

4.1.5          Each Hedging Lender and Eligible Hedging Instrument under the
               Existing Loan Agreement shall be considered as a Hedging Lender
               and Eligible Hedging Instrument under this Agreement.


<PAGE>
                                     - 58 -


                                    ARTICLE 5
                                     PAYMENT

5.1            PLACE OF PAYMENT

               All funds made available by the Lenders pursuant to the Credit
Facilities shall be made or delivered to the Agent at the Agent's Branch of
Account and then, subject to Sections 7.5.7 and 13.20, transferred to the
relevant Designated Account. All payments of principal, interest and fees or
other amounts payable by each Borrower to the Lenders hereunder shall be made or
delivered to the Agent at the Agent's Branch of Account and then transferred to
each Lender's Lending Office in accordance with each Lender's Rateable Share.
All payments of principal, interest and fees or other amounts payable by each
Corporate Borrower to the Swing Line Lender shall be made or delivered to the
Swing Line Lender at its Branch of Account.

5.2            APPLICATION OF PAYMENTS AND PREPAYMENTS

               Before any Default or Event of Default occurs, the Agent shall
appropriate and apply each payment made by a Borrower under this Agreement in
and towards payment of such Loan Obligations as such Borrower shall designate to
the Agent at the time of such payment or, failing such designation, in and
towards such indebtedness or Loan Obligations of such Borrower as the Agent
shall designate. After a Default or an Event of Default occurs, the Agent shall
be entitled, subject to Article 13, to appropriate and apply each payment made
by each Borrower under this Agreement in and towards payment of such
indebtedness or Loan Obligations of a Borrower as the Agent shall designate,
notwithstanding any designation made by a Borrower. Any amount of the Term
Facility repaid pursuant to Section 3.3 or prepaid pursuant to Section 3.5
shall, to the extent thereof, satisfy the Borrower's repayment obligations under
Section 3.3.2 in inverse order of maturity.

5.3            CHANGE IN CIRCUMSTANCES

               If the introduction of or any Change in Law:

5.3.1          subjects any Lender (or its Holding Body Corporate) to, or causes
               the withdrawal or termination of a previously granted exemption
               with respect to, any Taxes or changes the basis of taxation of
               payments on any Lender (or its Holding Body Corporate) due to the
               Lenders (or its Holding Body Corporate) or increases any existing
               Taxes on payments of the Loan Obligations (other than the
               Lender's Own Taxes (or those of its Holding Body Corporate));

5.3.2          imposes, modifies or deems applicable reserve, liquidity, cash,
               margin, capital, special deposit, deposit insurance or
               assessment, or any other regulatory or similar requirement
               against assets held by, or deposits in or for the account of, or
               loans by, or any other acquisition of funds for loans by, any
               Lender (or those of its Holding Body Corporate), or any
               unutilized portion of any Credit Facility or any obligations of
               any Lender under any Loan Document;

5.3.3          imposes on any Lender (or its Holding Body Corporate) any Taxes
               on reserves or deemed reserves in respect of the undrawn portion
               of any Credit Facility;


<PAGE>
                                     - 59 -


5.3.4          imposes on any Lender (or its Holding Body Corporate) or requires
               there to be maintained by any Lender (or its Holding Body
               Corporate) any capital adequacy or additional capital requirement
               (including a requirement which affects the Lenders' (or its
               Holding Body Corporate's) allocation of capital resources to its
               obligations) in respect of any Credit Facility, any Advance, any
               Derivative, this Agreement or the Lenders' obligations hereunder
               or imposes any other condition or requirement with respect to the
               maintenance by any Lender of a contingent liability with respect
               to any Credit Facility, any Advance or any Derivative hereunder;
               or

5.3.5          imposes on any Lender (or its Holding Body Corporate) any other
               condition or requirement with respect to this Agreement or a
               Credit Facility (other than the Lender's Own Taxes (or those of
               its Holding Body Corporate));

and, in the sole determination of such Lender (the "AFFECTED LENDER"), such
occurrence has the effect of:

5.3.6          increasing the cost to the Affected Lender (or its Holding Body
               Corporate) of the Affected Lender agreeing to make or making,
               maintaining or funding a Credit Facility, any Advance, any
               Derivative or any portion of any thereof;

5.3.7          reducing the amount of the Loan Obligations or the net income
               received by the Affected Lender in respect of this Agreement, a
               Credit Facility, any Advance, any Derivative, or any portion of
               any thereof;

5.3.8          directly or indirectly reducing the effective return to the
               Affected Lender (or its Holding Body Corporate) under this
               Agreement on its overall capital as a result of entering into
               this Agreement or as a result of any of the transactions or
               obligations contemplated by this Agreement (other than a
               reduction resulting from a higher rate of Income Tax being
               imposed on the Affected Lender's (or its Holding Body
               Corporate's) overall income); or

5.3.9          causing the Affected Lender to make any payment or to forego any
               interest, fees or other return on or calculated by reference to
               any sum received or receivable by the Affected Lender hereunder,

then, upon demand from time to time being made to the Relevant Borrowers by the
Agent on behalf of the Affected Lender, accompanied in each case by a
certificate of the Affected Lender documenting the relevant calculations of the
compensation being claimed by the Affected Lender (which certificate shall be
conclusive and binding on the parties hereto for all purposes, absent manifest
error), the Borrowers shall forthwith pay to the Agent for the account of the
Affected Lender such additional amounts as are set out in each such certificate
in order to fully compensate the Affected Lender (or its Holding Body Corporate)
for such additional cost, reduction, payment, foregone interest or other return.
The amount payable by each Borrower under this Section 5.3 shall be made in
proportion to its share of the aggregate Outstanding Amount of all outstanding
Advances under the Credit Facilities, unless the Agent otherwise agrees.


<PAGE>
                                     - 60 -


5.4            PAYMENTS GENERALLY

               All payments to be made by a Borrower in respect of Advances (in
respect of principal, interest, fees or otherwise) shall be made by the Relevant
Borrower to the Agent for the account of the Lender or Lenders concerned or to
the Swing Line Lender (as applicable) no later than 11:00 a.m. (Toronto time) on
the due date thereof (i) to the accounts of the Agent specified therefor by the
Agent at the Agent's Branch of Account or (ii) to the Swing Line Lender by
transfer to the Designated Accounts, in each case at the applicable Branch of
Account, or, in any such case, to such other accounts as may be specified by
such Lender to the Relevant Borrower from time to time. If a payment is not made
by such time it shall be considered to have been made on the next Banking Day,
unless the Lender concerned agrees, in its sole discretion, to accept a payment
at a later time as being effective on the date it is made. All payments to be
made by a Borrower shall be made by way of certified cheque, bank draft or other
immediately available funds, freely transferable, cleared funds for value on the
due date.

5.5            REPAYMENT NOTICE

               Each Relevant Borrower shall deliver a Repayment Notice to the
Agent at least five Banking Days before any required repayment is made pursuant
to any provision of this Agreement.

5.6            NETTING OF PAYMENTS

               If on any date amounts would be payable under this Agreement in
the same currency by the Relevant Borrower to the Lenders and by the Lenders to
the Relevant Borrower, then, on such date, unless the Agent notifies the
Relevant Borrower stating that netting is not to apply to such payments, each
such party's obligations to make payment of any such amount will be
automatically satisfied and discharged and, if the aggregate amount that would
otherwise have been payable by the Relevant Borrower to the Lenders exceeds the
aggregate amount that would otherwise have been payable by the Lenders to the
Relevant Borrower or vice versa, such obligations shall be replaced by an
obligation upon the Relevant Borrower or the Lenders by whom the larger
aggregate amount would have been payable to pay to the other the excess of the
larger aggregate amount over the smaller aggregate amount.

                                    ARTICLE 6
                        CONDITIONS PRECEDENT TO ADVANCES

6.1            CONDITIONS PRECEDENT TO ADVANCE

               No Borrower shall be entitled to obtain an Advance under any
Credit Facility pursuant to this Agreement until an Implementation Notice is
given and then only upon satisfaction of and compliance with the following terms
and conditions:

6.1.1          the representations and warranties set forth in Article 10 are
               true and accurate in all material respects on the date of this
               Agreement and shall continue to be true and accurate in all
               material respects on the date of the Advance in question and, in
               respect of an Advance under the Term Facility, the Agent shall
               have received a Certificate of Gerdau Steel to such effect;


<PAGE>
                                     - 61 -


6.1.2          no Default or Event of Default shall have occurred and be
               continuing on the requested date of Advance and, in respect of an
               Advance under the Term Facility, the Agent shall have received a
               Certificate of Gerdau Steel to such effect;

6.1.3          the Agent shall have received any required Drawdown Notice in
               accordance with Section 7.4; and

6.1.4          the aggregate Outstanding Amount of all Advances outstanding
               under a Credit Facility, following the making of the Advance in
               question and having regard to any repayments of principal to be
               made on the date of the Advance in question, shall not exceed the
               Maximum Amount of such Credit Facility.

6.2            CONDITIONS PRECEDENT TO EFFECTIVE TIME

               The amendments to and restatement of the Existing Loan Agreement
set out in this Agreement shall not take effect unless and until the Agent
confirms in writing to the Borrowers (the "IMPLEMENTATION Notice") that the
Agent has received each of the following agreements, documents and instruments
(each in form and substance satisfactory to the Agent), or it has received some,
but not all, of them and it is prepared to waive receipt of the balance of them
for the purposes of allowing such amendments and restatement to take effect:

6.2.1          the Agent shall have received a duly executed copy of this
               Agreement and each of the agreements, documents and instruments
               listed in Schedule Q relative to the Co-Steel Group Credit
               Agreements;

6.2.2          the Agent shall have received a duly executed copy of each of the
               Status Quo Agreement, an amended and restated security
               co-ordination agreement and the agreements, documents and
               instruments listed in Schedule L, together with any Mortgaged
               Property being delivered to the Agent pursuant to any Security
               comprised therein, to the extent not previously received by the
               Agent, including share certificates representing all of the
               issued Capital Stock in the Gerdau Canada Subgroup Interim
               Holding Company and the Gerdau Canada Subgroup Shares and
               arrangements satisfactory to the Agent shall have been made to
               ensure that the Agent receives the share certificate representing
               the Exchanged Co-Steel Shares, together with transfer forms duly
               executed in blank with signatures guaranteed by a Canadian
               chartered bank;

6.2.3          the Agent shall have received the following in form and substance
               satisfactory to the Agent:

               6.2.3.1  a Certificate of each Borrower dated the date of this
                        Agreement certifying that attached thereto are true and
                        correct copies of the following documents, and that such
                        documents are in full force and effect, unamended:

                        6.2.3.1.1  the articles and by-laws (or equivalent or
                                   analogous formation and internal management
                                   documentation) of


<PAGE>
                                     - 62 -


                                   each Borrower and any unanimous shareholder
                                   agreement pertaining to each Borrower;

                        6.2.3.1.2  a certificate of incumbency, including sample
                                   signatures of officers and directors, of each
                                   Borrower; and

                        6.2.3.1.3  the resolutions or other documentation
                                   evidencing that all necessary action,
                                   corporate or otherwise, has been taken by
                                   each Borrower to authorize the execution,
                                   delivery and performance of the New Loan
                                   Documents to which it is a party;

               6.2.3.2  a certificate of compliance or status (as applicable) in
                        respect of each Gerdau Canada Group Member dated on or
                        about the date of this Agreement;

               6.2.3.3  certificates for each other Gerdau S.A. Group Member
                        that is currently providing, or intended pursuant hereto
                        to provide, Security to the Syndicate substantially
                        equivalent or analogous to the certificates of each
                        Gerdau Canada Group Member (including attachments)
                        referred to in Sections 6.2.3.1 and 6.2.3.2 above;

               6.2.3.4  certified copies of the insurance policies evidencing
                        the insurance required to be maintained by each Gerdau
                        Canada Group Member under Section 9.6;

               6.2.3.5  certified copies of all Permits required to enable the
                        Borrowers and each other Gerdau S.A. Group Member
                        currently providing, or intended pursuant hereto to
                        provide, Security to the Syndicate to execute, deliver,
                        incur and perform its obligations under each Loan
                        Document to which it is a party and consummate the
                        transactions contemplated thereby;

               6.2.3.6  evidence that all Registrations and other actions as may
                        be necessary or desirable in the judgment of the
                        Lenders' Counsel to perfect, preserve and protect the
                        Security and its validity, effect and priority have been
                        effected;

               6.2.3.7  deposit of the share certificates representing all the
                        issued Capital Stock of Porter Bros., MRM America and
                        MFT, acknowledgements that such Capital Stock is pledged
                        to the Agent pursuant to the Security, and such other
                        documents and opinions relating thereto as the Agent may
                        require;

               6.2.3.8  deposit of the share certificates representing all the
                        new issued Capital Stock of the Gerdau S.A. Group
                        Members as may arise from the Debt Restructuring
                        Transactions, acknowledgements that such Capital Stock


<PAGE>
                                     - 63 -


                        is pledged to the Agent pursuant to the Security, and
                        such other documents and opinions relating thereto as
                        the Agent may require;

               6.2.3.9  deposit of the share certificates representing the
                        Capital Stock of Courtice, MRM Holdings and Gerdau USA
                        transferred pursuant to the Co-Steel Combination
                        Transactions and deposit of the share certificate
                        representing all the Capital Stock of the Gerdau Canada
                        Sub-Group Interim Holding Company, acknowledgements that
                        all such Capital Stock is pledged to the Agent pursuant
                        to the Security, a guarantee of the Loan Obligations
                        executed in favour of the Agent by the Gerdau Canada
                        Sub-Group Interim Holding Company, and such other
                        documents and opinions relating thereto as the Agent may
                        require;

               6.2.3.10  in respect of the FLS/Gerdau USA Merger, the deposit of
                         the share certificates representing all the Capital
                         Stock of AmeriSteel owned by Gerdau USA, an
                         acknowledgement that such Capital Stock continues to be
                         pledged to the Agent pursuant to the stock pledge
                         executed in favour of the Agent by FLS and pursuant to
                         the stock pledge executed in favour of the Agent by
                         Gerdau USA, and such other documents and opinions
                         relating thereto as the Agent may require;

               6.2.3.11  opinions from:

                         6.2.3.11.1  the Borrower's Counsel in respect of the
                                     Gerdau S.A. Trust Deed in respect of the
                                     Reorganization Transactions and the entry
                                     into effect of the amendments to the
                                     Existing Loan Agreement contemplated
                                     hereby;

                         6.2.3.11.2  Co-Steel's Counsel in respect of the Co-
                                     Steel Group Credit Agreements and the
                                     amendments contemplated by the agreements,
                                     documents and instruments listed in
                                     Schedule Q;

                         6.2.3.11.3  the Borrower's Counsel in respect of the
                                     Exchanged Co-Steel Shares; and

                         6.2.3.11.4  the Borrower's Counsel in respect of each
                                     Gerdau S.A. Group Member currently
                                     providing, or intended pursuant hereto to
                                     provide, Security to the Syndicate,
                                     addressed to the Syndicate and the Lenders'
                                     Counsel, in respect of the laws of such
                                     jurisdictions, the Loan Documents, the
                                     Gerdau S.A. Trust Deed and as to such
                                     matters and in such form as the Lenders may
                                     require;

               6.2.3.12  a Compliance Certificate for the period of four
                         consecutive Fiscal Quarters ending June 30, 2002;

<PAGE>
                                     - 64 -


               6.2.3.13  a Borrowing Base Report prepared as at June 30,
                         2002;

               6.2.3.14  satisfactory evidence that the New Loan Documents
                         shall, if necessary or desirable, have been filed,
                         registered and recorded where appropriate;

               6.2.3.15  such other agreements, documents and instruments as the
                         Agent or the Swing Line Lender may reasonably require;

               6.2.3.16  a Certificate of each Borrower dated the date of this
                         Agreement confirming satisfaction of and compliance
                         with the terms and conditions set out in this Section
                         6.2 as well as Sections 6.1.1 and 6.1.2;

               6.2.3.17  a Certificate of Gerdau Steel certifying that all of
                         the conditions contained in Sections 6.1.1, 6.1.2 and
                         6.1.3 inclusive have been satisfied; and

               6.2.3.18  a favourable report from the Lenders' Counsel to the
                         Lenders as to all legal aspects in this transaction on
                         which the Agent requires a report, including with
                         respect to this Agreement, the Security, the other New
                         Loan Documents and the opinions delivered pursuant to
                         Section 6.2.3.11.

6.2.4          The Agent shall have received from Gerdau Steel all outstanding
               fees agreed to be paid on or prior to the date of this Agreement
               by Gerdau Steel to the Agent and the Lenders (or any of them)
               pursuant to the fee letter dated September 5, 2002 from Gerdau
               Steel to the Agent.

6.3            EFFECTIVE TIME

               The Credit Facilities set out in this Agreement shall only become
available to the Borrowers pursuant to this Agreement if the Agent issues the
Implementation Notice.

6.4            EFFECTIVENESS

               Upon the Agent delivering the Implementation Notice to the
Borrowers, the Lenders will be deemed to have consented to the Reorganization
Transactions subject to and upon the terms and conditions stated herein and this
Agreement shall amend and restate the Existing Loan Agreement in its entirety.
The Existing Loan Agreement as amended and restated by this Agreement shall
constitute one agreement, and the Existing Loan Agreement as so amended and
restated is hereby ratified and confirmed by the parties hereto.

6.5            PROVISIONS TAKING IMMEDIATE EFFECT

               Notwithstanding any other provision of this Agreement, this
Section 6.5 and Section 8.2 of this Agreement shall take effect immediately upon
the execution and delivery of this Agreement whether or not the Implementation
Notice is ever issued.

<PAGE>
                                     - 65 -


6.6            RIGHTS UNAFFECTED

               This Agreement shall not waive, prejudice, delay or impair any
rights of the Syndicate, Gerdau Steel or the Borrowers arising under the
Existing Loan Agreement, the Security or otherwise, at law or in equity, which
have accrued to the Syndicate, Gerdau Steel or the Borrowers, as the case may
be, before the Effective Time. All interest, fees and other amounts (other than
principal) due or becoming due or owing as at the Effective Time shall be paid
after such time to the Syndicate in accordance with the terms and conditions of
this Agreement.

6.7            DATE OF AGREEMENT

               References in this Agreement to the date of this Agreement, the
date hereof and similar expressions shall be construed as references to the date
this amended and restated loan agreement is executed and delivered by the
parties hereto.

                                    ARTICLE 7
                                    ADVANCES

7.1            ADVANCE AND INTEREST PAYMENT DATES

               Upon timely fulfillment of and compliance with all applicable
terms and conditions as set forth in this Agreement by the Relevant Borrower,
the Agent (to the extent it has received funds from the Lenders) on behalf of
the Lenders will, subject to Section 5.6, make the requested amount of any
Advance by way of Prime Rate Loan, Base Rate Loan or LIBOR Loan requested by the
Relevant Borrower available to the Relevant Borrower on the Drawdown Date by
crediting its Designated Account with such amount. The Relevant Borrower shall
pay interest to the Swing Line Lender or to the Agent for the account of the
Lenders (as applicable) at such Lender's Branch of Account on each Loan borrowed
by the Relevant Borrower which is outstanding from time to time hereunder at the
rate of interest applicable to such Loan as set out in this Agreement.

               Interest on each Prime Rate Loan, Base Rate Loan and LIBOR Loan
shall be payable on each Interest Payment Date applicable thereto. All interest
shall accrue from day to day and shall be payable in arrears for the actual
number of days elapsed from and including the Borrowing Date of such Loan or the
previous date on which interest was payable, as the case may be, to but
excluding the date on which interest is payable, or the end of the Interest
Period, as the case may be, both before and after maturity, default and
judgment, with interest on overdue interest at the same rate payable on demand.
Overdue interest with respect to a LIBOR Loan made under a Credit Facility
shall, upon the expiry of the Interest Period applicable to such LIBOR Loan,
bear interest, payable on demand, calculated at the rates and in the manner
applicable to Base Rate Loans made under the same Credit Facility.

               Interest calculated with reference to the Prime Rate or the Base
Rate shall be calculated daily and compounded monthly on the basis of a year of
365 or 366 days, as applicable. Interest calculated with reference to the LIBO
Rate shall be calculated daily and compounded at the end of the Interest Period
applicable thereto, and if the Interest Period is longer than three months,
every three months on the basis of a year of 360 days.

<PAGE>
                                     - 66 -


7.2            PAYMENT OF INTEREST

               Each Borrower shall pay to the Agent for the account of the
applicable Lenders interest on each Loan borrowed by it in the manner and at the
rates per annum determined in accordance with this Agreement. Interest payable
hereunder shall be payable both before and after maturity, default and/or
judgment, if any, until payment in full thereof, and interest shall accrue on
overdue interest, if any, at the same rate, except as otherwise provided in
Section 7.1. Changes in the Prime Rate or the Base Rate shall cause an immediate
adjustment of the interest payable hereunder with respect to Prime Rate Loans
and Base Rate Loans, respectively, without the necessity of any notice to the
Borrowers.

7.3            CONVERSIONS

               Subject to the other terms of this Agreement, the Relevant
Borrower may from time to time convert all or any part of the outstanding amount
of any Advance under the Term Facility on its Maturity Date (in the case of a
LIBOR Loan or an issue of Bankers' Acceptance) or at any time (in the case of
Prime Rate Loan or a Base Rate Loan) into another form of Advance denominated in
the same Currency under the Term Facility permitted by this Agreement by giving
the Agent a Conversion Notice in accordance with Section 7.4 provided that any
part of an Advance that is not converted and the resulting new Advance each
comply with the amounts specified below:

7.3.1          in the case of a Prime Rate Loan or Base Rate Loan, a minimum
               principal amount of $5,000,000 (Cdn. or U.S., as applicable);

7.3.2          in the case of a LIBOR Loan, a minimum principal amount (subject
               to availability) of U.S.$10,000,000; and

7.3.3          in the case of an issue of Bankers' Acceptances, a minimum
               aggregate face amount (subject to availability) of Cdn.$5,000,000
               and in whole number multiples of Cdn.$1,000,000.

7.4            NOTICE OF ADVANCES, PAYMENTS, CONVERSIONS AND ROLLOVERS

               Each Borrowing Notice and Repayment Notice, as the case may be,
shall be given no later than:

7.4.1          on the third Banking Day prior to any Borrowing Date or payment
               date, in respect of any Prime Rate Loan or Base Rate Loan in an
               amount of $25,000,000 (Cdn. or U.S., as applicable) or more;

7.4.2          on the second Banking Day prior to any Borrowing Date or payment
               date, in respect of any Prime Rate Loan or Base Rate Loan in an
               amount of $10,000,000 (Cdn. or U.S., as applicable) or more but
               less than $25,000,000 (Cdn. or U.S., as applicable);


<PAGE>
                                     - 67 -


7.4.3          on the Banking Day before the Borrowing Date of any Prime Rate
               Loan or Base Rate Loan or payment date, in respect of any Prime
               Rate Loan or Base Rate Loan in an amount less than $10,000,000
               (Cdn. or U.S., as applicable);

7.4.4          on the third Banking Day prior to the Borrowing Date or payment
               date of any LIBOR Loan; and

7.4.5          on the second Banking Day prior to the Borrowing Date of any
               Bankers' Acceptances.

Notices shall be given not later than 10:00 a.m. (Toronto time) on the last
available date for notice. If a notice is not given by such time, it shall be
deemed to have been given on the next Banking Day. If a Conversion Notice is not
given by 10:00 a.m. on the second Banking Day prior to a proposed Conversion,
the Lenders may, in the case of a proposed Conversion to Bankers' Acceptances,
decline to accept such Bankers' Acceptances and in the case of a proposed
Conversion to a Prime Rate Loan, may charge, as liquidated damages, interest on
the resulting Prime Rate Loan at a rate equal to 115% of the rate of interest
otherwise applicable to such Prime Rate Loan under this Agreement for a period
of two Banking Days from the maturity of the Bankers' Acceptances. Thereafter
the rate of interest applicable to such Prime Rate Loan shall be the rate of
interest otherwise applicable to such Loan, as set out in this Agreement. The
foregoing provisions shall also apply if a Borrower requests a Rollover of
Bankers' Acceptances to take place on the Maturity Date of another issue of
Bankers' Acceptances but does not give a Rollover Notice by 10:00 a.m. on the
second Banking Day prior to such Maturity Date. The Relevant Borrower agrees
that such additional interest is a reasonable pre-estimate of loss to each
Lender and not a penalty. Such increased interest is payable for the
administrative expense incurred by each Lender and for the loss of protection
against future interest rate risks suffered by each Lender as a result of a
Borrower's failure to give any of these notices.

7.5            BANKERS' ACCEPTANCES

               The following provisions shall apply to Advances obtained by way
of the issuance of Bankers' Acceptances:

7.5.1          all drafts required to be accepted by a Lender pursuant to this
               Agreement shall be in the form requested by such Lender, and,
               shall be executed and drawn by such Lender on behalf of the
               Relevant Borrower pursuant to the power of attorney contained in
               Section 7.5.3;

7.5.2          any Borrowing Notice requesting an issue of Bankers' Acceptances
               shall include instructions from the Relevant Borrower stating
               that it wishes to have drafts accepted as Bankers' Acceptances
               under this Agreement and stating the aggregate face amount of and
               the term (being, subject to availability, one, two, three or six
               months) applicable to such drafts. The Relevant Borrower may
               notify the Agent by telephone of its instructions with respect to
               Bankers' Acceptances, provided it shall immediately thereafter
               confirm its telephone instructions given pursuant to this Section
               7.5.2 by a Borrowing Notice;


<PAGE>
                                     - 68 -


7.5.3          each Borrower authorizes each Lender, and for this purpose
               appoints each Lender the lawful attorney of such Borrower, to
               complete, sign and endorse drafts on its behalf in handwriting or
               by facsimile or mechanical signature in accordance with each
               Borrowing Notice and, once so completed, signed and endorsed, and
               following acceptance of them as a Bankers' Acceptance under this
               Agreement, then purchase, discount or negotiate such Bankers'
               Acceptances in accordance with the provisions of this Section
               7.5. Drafts so completed, signed and endorsed and negotiated on
               behalf of each Borrower shall bind such Borrower as if so
               performed by an authorized officer of such Borrower;

7.5.4          the face amount of each Bankers' Acceptance to be accepted by a
               Lender shall be a whole number multiple of Cdn.$100,000;

7.5.5          the Agent shall have the discretion to restrict the term and the
               Maturity Date of an issue of Bankers' Acceptances. The Maturity
               Date of each issue of Bankers' Acceptances must be no later than
               the Due Date of the relevant Credit Facility. There shall not be
               more than ten (10) issues of Bankers' Acceptances maturing during
               any single calendar month under the Credit Facilities, unless the
               Agent otherwise agrees;

7.5.6          each Lender shall purchase each Bankers' Acceptance accepted by
               it at a discount to yield (excluding the Acceptance Fee) an
               interest rate per annum equal to such Lender's BA Reference Rate
               on each Acceptance Date of Bankers' Acceptances issued pursuant
               to this Agreement. The obligation of the Relevant Borrower to pay
               to a Lender the face amount of each Bankers' Acceptance so
               purchased by it upon the maturity of such Bankers' Acceptance
               shall continue in full force and effect notwithstanding such
               purchase. A Lender may at any time and from time to time hold,
               sell, rediscount or otherwise dispose of any Bankers' Acceptance
               purchased by it;

7.5.7          when Bankers' Acceptances are being issued, each Lender shall,
               subject to Section 13.20.7, transfer to the Agent at the Agent's
               Branch of Account for value on the Acceptance Date immediately
               available Canadian dollars in an amount equal to the net proceeds
               of sale of all Bankers' Acceptances purchased by it on such
               Acceptance Date, net of the applicable Acceptance Fee in respect
               of such Bankers' Acceptances. Subject to Section 5.6, the Agent
               will transfer such amounts to the Relevant Borrower by depositing
               the same for value on the applicable Acceptance Date to the
               Designated Account of the Relevant Borrower;

7.5.8          the Acceptance Fee applicable to each Bankers' Acceptance shall
               be calculated upon the principal face amount of such Bankers'
               Acceptance for the duration of its term on the basis of the
               actual number of days from the date of its acceptance by a Lender
               up to the Maturity Date of the Bankers' Acceptance calculated on
               the basis of a 365 day year at the rates per annum provided for
               in Section 2.3 or 3.4, as applicable;


<PAGE>
                                     - 69 -


7.5.9          the Relevant Borrower shall provide for the payment to the
               Lenders at the Agent's Branch of Account of the full face amount
               of each issue of Bankers' Acceptance on its Maturity Date or, on
               the occurrence of an Event of Default, prior to its Maturity Date
               forthwith pursuant to Section 12.3. The Relevant Borrower shall
               not be entitled to prepay any Bankers' Acceptances. Where an
               issue of Bankers' Acceptances matures and the Relevant Borrower
               does not provide for payment or otherwise designate the manner in
               which payment is to be made in accordance with the provisions of
               this Agreement, the Borrower shall be deemed to have provided for
               payment of the aggregate face amount of such Bankers' Acceptances
               by Conversion into a Prime Rate Loan under the Credit Facility
               pursuant to which the Bankers' Acceptances were issued in a
               principal amount equal to the aggregate face amount of the
               Bankers' Acceptances on their Maturity Date;

7.5.10         the Relevant Borrower shall not claim from any Lender any days of
               grace for the payment at maturity of any Bankers' Acceptances
               presented and accepted by the Lender pursuant to this Agreement.
               In addition, the Relevant Borrower waives any demand, presentment
               for payment, protest, noting of protest, dishonour, notice of
               dishonour and any other notice or defence to payment which might
               otherwise exist if for any reason a Bankers' Acceptance is held
               by the Lender in its own right at the maturity thereof and the
               Relevant Borrower shall pay the Agent for the account of such
               Lender the face amount of any such Bankers' Acceptance on its
               Maturity Date;

7.5.11         any executed drafts to be used as Bankers' Acceptances which are
               held by the Agent or a Lender need only be held in safekeeping
               with the same degree of care as if they were such Lender's own
               property and such Lender was keeping them at the place at which
               they are to be held. Each Borrower shall, by written notice to
               the Agent, designate the Persons authorized to give the Agent
               instructions regarding the manner in which drafts are to be
               completed and the time at which they are to be issued;

7.5.12         the Relevant Borrower agrees to forthwith reimburse each Lender
               in full any amount paid by the Lender in respect of any Bankers'
               Acceptance accepted by the Lender hereunder on its behalf;
               however, the Relevant Borrower shall not be obliged to indemnify
               any Lender for any fees or expenses caused by the gross
               negligence or willful misconduct of such Lender;

7.5.13         the obligations of each Borrower under this Section 7.5 are
               unconditional, shall not be subject to any qualification or
               exception whatsoever and shall be fulfilled strictly in
               accordance with the terms of this Agreement under all
               circumstances including the following:

               7.5.13.1  any lack of validity or enforceability of any draft
                         accepted by any Lender as a Bankers' Acceptance; or

               7.5.13.2  the existence of any claim, set-off, defence or
                         otherwise which the Relevant Borrower may have at any
                         time against the holder of a


<PAGE>
                                     - 70 -


                         Bankers' Acceptance, any Lender or any other Person or
                         entity whether in connection with this Agreement or
                         otherwise;

7.5.14         each Borrower shall execute and deliver such bankers' acceptances
               agreements, indemnities, directions, powers of attorney and other
               assurances as any Lender may reasonably require from time to time
               with respect to any issue of Bankers' Acceptances. Such documents
               shall take effect subject to Section 1.11;

7.5.15         if any provision of this Agreement has the effect of requiring a
               Bankers' Acceptance to be prepaid, such prepayment is effected by
               paying to the Agent an amount in Canadian dollars equal to the
               face amount of such Bankers' Acceptance and the Agent crediting
               the amount so received by it into an interest bearing account
               with it in the name of the Relevant Borrower from which the only
               withdrawal which may be made is to pay the Lender accepting such
               Bankers' Acceptance the face amount of such Bankers' Acceptance
               on its Maturity Date.

7.5.16         If a Lender is not permitted by Applicable Law, or does not by
               virtue of customary market practice, accept drafts for the
               purpose of subsequent sale as a bankers' acceptance (a
               "NON-ACCEPTANCE LENDER"), each time a Relevant Borrower gives a
               Borrowing Request for an issue of Bankers' Acceptances, such
               Non-Acceptance Lender shall, in lieu of accepting and purchasing
               Bankers' Acceptances pursuant to this Section 7.5, make an
               advance in Canadian dollars to the Relevant Borrower (a "B/A
               EQUIVALENT ADVANCE") in the amount equal to the Acceptance
               Proceeds which would be derived from a hypothetical sale of
               drafts accepted by it ("NOTIONAL ACCEPTANCES") in the aggregate
               face amount of its Rateable Share of such requested issue of
               Bankers' Acceptances at a discount rate that yields to such
               Non-Acceptance Lender (excluding the Acceptance Fee) an interest
               rate per annum equal to such Lender's BA Reference Rate. Any B/A
               Equivalent Advance shall be repayable on the maturity of such
               issue of Bankers' Acceptances. A Non-Acceptance Lender shall be
               entitled to deduct from the amount of its B/A Equivalent Advance
               to be paid to the Agent pursuant to Section 7.5.7 an amount equal
               to the Acceptance Fee determined in accordance with Section 7.5.8
               that would have been payable to it with respect to the Notional
               Acceptances corresponding to the B/A Equivalent Advance. For the
               purposes of this Agreement each reference to an issue of Bankers'
               Acceptances shall be deemed to include, where relevant, B/A
               Equivalent Advances, with the necessary changes being made to fit
               the context.

7.6            STANDBY CREDITS

               The following provisions apply to Advances obtained by way of
issuance of Standby Credits:

7.6.1          A Standby Credit may be requested by a Corporate Borrower to be
               issued by the Issuing Bank under the Swing Line in Canadian
               dollars or U.S. Dollars or, with the prior consent of the Agent
               and the Issuing Bank, any other Currency;

<PAGE>
                                     - 71 -


7.6.2          The Issuing Bank shall have the right, in its sole discretion, to
               limit the Maturity Date of any Standby Credit. Following the
               occurrence of a Default or Event of Default, the Issuing Bank
               shall have the right, in its sole discretion, to extend the
               Maturity Date of any Standby Credit whether or not any other
               party requests or objects to such extension;

7.6.3          Notwithstanding any other provision of this Section 7.6, a
               Corporate Borrower may not request the issuance of any Standby
               Credit (i) if the aggregate Outstanding Amount of all Standby
               Credits outstanding under the Revolver Facility would, after the
               issuance of the Standby Credit in question, exceed
               Cdn.$4,000,000; or (ii) having a term which would extend beyond
               the Revolver Facility Due Date;

7.6.4          Reimbursement

               7.6.4.1  The Relevant Borrower unconditionally and irrevocably
                        authorizes the Issuing Bank to pay the amount of any
                        demand made on the Issuing Bank in accordance with the
                        terms of any Standby Credit issued for its account on
                        demand without requiring proof of the Relevant
                        Borrower's agreement that the amount so demanded was due
                        and notwithstanding that the Relevant Borrower may
                        dispute the validity of any such demand or payment;

               7.6.4.2  The Relevant Borrower shall indemnify and save the
                        Issuing Bank harmless from and against, and reimburse
                        the Issuing Bank for, any and all payments and losses
                        and expenses (other than lost profits) which it may
                        suffer or incur arising in any manner whatsoever out of
                        the issuance of any Standby Credit, including the making
                        of, or refusal to make, any payments demanded thereunder
                        (including any court costs and legal costs on a
                        substantial indemnity scale incurred in connection with
                        any proceedings to restrain the Issuing Bank from
                        making, or to compel the Issuing Bank to make, any such
                        payment). This indemnity shall be unconditional, shall
                        not be subject to any qualification or exception
                        whatsoever and shall not be lessened, invalidated or
                        otherwise prejudiced for any reason whatsoever including
                        by reason of (i) any lack of validity or enforceability
                        of the Standby Credit, (ii) any claim, set-off, defence
                        or other right the Relevant Borrower may have against
                        the beneficiary of the Standby Credit, including any
                        claim that a demand for payment under the Standby Credit
                        is fraudulent or (iii) any of the matters referred to in
                        Section 7.6.5.

7.6.5          Issuing Bank Not Liable

               7.6.5.1  The Issuing Bank shall not have any responsibility or
                        liability for, or duty to inquire into, the sufficiency,
                        authorization, execution, signature, endorsement,
                        correctness, genuineness or legal effect of any


<PAGE>
                                     - 72 -


                        certificate or other document presented to it pursuant
                        to any Standby Credit and the Relevant Borrower for whom
                        such Standby Credit was issued fully and unconditionally
                        assumes all risks with respect to the same and, without
                        limiting the generality of the foregoing, all risks of
                        the acts or  omissions of any beneficiary of any Standby
                        Credit with respect to the use by any beneficiary of any
                        Standby Credit. The Issuing Bank shall not be
                        responsible:

                        7.6.5.1.1  for the validity or genuineness of
                                   certificates or other documents delivered
                                   under or in connection with any Standby
                                   Credit that appear on their face to be in
                                   order, even if such certificates or other
                                   documents should in fact prove to be invalid,
                                   fraudulent or forged;

                        7.6.5.1.2  for errors, omissions, interruptions or
                                   delays in transmission or delivery of any
                                   messages by mail, cable, telegraph, telefax,
                                   wireless or otherwise, whether or not they
                                   are in code;

                        7.6.5.1.3  for errors in translation or for errors in
                                   interpretation of technical terms or for
                                   errors in the calculation of amounts demanded
                                   under any Standby Credit;

                        7.6.5.1.4  for any failure or inability by the Issuing
                                   Bank or anyone else to make payment under any
                                   Standby Credit as a result of any Applicable
                                   Law or by reason of any control or
                                   restriction rightfully or wrongfully
                                   exercised by any Person asserting or
                                   exercising governmental or paramount powers;

                        7.6.5.1.5  for any other consequences arising from
                                   causes beyond the control of the Issuing
                                   Bank; or

                        7.6.5.1.6  any error, neglect or default of any
                                   correspondent of the Issuing Bank, or of any
                                   advising, confirming, negotiating or paying
                                   bank,

                        and none of the above shall lessen, invalidate or
                        otherwise prejudice any of the rights of the Issuing
                        Bank hereunder or the obligations of the Relevant
                        Borrower under Section 7.6.4.2. In furtherance and not
                        in limitation of the foregoing provisions, it is agreed
                        that any payment made by the Issuing Bank in good faith
                        in response to any demand for payment under a Standby
                        Credit shall be deemed to have been properly made and
                        shall be binding upon all parties hereto and shall not
                        result in any liability of the Issuing Bank to the other
                        parties hereto and shall not lessen, invalidate or
                        otherwise prejudice the obligations of the Relevant
                        Borrower under Section 7.6.4.2.


<PAGE>
                                     - 73 -


               7.6.5.2  Notwithstanding the provisions of this Section 7.6.5, a
                        Corporate Borrower shall not be responsible for, and the
                        Issuing Bank shall not be relieved of responsibility
                        for, any willful misconduct or gross negligence of or by
                        the Issuing Bank.

7.6.6          Payments Under Standby Credits: Each payment made by the Issuing
               Bank under or otherwise in respect of a Standby Credit which is
               not reimbursed to the Issuing Bank pursuant to Section 7.6.4.2 on
               the date such payment is made shall be deemed to constitute an
               Advance under the Swing Line on the date such payment is made and
               shall be repaid by the Relevant Borrower to the Swing Line Lender
               accordingly. Each such payment made in Canadian dollars shall be
               treated as a Prime Rate Loan. Each such payment made in U.S.
               Dollars shall be treated as a Base Rate Loan. Each such payment
               made in any other Currency shall be treated as a Prime Rate Loan
               in the amount of Canadian Dollars equal to the equivalent of such
               other Currency payment determined at the spot rate of exchange
               quoted by the Swing Line Lender at the time such payment is made.

7.6.7          Standby Credit Fees: The Relevant Borrower shall pay a fee to the
               Issuing Bank in advance on the date of issuance of each Standby
               Credit for the period from and including the date of issuance of
               the Standby Credit to and including the stated expiry date
               thereof, based on the stated amount of the Standby Credit on such
               issuance date. Such fee shall be payable in the Currency in which
               the applicable Standby Credit is denominated. The fee payable
               shall be determined as the product obtained by multiplying (i)
               the stated amount of such Standby Credit times (ii) the
               Applicable Margin and times (iii) the fraction of the number of
               days from the date of issue until the Maturity Date of such
               Standby Credit divided by the actual number of days in the year.
               In addition, the Relevant Borrower shall pay the Issuing Bank's
               prevailing scheduled rates for services (including advices,
               amendments and renewals) provided by the Issuing Bank pertaining
               to outstanding Standby Credits. All amounts paid to the Issuing
               Bank pursuant to this Section 7.6.7 shall be retained by the
               Issuing Bank for its own account.

7.6.8          Acceleration: On the Revolver Facility Due Date or upon the Agent
               making a declaration under Section 12.2.2, the maximum amount of
               the contingent liability of the Issuing Bank under any Standby
               Credit which is then outstanding shall immediately become due and
               payable notwithstanding that the Issuing Bank has not at such
               date been required to make payment under any such Standby Credit.
               Any such amount shall be paid to the Agent and shall be credited
               to the Cash Collateral Account and held in the manner
               contemplated by Section 7.6.10 as security for the repayment of
               future indebtedness of that Borrower to the Issuing Bank in
               respect of each Standby Credit issued for its account which are
               drawn down, and, pending the expiry of all such outstanding
               Standby Credits, any such amounts held by the Agent shall bear
               interest at the rate established by the Agent from time to time
               as that payable in respect of 30 day term deposits of the Agent
               for monies of like amount.


<PAGE>
                                     - 74 -


7.6.9          Conflict: Each Standby Credit shall be subject to the Issuing
               Bank's customary Standby Credit terms and procedures from time to
               time in effect and shall be in a form acceptable to the Issuing
               Bank. Each Borrower shall execute and deliver such standard form
               indemnities, bonds and other assurances as the Issuing Bank may
               reasonably require from time to time with respect to Standby
               Credits and such standard form indemnities, bonds and other
               assurances shall take effect subject to Section 1.11. A Standby
               Credit shall in no event contain provisions requiring the Issuing
               Bank to satisfy itself, prior to payment thereunder, as to any
               conditions for a drawing thereunder other than the presentation
               of prescribed documents.

7.6.10         Prepayment: If any provision of this Agreement has the effect of
               requiring a Standby Credit to be prepaid, such prepayment is
               effected by providing the Agent with cash cover in the Currency
               in which that Standby Credit is denominated, by reducing, whether
               by partial cancellation or otherwise, (in accordance with the
               terms of this Agreement and the relevant Standby Credit) the
               amount that may be demanded under that Standby Credit (or by such
               amount automatically reducing in accordance with the terms of the
               relevant Standby Credit) or by cancelling that Standby Credit by
               returning the original to the Issuing Bank together with written
               confirmation (in form and substance satisfactory to the Issuing
               Bank) from the beneficiary that the Issuing Bank has no further
               liability under that Standby Credit. "CASH COVER" is provided, in
               whole or in part, in respect of a Standby Credit at any time by
               paying an amount, in the Currency in which that Standby Credit is
               denominated, equal to the whole or a part of the maximum amount
               which may be drawn under such Standby Credit at such time to the
               Agent, to be held by the Agent pursuant to the Relevant
               Borrower's debenture listed in Schedule L and the Agent paying
               the amount so received by it into an interest bearing account
               with it in the name of the Relevant Borrower (a "CASH COLLATERAL
               ACCOUNT") from which the only withdrawals which may be made until
               the relevant Standby Credit is otherwise cancelled or expires or
               prepaid in its entirety are withdrawals to pay the Issuing Bank
               amounts due and payable to it under this Agreement following any
               payment made by it under such Standby Credit. If a Standby Credit
               is cancelled or expires or is returned to the Issuing Bank by the
               beneficiary for cancellation without payment, then, so long as no
               Event of Default has occurred, the Relevant Borrower shall
               thereafter be free to withdraw any remaining credit balance in
               the Cash Collateral Account pertaining to such Standby Credit.

7.7            LIBOR LOANS - MARKET DISRUPTION

               If at any time prior to the commencement of any Interest Period,
any Lender (an "AFFECTED LENDER") shall have determined and gives notice to the
Agent (which will promptly notify the Borrowers and the other Lenders) that it
has become unlawful or impossible for that Lender to make, maintain or fund any
LIBOR Loan or that the Lender's ability to make, maintain or fund such LIBOR
Loan has been materially adversely affected because:


<PAGE>
                                     - 75 -


7.7.1          of circumstances affecting the London interbank market or
               elsewhere which result in there not existing adequate and fair
               means for ascertaining the rate of interest applicable to such
               LIBOR Loan during such Interest Period;

7.7.2          deposits in U.S. Dollars are not being offered to a Lender in the
               London interbank market or elsewhere in sufficient amounts in the
               ordinary course of business; or

7.7.3          any Change in Law or any change in national or international,
               financial, political or economic conditions or currency exchange
               rates or exchange control,

then, from and after the date of such determination for so long as such
condition shall continue to exist, no Borrower shall have the right to obtain or
maintain a participation in any LIBOR Loan from the Affected Lender. When the
Affected Lender has made any such determination, upon notice thereof by the
Agent to the Relevant Borrower, the Relevant Borrower shall on the last day of
the then current Interest Period applicable to the participation of the Affected
Lender in any LIBOR Loan owing by the Relevant Borrower to such Lender either
(i) repay to the Affected Lender its participation in such LIBOR Loan together
with all unpaid interest accrued thereon to the date of repayment and all other
amounts payable to the Affected Lender hereunder in respect of such LIBOR Loan
or (ii) convert its participation in such LIBOR Loan to another form of Loan
under the same Credit Facility in the same Currency.

7.8            ILLEGALITY

               If any Change in Law shall make it unlawful or impossible for any
Lender (an "AFFECTED LENDER") to make, maintain or fund its participation in any
Advance, such Affected Lender shall promptly give notice to the Agent which will
promptly give notice to the Borrowers and the other Lenders. Upon the Agent
giving such notice the obligation of the Affected Lender to make or continue its
participation in such Advances, which it would be unlawful or impossible for
such Lender to make or continue, shall be suspended for so long as such
condition shall exist. Upon receipt of such notice the Relevant Borrower shall
either (i) convert each participation of the Affected Lender in each affected
Advance to another Type of Advance under the same Credit Facility in the same
Currency or (ii) repay the Affected Lender's participation in such Advance
together with all unpaid interest accrued thereon to the date of repayment and
all other amounts payable hereunder to such Affected Lender in respect of such
Advance, in either case (A) on the Maturity Date applicable to each such
Advance, if the Affected Lender may lawfully continue to maintain and fund its
participation in such Advance to such date, or (B) immediately if the Affected
Lender may not lawfully continue to fund and maintain its participation in such
Advance to such dates and the Relevant Borrower promptly shall pay any
compensation owing to such Lender under Section 8.3 in consequence thereof. If
the Relevant Borrower fails to select (i) or (ii), the Relevant Borrower shall
be deemed to have selected to prepay such Affected Lender's participation in any
affected Advance.

7.9            FACILITY EXCESSES BY REASON OF FOREIGN CURRENCY FLUCTUATIONS

               If and each time the Agent determines (which determination shall
be conclusive and bind the Borrowers, absent manifest error) that the
Outstanding Amount of all Advances under either Credit Facility exceeds 102% of
the Revolver Commitment or Total Term


<PAGE>
                                     - 76 -


Commitment, as the case may be, by reason of fluctuations in exchange rates, the
Agent may request (or if such excess is more than five percent (5%) of the
Revolver Commitment or Total Term Commitment, as applicable, shall request) the
Borrowers to repay the entire excess over the Revolver Commitment or Total Term
Commitment, as applicable. Within five Banking Days of the receipt of any such
request, each Relevant Borrower with Advances outstanding under the relevant
Credit Facility shall repay to the Lenders such Advances outstanding under such
Credit Facility as may be required to ensure that such excess is eliminated.

7.10           EVIDENCE OF INDEBTEDNESS

7.10.1         The indebtedness of each Borrower to each Lender hereunder
               resulting from all Loans shall be evidenced by the loan accounts
               which shall be opened and maintained by the Agent. The Agent
               shall debit in its accounts the amount of all such indebtedness
               and shall credit therein each repayment of such indebtedness by
               appropriate entries. Entries recorded by the Agent or its
               employees on a loan history statement for each Borrower, shall be
               prima facie evidence thereof, absent manifest error. The failure
               of the Agent to record any such amount or date shall not affect
               the obligation of a Borrower to pay amounts due hereunder in
               accordance with this Agreement.

7.10.2         Any Lender may request that its Rateable Share in Advances be
               evidenced by a promissory note (a "NOTE"). In such event, each
               Borrower shall prepare, execute and deliver to such Lender a Note
               payable to the order of such Lender in a form supplied by the
               Agent. Thereafter, the Rateable Share of such Lender in all
               outstanding Advances evidenced by such Note and interest thereon
               shall at all times (including after any transfer pursuant to
               Section 14.5) be represented by one or more Notes payable to the
               order of the payee named therein or any Transferee, except to the
               extent that any such Lender or Transferee subsequently returns
               any such Note for cancellation and requests that its Rateable
               Share on outstanding Advances once again be evidenced as
               described in Section 7.10.1.

                                    ARTICLE 8
                                FEES AND EXPENSES

8.1            COMMITMENT FEE

8.1.1          The Corporate Borrowers and Gerdau Steel shall pay to the Agent
               for the account of the Lenders a commitment fee in respect of the
               Revolver Facility calculated at the Applicable Margin. Such
               Applicable Margin shall be computed upon the amount by which the
               Maximum Amount of the Revolver Facility exceeds the daily
               aggregate Outstanding Amount of all Advances under the Revolver
               Facility.

8.1.2          The Corporate Borrowers and Gerdau Steel shall pay to the Swing
               Line Lender for its own account a commitment fee in respect of
               the Swing Line calculated at the Applicable Margin. Such
               Applicable Margin shall be computed upon the amount by which the
               Swing Line Amount exceeds the daily aggregate Outstanding Amount
               of all Advances under the Swing Line.


<PAGE>
                                     - 77 -


8.1.3          Each commitment fee payable pursuant to this Section 8.1 shall be
               calculated for each calendar quarter from and after September 27,
               1999 until the Revolver Facility Due Date and shall be payable
               quarterly in arrears on the third Banking Day of the immediately
               following calendar quarter. The first payment of such fee shall
               be due and payable on January 6, 2000 and the final payment of
               such fee shall be due and payable on the Revolver Facility Due
               Date.

8.2            PAYMENT OF COSTS AND EXPENSES

               Whether or not any Borrower obtains any Advances hereunder,
Gerdau Steel and the Borrowers shall pay to the Syndicate on demand all
reasonable out-of-pocket costs and expenses of the Syndicate and each of their
respective agents, officers and employees and any receiver or receiver-manager
appointed by the Agent or by a court in connection with this Agreement or any
other Loan Document, including:

8.2.1          the preparation, execution, filing and registration of this
               Agreement or any of the other New Loan Documents, any actual or
               proposed amendment or modification of any of the Loan Documents
               or any waiver hereunder or thereunder and all instruments
               supplemental or ancillary thereto;

8.2.2          obtaining advice as to any Lender's rights or obligations under
               any of the Loan Documents; and

8.2.3          the defence, establishment, protection or enforcement of any of
               the rights of any Lender under any of the Loan Documents
               including all costs and expenses of establishing the validity,
               effect, perfection, enforceability and priority of, or of
               collection of amounts owing under, any of the Loan Documents or
               of any enforcement of the Security,

and further including all of the fees, expenses and disbursements of the
Lenders' Counsel, on a substantial indemnity scale, incurred in connection with
any of the foregoing, and including all Sales Taxes payable by any Lender
(whether refundable or not) on all such fees, costs and expenses.

8.3            INDEMNITY

               The Relevant Borrower shall compensate each Lender for all losses
and expenses including any losses and expenses sustained by any Lender in
connection with the liquidation or re-employment in whole or in part of deposits
or funds borrowed or acquired by the Lender to fund any Advance to the Relevant
Borrower which the Lender may sustain or incur (i) if for any reason a Drawdown,
Conversion or Rollover does not occur on a date requested by such Borrower, (ii)
if the Relevant Borrower fails to give any notice required to be given by it
hereunder, in the manner and at the time specified herein, (iii) as a
consequence of any failure by the Relevant Borrower to repay any Loan
Obligations when required by the terms of this Agreement, or (iv) if the whole
or any part of any Advance owing by the Relevant Borrower is paid to the Lender
or converted to another form of Advance other than on the Maturity Date thereof.
A certificate of a Lender provided to the Agent setting forth the amounts
claimed by the Lender as compensation under this Section 8.3 in respect of such
losses and expenses shall be


<PAGE>
                                     - 78 -


conclusive and binding on the parties hereto, absent manifest error, and the
Relevant Borrower shall forthwith pay to the Agent for the account of the Lender
the amount of compensation set out in each such certificate.

8.4            AGENCY FEE

               The Borrowers and Gerdau Steel shall pay the Agent for its own
account the agency fees stipulated in the Agency Fee Agreement at the times
therein provided.

                                    ARTICLE 9
                             SECURITY AND INSURANCE

9.1            SECURITY

               In addition to the Existing Security, and as security for the due
and punctual payment and performance of all Loan Obligations of each Borrower,
Gerdau Steel and the Borrowers shall deliver or cause to be delivered to and for
the benefit of the Syndicate, the New Loan Documents before the Effective Time.

9.2            PERFECTION

               Each of Gerdau Steel and the Borrowers shall ensure that all the
Security referred to in Section 9.1 is executed and delivered and that the Liens
created thereby and by all other Security are registered, filed, recorded and
perfected at or prior to the time the Implementation Notice is given in all
jurisdictions reasonably required by the Agent.

9.3            SECURITY EFFECTIVE NOTWITHSTANDING DATE OF ADVANCE

               The Liens constituted or required to be created under the
Security shall be effective and the undertakings therein in respect thereto
shall be continuing, whether the monies hereby or thereby secured or any part
thereof shall be advanced before or after or at the same time as the creation of
any such Liens or before or after or upon the date of this Agreement. The
Security shall not be affected by any payments on the Advances, or by the
balance of the Advances fluctuating from time to time, but shall constitute
continuing security to the Lenders for the Loan Obligations from time to time.

9.4            NO MERGER

               The security constituted by the Security shall not merge in any
other security. No judgment obtained by the Agent shall in any way affect any of
the provisions of this Agreement or the Security. For greater certainty, no
judgment obtained by any Lender shall in any way affect the Obligation of Gerdau
Steel or any Borrower to pay interest and fees at the rates, times and in the
manner provided in this Agreement.

9.5            EXISTING SECURITY

9.5.1          Each of Gerdau Steel and the Borrowers confirms that the Existing
               Security shall remain in full force and effect notwithstanding
               amendments to the Existing Loan


<PAGE>
                                     - 79 -


               Agreement reflected in this Agreement and shall continue to
               secure the Loan Obligations until repayment in full of all of the
               Loan Obligations. For greater certainty, (i) Courtice agrees with
               and confirms to the Lenders that as at the Effective Time no
               amount has been paid by it in reduction of the amounts secured
               under the Courtice Debenture, as amended by Amending Agreement
               No. 1 and Amending Agreement No. 3, or the Courtice Supplemental
               Debenture, as amended by Amending Agreement No. 2, and that such
               Security collectively shall secure Loan Obligations of Courtice
               in an aggregate principal amount of up to Cdn. $100,000,000 plus
               interest thereon at a rate of 20% per annum, (ii) MRM agrees with
               and confirms to the Lenders that as at the Effective Time no
               amount has been paid by it in reduction of the amounts secured
               under the MRM Debenture, as amended by Amending Agreement No. 4,
               and that the MRM Debenture, as amended by Amending Agreement No.
               4, shall secure Loan Obligations of MRM in an aggregate principal
               amount of up to Cdn. $80,000,000 plus interest thereon at the
               rate of 25% per annum and (iii) each of Gerdau Steel and the
               Borrowers agrees with and confirms to the Lenders that as at the
               Effective Time no amount has been paid by it in reduction of the
               amounts secured under the Cdn.$350,000,000 debenture dated as of
               September 27, 1999 or December 23, 1999, as applicable, issued by
               it to the Agent and that such debentures collectively shall
               secure Loan Obligations of each of Gerdau Steel and the Borrowers
               in an aggregate principal amount of up to U.S.$100,000,000.00 (or
               the Canadian Dollar equivalent) plus interest thereon at the rate
               of 25% per annum.

9.5.2          Each of the parties hereto acknowledges that the Lien by way of
               floating charge originally created under Section 3.01(b) of the
               MRM Debenture to the extent such Lien applied to the personal and
               moveable property of MRM that is not property of the nature
               described in Section 3.01(a)(i) to (iv) of the MRM Debenture has
               been released.

9.6            INSURANCE

               Each Corporate Borrower will insure, with insurance companies and
in scope satisfactory to the Agent, the Mortgaged Property, and during the term
of this Agreement keep the Mortgaged Property so insured to the extent of its
full insurable value, on a replacement cost basis, against "All-Risks",
including loss or damage by fire, boiler explosion and other casualty, such
policies to contain the usual "Extended Coverage" and "Replacement Cost"
endorsements and the Agent shall be noted therein as a named insured and first
loss payee. Each such policy shall bear endorsements and a mortgage clause in
form and substance satisfactory to the Agent making all proceeds payable
thereunder payable to the Agent as first loss payee. Further, each Corporate
Borrower will at all times maintain general comprehensive liability insurance,
with insurance companies and in scope satisfactory to the Agent, against, inter
alia, claims for personal injury, death or property damage, such insurance to
afford protection in an amount not less than FIVE MILLION DOLLARS. No Borrower
will do or permit anything to be done whereby any of the aforementioned policies
may be vitiated and will pay all premiums and sums of money necessary for
maintaining every such insurance as aforesaid, as the same become due.


<PAGE>
                                     - 80 -


9.7            PARTIAL DISCHARGES OF SECURITY

               Unless an Event of Default has occurred, the Agent will from time
to time upon request of a Borrower execute partial discharges of the Security
prepared by the Borrower (in form and substance satisfactory to the Agent) with
respect to any of its assets disposed of in accordance with Section 11.3.1.1.

9.8            OBLIGATIONS SECURED

               The parties acknowledge that certain of the Existing Security and
other Loan Documents are in generic form and have not been customized for
purposes of this transaction. Accordingly, the parties agree that
notwithstanding anything to the contrary contained in such Existing Security or
other Loan Documents, such Existing Security and other Loan Documents secure the
applicable Obligor's Loan Obligations under this Agreement and/or each guarantee
of each Borrower's Loan Obligations under this Agreement.

9.9            ADDITIONAL OBLIGATIONS SECURED

               For the purposes of the Security and Section 13.25, the
obligations owing by each of Gerdau Steel and the Borrowers to each Hedging
Lender under each Hedging Instrument (whether or not it is an Eligible Hedging
Instrument) shall be deemed to be Loan Obligations due and owing under or
otherwise in respect of this Agreement and shall be guaranteed and secured by
the Security.

9.10           REDEMPTION OF SECURITY

               Upon and subject to (a) none of the Lenders being under any
obligation to make advances or provide other financial accommodation to any of
the Borrowers under or pursuant to this Agreement and (b) and the Loan
Obligations having been repaid and discharged in full, as soon as reasonably
practicable thereafter and at the request and cost of the Borrowers, the Agent
shall (but subject to the rights and claims of any Person having prior right
thereto) reassign to the Borrowers any remaining Mortgaged Property held by the
Agent by or pursuant to this Agreement and release or otherwise discharge the
Liens constituted by the Security, or at the specific request and direction of
the Borrowers, assign any remaining Security to any Person designated by the
Borrowers, in each case without representation or warranty of any kind and, in
the case of an assignment, without recourse of any kind.

9.11           REPAYMENT IN FULL

               Each reference in this Agreement to payment or repayment of Loan
Obligations in full, and words to like effect, means payment or repayment of
such Loan Obligations in cash in full in accordance with the express provisions
of this Agreement, without regard to any compromise, reduction or disallowance
of all or any item or part thereof by virtue of the application of any
bankruptcy, insolvency or other similar such laws or general principles of
equity.


<PAGE>
                                     - 81 -


                                   ARTICLE 10
                         REPRESENTATIONS AND WARRANTIES

10.1           REPRESENTATIONS AND WARRANTIES

               To induce the Lenders to make the Credit Facilities available to
each Borrower, each of Gerdau Steel and the Borrowers represents and warrants,
with respect to itself and (to the extent the context so admits) each other
Gerdau S.A. Group Member, to and in favour of the Syndicate as follows:

10.1.1         Incorporation and Status. It is duly incorporated or formed and
               validly existing under the laws of its jurisdiction of
               incorporation or formation and up-to-date in the filing of all
               corporate or partnership and similar returns under the laws of
               its jurisdiction of incorporation or formation; it has the
               corporate or partnership power and capacity to own its Business
               Assets and to carry on its business as presently carried on by it
               or as contemplated hereunder to be carried on by it.

10.1.2         Power and Capacity. It has the corporate or partnership power and
               capacity to enter into each of the Loan Documents to which it is
               a party and to do all acts and things as are required or
               contemplated under each Loan Document to be done, observed and
               performed by it.

10.1.3         Due Authorization. It has taken all necessary corporate or
               partnership action to authorize the execution, delivery and
               performance by it of each of the Loan Documents to which it is a
               party;

10.1.4         Due Execution. It has duly executed and delivered each Loan
               Document to which it is a party.

10.1.5         No Contravention. The execution and delivery by it of each Loan
               Document to which it is a party and the performance by it of its
               obligations under each such Loan Document (i) does not and will
               not contravene, breach or result in any default under its
               constating documents or other organizational documents or under
               any material mortgage, lease, agreement or other legally binding
               instrument, Permit or Applicable Law to which it is a party or by
               which it or any of its Business Assets may be bound, (ii) will
               not obligate it to grant any Lien to any Person other than the
               Syndicate, (iii) will not result in or permit the acceleration of
               the maturity of any obligation under any material mortgage,
               lease, agreement or other legally binding instrument of or
               affecting it or its Business Assets, and (iv) will not violate
               any Award which is binding on it.

10.1.6         No Consents Required. No authorization, consent or approval of,
               or filing with or notice to, any Person (including any
               Governmental Body) is required which has not been obtained in
               connection with the execution, delivery or performance by it of
               this Agreement or any of the other Loan Documents to which it is
               a party other than as agreed to in writing by the Agent.


<PAGE>
                                     - 82 -


10.1.7         Enforceability. Each of the Loan Documents to which it is party
               constitutes a legal, valid and binding obligation enforceable
               against it, in accordance with its terms, subject only to
               bankruptcy, insolvency or other statutes affecting the
               enforcement of creditors' rights in general and to general
               principles of equity under which specific performance and
               injunctive relief may be refused by a court in its discretion.

10.1.8         Title. Subject only to Permitted Liens, it has good and
               marketable title to its real and personal property (including in
               the case of Courtice, the Real Property owned by it, and, in the
               case of MRM, the Real Property owned by it) free and clear of any
               Liens and no Person has an agreement or right to acquire any such
               property other than inventory in the ordinary course of business.
               The Real Property is all of the real property in which the
               Borrowers have any freehold interest as at the date hereof.

10.1.9         Zoning and Other Matters Relating to Real Estate. The buildings
               and other structures located on the Real Estate owned or leased
               by it and the operation and maintenance thereof comply in all
               material respects with all Applicable Laws; none of such
               buildings or other structures encroaches upon any land not owned
               or leased by a Borrower; there are no restrictive covenants or
               Applicable Laws which in any way restrict or prohibit the use of
               such land, buildings or structures for the purposes for which
               they are presently being used, other than Permitted Liens; there
               are no expropriation or similar proceedings, actual or
               threatened, of which any Borrower has received notice against the
               Real Estate owned or leased by it, other than any which have been
               disclosed to the Agent in writing within five Banking Days of
               such Borrower learning of same.

10.1.10        No Work Orders. It is not aware of any work orders, directions or
               notices having been issued before the date hereof pursuant to any
               Applicable Law pertaining to its Real Estate or any environmental
               matters affecting its Real Estate. No work orders, directions or
               notices have been issued pursuant to any Applicable Law relating
               to its Real Estate or any environmental matters affecting its
               Business or its Real Estate, other than any which have been
               disclosed to the Agent in writing within five Banking Days of
               such Borrower learning of same. It has not received any
               notification from any Governmental Body that any work, repairs,
               construction or capital expenditures are required to be made in
               respect of any Real Estate or any part thereof owned or leased by
               it as a condition of continued compliance with any Applicable Law
               or any Permit issued thereunder, other than any which have been
               disclosed to the Agent in writing within five Banking Days of
               such Borrower learning of same.

10.1.11        Financial Statements. Each of its most recent financial
               statements delivered to the Syndicate pursuant to the provisions
               of this Agreement, in the form delivered to the Syndicate, has
               (except for its quarterly financial statements) been audited by
               its Auditors and has been prepared in accordance with generally
               accepted accounting principles consistently applied throughout
               the period indicated and fairly, in all material respects,
               presents its financial condition or business to which



<PAGE>
                                     - 83 -


               such financial statements relate and the financial information
               presented therein for the period and as at the date thereof. The
               notes to such financial statements do not contain any
               misstatement of a material fact nor do they omit to state a
               material fact required to make any statement contained therein
               not untrue or misleading. Since the date of the last financial
               statements delivered to the Agent, there has been no development
               which has had or will have a Material Adverse Effect.

10.1.12        No Litigation. There is no Litigation against or involving it
               whether in progress or, to the best of its knowledge, threatened,
               which, if determined adversely to it, would have a Material
               Adverse Effect, other than any which has been disclosed to the
               Agent in writing within five Banking Days of such Borrower
               learning of same. No event has occurred which might reasonably be
               expected to give rise to any such proceedings, and there is no
               Award outstanding against it which has or could have a Material
               Adverse Effect, other than any which has been disclosed to the
               Agent in writing within five Banking Days of such Borrower
               learning of same.

10.1.13        Permits, etc. It is duly registered and qualified and holds all
               Permits necessary or appropriate to carry on Business in all
               jurisdictions where the character of the properties owned by it
               or the nature of the Business transacted by it makes such
               registration or qualification necessary under the laws of such
               jurisdiction; all such Permits are in full force and effect; it
               is in compliance in all material respects with the terms and
               conditions of all such Permits applicable to it; and there are no
               proceedings in progress or to the best of its knowledge, pending
               or threatened which may reasonably be expected to result in the
               revocation, cancellation, suspension or any adverse modification
               of any of such Permits.

10.1.14        Hazardous Substances. Its Business is being conducted in material
               compliance with Applicable Law of each jurisdiction in which its
               Business is carried on and its Business is in material compliance
               with applicable Environmental Law and for greater certainty and
               without limiting the generality of the foregoing:

               10.1.14.1  its Business has been operated and has received,
                          handled, used, stored, treated, shipped and disposed
                          of at all times all Hazardous Substances in material
                          compliance with Environmental Law and there are no
                          Hazardous Substances located on any of its Real Estate
                          other than those on such property in material
                          compliance with Environmental Law;

               10.1.14.2  there are no PCBs, including any monochlorinated
                          biphenyl or polychlorinated biphenyl, or any mixture
                          which contains one or more of them, in excess of
                          concentrations of 50 parts per million or any
                          equipment or containers containing PCB's in excess of
                          concentrations of 50 parts per million on any of its
                          Real Estate;

               10.1.14.3  none of the buildings or other structures located on
                          any of its Real Estate contain any friable asbestos;


<PAGE>
                                     - 84 -


               10.1.14.4  there are no underground storage vessels located on
                          any of its Real Estate; and

               10.1.14.5  there have been no unrectified spills, releases,
                          deposits or discharges of any Hazardous Substances on
                          or near any of its Real Estate, except in material
                          compliance with Environmental Law, nor has any of its
                          Real Estate been used at any time by any Person as a
                          landfill or waste disposal site, except for the Real
                          Estate of MRM which is used by MRM and has been used
                          by MRM's predecessors in title in the course of metal
                          recycling and steel manufacturing and fabricating
                          carried out on MRM's Real Estate.

10.1.15        Environmental Matters. Except as disclosed in Schedule N (none of
               which matters so disclosed are material):

               10.1.15.1  There are no existing, pending or threatened:

                          10.1.15.1.1  claims, complaints, notices or requests
                                       received by it in writing or of which it
                                       is aware with respect to any alleged
                                       violation of or alleged liability under
                                       any Environmental Law relating to any of
                                       its Real Estate; or

                          10.1.15.1.2  governmental or court orders, including
                                       stop, clean up or preventative orders,
                                       directions or action requests notice of
                                       which has been received by it or which it
                                       is otherwise aware relating to
                                       environmental matters requiring any
                                       works, repairs, remediation, clean up,
                                       construction or capital expenditures with
                                       respect to any of its Real Estate;

               10.1.15.2  except with respect to shredder fluff and electric arc
                          furnace dust on MRM's Real Estate, to the best of its
                          knowledge, no condition exists at, on or under any of
                          its Real Estate which with the passage of time, the
                          giving of notice, the making of any determination,
                          or any combination of the foregoing, has given rise to
                          or is likely to give rise to material liability under
                          any Environmental Law;

               10.1.15.3  each Borrower has made available for inspection and
                          review on a confidential basis by representatives of
                          the Agent and the Co-Syndication Agents all material
                          environmental or operating documents or records which
                          it is obliged to maintain under all Environmental
                          Laws; and

               10.1.15.4  except for the Real Estate of MRM in respect of any
                          period prior to June 23, 1995, all its Real Estate has
                          been at all times owned, leased, managed, controlled
                          and operated (as applicable) by it and, to the best of
                          its knowledge, its predecessors in title in material
                          compliance with all Environmental Laws.
<PAGE>
                                     - 85 -


10.1.16        All Material Information Supplied. No information furnished by it
               to the Syndicate in connection with any of the Loan Documents
               (including the Information Circular) contains any material
               misstatement of fact or omits to state a material fact necessary
               to make the statements contained therein not misleading in light
               of the circumstances in which they were made and as of the date
               made. Each financial forecast and projection ("FORECAST")
               prepared by it and furnished to the Syndicate was based upon
               assumptions believed to be reasonable by it as of the date of
               preparation; there has been no material change in such
               assumptions or in the information on which such assumptions are
               based which has not been disclosed in writing to the Syndicate;
               it has no reason to believe that any such Forecast as it relates
               to periods ending after its date of preparation, when read in
               conjunction with the related assumptions and other information
               disclosed in writing to the Agent, fails to reflect its judgment
               as the most probable set of economic conditions its planned
               courses of action given these conditions, and such Forecast as it
               relates to periods already ended, does not reflect results which
               are materially higher than the anticipated actual results for
               such periods.

10.1.17        No Material Adverse Change. Since the date of its most recent
               financial statements of Gerdau Steel furnished to the Syndicate,
               there has been no change in any of its Business Affairs which
               could have a Material Adverse Effect.

10.1.18        Compliance with Laws. It is in compliance in all material
               respects with all Applicable Laws, non-compliance with which
               could give rise to a Material Adverse Change. It has obtained all
               Permits and made all Registrations necessary for the conduct of
               its Business.

10.1.19        Unfunded Pension Liabilities. It does not have any unfunded
               liabilities in respect of which it is in default arising out of
               any employee pension plan or any other employee benefit plan to
               which it is a party or by which it is bound, and all requisite
               employer contributions required thereunder to date have been
               made. There is no Award outstanding and no pending or, to its
               knowledge, threatened Litigation against any such plan, any
               fiduciary thereof, or any Gerdau Canada Group Member with respect
               thereto which could have a Material Adverse Effect.

10.1.20        Intellectual Property:

               10.1.20.1  Identification. Schedule O:

                          10.1.20.1.1  contains a complete list of all patents,
                                       subdivided into the categories (i)
                                       developed and owned by each Gerdau Canada
                                       Group Member, (ii) otherwise owned by
                                       each Gerdau Canada Group Member, (iii)
                                       licensed for use by each Gerdau Canada
                                       Group Member; and

                          10.1.20.1.2  contains a complete list of all trade
                                       marks subdivided into the categories (i)
                                       registered, owned and used by each Gerdau
                                       Canada Group Member, (ii) registered,


<PAGE>
                                     - 86 -


                                       owned but not currently used by each
                                       Gerdau Canada Group Member, (iii)
                                       unregistered, owned and used by each
                                       Gerdau Canada Group Member, (4) licensed
                                       for use by each Gerdau Canada Group
                                       Member.

               10.1.20.2  Ownership.

                          10.1.20.2.1  except with respect to those rights in
                                       Intellectual Property Rights owned by
                                       third parties granted to a Gerdau Canada
                                       Group Member pursuant to a license as
                                       disclosed in Schedule O, each Gerdau
                                       Canada Group Member is the sole legal
                                       and beneficial owner of the Intellectual
                                       Property Rights set out in Schedule O,
                                       free and clear of all Liens whatsoever,
                                       except for Permitted Liens; and

                          10.1.20.2.2  the Patent and Trade Mark registrations
                                       and any copyright registrations
                                       identified in Schedule O are valid and
                                       subsisting, and are in good standing, all
                                       required filings with any relevant
                                       governmental intellectual property office
                                       have been made and all required filing
                                       fees have been paid.

               10.1.20.3  Licensing.

                          10.1.20.3.1  all licenses granted by each Gerdau
                                       Canada Group Member permitting third
                                       parties to use any Intellectual Property
                                       Rights of any Gerdau Canada Group Member
                                       (the "LICENCES") are set out in Schedule
                                       O;

                          10.1.20.3.2  all Licences are in full force and effect
                                       unamended, each Gerdau Canada Group
                                       Member party thereto has duly observed
                                       and performed all of its covenants and
                                       obligations under each of the Licenses
                                       and there has not been any default under
                                       or breach of any Licenses by the other
                                       parties thereto; and

                          10.1.20.3.3  no Gerdau Canada Group Member has granted
                                       any Licences to any Person other than the
                                       Licences disclosed in Schedule O.

10.1.21        Taxes and Claims. It has:

               10.1.21.1  delivered or caused to be delivered all Income Tax and
                          Sales Tax returns and other Tax returns which are now
                          due to the appropriate Governmental Body;

               10.1.21.2  paid and discharged all lawful claims for labour,
                          material and supplies;

<PAGE>
                                     - 87 -


          10.1.21.3  paid and discharged all Taxes payable by it;

          10.1.21.4  made provision for appropriate amounts in respect of any
                     Taxes likely to be exigible in accordance with generally
                     accepted accounting principles;

          10.1.21.5  withheld and collected all Taxes required to be withheld
                     and collected by it and remitted such Taxes to the
                     appropriate Governmental Body; and

          10.1.21.6  paid and discharged all obligations incidental to any trust
                     imposed upon it by statute which, if unpaid, might become
                     or give rise to enforcement rights under a Lien upon any of
                     the Mortgaged Property,

          and no assessment, appeal or claim is, as far as it is aware, being
          asserted or processed with respect to such claim, Taxes or
          obligations;

10.1.22   Non-Default. It is not in default, in any respect which materially and
          adversely affects its Business Affairs in respect of any Award or
          demand of any Governmental Body or under any indenture, mortgage, deed
          of trust, agreement or other instrument to which it is a party or by
          which it is bound and no Default or Event of Default has occurred and
          is continuing.

10.1.23   Solvency. Each Gerdau S.A. Group Member is Solvent.

10.1.24   Ownership of Subsidiaries. Attached as Schedule E - Part I is a chart,
          as at the date of this Agreement, identifying all of the direct and
          indirect Subsidiaries of Gerdau S.A. which hold, directly or
          indirectly, through Subsidiaries, Capital Stock in any Gerdau S.A.
          Group Member, as well as the percentage of all issued Capital Stock
          held by Gerdau S.A., directly or indirectly. Attached as Schedule E -
          Part II is a chart, pro forma as at the Effective Time and assuming
          the AmeriSteel Merger Transactions have taken place, identifying all
          of the direct and indirect Subsidiaries of Gerdau S.A. which hold,
          directly or indirectly through Subsidiaries, Capital Stock in any
          Gerdau S.A. Group Member, as well as the percentage of all issued
          Capital Stock held by Gerdau S.A., directly or indirectly.

10.1.25   Year 2000 Problem. Each Gerdau Canada Group Member has carefully
          reviewed and identified all material aspects of the Gerdau Canada
          Group's Business which could be adversely affected by the "Year 2000
          Problem" (ie., the risk that computer applications may be unable to
          recognize and properly perform date sensitive functions for periods
          ending in the next millennium). The software used in the Gerdau Canada
          Group's Business is to the best of its knowledge Year 2000 Compliant.
          For this purpose, "YEAR 2000 COMPLIANT" means:

          10.1.25.1  The software accepts, calculates, compares, sorts,
                     extracts, sequences, and otherwise processes date inputs
                     and date values (whether forward or backward), and returns,
                     generates, processes and displays date output and date
                     values (collectively, the "PROCESSES"), accurately,

<PAGE>
                                     - 88 -


                     without interruptions, and in a consistent manner (without
                     errors or omissions due to date selection), regardless of
                     the date used, and whether before, on or after January 1,
                     2000 and whether or not the dates are affected by leap
                     years;

          10.1.25.2  The software accepts and responds to two-digit year-date
                     input in a manner that resolves any ambiguities as to the
                     century in a defined, predetermined, and appropriate
                     manner; and

          10.1.25.3  The software stores, processes and displays date
                     information (including in user interfaces and data fields)
                     in ways that are unambiguous as to the determination of the
                     century in a defined, predetermined and appropriate manner.

10.1.26   Employee Relations. There are no strikes, work stoppages or
          controversies pending or, to its knowledge, threatened between any
          Gerdau Canada Group Member and any of its employees (including unions
          representing employees), other than employee grievances arising in the
          ordinary course of business which would not reasonably be likely to
          result in work stoppages, and other than those disclosed in writing to
          the Lenders.

10.1.27   Investment Company; Public Utility Holding Company. No Borrower or
          Gerdau S.A. Group Member is, and after giving effect to any Advance no
          Borrower or Gerdau S.A. Group Member will be, an "investment company"
          or a company "controlled" by an "investment company" within the
          meaning of the United States Investment Company Act of 1940, as
          amended. No Borrower or Gerdau S.A. Group Member is subject to
          regulation under the United States Public Utility Holding Company Act
          of 1935, as amended.

10.1.28   Federal Reserve Regulations. No Borrower or Gerdau S.A. Group Member
          is engaged, directly or indirectly, principally or as one of its
          important activities, in the business of extending, or arranging for
          the extension of, credit for the purpose of purchasing or carrying
          margin stock (as defined in Regulation U). Neither the borrowing of
          any Advance hereunder, nor the use of the proceeds thereof, will (i)
          be used to purchase or carry any "MARGIN STOCK" within the meaning of
          Regulation U, or (ii) violate or be inconsistent with the provisions
          of Regulation U. None of the assets which are subject to any
          limitation on sale, pledge or other restriction under the Loan
          Documents have been, or will be, margin stock.

10.1.29   Chief Executive Office. The location of the chief executive office (as
          that term is used in Section 7(4) of the Personal Property Security
          Act (Ontario) of each Borrower and Gerdau S.A. Group Member is listed
          in Schedule P.

10.1.30   Gerdau S.A. Trust Deed: The execution, delivery and creation and
          performance of obligations under each Loan Document by each party
          thereto and the consummation of the transactions contemplated in each
          Loan Document


<PAGE>
                                     - 89 -


          (including the creation of the Security contemplated thereby) and by
          the Reorganization Transactions are permitted by, and do not and will
          not violate or breach any obligation under or give rise to any
          default, Potential Event of Default or Event of Default (each as
          defined in each Gerdau S.A. Trust Deed) or similar such event
          (howsoever described) under the Gerdau S.A. Trust Deed.

10.2      SURVIVAL OF REPRESENTATIONS AND WARRANTIES

          Each of Gerdau Steel and the Borrowers covenants that the
representations and warranties made by it in this Article 10 shall be true and
correct on each day that this Agreement remains in force and effect, and all
such representations and warranties shall be deemed to be made on each such day
with the same effect as if such representations and warranties had been made and
given on and as of such day, notwithstanding any investigation made at any time
by or on behalf of any Lender; except that if any such representation and
warranty is specifically given in respect of information as of a particular date
or particular period of time and relates only to such information, then such
representation and warranty shall continue to be given as at such date or for
such period of time until the information to which it relates is updated at
which point it shall continue to be given as of such updated date or period of
time, and so forth from time to time.

10.3      ENVIRONMENTAL INDEMNITY

          Each of Gerdau Steel and the Borrowers hereby agrees forthwith on
demand to indemnify and save the Syndicate harmless, from and against any and
all losses and expenses which the Syndicate may at any time or from time to time
suffer or incur as a result of, in respect of, or arising out of any and all
environmental claims or liabilities of any kind, including, but not limited to,
any claims in nuisance, negligence, strict liability, or any other cause of
action arising out of a discharge of a Contaminant into the natural environment
and (to the extent permitted by applicable law) any fines or orders of any kind
that may be levied or made pursuant to an Environmental Law, relating to,
arising out of or in respect of any of the Business Assets of any Gerdau S.A.
Group Member or the Business and whether or not any of the Syndicate is in
charge, management or control of all or any part of any of the Business Assets
of any Gerdau S.A. Group Member or the Business. Each reference above in this
Section 10.3 to any of the Syndicate shall be deemed to include the Syndicate
member and its directors, officers, employees, agents, solicitors, accountants,
consultants, financial advisors and all other representatives, and each
Syndicate member shall be constituted as the trustee of each of its own
directors, officers, employees, agents, solicitors, accountants, financial
advisors and other representatives and shall hold and enforce their rights under
this Section 10.3 for their respective benefits.

                                   ARTICLE 11
                                    COVENANTS

11.1      AFFIRMATIVE COVENANTS

11.1.1    Gerdau Steel and Borrowers' Covenants. So long as any Loan Obligations
          remain payable or any Borrower may be or become entitled to any
          Drawdown,


<PAGE>
                                     - 90 -


          unless the Majority Lenders otherwise consent in writing, each of
          Gerdau Steel and the Borrowers covenants and agrees with the Syndicate
          that it will, and (where the context so admits) it will ensure that
          each Gerdau S.A. Group Member will, duly perform and comply with each
          of the following affirmative covenants:

          11.1.1.1  Punctual Payment. It shall pay or cause to be paid all Loan
                    Obligations falling due hereunder on the dates and in the
                    manner specified herein.

          11.1.1.2  Conduct of Business. It shall do or cause to be done all
                    things necessary or desirable to maintain its corporate or
                    partnership existence, in its present jurisdiction of
                    incorporation or formation, and to maintain its corporate or
                    partnership power and capacity, to own its properties and
                    assets, wherever located, and for it to carry on its
                    Business in each jurisdiction in which it carries on
                    Business or owns, leases, manages, controls or operates
                    Business Assets.

          11.1.1.3  Preservation of Permits. It shall preserve and maintain all
                    Permits and Registrations necessary or appropriate for it to
                    carry on its Business or own, lease, manage, control or
                    operate its Business Assets in each jurisdiction in which it
                    carries on Business or owns, leases, manages, controls or
                    operates Business Assets.

          11.1.1.4  Compliance with Applicable Law and Contracts. It shall
                    comply with the requirements of all Applicable Law and all
                    obligations which, if contravened, could give rise to a Lien
                    over any of the Mortgaged Property or have a Material
                    Adverse Effect and it shall comply with all insurance
                    policies and all contracts to which it is a party or by
                    which it or any of its Business Assets are bound,
                    non-compliance with which would, singly or in the aggregate,
                    have a Material Adverse Effect.

          11.1.1.5  Accounting Methods. It shall maintain a system of accounting
                    which is established and administered in accordance with
                    GAAP.

          11.1.1.6  Financial Records. It shall keep adequate records and books
                    of account in which accurate and complete entries shall be
                    made in accordance with GAAP reflecting all transactions
                    required to be reflected by GAAP and keep accurate and
                    complete records of any property owned or leased by it.

          11.1.1.7  Maintenance of Mortgaged Property. It shall maintain its
                    Mortgaged Property in good repair, working order and
                    condition (reasonable wear and tear excepted) and from time
                    to time make or cause to be made all necessary and
                    appropriate repairs, renewals, replacements, additions and
                    improvements thereto.


<PAGE>
                                     - 91 -



          11.1.1.8  Payment of Taxes and Claims. It shall:

                    11.1.1.8.1  pay and discharge all lawful claims for labour,
                                material and supplies;

                    11.1.1.8.2  deliver or cause to be delivered all Income Tax,
                                Sales Tax and other Tax returns when they are
                                due to the appropriate Governmental Body;

                    11.1.1.8.3  pay and discharge all Taxes payable by it;

                    11.1.1.8.4  withhold and collect all Taxes required to be
                                withheld and collected by it and remit such
                                Taxes to the appropriate Governmental Body at
                                the time and in the manner required; and

                    11.1.1.8.5  pay and discharge all obligations incidental to
                                any trust imposed upon it by statute which, if
                                unpaid, might become, or give rise to
                                enforcement rights under, a Lien upon any of the
                                Mortgaged Property,

          except that no such claim, Taxes (other than Taxes required to be
          withheld and remitted pursuant to the Income Tax Act (Canada), the
          Excise Tax Act (Canada) or any provincial legislation of comparable
          nature) or obligations need be paid, collected or remitted if (i) it
          is being actively and diligently contested in good faith by
          appropriate proceedings, (ii) reserves considered adequate by it and
          its Auditors shall have been set aside therefor on its books, and
          (iii) such claim, Taxes, or obligation shall not have resulted in a
          Lien other than a Permitted Lien, all enforcement proceedings shall
          have been stayed and appropriate security shall have been given, if
          required, to prevent the commencement or continuation of proceedings.

          11.1.1.9  Notice of Litigation and Other Matters. It shall as soon as
                    it becomes aware of the same, give notice to the Agent of
                    the following events:

                    11.1.1.9.1  the commencement of any Litigation against or in
                                any other way relating adversely to it, or any
                                of its Business Assets which, if adversely
                                determined, could singly or when aggregated with
                                all other such Litigation, have a Material
                                Adverse Effect;

                    11.1.1.9.2  any amendment of its constating or other
                                organizational documents;

                    11.1.1.9.3  any development which has had or could have a
                                Material Adverse Effect; and


<PAGE>
                                     - 92 -


                    11.1.1.9.4  any Default or Event of Default, or the
                                occurrence or non-occurrence of any event which
                                constitutes, or which with the passage of time,
                                the giving of notice, the making of any
                                determination, or any combination thereof, would
                                constitute, a material default under any other
                                agreement to which it is a party or by which any
                                of its Business Assets may be bound, giving in
                                each case the details thereof and specifying the
                                action proposed to be taken with respect
                                thereto.

                    11.1.1.10   Delivery of Financial Statements and
                                Information. It shall deliver or cause to be
                                delivered to the Agent (in sufficient numbers to
                                provide a copy for the Agent and each of the
                                Lenders):

                                11.1.1.10.1  as soon as practicable and in any
                                             event within 90 days after the end
                                             of each Fiscal Year, the annual
                                             financial statements of Gerdau
                                             Steel prepared on a Combined Basis
                                             audited by its Auditors, the annual
                                             consolidated financial statements
                                             of Co-Steel audited by its auditors
                                             and unaudited consolidating
                                             financial statements of each of
                                             Co-Steel, the Gerdau Canada Group,
                                             FLS and AmeriSteel for such Fiscal
                                             Year, each prepared in accordance
                                             with GAAP, together with a
                                             Compliance Certificate for such
                                             Fiscal Year, including a
                                             computation of Free Cash Flow;

                                11.1.1.10.2  as soon as practicable and in any
                                             event within 45 days after the end
                                             of each Fiscal Quarter, the
                                             unaudited quarterly financial
                                             statements of Gerdau Steel prepared
                                             on a Combined Basis, the unaudited
                                             quarterly financial statements of
                                             Co-Steel, and consolidating
                                             financial statements of each of
                                             Co-Steel, the Gerdau Canada Group,
                                             FLS and AmeriSteel for the current
                                             Fiscal Year to such Fiscal Quarter
                                             end, prepared in accordance with
                                             GAAP (subject to annual audit
                                             adjustments) consisting in each
                                             case of a balance sheet and
                                             statements of income and retained
                                             earnings (or deficit) and of
                                             changes in financial position,
                                             together with a Compliance
                                             Certificate as at such Fiscal
                                             Quarter end and a commentary
                                             prepared by the Vice President,
                                             Finance of Gerdau Steel summarizing
                                             the salient points of the
                                             performance of each relevant
                                             corporation, as shown in the
                                             quarterly financial statements;

                                11.1.1.10.3  within 90 days after the
                                             commencement of each Fiscal Year,
                                             the budget and business plan of
                                             Gerdau Steel prepared on a Combined
                                             Basis for such Fiscal Year and


<PAGE>
                                     - 93 -


                                             the following four Fiscal Years,
                                             including (A) forecasts of
                                             projected disposals (including
                                             timing and amount thereof) of
                                             Gerdau Steel prepared on a Combined
                                             Basis for each such Fiscal Year,
                                             (B) projected balance sheets and
                                             statements of income and cash flow
                                             and retained earnings (or deficit)
                                             and of changes in financial
                                             position (broken out on a quarterly
                                             basis) for Gerdau Steel prepared on
                                             a Combined Basis and on a
                                             consolidated basis for each other
                                             Gerdau Canada Group Member and (C)
                                             a qualitative analysis and
                                             commentary from the management on
                                             its proposed activities;

                                11.1.1.10.4  within 30 days of the close of each
                                             calendar month end, a Borrowing
                                             Base Report prepared as of such
                                             calendar month end attaching (A) an
                                             aged accounts receivable listing,
                                             (B) an inventory listing and (C) an
                                             aged accounts payable listing, in
                                             each case prepared as at such
                                             calendar month end;

                                11.1.1.10.5  within 45 days after receipt, a
                                             properly completed annual
                                             environmental questionnaire in such
                                             form and requesting details of such
                                             information as the Majority Lenders
                                             may require;

                                11.1.1.10.6  within 90 days after the end of
                                             each Fiscal Year, revised Schedules
                                             to this Agreement reflecting any
                                             changes occurring during such
                                             Fiscal Year in the information
                                             contained in such Schedules
                                             required to ensure that no
                                             representation or warranty
                                             contained in this Agreement is
                                             false or incorrect in any respect,
                                             and thereafter each reference in
                                             this Agreement to any such Schedule
                                             shall be deemed to refer to such
                                             revised Schedule as from the
                                             earliest of (A) the last day of
                                             such 90 day period or (B) the date
                                             of delivery of such Schedule to the
                                             Agent pursuant to this Section
                                             11.1.1.10.6; and

                                11.1.1.10.7  from time to time, such additional
                                             information regarding any of its
                                             Business Affairs as the Agent may
                                             reasonably request.

                    11.1.1.11  Information and Inspection. At any time and from
                               time to time it shall permit any officer, agent
                               or other representative of any Lender, at the
                               expense of Gerdau Steel, to examine and make
                               copies of any abstracts from the records and
                               books of account of any Borrower or Gerdau Canada
                               Group Member and to discuss any of the Business
                               Affairs of any Borrower or Gerdau Canada Group
                               Member with any of its


<PAGE>
                                     - 94 -


                    directors, Senior Officers and with any of its Auditors or
                    other consultants.

          11.1.1.12 Arm's Length Arrangements. Except for transactions with
                    Affiliates expressly permitted herein, only enter into an
                    agreement, transaction or other arrangement with or for the
                    benefit of an Affiliate if such agreement, transaction or
                    arrangement is made on commercially reasonable terms, with
                    no deferred payment terms, at fair market value and
                    consistent with commercial relations between Persons that
                    deal at arm's length. Notwithstanding the foregoing or any
                    other provision of this Agreement, no Gerdau S.A. Group
                    Member shall enter into any agreement, transaction or other
                    arrangement with or for the benefit of, or assume any
                    obligations of, any Co-Steel Group Member, or dispose of any
                    of its Business Assets or transfer or pay any amount to or
                    for the benefit of any Co-Steel Group Member, except for (i)
                    the Reorganization Transactions and (ii) transactions
                    carried out between one Gerdau S.A. Group Member and a
                    Co-Steel Group Member in the ordinary course of trading at
                    fair market value and consistent with commercial relations
                    between Persons that deal at arm's length (including payment
                    terms taking into account the creditworthiness of the
                    purchasing party) provided that the aggregate outstanding
                    amount of all amounts owing by the entire Co-Steel Group to
                    the entire Gerdau S.A. Group pursuant to such transactions
                    shall not exceed U.S.$10,000,000 (or the foreign currency
                    equivalent) at any time.

          11.1.1.13 Gerdau Canada Group Financial Tests. Ensure that the
                    following financial tests are complied with at all times:

                    11.1.1.13.1  Current Ratio. Not permit the ratio of (A) the
                                 current assets of Gerdau Steel prepared on a
                                 Combined Basis divided by (B) the sum of (1)
                                 the current liabilities of Gerdau Steel
                                 prepared on a Combined Basis minus (2) the
                                 current portion of Long Term Debt to be less
                                 than 1.00:1 at any time.

                    11.1.1.13.2  Debt Service Coverage Ratio. Not permit the
                                 Debt Service Coverage Ratio for any period of
                                 four consecutive Fiscal Quarters to be less
                                 than 1.0:1.0 at any time.

                    11.1.1.13.3  Interest Coverage Ratio. Not permit the ratio
                                 for any period of four consecutive Fiscal
                                 Quarters of (A) the sum of (1) EBITDA minus (2)
                                 the aggregate amount of all Capital
                                 Expenditures incurred by Gerdau Steel
                                 determined on a Combined Basis in respect of
                                 such period to (B) Cash Interest Expense to be
                                 less than 2.00:1 at any time.

<PAGE>
                                     - 95 -


                    11.1.1.13.4  Total Debt/EBITDA Ratio. Not permit the Total
                                 Debt/EBITDA Ratio for any period of four
                                 consecutive Fiscal Quarters ending on any
                                 Fiscal Quarter end to exceed the ratio limits
                                 set out below:

<TABLE>
<CAPTION>
FISCAL QUARTER                                                       RATIO LIMIT
--------------                                                       -----------

<S>                                                                     <C>
Each of the last 2 Fiscal Quarters of the 1999 Fiscal Year and
  the first 3 Fiscal Quarters of the 2000 Fiscal Year                   3.25:1

Each of the last Fiscal Quarter of the 2000 Fiscal Year and
  the first 3 Fiscal Quarters of the 2001 Fiscal Year                   2.75:1

Each of the last Fiscal Quarter of the 2001 Fiscal Year and
  the first 3 Fiscal Quarters of the 2002 Fiscal Year                   2.75:1

Each Fiscal Quarter ending on or after December 31, 2002                2.00:1

</TABLE>

                    11.1.1.13.5  Term Debt/Capitalization Ratio. Not permit the
                                 ratio of (A) Long Term Debt divided by (B) the
                                 sum of (1) Tangible Net Worth plus (2) Long-
                                 Term Debt to be greater than (I) at any time
                                 before December 31, 2001, 0.55:1 and (II) at
                                 any time on or after December 31, 2001, 0.40:1.

                    11.1.1.13.6  Tangible Net Worth. Not permit Tangible Net
                                 Worth to be less than the sum of (A)
                                 Cdn.$175,000,000 plus (B) 50% of the cumulative
                                 net income of Gerdau Steel determined on a
                                 Combined Basis earned after December 31, 1999
                                 plus (C) 100% of the net proceeds of each
                                 Rights Offering (as defined in Section 3.3.6)
                                 at any time.

          11.1.1.14  Comply with Environmental Laws. It shall cause its agents
                     to (i) manage and operate all of its Real Estate in
                     material compliance with Environmental Law, (ii) maintain
                     all material Permits and Registrations required under
                     Environmental Law in relation to all its Real Estate and
                     remain in material compliance therewith and (iii) store,
                     treat, transport, or otherwise dispose of all Hazardous
                     Substances owned, managed or controlled by it in material
                     compliance with Environmental Law.
<PAGE>
                                     - 96 -


          11.1.1.15  Environmental Reports. It shall forthwith notify the Agent
                     of and:

                     11.1.1.15.1 promptly provide copies to the Agent of each
                                 environmental report prepared by or on its
                                 behalf in respect of any of its Real Estate
                                 and filed with any Governmental Body pursuant
                                 to Environmental Law; and

                    11.1.1.15.2  promptly make available for inspection and
                                 review by the Agent (i) each environmental
                                 report prepared by or on its behalf in
                                 accordance with its regular environmental
                                 practices and procedures and (ii) the report on
                                 any environmental audit conducted on any of its
                                 Real Estate;

          11.1.1.16 Environmental Audits. If any information provided to the
                    Agent leads the Agent to believe on reasonable grounds that
                    a materially adverse environmental liability may have
                    arisen, or a materially adverse change in an existing
                    environmental condition may have occurred, with respect to
                    any of its Real Estate, it shall promptly undertake such
                    environmental audit or audits in scope, content, form and
                    substance satisfactory to the Agent by independent
                    consultants acceptable to the Agent as the Agent may
                    reasonably request and promptly provide copies to the Agent
                    of the report on such audit or audits; provided that, if any
                    Governmental Body has taken or threatened any proceedings
                    against it in respect of such environmental liability or
                    condition, then it shall promptly undertake such audit as
                    may be reasonably necessary to defend against such
                    proceedings and properly analyze the nature and extent of
                    the environmental liability or condition concerned and allow
                    the Agent and its representatives to review the resulting
                    report on such audit on a confidential basis.

          11.1.1.17 Work Orders. It will promptly advise the Agent if it
                    receives notification from any Governmental Body requiring
                    any work, repairs, construction or capital expenditures in
                    respect of any of its Real Estate having an aggregate
                    compliance cost exceeding Cdn. $200,000 or equivalent in
                    foreign currency, and it will forthwith commence and
                    diligently pursue such actions as may be required to comply
                    with such notification.

          11.1.1.18 Lenders Copies. Upon request of the Agent, it will promptly
                    provide the Agent with copies of the financial statements,
                    reports, declarations, forecasts, questionnaires,
                    Certificates and other information provided to the Agent
                    pursuant to this Section 11.1.1 in sufficient numbers to
                    allow the Agent to distribute one copy to each Lender.

<PAGE>
                                     - 97 -


          11.1.1.19 Derivatives. Ensure that at least fifty percent (50%) of the
                    aggregate Outstanding Amount of all Advances under the Term
                    Facility are fully hedged to fixed rates by interest rate
                    swaps or other similar Derivatives for the first three years
                    of the Term Facility and at least twenty-five percent (25%)
                    of the aggregate Outstanding Amount of all Advances under
                    the Term Facility are fully hedged to fixed interests by
                    interest rate swaps or other similar Derivatives for the
                    full term of the Term Facility.

          11.1.1.20 Vertical Amalgamation. The Gerdau Canada Subgroup Interim
                    Holding Company will vertically amalgamate with Gerdau Steel
                    on January 1, 2003.

          11.1.1.21 AmeriSteel Merger Transactions. It will cause the AmeriSteel
                    Merger Transactions to take place strictly in accordance
                    with the description thereof contained herein and in the
                    Information Circular with the result that AmeriSteel becomes
                    a Wholly-Owned Subsidiary of Gerdau USA and all of the
                    issued Capital Stock of AmeriSteel is subject to the first
                    priority Liens in favour of the Syndicate created pursuant
                    to the Security Documents. It will cause the Borrower's
                    Counsel to deliver to the Agent, promptly following the
                    AmeriSteel Merger Transactions taking place, such legal
                    opinions regarding the AmeriSteel Merger Transactions and
                    the Security in the Capital Stock of AmeriSteel consequent
                    upon such AmeriSteel Merger Transactions as the Agent shall
                    reasonably require.

11.2      AGENT ENTITLED TO PERFORM COVENANTS

          If a Default or an Event of Default has occurred and is continuing and
if any Gerdau S.A. Group Member fails to perform any covenant contained in this
Agreement or in any other provision of any Loan Document, the Agent may, but
shall be under no obligation to, perform any such covenant capable of being
performed by such Gerdau S.A. Group Member and if any such covenant requires the
payment of money the Agent may make such payments. All sums so expended by the
Agent shall be deemed to be a Prime Rate Loan (if the expenditure was made in
Canadian dollars) or a Base Rate Loan (if the expenditure was made in United
States dollars) under the Revolver Facility to the Corporate Borrowers and shall
be repaid accordingly.

11.3      NEGATIVE COVENANTS

11.3.1    Gerdau Steel and Borrowers' Negative Covenants. So long as any Loan
          Obligations remain payable or any Borrower may be or become entitled
          to obtain any Drawdown, unless the Majority Lenders otherwise consent
          in writing, each of Gerdau Steel and the Borrowers covenants and
          agrees with the Syndicate that it will, and (where the context so
          admits) it will ensure that each Borrower and Gerdau Canada Group
          Member will, duly perform and comply with each of the following
          negative covenants:


<PAGE>
                                     - 98 -


11.3.1.1  Sale of Assets. Not dispose of any of its Business Assets, except for
          (i) dispositions made in the ordinary course of carrying on its day to
          day business for cash or Cash Equivalent Investments (A) to Person's
          with whom it deals at arm's length at fair market value, (B) to an
          Affiliate in accordance with Section 11.1.1.12 or (C) to any other
          Gerdau Canada Group Member in accordance with Section 11.3.1.12, (ii)
          disposals of assets for fair market value to any other Person, other
          than an Affiliate (including, for certainty, any Co-Steel Group
          Member), in any period of four consecutive Fiscal Quarters having an
          aggregate book value of up to Cdn.$10,000,000 and (iii) the
          Reorganization Transactions.

11.3.1.2  Negative Pledge. Not create, incur, assume or otherwise become liable
          upon or permit to exist any Lien on, against or with respect to any
          part of its Business Assets, except for Permitted Liens.

11.3.1.3  No Merger; Amalgamations; etc. Not enter into any merger,
          amalgamation, arrangement, consolidation, liquidation, winding-up,
          dissolution or similar transaction, except (i) the Merger
          Transactions, (ii) that it may liquidate or dissolve voluntarily into
          and may merge, consolidate or amalgamate with and into any other
          Gerdau Canada Group Member so long as no Default or Event of Default
          has occurred and is continuing or would occur after giving effect
          thereto, and (iii) the vertical amalgamation referred to in Section
          11.1.1.20.

11.3.1.4  Nature of Business. Not change the nature of the Gerdau Canada Group's
          Business or cease to carry on the Gerdau Canada Group's Business or
          any substantial part thereof; and not engage in any new business other
          than a business principally engaged in a Core Related Business.

11.3.1.5  Limitation on Investments. Not make any new Investments after
          November 8, 1996, other than:

          11.3.1.5.1 Cash Equivalent Investments;

          11.3.1.5.2 Investments in Gerdau Canada Group Members in existence at
                     the date hereof, or in any Wholly-Owned Subsidiaries of any
                     such existing Gerdau Canada Group Members that are also
                     Gerdau Canada Group Members, so long as:

                     (A) such Wholly-Owned Subsidiaries are engaged in a Core
                         Business in Canada or the continental United States of
                         America; and
<PAGE>
                                     - 99 -


                               (B) such Wholly-Owned Subsidiaries have granted
                                   Security to the Syndicate in form and
                                   substance satisfactory to the Agent;

                    11.3.1.5.3 Investments of up to Cdn.$2,000,000 in the
                               aggregate in Bradley Steel Processors Inc. made
                               after November 8, 1996;

                    11.3.1.5.4 Subordinated Debt in Gerdau USA to fund the
                               purchase of FLS shares pursuant to the FLS
                               shareholder agreement in an aggregate amount not
                               to exceed U.S.$15,500,000;

                    11.3.1.5.5 Investments in each of Gerdau USA, USP, NSULC and
                               Finco to the extent and in the manner
                               contemplated by the Loan Documents entered into
                               on or about December 23, 1999 and the Mortgaged
                               Property subject thereto, as amended or replaced
                               by the documentation delivered to the Agent
                               pursuant to Section 6.2.3.8.

                    11.3.1.5.6 a cash Investment in a Gerdau S.A. Group Member,
                               other than the Gerdau Canada Subgroup Interim
                               Holding Company and the Gerdau Canada Subgroup
                               Holding Company, (an "EXISTING GERDAU S.A. GROUP
                               MEMBER") in the same amount as, and out of the
                               proceeds of, an Investment made in that Existing
                               Gerdau S.A. Group Member by another Existing
                               Gerdau S.A. Group Member or by Gerdau S.A.,
                               provided that:

                               (i)  at least five (5) Banking Days' prior
                                    written notice of each such Investment is
                                    given by Gerdau Steel to the Agent,
                                    specifying the date and amount of the
                                    Investment;

                               (ii) there may be one Investment, or two or more
                                    successive Investments in a series, as long
                                    as in any case the first of such Investments
                                    is made by Gerdau S.A., the last is made to
                                    AmeriSteel and both or all the Investments
                                    are made during the same Fiscal Quarter; and

                               (iii) repayment of such cash Investments is made
                                     at a time when no Default or Event of
                                     Default has occurred that is continuing and
                                     on not less than five (5) Banking Days
                                     prior written notice to the Agent
                                     specifying the date and method of


<PAGE>
                                    - 100 -


                                     repayment, being either by payment directly
                                     from AmeriSteel to Gerdau S.A. or by
                                     repayment of all the Investments in a
                                     series during the same Fiscal Quarter in
                                     the reverse order to the order in which
                                     they were made;

                    11.3.1.5.7  the Investment in the Gerdau Canada Subgroup
                                Interim Holding Company, the Gerdau Canada
                                Subgroup Holding Company and the Exchanged
                                Co-Steel Shares contemplated by the Co-Steel
                                Combination Transactions and the Investment in
                                the Intermediate Holding Company contemplated by
                                the Status Quo Agreement;

                    11.3.1.5.8  the Investment by MRM in 100% of the issued and
                                outstanding shares of MRM America in the
                                aggregate amount of Cdn.$3,307,376 as at the
                                date hereof;

                    11.3.1.5.9  the Investment by MRM America in 100% of the
                                issued and outstanding shares of MFT in the
                                aggregate amount of Cdn.$1,194,600 as at the
                                date hereof;

                    11.3.1.5.10 the Investment by MRM in 100% of the issued and
                                outstanding shares of Mandak Car Crusher Inc. a
                                corporation incorporated under the laws of
                                Manitoba as at the date hereof, in the aggregate
                                amount of Cdn.$nil as at the date hereof; and

                    11.3.1.5.11 the Investment by MRM in 50% of the issued and
                                outstanding common shares of SSS/MRM Guide Rail
                                Inc., a corporation incorporated pursuant to the
                                laws of Manitoba at the date hereof, in the
                                aggregate amount of Cdn.$4,796,229 as at the
                                date hereof;

          11.3.1.6  Redemptions and Distributions; Dividends. Except for
                    repayments made in accordance with Section 11.3.1.5.6(iii),
                    not declare, set apart for payment or distribution or pay
                    any dividends or make any other distributions (including in
                    specie distributions and Capital Stock dividends) to
                    shareholders that are not Gerdau Canada Group Members on any
                    of its Capital Stock, or redeem, retract, purchase for
                    cancellation or retire or otherwise acquire for value in any
                    manner any of its Capital Stock that is not held by Gerdau
                    Canada Group Members or otherwise reduce its capital in any
                    manner.

          11.3.1.7  Capital Expenditures. Allow Capital Expenditures for the
                    entire Gerdau Canada Group in any Fiscal Year to exceed the
                    Capital Expenditure Limit for that Fiscal Year.


<PAGE>
                                    - 101 -


          11.3.1.8  Operating Lease Payments. Incur operating lease obligations
                    requiring payments in excess of Cdn.$1,500,000 in the
                    aggregate for the entire Gerdau Canada Group during any
                    period of four consecutive Fiscal Quarters.

          11.3.1.9  Derivatives. Not enter into any Derivative except for the
                    purpose of paying or hedging its actual or anticipated
                    normal business operating expenses or hedging its interest
                    rate or currency exposure on its long term Debt.

          11.3.1.10 No Continuance. Not continue under the laws of any other
                    jurisdiction.

          11.3.1.11 Fiscal Year. Not change its Fiscal Year.

          11.3.1.12 Subsidiaries.

                    11.3.1.12.1 Not dispose, or permit any Subsidiary of it to
                                dispose, of any Capital Stock in any Subsidiary,
                                or any rights to acquire Capital Stock in any
                                Subsidiary, or issue, or permit any Subsidiary
                                to issue, any Capital Stock or rights to acquire
                                Capital Stock to any Person except for disposals
                                or issues of Capital Stock (A) by any Gerdau
                                Canada Group Member to another Gerdau Canada
                                Group Member so long as such Capital Stock will,
                                upon acquisition by such Gerdau Canada Group
                                Member, be subject to the Security free and
                                clear of any other Liens, (B) in the case of any
                                Subsidiary that is a limited partnership, of
                                non-Voting Capital Stock in such Subsidiary to
                                any other Person that is not an Affiliate on
                                commercially reasonable terms for fair market
                                value for consideration consisting solely of
                                cash or Cash Equivalent Investments payable on
                                disposal or  issuance consistent with commercial
                                relations with Persons that deal at arm's length
                                or (C) by any Co-Steel Group Member, save that
                                Co-Steel shall not be permitted to dispose of
                                any Capital Stock or rights to acquire any
                                Capital Stock in Gerdau Canada Subgroup Holding
                                Company, and Gerdau Canada Subgroup Holding
                                Company shall not be permitted to issue any
                                Capital Stock or rights to acquire Capital
                                Stock, except to the extent contemplated by the
                                Co-Steel Combination Transactions.

                    11.3.1.12.2 Subject to Section 11.1.1.12, not acquire any
                                new Subsidiary (a) that is a body corporate
                                unless such new Subsidiary becomes a Wholly-
                                Owned Subsidiary on


<PAGE>
                                    - 102 -


                                acquisition and at no time before acquisition
                                was it a Co-Steel Group Member or a Gerdau USA
                                Group Member or (b) that is a limited or general
                                partnership, unless all of the Voting Capital
                                Stock in such Subsidiary will be owned by
                                another Gerdau Canada Group Member on
                                acquisition and at no time before acquisition
                                was it a Co-Steel Group Member or a Gerdau USA
                                Group Member; provided that the foregoing shall
                                not restrict (i) any of the Co-Steel Group from
                                acquiring any new Subsidiary, other than a
                                Subsidiary that owns Capital Stock in the
                                Intermediate Holding Company or (except for the
                                Intermediate Holding Company) in the Gerdau
                                Canada Subgroup Holding Company, (ii) any of
                                AmeriSteel and its Subsidiaries from acquiring
                                any Subsidiary or (iii) prohibit the
                                Reorganization Transactions.

                    11.3.1.12.3 Subject to Section 11.1.1.12, not dispose of any
                                of its Business Assets to any Subsidiary of it,
                                or to any other Gerdau Canada Group Member,
                                except on commercially reasonable terms at fair
                                market value consistent with commercial
                                relations between Persons that deal at arm's
                                length so long as such Business Assets will,
                                upon acquisition by such Subsidiary be subject
                                to the Security free and clear of any other
                                Liens.

          11.3.1.13 Securitizations. Not dispose of any account, note receivable
                    or accounts receivable, with or without recourse, except if
                    such disposal arises from a dealing in the ordinary course
                    of business with the account debtor which owes the relevant
                    obligation.

          11.3.1.14 Other Benefit Plans. With respect to any benefit plan
                    referred to in Section 10.1.19, not incur any accumulated
                    funding deficiency or other unfunded liability in excess of
                    $600,000 in the aggregate.

          11.3.1.15 Change in Control. Not permit any Capital Stock in Gerdau
                    Steel to be owned, directly or indirectly, and Controlled by
                    any Person other than Gerdau S.A. Not permit any Capital
                    Stock in any Gerdau S.A. Group Member to be issued or
                    disposed of if the percentage ownership of Capital Stock of
                    any Gerdau S.A. Group Member directly owned by any other
                    Gerdau S.A. Group Member or (in the case of each of the
                    Intermediate Holding Company and the Gerdau Canada Subgroup
                    Holding Company) Co-Steel on a fully diluted basis (and
                    after giving effect to minority interests) would be diluted
                    below the percentage ownership depicted in Schedule E - Part
                    II.


<PAGE>
                                    - 103 -


          11.3.1.16 Financial Assistance. Except as contemplated by Section
                    11.3.1.5.6, not provide financial assistance, by means of
                    Investments, guarantees, provision of security or otherwise,
                    to any Person other than (a) to another Gerdau Canada Group
                    Member, and (b) to Gerdau USA, NSULC and Finco to the extent
                    and in the manner contemplated by the Loan Documents entered
                    into on or about December 23, 1999 and the Mortgaged
                    Property subject thereto, as amended or replaced by the
                    documentation delivered to the Agent pursuant to Section
                    6.2.3.8.

          11.3.1.17 Management Contracts. Not pay any amount to any Affiliate
                    (including, for certainty, any of the Co-Steel Group, Gerdau
                    Canada Subgroup Interim Holding Company and Gerdau Canada
                    Subgroup Holding Company) under any management agreement or
                    service contract or for any other reason whatsoever.

          11.3.1.18 Repayment of Gerdau S.A. Advances. Not repay the principal
                    amount of any Gerdau S.A. Advance or any part thereof or pay
                    any interest, fees or any other sum on or in respect of a
                    Gerdau S.A. Advance, except that a Gerdau S.A. Advance (or
                    part thereof and/or any accrued but unpaid interest, fees
                    and charges in respect thereof) may be repaid at any time or
                    times during the Fiscal Quarter next following a Fiscal
                    Quarter in respect of which a Compliance Certificate has
                    been delivered to the Agent that discloses no existing
                    Default or Event of Default that is continuing, provided
                    that:

                    11.3.1.18.1 there would be no Default or Event of Default if
                                (i) the relevant repayment of the Gerdau S.A.
                                Advance was included in the Debt Service Cost in
                                respect of the period covered by the relevant
                                Compliance Certificate, (ii) the required Total
                                Debt/EBITDA Ratio in respect of the said period
                                would be complied with if it took account of any
                                Debt or increased Debt of Gerdau Steel that
                                would result if the proposed repayment was made,
                                or (iii) the principal amount to be repaid was
                                excluded from any Indebtedness in which it had
                                been included for purposes of compliance with
                                any other financial tests specified in Section
                                11.1.1.13,

                    11.3.1.18.2 not less than five (5) Banking Days notice in
                                writing of the proposed repayment is given to
                                the Agent, and such notice annexes a copy of the
                                Compliance Certificate referred to above, and

                    11.3.1.18.3 no Default or Event of Default has occurred that
                                is continuing at the time of the repayment.

<PAGE>
                                    - 104 -


          11.3.1.19 Repayment of Kyoei Steel Balance of Sale Notes Refinancing
                    Loans. Not make any payment in respect of a Kyoei Steel
                    Balance of Sale Notes Refinancing Loan without the prior
                    written consent of the Agent (acting on the instructions of
                    the Majority Lenders).

          11.3.1.20 Gerdau Canada Subgroup Holding Company. Not permit the
                    Gerdau Canada Subgroup Holding Company to (i) conduct any
                    business, except for the acquisition and holding of the
                    Gerdau Canada Subgroup Shares, (ii) incur any contractual
                    obligations, except those under the Loan Documents
                    (including the Status Quo Agreement) and the agreements
                    required to be entered into by it to complete the Co-Steel
                    Combination Transactions (which must be in form and
                    substance satisfactory to the Agent), (iii) receive any
                    money or other property, except for the existing Gerdau
                    Canada Subgroup Shares in the manner contemplated by the
                    Co-Steel Combination Transactions, (iv) make any
                    distributions on any of its Capital Stock or redeem or
                    purchase any of its Capital Stock, (v) issue any of its
                    Capital Stock, except to Gerdau Canada Subgroup Interim
                    Holding Company pursuant to the Co-Steel Combination
                    Transactions, or (vi) dissolve, be liquidated or wind up.

          11.3.1.21 Intermediate Holding Company. Not permit the Intermediate
                    Holding Company to (i) conduct any business, except for the
                    acquisition and holding of all the issued Capital Stock in
                    the Gerdau Canada Subgroup Holding Company, (ii) incur any
                    contractual obligations except those under the Loan
                    Documents (including the Status Quo Agreement) and the
                    Intermediate Holding Company Transfer Agreement (as defined
                    in the Status Quo Agreement), (iii) receive any money or
                    other property, except for the issued Capital Stock in the
                    Gerdau Canada Subgroup Holding Company, (iv) make any
                    distributions on any of its Capital Stock or redeem or
                    purchase any of its Capital Stock, (v) issue any Capital
                    Stock, except to Co-Steel in exchange for the entire issued
                    Capital Stock in the Gerdau Canada Subgroup Holding Company
                    pursuant to the Intermediate Holding Company Transfer (as
                    defined in the Status Quo Agreement) or (vi) dissolve, be
                    liquidated or wind up.

          11.3.1.22 Gerdau Canada Subgroup Interim Holding Company. Not permit
                    Gerdau Canada Subgroup Interim Holding Company, before its
                    vertical amalgamation with Gerdau Steel, to (i) conduct any
                    business, except for the holding of the Gerdau Canada
                    Subgroup Holding Company Shares and the Exchanged Co-Steel
                    Shares, (ii) incur any contractual obligations, except those
                    under the Loan Documents and the agreements required to be
                    entered into by it to complete the Co-Steel Combination
                    Transactions (which must be in form and substance
                    satisfactory to the Agent), or (iii) receive any money or
                    other property, except for the existing Gerdau Canada
                    Subgroup Shares and the


<PAGE>
                                    - 105 -


                    Exchanged Co-Steel Shares in the manner contemplated by the
                    Co-Steel Combination Transactions.

          11.3.1.23 Repayment of GTL Netherlands Debt. Not make any payment
                    (including by way of set-off, combination of accounts or
                    conversion to equity) in respect of the Indebtedness of any
                    Gerdau S.A. Group Member owing to GTL Netherlands, except
                    (i) with the prior written consent of the Agent acting on
                    the instructions of the Majority Lenders and (ii) the Debt
                    Restructuring Transactions in accordance with the
                    agreements, documents and instruments delivered to the Agent
                    pursuant to Section 6.2.3.8.

          11.3.1.24 Consolidated Tax Filing. Not participate in or make any
                    consolidated or combined Tax filing with any Co-Steel Group
                    Member.

                                   ARTICLE 12
                         EVENTS OF DEFAULT AND REMEDIES

12.1      EVENTS OF DEFAULT

          The occurrence of any one or more of the following events (each such
event being herein referred to as an "EVENT OF DEFAULT") shall constitute a
default by each Borrower under this Agreement:

12.1.1    Non-Payment of Principal or Interest. Any Borrower fails to pay any
          principal or interest amount outstanding hereunder when due.

12.1.2    Non-Payment of Other Amounts. Any Borrower fails to pay any fee or
          other amount payable hereunder when due and such failure continues
          unremedied for more than three days.

12.1.3    Misrepresentation. Any representation or warranty made or deemed made
          by any Gerdau Canada Group Member or Gerdau S.A. Group Member in any
          Loan Document is found to have been false or incorrect in any material
          respect.

12.1.4    Financial Tests. Any financial test contained in Section 11.1.1.13 or
          in the Gerdau S.A. Guarantee is not complied with, provided that
          non-compliance with Section 11.1.1.13.2 as of the end of any Fiscal
          Quarter shall not be deemed to be an Event of Default if a Gerdau S.A.
          Advance is made within 20 Banking Days of the end of that Fiscal
          Quarter which, if the Gerdau S.A. Advance had been made prior to the
          end of that Fiscal Quarter, would have resulted in compliance with
          Section 11.1.1.13.2, and provided that the prior notice to the Agent
          in respect of such Gerdau S.A. Advance includes details of the
          non-compliance to be cured by it. Notwithstanding anything in this
          Section 12.1.4, (i) the aggregate principal amount of Gerdau S.A.
          Advances made during the period from April 1, to December 31, 2001
          shall not at any time exceed US $15,000,000, and (ii) the aggregate
          principal amount of Gerdau S.A. Advances made during any calendar year
          after December 31, 2001 shall not exceed US $15,000,000, without in
          either


<PAGE>
                                    - 106 -


          case the prior written consent of the Agent (acting on the
          instructions of the Majority Lenders).

12.1.5    Breach by Gerdau Canada Subgroup Holding Company, Gerdau Canada
          Subgroup Interim Holding Company, USP, Gerdau USA, NSULC or Finco. Any
          of Gerdau Canada Subgroup Holding Company, Gerdau Canada Subgroup
          Interim Holding Company, Gerdau USA, NSULC or Finco fails to perform
          or comply with any provision or obligation contained in any Loan
          Document (including the Status Quo Agreement) to which it is party.

12.1.6    Breach of Other Covenants. Any Gerdau S.A. Group Member (other than
          those referred to in Section 12.1.5) fails to perform or comply with
          any provision or obligation contained in any Loan Document to which it
          is a party in any material respect and such failure continues
          unremedied for a period of 15 Banking Days after any Borrower or
          Gerdau S.A. knows or ought to have known of such failure (other than
          those referred to in Sections 12.1.1, 12.1.2, 12.1.3, 12.1.4 or 12.1.5
          above or 12.1.7 or 12.1.17 below.

12.1.7    Cross-Default.

          (a)  Any Gerdau Canada Group Member defaults under any one or more
               agreements, documents or instruments relating to Indebtedness in
               an aggregate amount exceeding Cdn.$25,000,000 (or the Equivalent
               Amount in foreign currency).

          (b)  AmeriSteel or FLS defaults under any one or more agreements,
               documents or instruments relating to Indebtedness in an aggregate
               amount exceeding U.S.$10,000,000 (or the Equivalent Amount in
               other currency).

          (c)  Gerdau S.A. defaults under any one or more agreements, documents
               or instruments relating to Indebtedness in an aggregate amount
               exceeding U.S.$25,000,000 (or the Equivalent Amount in other
               currency).

          (d)  Any payment in respect of a Kyoei Steel Balance of Sale Notes
               Refinancing Loan made without the prior written consent of the
               Agent is made from monies derived, directly or indirectly, from
               any Gerdau S.A. Group Member, it being the intention of the
               parties that all such payments shall be fully subordinated to
               repayment in full and discharge of the Loan Obligations.

          (e)  Any payment in respect of outstanding Gerdau S.A. Advances is
               made from monies derived, directly or indirectly, from any Gerdau
               S.A. Group Member, save for a repayment in accordance with the
               terms of Section 11.3.1.18, or any payment in respect of a loan
               made pursuant to Section 11.3.1.5.6 is made otherwise than in
               accordance with paragraph (iii) of that Section.


<PAGE>
                                    - 107 -


          (f)  Any Indebtedness of any Co-Steel Group Member in an aggregate
               amount exceeding U.S.$10,000,000 (or the Equivalent Amount in
               other currency) is declared due or becomes due, before its
               scheduled maturity date by reason of a default or event of
               default referred to and defined in any of the agreements,
               documents or instruments governing the payment of such
               Indebtedness (including the Co-Steel Credit Agreements) and the
               Agent, in good faith, determines that there is a possibility that
               the Capital Stock of any of the Intermediate Holding Company, the
               Gerdau Canada Subgroup Holding Company and the Gerdau Canada
               Subgroup may be exposed to risk of seizure, loss, forfeiture,
               transfer or other disposal or that the arrangements contemplated
               by the Status Quo Agreement may not be observed or complied with;
               or any event similar to those events described in Section 12.1.9
               below occurs in relation to any Capital Stock or property of any
               Co-Steel Group Member; or any event similar to those events
               referred to Section 12.1.11 below occurs in relation to any
               Co-Steel Group Member.

12.1.8    Unsatisfied Judgments. Any one or more Awards for the payment of money
          in an aggregate amount exceeding Cdn.$1,000,000 (or the Equivalent
          Amount in foreign currency) are rendered against any Gerdau S.A. Group
          Member and such Awards shall remain unsatisfied or unstayed for more
          than 10 Banking Days.

12.1.9    Enforcement of Liens. Any one or more Persons entitled to any Liens on
          any Capital Stock or property of any Gerdau S.A. Group Member having
          an aggregate value exceeding Cdn.$1,000,000, or U.S.$5,000,000 in the
          case of AmeriSteel, take possession of such Capital Stock or property
          or any one or more seizures, executions, garnishments, sequestrations,
          distresses, attachments or other equivalent processes are issued or
          levied against any Capital Stock or property of any Gerdau S.A. Group
          Member having an aggregate value exceeding Cdn.$1,000,000, or
          U.S.$5,000,000 in the case of AmeriSteel, and such property is not
          released within 10 Banking Days or such shorter period as would permit
          such Capital Stock or property to be sold, foreclosed upon or
          forfeited thereunder.

12.1.10   Impossibility. Any Change in Law occurs which has given rise or could
          reasonably be expected to give rise to a Material Adverse Change.

12.1.11   Insolvency. Any Gerdau S.A. Group Member does not generally pay its
          debts as they become due or admits its inability to pay its debts
          generally or makes a general assignment for the benefit of creditors
          or commits an act of bankruptcy (within the meaning of the Bankruptcy
          and Insolvency Act (Canada)) or any proceedings are instituted by or
          against any Gerdau S.A. Group Member seeking to adjudicate it a
          bankrupt or insolvent or seeking liquidation, winding-up,
          reorganization, compromise, arrangement, adjustment, protection,
          relief or composition of it or of its debts under any Applicable Law
          relating to bankruptcy, insolvency or reorganization or relief of
          debtors or other similar matters or seeking the appointment of a
          receiver, manager, receiver and manager, trustee, custodian or other
          similar official for it or for any substantial part of its Business


<PAGE>
                                    - 108 -


          Assets (excluding proceedings being contested by such Gerdau S.A.
          Group Member in good faith by appropriate proceedings so long as
          enforcement remains stayed, none of the relief sought is granted
          (either on an interim or permanent basis) and such proceedings are
          dismissed within 15 days of their commencement); or any Gerdau S.A.
          Group Member takes corporate action to authorize any of the actions
          set forth above in this Section 12.1.11.

12.1.12   Cessation of Business. Any Gerdau S.A. Group Member ceases or suspends
          or threatens to cease or suspend all or a Substantial Portion of its
          business.

12.1.13   Security Imperilled. If any Litigation is commenced which, if
          determined adversely to any Gerdau S.A. Group Member or to the rights
          of the Syndicate, could reasonably be expected to give rise to a
          Material Adverse Change, or any Gerdau S.A. Group Member or any other
          person party to any Loan Document denies that it has any or further
          obligations thereunder.

12.1.14   Material Adverse Change. Any Material Adverse Change occurs.

12.1.15   Change of Ownership. Any Person, or more than one Person acting in
          concert, (other than Gerdau S.A.) acquires ownership or Control of any
          Capital Stock of Gerdau Steel, unless the Majority Lenders consent to
          such acquisition. USP, Gerdau USA or any Gerdau Canada Group Member
          (other than Gerdau Steel) ceases to be a Wholly-Owned Subsidiary of
          the Gerdau Canada Subgroup Holding Company. The Gerdau Canada Subgroup
          Holding Company ceases to own and Control, directly or indirectly, all
          of the Capital Stock of USP or any Gerdau Canada Group Member that is
          a general or limited partnership, unless the Majority Lenders consent
          otherwise. NSULC or Finco ceases to be a Wholly-Owned Subsidiary of
          USP or the Gerdau Canada Subgroup Holding Company, unless the Majority
          Lenders consent otherwise. Gerdau Steel ceases to own and Control at
          least a majority of the Voting Capital Stock of Co-Steel determined on
          a fully diluted basis, after giving effect to each of the
          Reorganization Transactions, unless the Majority Lenders consent
          otherwise. Any Person, other than Gerdau Steel, acquires Capital
          Stock, or rights to acquire Capital Stock, in any class of Capital
          Stock of Co-Steel other than common shares.

12.1.16   Condemnation. Any court, government or governmental agency shall
          condemn, seize, expropriate or otherwise appropriate, or take custody
          or control of, all or any Substantial Portion of the property of any
          Gerdau S.A. Group Member which, when taken together with all other
          property of any Gerdau S.A. Group Member so condemned, seized,
          expropriated, appropriated, or taken custody or control of, during the
          twelve-month period ending with the month in which any such action
          occurs, constitutes a Substantial Portion.

12.1.17   Breach of Special Provisions. Any step or action is taken or omitted
          by any Gerdau S.A. Group Member or any Co-Steel Group Member (or any
          trustee-in-bankruptcy, liquidator or other representative thereof or
          of its creditors) which authorizes or is reasonably likely to result
          in any breach of any of

<PAGE>
                                    - 109 -


          Sections 11.3.1.3, 11.3.1.6, 11.3.1.12, 11.3.1.15, 11.3.1.16,
          11.3.1.17, 11.3.1.20, 11.3.1.21 and 11.3.1.22.

12.2      REMEDIES UPON DEFAULT

          Upon the occurrence of any Event of Default, the Agent may (or, at the
direction of the Majority Lenders, shall) do any one or more or all of the
following:

12.2.1    declare the whole or any part of the unutilized portion (if any) of
          the Credit Facilities to be terminated or reduced, whereupon the
          Lenders shall not be required to make any further Drawdowns or permit
          any further Conversions or Rollovers (other than conversions of
          maturing Bankers' Acceptances to Prime Rate Loans and LIBOR Loans to
          Base Rate Loans);

12.2.2    declare all or any item or part of the Loan Obligations to be
          immediately due and payable, whereupon they shall become so due and
          payable;

12.2.3    suspend any right of a Borrower under any Loan Document;

12.2.4    demand payment under any guarantee comprised in the Security;

12.2.5    realize upon all or part of the Liens constituted under the Security;
          and

12.2.6    take any other action, commence any other suit, action or proceeding
          or exercise such other right as may be permitted at law or in equity
          (whether or not provided for herein or in any other Loan Document) at
          such times and in such manner as the Agent may consider expedient,

all without, except as may be required by Applicable Law, any additional notice,
presentment, demand, protest, noting of protest, dishonour or any other action.
If an Event of Default referred to in Section 12.1.11 occurs, unless the
Majority Lenders otherwise agree, the Loan Obligations shall be accelerated and
become immediately due and payable automatically without any action on the part
of the Agent or any Lender being required. The rights of the Syndicate hereunder
are cumulative and are in addition to and not in substitution for any other
rights or remedies provided by Applicable Law or by the Security. For the
purposes of each Loan Document, an Event of Default which occurs or exists at
any time shall be deemed to be continuing at all times thereafter unless it is
expressly waived in writing by the Majority Lenders, whether or not the default,
breach, failure, event, state or condition that gave rise to such Event of
Default is remedied at any time.

12.3      PAYMENT OF BANKERS' ACCEPTANCES

          Immediately upon the Agent making a declaration pursuant to Section
12.2.2, the Relevant Borrower shall, without the necessity of further act or
evidence, be and become unconditionally obligated to deposit with the Agent the
aggregate face amount of all Bankers' Acceptances then outstanding for the
Relevant Borrower's account and the Relevant Borrower hereby authorizes each
Lender to debit any then existing credit in its accounts with the amount
required to make such payment to the Agent notwithstanding that any such
Bankers'


<PAGE>
                                    - 110 -


Acceptances may be held by the Lender in its own right at maturity. Amounts paid
to the Agent pursuant to this Section 12.3 shall bear interest at the rate
offered by the Agent on deposits of similar amounts for similar terms. All such
amounts, together with interest earned thereon, shall be applied against and
shall reduce to the extent of such amounts the Relevant Borrower's obligations
to pay amounts then or thereafter payable under Bankers' Acceptances at the
respective times such amounts become so payable. Any remaining cash being held
by the Agent pursuant to this Section 12.3 shall be applied against any other
Loan Obligations and any excess thereafter shall be released to the Relevant
Borrower or its assigns, but only after all Bankers' Acceptances have matured
and all Loan Obligations have been satisfied in full.

12.4      LENDERS' RIGHT OF ADVANCE

          In the event that a Borrower fails to comply with its Loan Obligations
under Section 12.3 or 7.6.8, each Lender may, at such time, in its discretion,
make an Advance by way of a Prime Rate Loan under the relevant Credit Facility
on behalf of the Relevant Borrower in an amount not exceeding its participation
in the Outstanding Amount of all outstanding Bankers' Acceptances or the
Outstanding Amount of all outstanding Standby Credits under such Credit Facility
(even if such Advance results in such Lender's participation in the aggregate
Outstanding Amount of all Loans under any Credit Facility exceeding its Revolver
Commitment or Term Commitment, as applicable) and hold the proceeds of such Loan
as security for the obligations of the Relevant Borrower to indemnify such
Lender in respect of such Bankers' Acceptances on their maturity to be applied
in accordance with Section 12.3 or such Standby Credits under Section 7.6.8.

12.5      DISTRIBUTIONS

          All distributions under or in respect of any of the Security shall be
held by any Lender on account of the Loan Obligations without prejudice to any
claim by any Lender for any deficiency after such distributions are received by
any Lender and each Borrower shall remain liable for any such deficiency. All
such distributions may be applied to such part of the Loan Obligations as each
Lender may see fit in its sole discretion, and each Lender may at any time
change any appropriation of any such distributions or other moneys received by
it and reapply the same against any other part of the Loan Obligations as each
Lender may see fit, notwithstanding any previous application.

                                   ARTICLE 13
              THE AGENT AND ADMINISTRATION OF THE CREDIT FACILITIES

13.1      APPOINTMENT AND AUTHORIZATION

          Each Lender irrevocably appoints and authorizes the Agent to execute,
deliver and take such actions as its agent under each Loan Document to which the
Agent is party and to exercise such rights under each such Loan Document as are
specifically delegated to the Agent by the terms thereof, together with such
rights as are reasonably incidental thereto.


<PAGE>
                                    - 111 -


13.2      DECLARATION OF AGENCY

          The Agent declares that it shall hold the Security, the Collateral
charged thereby and the rights granted to it under each other Loan Document for
its own benefit and in its capacity as agent for the ratable benefit of the
Lenders. The rights vested in the Agent by any Loan Document shall be performed
by the Agent in accordance with this Article 13.

13.3      PROTECTION OF AGENT

          The Agent shall not be liable for any action taken or omitted to be
taken by it under any Loan Document or in connection therewith, except for its
own gross negligence or willful misconduct.

13.4      INTEREST HOLDERS

          The Agent may treat each Lender as the holder of all of the interests
of such Lender in respect of the Credit Facilities until a duly executed and
delivered Loan Transfer Agreement signed by such Lender and the Transferee,
completed in form and substance satisfactory to the Agent, has been delivered to
the Agent and the Agent has been paid its required processing fee for such loan
transfer.

13.5      CONSULTATION WITH PROFESSIONALS

          The Agent may engage and consult with the Lenders' Counsel,
accountants, consultants, financial advisors and other experts and the Agent
shall not be liable for any action taken or not taken or suffered by it in good
faith and in accordance with the advice and opinion of the Lenders' Counsel or
such accountants, consultants, financial advisors or other experts.

13.6      DOCUMENTS

          The Agent shall not be under any duty or obligation to examine,
enquire into or pass upon the validity, effectiveness or genuineness of any Loan
Document or any other agreement, document, instrument or communication furnished
pursuant to or in connection with any Loan Document, and the Agent shall be
entitled to assume that the same are valid, effective and genuine, have been
signed or sent by the proper parties and are what they purport to be.

13.7      AGENT AND ITS SUBSIDIARIES AND AFFILIATES

          With respect to its Revolver Commitment, its Term Commitment and those
portions of the Credit Facilities made available by it, the Agent shall have the
same rights hereunder as any other Lender and may exercise the same as though it
were not the Agent and the Agent and its Subsidiaries and affiliates may accept
deposits from, lend money to and generally engage in any kind of business with
any Gerdau Canada Group Member and its Affiliates and Persons doing business
with any Gerdau Canada Group Member or any of its Affiliates as if it were not
the Agent and without any obligation to account therefor.


<PAGE>
                                    - 112 -


13.8      RESPONSIBILITY OF THE AGENT

          The obligations of the Agent to the Lenders under each Loan Document
are only those expressly set forth in such Loan Document, subject as otherwise
provided in this Article 13. The Agent shall not have any fiduciary obligation
to any Lender. The Agent shall only have those contractual obligations expressly
set forth in each Loan Document. The Agent shall not have any duty or obligation
to investigate whether a Default or an Event of Default has occurred. The Agent
shall be entitled to assume that no Default or Event of Default has occurred and
is continuing, unless any officer of the Agent charged with the administration
of the Loan Documents has actual knowledge or has been notified by a Borrower of
such fact or has been notified by a Lender that such Lender considers that a
Default or Event of Default has occurred and is continuing, such notification to
specify in detail the nature thereof.

13.9      ACTION BY THE AGENT

13.9.1    The Agent shall be entitled to use its discretion with respect to
          exercising or refraining from exercising any rights which may be
          vested in it by and with respect to taking or refraining from taking
          any action which it may be able to take under or in respect of any
          Loan Document, unless the Agent has been instructed by the Required
          Lenders to exercise such rights or to take or refrain from taking such
          action; provided, however, that the Agent shall not release or
          postpone any guarantee of any Gerdau S.A. Group Member or release,
          discharge or subordinate any Lien created under any Security without
          the consent of all the Lenders, unless expressly permitted or required
          to do so by the provisions of any Loan Document. The Agent shall not
          incur any obligations under or in respect of any Loan Document with
          respect to anything which it may do or refrain from doing in the
          reasonable exercise of its judgment or which may seem to it to be
          necessary or desirable in the circumstances, except for its gross
          negligence or willful misconduct.

13.9.2    The Agent shall in all cases be fully protected in acting or
          refraining from acting under any Loan Document in accordance with the
          instructions of the Required Lenders, and any action taken or failure
          to act pursuant to such instructions shall be binding on all Lenders.

13.9.3    Notwithstanding anything else herein contained, the Agent may refrain
          from doing anything which would or might in its opinion be contrary to
          any Applicable Law or which would or might otherwise render it liable
          to any Person and may do anything which is, in its opinion, necessary
          to comply with any Applicable Law.

13.9.4    Without prejudice to the provisions of any other Loan Document, the
          Agent shall have the right, but not the obligation to insure any of
          the Collateral or to require any other Person to maintain any such
          insurance and it shall not be responsible for any losses and expenses
          which may be suffered by any Person as a result of the lack of or
          inadequacy or insufficiency of any such insurance.


<PAGE>
                                    - 113 -


13.9.5    The Agent shall have the right to institute, prosecute and defend any
          Litigation affecting the Agent, the Collateral or the Security and to
          compromise any matter or difference or submit any such matter or
          difference to arbitration and to compromise or compound any debts
          owing to the Agent as agent or any other claims against it as such
          agent upon being provided with such evidence as shall seem sufficient
          to the Agent.

13.9.6    The Agent shall have the right to give or enter into any obligation as
          it shall, with the approval of the Required Lenders and subject to all
          of the provisions of the Loan Documents, think fit in relation to the
          Collateral or the Security.

13.9.7    Notwithstanding Section 13.9.1, the Agent may refrain from acting in
          accordance with any instructions of the Required Lenders to begin any
          Litigation, or to take management or control of any Collateral,
          arising out of or in connection with any Loan Document until it has
          received such security as it may require (whether by way of collateral
          deposit or payment in advance or otherwise) for all losses and
          expenses and disbursements which it will or may expend or incur in
          complying with such instructions.

13.9.8    Where the Agent is obliged by the provisions of this Article 13 to
          give any notice or notification "promptly" or "forthwith", if it gives
          such notice or notification within two Banking Days of an officer of
          it charged with the administration of this Agreement becoming aware of
          the subject matter of such notice or notification, it shall be deemed
          to have given such notice or notification promptly or forthwith.

13.10     NOTICE OF EVENTS OF DEFAULT

          In the event that an officer of the Agent charged with the
administration of this Agreement is notified of any Default or Event of Default,
the Agent shall promptly notify the Lenders, and, subject to Section 13.9, the
Agent shall take such action and assert such rights under the Loan Documents as
the Majority Lenders shall request in writing, and the Agent shall not be
subject to any liability by reason of its acting pursuant to any such request.
Prior to receiving any instructions from the Required Lenders in respect of such
Default or Event of Default, the Agent may, but shall not be obliged to, take
such action or assert such rights (other than those matters requiring unanimous
Lender consent under any other provision of this Agreement) as it deems in its
discretion to be advisable for the protection of the Lenders, except that, if
the Required Lenders have instructed the Agent not to take such action or assert
such rights, in no event shall the Agent act contrary to those instructions.

13.11     RESPONSIBILITY DISCLAIMED

          The Agent in such capacity shall not be under any obligation
          whatsoever:

13.11.1   to any Gerdau Canada Group Member as a consequence of any failure or
          delay in the performance by, or any breach by, any Lender of any of
          its obligations under any Loan Document;


<PAGE>
                                    - 114 -


13.11.2   to any Lender, as a consequence of any failure or delay in performance
          by, or any breach by, any Gerdau S.A. Group Member of any of its
          obligations under any Loan Document; or

13.11.3   to any Lender for any statements, representations or warranties in any
          Loan Document or any other agreement, document or instrument
          contemplated by any Loan Document or in any other information provided
          pursuant to any Loan Document or any other agreement, document or
          instrument contemplated by any Loan Document or for the validity,
          effectiveness, enforceability or sufficiency of any Loan Document or
          any other agreement, document or instrument contemplated thereby.

13.12     INDEMNIFICATION

13.12.1   Each of the Lenders severally agrees to indemnify the Agent (to the
          extent not reimbursed by the Relevant Borrower on demand) pro rata
          according to their respective Rateable Shares from and against any and
          all losses and expenses or disbursements of any kind or nature
          whatsoever which may be imposed on, incurred by or asserted against
          the Agent in any way relating to or arising out of any Loan Document
          or any other agreement, document or instrument contemplated thereby or
          any action taken or omitted by the Agent under any Loan Document or
          any agreement, document or instrument contemplated thereby, except
          that no Lender shall be liable to the Agent for any portion of such
          losses and expenses or disbursements resulting from the gross
          negligence or willful misconduct of the Agent.

13.12.2   The Agent may indemnify itself out of the Collateral charged by the
          Security, or any funds received by the Agent pursuant to Section 13.20
          against all of the losses and expenses or disbursements suffered or
          incurred by the Agent in connection with any matter or thing done or
          omitted to be done in any way relating to any Loan Document.

13.13     PROTECTION OF EMPLOYEES, ETC.

          Each reference in Sections 13.1, 13.3, 13.9, 13.10, 13.11, 13.12,
13.15 and 13.20 to the Agent shall (to the extent the context so admits) be
deemed to include the Agent and its directors, officers, employees, agents,
solicitors, accountants, consultants, financial advisors, other experts and all
other representatives and the Agent shall be constituted as agent and bare
trustee of each such Person and shall hold and enforce their rights under those
Sections for their respective benefits.

13.14     CREDIT DECISION

          Each Lender represents and warrants to the Agent that:

13.14.1   in making its decision to enter into this Agreement and to make its
          Revolver Commitment, Term Commitment and its portion of the Credit
          Facilities available to the Borrowers, it has independently taken
          whatever steps it considers necessary


<PAGE>
                                    - 115 -


          to evaluate the financial condition and affairs of each Gerdau S.A.
          Group Member and that it has made an independent credit judgment
          without reliance upon any information furnished by the Agent; and

13.14.2   so long as any portion of the Credit Facilities is being utilized by a
          Borrower, it will continue to make its own independent evaluation of
          the financial condition and affairs of each Gerdau Canada Group
          Member.

13.15     REPLACEMENT AGENT AND REFERENCE LENDERS

13.15.1   The Agent (a "Resigning Agent") may resign at any time by giving
          written notice thereof to the Lenders and Gerdau Steel. Such
          resignation will not be effective until a replacement agent is
          appointed. Upon receipt of notice of any such intended resignation,
          the Majority Lenders and the Borrowers shall have the right to appoint
          a replacement to the Resigning Agent who shall be one of the Lenders.
          If no replacement to the Resigning Agent shall have been so appointed
          and shall have accepted such appointment within 15 days of receipt of
          such notice, the Lenders (excluding the Resigning Agent) shall within
          the following 15 days appoint a replacement who may, but need not be,
          a Lender. If the Lenders fail to appoint a replacement to the
          Resigning Agent within such 15 day period, without limitation of its
          rights under this Section 13.15.1, the Resigning Agent may, on behalf
          of the Lenders, appoint a replacement Agent which shall be a financial
          institution organized under the laws of Canada (or a Province) which
          has (or whose Holding Body Corporate has) combined capital and
          reserves in excess of Cdn $1,000,000,000 or the Equivalent Amount in
          foreign currency and has an office in Toronto. Upon the resignation of
          a Resigning Agent, the replacement administration agent shall
          thereupon succeed to and become vested with all the rights and
          obligations of the Resigning Agent and the Resigning Agent shall be
          discharged from its obligations under the Loan Documents. A
          replacement administration agent shall evidence its acceptance of
          appointment hereunder by signing and delivering a counterpart of this
          Agreement. After any Resigning Agent's resignation or removal
          hereunder as Agent the provisions of this Article 13 shall continue in
          effect for its benefit in respect of any actions taken or omitted to
          be taken by it while it was acting as Agent.

13.15.2   The Agent may nominate up to three Lenders to act as Reference Lenders
          under this Agreement. Any Reference Lender may resign at any time by
          giving notice thereof to the Agent. Upon receipt of such notice, the
          Agent may appoint a replacement Reference Lender who shall be one of
          the Lenders.

13.15.3   The Swing Line Lender may resign at any time by giving notice thereof
          to the Agent. Upon receipt of such notice, the Majority Lenders shall
          appoint a replacement Swing Line Lender who shall be one of the
          Lenders.


<PAGE>
                                    - 116 -


13.16     DELEGATION

          With the prior approval of the Majority Lenders, such approval not to
be unreasonably withheld, the Agent shall have the right to delegate any of its
rights, duties or obligations under the Loan Documents as Agent to any other
Person upon such terms and conditions as the Agent may think fit and the Agent
shall not be bound to supervise the proceedings or be in any way responsible for
any obligations or losses and expenses incurred by reason of any misconduct or
default on the part of any such delegate.

13.17     REQUIRED LENDER DECISIONS

          Where the Required Lenders are required to consent to any act or thing
under any Loan Document, the Agent shall ask all Lenders for such consent to do
any such act or thing. The foregoing shall not limit the right of the Required
Lenders to consent to any such act or thing. A copy of such consent shall be
sent by the Agent to all the Lenders.

13.18     WAIVERS AND AMENDMENTS

13.18.1   The rights of each Lender under each Loan Document shall be cumulative
          and not exclusive of any rights which each Lender would otherwise
          have, and no failure or delay by any Lender in exercising any right
          shall operate as a waiver of it nor shall any single or partial
          exercise of any right preclude its further exercise or the exercise of
          any other right. Subject as otherwise provided in Subsections 13.18.2
          and 13.18.3, any term, covenant, agreement, or condition of any Loan
          Document may only be amended with the consent of the Relevant Borrower
          and the Majority Lenders or compliance therewith may only be waived
          (either generally or in a particular instance and either retroactively
          or prospectively) by the Majority Lenders.

13.18.2   Without the prior consent of every Lender, no amendment, waiver or
          other action referred to in Subsection 13.18.1 shall:

          13.18.2.1 increase the aggregate amount of any Credit Facility, the
                    amount or term of any of the Revolver Commitments, the Term
                    Commitments or the proportion represented by the Rateable
                    Share of any Lender;

          13.18.2.2 postpone or defer the time for the payment of the principal
                    of or interest on any Advance, any Stamping Fee, Commitment
                    Fee or any other amount payable hereunder;

          13.18.2.3 decrease the rate or amount or change the currency of any
                    principal, interest or fees (including Stamping Fees and
                    Commitment Fee) payable hereunder or the requirement of pro
                    rata application in accordance with each Lender's Rateable
                    Share of all amounts received by the Agent in respect of
                    each Credit Facility;

          13.18.2.4 change the definition of "Required Lenders" or "Majority
                    Lenders";


<PAGE>
                                    - 117 -


          13.18.2.5 amend Sections 13.22, 13.25 or this Section 13.18; or

          13.18.2.6 release or postpone any guarantee of any Gerdau S.A. Group
                    Member under any Loan Document or release, discharge or
                    subordinate any Lien created under the Security except as
                    otherwise expressly permitted or required by the provisions
                    of any Loan Document.

13.18.3   No amendment or waiver of any provision of any Loan Document shall
          affect any of the rights or obligations of the Agent, the Swing Line
          Lender or Issuing Bank under any Loan Document without the prior
          consent of the Agent, Swing Line Lender or Issuing Bank.

13.19     DETERMINATION BY AGENT

13.19.1   Good Faith. Any determination to be made by the Agent under any Loan
          Document shall be made by the Agent in good faith and, if so made,
          shall be conclusive and binding on all parties, absent manifest error.

13.19.2   Certificate of the Agent as to Rates. A certificate of the Agent
          certifying any amount or interest or discount rate shall be conclusive
          and binding on the parties hereto for all purposes, absent manifest
          error. No provision hereof shall be construed so as to require the
          Agent to issue a certificate at any particular time.

13.19.3   Notification of Rates. Each Reference Lender and Swing Line Lender (if
          it is not the same Person as the Agent) shall promptly notify the
          Agent of each interest rate that is required to determine any rate of
          interest pursuant to this Agreement. Promptly following receipt of
          each such notice, or promptly after determination if the Agent and the
          Reference Lender or Swing Line Lender is the same Person, the Agent
          shall promptly notify the Lenders of each interest rate the Agent is
          required to determine and report to the Lenders pursuant to this
          Agreement.

13.20     INTERLENDER PROCEDURE FOR MAKING ADVANCES

13.20.1   Subject to the terms and conditions of this Agreement, each Credit
          Facility shall be available to the Relevant Borrower as follows: upon
          receipt by the Agent of a Borrowing Request, the Agent will promptly
          notify each Lender of the Agent's receipt of such notice and of such
          Lender's Rateable Share of such Borrowing. In the case of an issue of
          Bankers' Acceptances, the Agent will round allocations amongst the
          Lenders to ensure that each Bankers' Acceptance issued has a face
          amount which is a whole number multiple of Cdn.$100,000 (and such
          rounded allocations shall constitute the Lenders' respective Rateable
          Shares for the purposes of this Agreement). Subject to Section
          13.20.7, each Lender will make its Rateable Share of each Borrowing or
          its Acceptance Proceeds available to the Agent by paying, no later
          than 11:00 a.m. (Toronto time) on the Borrowing Date requested by the
          Borrower, its Rateable Share of such Advance or such Acceptance
          Proceeds to the Agent's Accounts. Subject to Section 5.6, the Agent
          will make such funds available, upon receipt, to the Relevant Borrower
          on the Borrowing Date by bank transfer to the Relevant Borrower's
          Accounts.


<PAGE>
                                    - 118 -


13.20.2   The obligations of the Agent under this Section 13.20 shall be limited
          to taking such steps as are commercially reasonable to implement the
          instructions described in Section 13.20.1, and the Agent shall not be
          liable for any losses and expenses which may be incurred or suffered
          by the Relevant Borrower and occasioned by the failure or delay of
          funds to reach the designated destination.

13.20.3   Unless the Agent has been notified by a Lender within two Banking Days
          prior to the Borrowing Date requested by a Borrower that such Lender
          will not make available to the Agent its Rateable Share of such
          Borrowing or its Acceptance Proceeds, the Agent may assume that such
          Lender has made such portion of the Borrowing or such Acceptance
          Proceeds available to the Agent on the Borrowing Date in accordance
          with the provisions hereof, and the Agent may, in reliance upon such
          assumption, make available (to the extent applicable) to the Relevant
          Borrower on such date a corresponding amount. If the Agent has made
          such assumption, to the extent a Lender has not so made its Rateable
          Share of the Borrowing or its Acceptance Proceeds available to the
          Agent, such Lender agrees to pay to the Agent forthwith on demand, to
          the extent that such amount is not recovered from the Relevant
          Borrower within seven days of demand (without in any way obligating
          the Agent to take legal action with respect to such collection), such
          Lender's Rateable Share of the Borrowing or its Acceptance Proceeds
          and all losses and expenses incurred by the Agent in connection
          therewith together with interest thereon (at the rate payable
          hereunder by the Relevant Borrower in respect of such Borrowing or at
          the rate per annum equivalent to the one month CDOR BA Rate plus the
          applicable Stamping Fee which would otherwise have been applicable to
          such Bankers' Acceptances) for each day from the date such amount is
          made available by the Agent until the date such amount is paid or
          repaid to the Agent.

13.20.4   Notwithstanding Section 13.20.3, if a Lender fails so to pay any
          portion of any Borrowing or its Acceptance Proceeds to the Agent
          pursuant to Section 13.20.3, the Relevant Borrower shall, without
          prejudice to any rights that the Borrower might have against such
          Lender, repay such amount to the Agent within three Banking Days after
          demand therefor by the Agent.

13.20.5   Any amount payable to the Agent pursuant to this Section 13.20 (other
          than Section 13.20.1) shall be set forth in a certificate delivered by
          the Agent to the Lender concerned and Gerdau Steel (which certificate
          shall contain reasonable details of how the amount payable is
          calculated) and shall be prima facie evidence thereof. If a Lender
          makes the payment to the Agent required by this Section 13.20, the
          amount so paid shall constitute such Lender's Rateable Share of the
          Borrowing or its Acceptance Proceeds for purposes of this Agreement.

13.20.6   The failure of any Lender to make its Rateable Share of any Borrowing
          or its Acceptance Proceeds shall not relieve any other Lender of its
          obligations, if any, hereunder to make its Rateable Share of the
          Borrowing or its Acceptance Proceeds on the Borrowing Date, but no
          Lender shall be responsible for the failure of any other Lender to
          make available its Rateable Share of any Borrowing


<PAGE>
                                    - 119 -


          or its Acceptance Proceeds to be made available by such other Lender
          on any Borrowing Date.

13.20.7   If on any date amounts would be payable under this Agreement by the
          Agent to any Lender and by that Lender to the Agent, then, on such
          date, unless the Agent notifies the Lenders that netting is not to
          apply to such payments, each such party's obligations to make payment
          of any such amount will be automatically satisfied and discharged and,
          if the aggregate amount that would otherwise have been payable by the
          Agent (after receipt from the Relevant Borrower or the Lenders, as the
          case may be) to that Lender exceeds the aggregate amount that would
          otherwise have been payable by that Lender to the Agent (for the
          account of the Relevant Borrower or the Lenders, as the case may be)
          or vice versa, such obligation shall be replaced by an obligation upon
          the Agent or the Lender by whom the larger aggregate amount would have
          been payable to pay to the other the excess of the larger aggregate
          amount over the smaller aggregate amount.

13.21     REMITTANCE OF PAYMENTS

          Forthwith after receipt of any payment of principal, interest, fees or
other amounts for the benefit of the Lenders pursuant to the provisions hereof,
the Agent shall remit to each Lender, its Rateable Share of such payment. If the
Agent, on the assumption that it will receive, on any particular date, a payment
of principal, interest, fees or other amounts hereunder, remits to each Lender
its Rateable Share of such payment and the Relevant Borrower fails to make such
payment, each Lender agrees to repay to the Agent forthwith on demand, to the
extent that such amount is not recovered from the Relevant Borrower within seven
days of demand (without in any way obligating the Agent to take any legal action
with respect to such collection), such Lender's Rateable Share of the payment
made pursuant hereto together with all losses and expenses incurred by the Agent
in connection therewith and interest thereon (at the rate payable hereunder by
the Relevant Borrower in respect of such amount) for each day from the date such
amount is remitted to the Lenders. The exact amount of the repayment required to
be made by the Lenders will be set forth in a certificate delivered by the Agent
to each Lender, which certificate shall be conclusive and binding for all
purposes, absent manifest error.

13.22     REDISTRIBUTION OF PAYMENTS

13.22.1   If any Lender shall exercise any right of counter-claim, set-off or
          bankers' lien or similar right with respect to the property of an
          Obligor or if under any applicable bankruptcy, insolvency or other
          similar law it receives a secured claim the security for which is a
          debt owed by it to such Obligor, it shall apportion the amount thereof
          proportionately between:

          13.22.1.1 amounts comprised in the Loan Obligations owing to such
                    Lender, which amounts shall be applied in accordance with
                    this Agreement; and

          13.22.1.2 amounts otherwise owed to it by such Obligor;


<PAGE>
                                    - 120 -


          provided that any cash collateral account funded by way of advances
          from an Obligor as collateral for a documentary or standby credit or
          letter of guarantee issued by such Lender on behalf of such Obligor
          may be applied by such Lender to such amounts owed by such Obligor to
          such Lender in respect of any such documentary or standby credit or
          letter of guarantee without apportionment.

13.22.2   If a Lender shall, through the exercise of a right, or the receipt of
          a secured claim described above or otherwise receives payment of a
          portion of the Loan Obligations due to it which is greater than the
          proportion received by any other Lender in respect of the aggregate
          amount of the Loan Obligations due to such other Lender (having regard
          to the respective Rateable Shares of the Lenders), the Lender
          receiving such proportionately greater payment shall purchase a
          participation (which shall be done simultaneously with receipt of such
          payment) in that portion of the Loan Obligations due to the other
          Lender or Lenders (the "Selling Lender or Lenders") so that the
          respective receipts shall be pro rata according to their Rateable
          Shares; provided, however, that if all or part of such proportionately
          greater payment received by such purchasing Lender shall be recovered
          from an Obligor by the Selling Lender or Lenders, such purchase shall
          be rescinded and the purchase price paid for such participation shall
          be returned by such Selling Lender or Lenders to the extent of such
          recovery, but without interest. Such Lender shall exercise its rights
          in respect of such secured claim in a manner consistent with the
          rights of the Lenders entitled under this Section 13.22 to share in
          the benefits of any recovery on such secured claims.

13.22.3   If any Lender does any act or thing permitted by subsections 13.22.1
          or 13.22.2, it shall promptly provide full particulars thereof to the
          Agent and the Agent shall promptly provide copies of such particulars
          to the other Lenders.

13.23     PROMPT NOTICE TO LENDERS

          The Agent agrees to provide to the Lenders copies of the information,
notices and reports received by it pursuant to Section 11.1.1.10 promptly upon
receipt of same.

13.24     SEVERAL DEBTS OF THE LENDERS

          Each Lender's share in each Borrowing constitutes a several debt owing
by the Relevant Borrower to such Lender.

13.25     ENFORCEMENT OF SECURITY

          Subject to the Security Co-ordination Agreement, to the extent that
the Agent receives or recovers monies pursuant to any right of enforcement under
the Security, such monies shall (without prejudice to the rights of the Agent to
credit any monies received by it to the Cash Collateral Account), be applied as
among the Syndicate:

13.25.1   first, in or towards payment of all of the Agent's losses and expenses
          and disbursements;


<PAGE>
                                    - 121 -


13.25.2   secondly, in or towards payment of all amounts which are due and
          payable at such time by each Borrower to the Lenders on account of the
          Loan Obligations owing by such Borrower pro rata to the respective
          aggregate amounts owing to the Lenders;

13.25.3   thirdly, if the Loan Obligations have been paid in full, in payment to
          any Person to whom the Agent is obliged to pay in priority to the
          Obligor otherwise entitled thereto, to the extent it is so obliged;
          and

13.25.4   fourthly, thereafter, in payment of the Obligor entitled thereto.

The fact that the Agent may make a payment pursuant to Sections 13.25.3 or
13.25.4 above or may determine that the Loan Obligations have been paid in full,
will not thereafter prevent the Agent from applying any further monies, or any
credit balance on any account, in the order set out in this Section 13.25.

13.26     SWING LINE LOANS

13.26.1   Unless the Swing Line Lender and the Majority Lenders agree otherwise,
          if an Event of Default occurs then the Swing Line Lender will promptly
          request the Agent on behalf of each Relevant Borrower (and for this
          purpose the Swing Line Lender is irrevocably authorized by each
          Relevant Borrower to do so) for an Advance by way of Prime Rate Loan
          or Base Rate Loan (as applicable) from the Lenders pursuant to Section
          2.4 to repay to the Swing Line Lender the Swing Line Loans. The
          Lenders are irrevocably directed by each Relevant Borrower to make any
          Advance by way of Prime Rate Loan or Base Rate Loan (as applicable) if
          so requested by the Swing Line Lender and pay the proceeds thereof
          directly to the Swing Line Lender. At all times thereafter the Swing
          Line Commitment shall be treated as reduced to nil, the Swing Line
          Lender's Revolver Commitment shall be increased by the amount of such
          reduction and the Lenders shall make such adjusting payments amongst
          them in the manner contemplated by Section 13.22.2 as may be required
          to ensure their respective participations in outstanding Advances
          under the Revolver Facility reflect their respective Rateable Shares
          of the Revolver Facility. If any Standby Instrument is thereafter
          drawn upon which results in a further Swing Line Loan the Swing Line
          Lender will again promptly request the Agent on behalf of the Relevant
          Borrower (and for this purpose the Swing Line Lender is irrevocably
          authorized by the Relevant Borrower to do so) for an Advance by way of
          Prime Rate Loan or Base Rate Loan (as applicable) from the Lenders
          pursuant to Section 2.4 to repay that Swing Line Loan and the
          foregoing provisions of this Section 13.26.1 shall equally apply to
          each such further Advance. Each Lender unconditionally agrees to pay
          to the Agent for the account of the Swing Line Lender such Lender's
          Rateable Share of each Advance requested by the Swing Line Lender on
          behalf of the Relevant Borrower to repay Swing Line Loans made by such
          Swing Line Lender.

13.26.2   Except as provided in Section 13.26.4, the obligations of each Lender
          under Section 13.26.1 are unconditional, shall not be subject to any
          qualification or


<PAGE>
                                    - 122 -


          exception whatsoever and shall be performed in accordance with the
          terms and conditions of this Agreement under all circumstances
          including:

          13.26.2.1 any lack of validity or enforceability of the Relevant
                    Borrower's obligations under Section 2.6 or Article 6;

          13.26.2.2 any of the matters referred to in Section 6.2 or 6.3;

          13.26.2.3 the occurrence of any Default or Event of Default or the
                    exercise of any rights by the Agent under Section 13.2; and

          13.26.2.4 the absence of any demand for payment being made, any proof
                    of claim being filed, any Security being enforced, any
                    proceeding being commenced or any judgment being obtained by
                    the Swing Line Lender or the Issuing Bank against the
                    Relevant Borrower.

13.26.3   If a Lender (a "Defaulting Lender") fails to make payment on the due
          date therefor of any amount due from it for the account of the Swing
          Line Lender pursuant to Section 13.26.1 (the balance thereof for the
          time being unpaid being referred to in this Section 13.26.3 as an
          "overdue amount") then until the Swing Line Lender has received
          payment of the overdue amount (plus interest as provided below) in
          full (and without in any way limiting the rights of the Swing Line
          Lender in respect of such failure):

          13.26.3.1 the Swing Line Lender shall be entitled to receive any
                    payment which the Defaulting Lender would otherwise have
                    been entitled to receive in respect of the Credit Facilities
                    or otherwise in respect of any Loan Document; and

          13.26.3.2 the overdue amount shall bear interest payable by the
                    Defaulting Lender to the Swing Line Lender at the rate
                    payable by the Relevant Borrower in respect of the Loan
                    Obligations which gave rise to such overdue amount.

13.26.4   If for any reason, determined by the Agent to be prejudicial to the
          interests of any of the Syndicate, an Advance may not be made pursuant
          to Section 13.26.1 to reimburse the Swing Line Lender as contemplated
          thereby, then promptly upon receipt of notification of such fact from
          the Agent, each Lender shall deliver to the Agent for the account of
          such Swing Line Lender in immediately available funds the purchase
          price for such Lender's participation interest in the relevant
          unreimbursed Swing Line Advances. Each Lender shall, upon demand by
          such Swing Line Lender made to the Agent, deliver to the Agent for the
          account of such Swing Line Lender interest on such Lender's Rateable
          Share from the date of payment by such Swing Line Lender of such
          unreimbursed Swing Line Advances until the date of delivery of such
          funds to such Swing Line Lender by such Lender at a rate per annum
          equal to the Federal Funds Rate (in the case reimbursement is to be
          made in U.S. Dollars) or the one month CDOR BA Rate (in the case the
          reimbursement is to be made in Canadian Dollars) for such period.



<PAGE>
                                    - 123 -


          Such payment shall only, however, be made by the Lenders in the event
          and to the extent such Swing Line Lender has not been reimbursed in
          full by the Relevant Borrower for interest on the amount of such
          unreimbursed Swing Line Advances.

13.26.5   The Swing Line Lender shall, forthwith upon its receipt of any
          reimbursement (in whole or in part) by the Relevant Borrower for any
          unreimbursed Swing Line Advances in relation to which other Lenders
          have purchased a participation interest pursuant to Section 13.26.4,
          or of any other amount from the Relevant Borrower or any other Person
          in respect of such payment (other than pursuant to Section 2.6 or
          6.2), transfer to such other Lender such other Lender's Rateable Share
          of such reimbursement or other amount. In the event that any receipt
          by the Issuing Bank of any reimbursement or other amount is found to
          have been a transfer in fraud of creditors or a preferential payment
          under any applicable insolvency legislation or is otherwise required
          to be returned, such Lender shall promptly return to such Swing Line
          Lender any portion thereof previously transferred to it by such Swing
          Line Lender, without interest to the extent that interest is not
          payable by such Swing Line Lender in connection therewith.

                                   ARTICLE 14
                                     GENERAL

14.1      RELIANCE AND NON-MERGER

          All covenants, agreements, representations and warranties of each
party hereto (other than the Lenders) made herein or in any other Loan Document
or in any certificate or other document signed by any of its directors or
officers and delivered by or on behalf of it pursuant hereto or thereto are
material, shall be deemed to have been relied upon by the Syndicate
notwithstanding any investigation heretofore or hereafter made by the Syndicate
or the Lenders' Counsel or any employee, agent or other representative of any of
the Syndicate and shall survive the execution and delivery of this Agreement and
the other Loan Documents until the Borrowers shall have satisfied, paid in full
and performed all of the Loan Obligations.

14.2      AMENDMENT AND WAIVER

          No amendment of any provision of any Loan Document or consent to any
departure by any other party thereto from any provision thereof is effective
unless it is in writing and signed by the Required Lenders. No amendment of or
consent to any departure from any provision of any Loan Document to which any
party hereto (other than a Lender) is party shall require the agreement of any
other party hereto, except the Required Lenders, to be effective and binding on
all parties hereto. Such amendment or consent shall be effective only in the
specific instance and for the specific purpose for which it is given. No failure
or delay on the part of the Syndicate in exercising any right under any Loan
Document or under any other instrument delivered to any Lender pursuant thereto
and no indulgence or forbearance by any of the Syndicate in respect of the
strict application of the provisions thereof shall operate as a waiver unless
made in writing and signed by an officer of the Agent in accordance with Section
13.18. Any written waiver by the Syndicate shall not preclude the further
exercise by the Syndicate of


<PAGE>
                                    - 124 -


any right hereunder or extend to or apply to any subsequent default of the same
or any other nature.

14.3      SET-OFF OR COMPENSATION

          In addition to and not in limitation of any rights now or hereafter
granted under Applicable Law, but subject to Section 13.22, if a Default or
Event of Default has occurred or is continuing, each Lender, may at any time and
from time to time without prior notice to any other party hereto or any other
Person, any such prior notice being expressly waived by each such party hereto,
combine, off-set, set-off or compensate and apply any and all deposits, general
or special, time or demand, provisional or final, matured or unmatured, in the
same or in different currencies, and any other indebtedness at any time owing by
the Lender, to or for the credit of or for the account of Gerdau Steel or any
Borrower, against and on account of Gerdau Steel's or that Borrower's Loan
Obligations notwithstanding that any of them are contingent or unmatured and
notwithstanding that any such deposit or indebtedness may or may not be
expressed in the same Currency.

14.4      NOTICES

          Any notice or other communication required or permitted to be given
hereunder shall be in writing and shall be given by prepaid first-class mail, by
telecopier or other means of electronic communication or by hand-delivery as
hereinafter provided. Any such notice, if mailed by prepaid first-class mail at
any time other than during or within three Banking Days prior to a general
discontinuance of postal service due to strike, lockout or otherwise, shall be
deemed to have been received on the fourth Banking Day after the post-marked
date thereof, or if sent by telecopier or other means of electronic
communication, shall be deemed to have been received on the Banking Day
following the sending, or if delivered by hand shall be deemed to have been
received at the time it is delivered to the applicable address of the addressee
either to the individual designated in Schedule A or F, as applicable, or to a
senior employee of the addressee at such address (and, in the case of any
Lender, at the same department within the Lender) with responsibility for
matters to which the information relates. Notice of change of address shall also
be governed by this Section 14.4. In the event of a general discontinuance of
postal service due to strike, lock-out or otherwise, notices or other
communications shall be delivered by hand or sent by facsimile or other means of
electronic communication and shall be deemed to have been received in accordance
with this Section 14.4. Notwithstanding the foregoing, no notice or other
communication to the Agent or the Swing Line Lender shall be effective or be
deemed to be received by the Agent or the Swing Line Lender unless it is sent by
telecopier or delivered by hand. Notices and other communications shall be
addressed to the addresses of the relevant party hereto specified beside its
name on Schedule A or F, as applicable.

14.5      BINDING EFFECT AND ASSIGNMENT

14.5.1    Benefit & Burden. The Loan Documents shall enure to the benefit of and
          be binding on the parties hereto, their respective successors and each
          assignee of some or all of the rights or obligations of the parties
          under the Loan Documents permitted by Section 14.5.4. Any reference in
          any such Loan Document to any


<PAGE>
                                    - 125 -


          party shall (to the extent the context so admits) be construed
          accordingly to include reference to such successors and permitted
          assigns.

14.5.2    Borrower. None of Gerdau Steel and the Borrowers may assign all or any
          part of any of its rights or obligations in respect of any Credit
          Facility or under any Loan Document. Where the context so admits, each
          reference in this Agreement to Gerdau Steel or any Borrower shall be
          construed so as to include the successors of Gerdau Steel or such
          Borrower.

14.5.3    Participation. Each Lender may grant a participation to any other
          Person (a "PARTICIPANT") in the whole or any part of its Revolver
          Commitment or Term Commitment (including its share in any Advances
          made by it hereunder) under which the Participant shall be entitled to
          the benefit of the same rights under this Agreement with respect to
          such participation as if it were a party hereto in the place and stead
          of such Lender provided that, in respect of such participated share of
          its Revolver Commitment or Term Commitment and as amongst all parties
          to this Agreement, such Lender shall remain entitled to enforce such
          rights, and shall remain responsible for the performance of all
          obligations, of such Lender under this Agreement with respect to the
          share of its Revolver Commitment or Term Commitment subject to such
          participation.

14.5.4    Assignments. Each Lender (a "TRANSFERRING LENDER") may assign its
          Revolver Commitment or Term Commitment (including its share in any
          Advances made hereunder), or any part thereof in a minimum amount of
          Cdn.$10,000,000, or such lesser amount as the Agent and Gerdau Steel
          may permit, to (i) any Person during the period of primary syndication
          of the Credit Facilities, (ii) any affiliate of the Transferring
          Lender, (iii) prior to the occurrence of an Event of Default, to any
          Person not referred to in clauses (i) and (ii), with the prior consent
          of the Agent and Gerdau Steel, such consent not to be unreasonably
          withheld or delayed or (iv) after the occurrence of an Event of
          Default, to any other Person without the consent of any other party
          hereto, other than the Agent whose consent shall still be required and
          which will not be unreasonably withheld or delayed. Any such transfer
          to any Person permitted pursuant to the preceding sentence (a
          "TRANSFEREE") shall be made pursuant to a loan transfer agreement (a
          "LOAN TRANSFER AGREEMENT") substantially in the form of Schedule H (or
          in such other form to similar effect as the Agent may approve). Each
          Loan Transfer Agreement must be delivered to the Agent at least five
          Banking Days before it takes effect accompanied, if such assignment is
          not being made to an affiliate of an existing Lender and is not being
          made during the period of primary syndication of the Credit
          Facilities, by payment to the Agent of a processing fee of Cdn.$3,500.
          Each party hereto hereby agrees that any such Transferee under any
          such Loan Transfer Agreement shall be entitled to rights identical to
          the rights assigned to such Transferee as if such Transferee were
          named in this Agreement as an original party in substitution for the
          Transferring Lender in respect of such Revolver Commitment and Term
          Commitment, or part thereof, assigned, and such Transferring Lender
          shall be released from all obligations in relation to its Revolver
          Commitment and Term Commitment, or part thereof, so assigned.


<PAGE>
                                    - 126 -


14.5.5    Schedule A Revisions. Schedule A attached to this amended and restated
          loan agreement records the Lenders and their respective Commitments
          and Lending Offices as of the date of execution and delivery hereof.
          The Agent shall from time to time revise Schedule A to record the
          Lenders and their respective Commitments and Lending Offices after
          giving effect to assignments and changes in Lending Offices referred
          to above. Any such revised Schedule A shall be prima facie evidence of
          the identities, Commitments and Lending Offices of the Lenders. The
          Agent shall provide a copy of any revised Schedule A to any Borrower
          or Lender upon request.

14.6      CONFIDENTIALITY

          Each Lender shall, subject as hereinafter provided, keep confidential
from any third party (excluding directors, officers, employees, agents,
solicitors, accountants, consultants, financial advisors and all other
representatives of the Lender) any data or information received by it from a
Borrower pursuant to this Agreement which is confidential or which is designated
in writing as such by a Borrower except to the extent that such information was
not confidential when received by the Lender, except as required by law, rule,
regulation or official directive or as may be necessary to protect the interests
of any Lender under this Agreement. Notwithstanding any other provision of this
Section 14.6, the Agent or any Lender may make available any confidential data
or information received by it pursuant to this Agreement:

14.6.1    to any other Lender;

14.6.2    to any Person referred to in Section 14.5 to whom the Lender is
          soliciting to purchase or has granted a participation or assignment of
          the whole or any part of any of the Lender's rights or obligations
          under this Agreement so long as that Person agrees with the Lender to
          be bound by the same conditions and obligations pertaining to
          confidentiality which apply to the Lender under this Section 14.6;

14.6.3    to any Person referred to in Section 13.15 to whom the Agent, Agent or
          the Issuing Bank is soliciting to be a successor agent, security
          trustee or issuing bank under this Agreement;

14.6.4    to the legal, accounting and other professional advisors to the Agent
          or any Lender on a privileged or confidential basis; or

14.6.5    after the occurrence of a Default and for so long as it is continuing,
          as such Lender or the Agent may in good faith determine to be
          necessary or of advantage in connection with the enforcement of this
          Agreement or any other Loan Document.

14.7      TIME

          Time is of the essence of each of the Loan Documents.


<PAGE>
                                    - 127 -


14.8      FURTHER ASSURANCES

          Whether before or after the happening of a Default or an Event of
Default, each Obligor party hereto shall at its own expense do, make, execute or
deliver all such further acts, documents and things in connection with the Loans
and the Loan Documents as the Agent may reasonably require from time to time for
the purpose of giving effect to the Loan Documents including for the purpose of
facilitating the enforcement of the Security, all immediately upon the request
of the Agent.

14.9      CURRENCY CONVERSION AND INDEMNITY

14.9.1    If any of the Agent and the Lenders receives or recovers any amount
          payable under any of the Loan Documents in a currency (the "RECOVERED
          AMOUNT") which is different than the currency in which the relevant
          Loan Obligations are required to be paid (the "CONTRACT CURRENCY"),
          the Agent or such Lender may convert the Recovered Amount to the
          Contract Currency at the Spot Rate or, if a Spot Rate is not
          available, at the rate of exchange for which the Agent or such Lender
          is able, acting in a reasonable manner and in good faith, to purchase
          the relevant amount of the Contract Currency. The amount of the
          Contract Currency resulting from any such conversion shall then be
          applied in accordance with the applicable provisions of this
          Agreement.

14.9.2    If, for the purposes of obtaining or enforcing judgment in any court
          in any jurisdiction, it becomes necessary to convert into the currency
          of the country giving such judgment (the "JUDGMENT CURRENCY") any of
          the Loan Obligations which are denominated in different currency (the
          "AGREED CURRENCY"), then the date on which the rate of exchange for
          conversion is selected by that court is referred to herein as the
          "Conversion Date". If there is a change in the rate of exchange
          between the Judgment Currency and the Agreed Currency between the
          Conversion Date and the actual receipt by the Agent of the amount due
          in respect of such Loan Obligations or judgment, Gerdau Steel or the
          Relevant Borrower (as applicable) will, notwithstanding such judgment,
          pay all such additional amounts as may be necessary to ensure that the
          amount received by the Agent (when converted at the rate of exchange
          prevailing on the date of receipt, in the case of any such amount not
          received by the Agent in the Agreed Currency) will produce the amount
          due in the Agreed Currency. Gerdau Steel or the Relevant Borrower's
          liability hereunder constitutes a separate and independent liability
          which shall not merge with any judgment or any partial payment or
          enforcement of payment of sums due in respect of the Loan Obligations,
          or under any of the Loan Documents.

14.10     TAXES

14.10.1   Each payment under each Loan Document shall be made without any
          deduction or withholding for or on account of any Tax unless such
          deduction or withholding is required by any Applicable Law, as
          modified by the practice of any relevant Governmental Body, then in
          effect. If Gerdau Steel or the Relevant Borrower


<PAGE>
                                    - 128 -


          (the "RELEVANT OBLIGOR") is required to deduct or withhold Tax from
          any such payment to any Lender or the Agent (the "AFFECTED LENDER"),
          then the Relevant Obligor will:

          14.10.1.1 promptly notify the Agent of such requirement;

          14.10.1.2 pay to the relevant Governmental Body the full amount
                    required to be deducted or withheld (including the full
                    amount required to be deducted or withheld from any
                    additional amount paid by the Relevant Obligor to the
                    Affected Lender under this Section 14.10.1) promptly upon
                    the earlier of determining that such deduction or
                    withholding is required or receiving notice that such amount
                    has been assessed against the Relevant Obligor;

          14.10.1.3 promptly forward to the Agent an official receipt (or a
                    certified copy), or other documentation reasonably
                    acceptable to the Agent, evidencing such payment to such
                    Governmental Body; and

          14.10.1.4 pay to the Affected Lender, in addition to the payment to
                    which the Affected Lender is otherwise entitled under such
                    Loan Document such additional amount as is necessary to
                    ensure that the net amount actually received by the Affected
                    Lender (free and clear of Tax, whether assessed against the
                    Relevant Obligor or the Affected Lender) will equal the full
                    amount the Affected Lender would have received had no such
                    deduction or withholding been required.

14.10.2   If any Relevant Obligor fails to pay to the relevant Governmental Body
          when due any Tax that it was required to deduct or withhold under
          Section 14.10.1 in respect of any payment to or for the benefit of any
          Affected Lender under any Loan Document or fails to promptly furnish
          such Affected Lender with the documentation referred to in Section
          14.10.1.3, that Relevant Obligor shall forthwith on demand fully
          indemnify such Affected Lender on an after-Tax basis from and against
          any Taxes (including interest and penalties), losses and expenses
          which such Affected Lender may suffer or incur as a result of such
          failure.

14.10.3   Each Relevant Obligor shall also indemnify each Affected Lender on an
          after-Tax basis, for any additional Taxes on net income that an
          Affected Lender may be obliged to pay as a result of the receipt of
          additional amounts under this Section 14.10.

14.10.4   If an Affected Lender is, in its sole opinion, entitled to claim a
          refund or able to apply for or otherwise take advantage of any tax
          credit, tax deduction or similar benefit by reason of any withholding
          or deduction made by a Relevant Obligor in respect of a payment made
          by it hereunder which payment shall have been increased pursuant to
          Section 14.10.1, then such Affected Lender will use commercially
          reasonable efforts (to the extent it has the administrative controls
          in place to enable it to do so) to obtain such refund, credit,
          deduction or benefit and


<PAGE>
                                    - 129 -


          upon receipt thereof will pay to the Relevant Obligor such amount (if
          any) not exceeding the increased amount paid by the Relevant Obligor
          as equals the net after tax value to such Affected Lender of such part
          of such refund, credit, deduction or benefit as it considers is
          allocable to such withholding or deduction having regard to all its
          dealings giving rise to similar credits, deductions or benefits in
          relation to the same tax period and to the cost of obtaining the same,
          provided that nothing herein shall (i) interfere with the right of any
          Affected Lender to arrange its tax affairs in whatever manner it deems
          fit and in particular no Affected Lender shall be under any obligation
          to claim relief from its corporate profits or similar tax liability in
          respect to any such deduction or withholding in priority to any other
          relief, claims, credits or deductions available to it and (ii) no
          Affected Lender shall be obligated to disclose to any Relevant Obligor
          any information regarding its tax affairs or tax computations.

14.11     JOINT ARRANGERS AND JOINT BOOKRUNNERS AND CO-SYNDICATION AGENTS

          None of the Joint Arrangers and Joint Bookrunners, Co-Syndication
Agents or their respective directors, officers, employees, agents, solicitors,
accountants, consultants, financial advisors, other experts or other
representatives shall be under any obligation whatsoever:

14.11.1   to any Gerdau S.A. Group Member as a consequence of any failure or
          delay in performance by, or any breach by, any Lender of any of its
          obligations under any Loan Document;

14.11.2   to any Lender as a consequence of any failure or delay in performance
          by, or any breach by, any Gerdau S.A. Group Member of any of its
          obligations under any Loan Document; or

14.11.3   to any Lender for any statements, representations or warranties in any
          Loan Document or any other agreement, document or instrument
          contemplated by any Loan Document or any other information provided
          pursuant to any Loan Document or any other agreement, document or
          instrument contemplated by any Loan Document or for validity,
          effectiveness, enforceability or sufficiency of any Loan Document or
          any other agreement, document or instrument contemplated thereby.

14.12     SURVIVAL

          The Loan Obligations payable under Sections 5.3, 7.6, 8.2, 8.3, 14.9
and 14.10 ("INDEMNITY OBLIGATIONS") shall survive the payment in full of all
other Loan Obligations and shall continue in full force and effect without time
limit until such Indemnity Obligations are irrevocably paid in full. The
survival of any Indemnity Obligations pursuant to this Section 14.12 which
relate to amounts that could become due or owing by reason of unknown facts or
unknown contingencies shall not relieve the Agent of any obligation to discharge
or assign the Security pursuant to Section 9.10.


<PAGE>
                                    - 130 -


14.13     ENTIRE AGREEMENT

          From and after the Effective Time, the Loan Documents will constitute
the entire agreement between the parties hereto pertaining to the subject matter
contemplated therein and there will be no warranties, representations or
agreements between the parties in connection with such subject matter except as
specifically set forth or referred to in the Loan Documents. Each Borrower
agrees to pay and satisfy its indebtedness, obligations and liabilities under
the Existing Loan Agreement outstanding immediately before the Effective Time in
accordance with the provisions of this Agreement, and that such indebtedness,
obligations and liabilities shall constitute Loan Obligations for the purposes
of this Agreement. Each of Gerdau Steel and the Borrowers hereby confirms its
obligations under the Existing Security and agrees that the Existing Security,
subject to the terms of this Agreement and the Confirmed Loan Documents,
continues in full force and effect in accordance with its terms. Each Obligor
party hereto hereby confirms that, subject to the provisions of this Agreement,
the Security shall secure, directly and/or indirectly, the obligations of each
of Gerdau Steel and the Borrowers incurred hereunder or pursuant hereto.

14.14     COUNTERPARTS

          This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original and all of which taken together shall be
deemed to constitute one and the same instrument, and it shall not be necessary
in making proof of this Agreement to produce or account for more than one such
counterpart. Delivery of an executed signature page of this Agreement (including
any amendment and Loan Transfer Agreement) by facsimile transmission shall be
effective as delivery of a manually executed counterpart hereof.

          IN WITNESS WHEREOF the parties have executed this Agreement as of the
date first written above.

                                        GERDAU STEEL INC.


                                        By:
                                            ------------------------------------
                                            Name:  Glen A. Beeby
                                            Title: Secretary and Treasurer


                                        GERDAU COURTICE STEEL INC.


                                        By:
                                            ------------------------------------
                                            Name:  Glen A. Beeby
                                            Title: Secretary and Treasurer


<PAGE>
                                    - 131 -


                                        GERDAU MRM STEEL INC.


                                        By:
                                            ------------------------------------
                                            Name: Glen A. Beeby
                                            Title: Secretary and Treasurer


                                        GUSAP PARTNERS
                                        BY ITS PARTNERS
                                        GERDAU COURTICE STEEL INC.


                                        By:
                                            ------------------------------------
                                            Name: Glen A. Beeby
                                            Title: Secretary and Treasurer

                                        - AND -

                                        GERDAU MRM STEEL INC.


                                        By:
                                            ------------------------------------
                                            Name: Glen A. Beeby
                                            Title: Secretary and Treasurer


THE LENDERS:

THE TORONTO-DOMINION BANK


By:
    ----------------------------------



By:
    ----------------------------------


P.O. Box 1
2nd Floor, 55 King Street West at Bay
Toronto, Ontario  M5K 1A2

Attention:  Relationship Manager,
            Corporate & Financial Institutions Group

<PAGE>
                                    - 132 -


Telephone:  (416) 982-7772
Facsimile:  (416) 982-6076

CITI BANK N.A.
CANADIAN BRANCH


By:
    -------------------------------


By:
    -------------------------------


123 Front Street West
Suite 1900
Toronto, Ontario   M5J 2M3

Attention:  Vice President

Telephone:  (416) 947-2917
Facsimile:  (416) 947-5674



JPMORGAN CHASE BANK
TORONTO BRANCH


By:
    -------------------------------


By:
    -------------------------------


JPMORGAN CHASE BANK
TORONTO BRANCH
Royal Bank Plaza, South Tower
Suite 1800
Toronto, Ontario   M5J 2J2

Attention:  Vice President

Telephone:  (416) 981-9123
Facsimile:  (416) 981-9138


<PAGE>
                                    - 133 -


GENERAL ELECTRIC CAPITAL CANADA, INC.

By:
    -------------------------------


By:
    -------------------------------


GENERAL ELECTRIC CAPITAL CANADA, INC.
c/o GE Capital - SFG
120 Long Ridge Road, 3rd Floor
Stamford, CT   06927

Attention:   Douglas Anderson / Maria Maslennikova

Telephone:   (203) 357-4636 / 357-4012
Facsimile:   (203) 961-2343 / 357-3962



GENERAL ELECTRIC CAPITAL CORPORATION

By:
    -------------------------------


By:
    -------------------------------


GENERAL ELECTRIC CAPITAL CORPORATION
c/o GE Capital - SFG
120 Long Ridge Road, 3rd Floor
Stamford, CT   06927

Attention:   Douglas Anderson / Maria Maslennikova

Telephone:   (203) 357-4636 / 357-4012
Facsimile:   (203) 961-2343 / 357-3962




<PAGE>
                                    - 134 -


INTESABCI CANADA


By:
    -------------------------------


By:
    -------------------------------


INTESABCI CANADA
One Financial Place
1 Adelaide Street East
Toronto, Ontario   M5C 2V9

Attention:   Glenn J. Hubert / Judy Ellis

Telephone:   (416) 313-4775 / 4753
Facsimile:   (416) 366-6041


BOSTON LATIN AMERICA FINANCE COMPANY
(BLAFCO) GRAND CAYMAN

By:
    -------------------------------


By:
    -------------------------------



BOSTON LATIN AMERICA FINANCE COMPANY
(BLAFCO) GRAND CAYMAN
c/o BankBoston
Rua Libero Badaro, 487 - 9th Floor
San Paulo, SP
Brazil, 01009-000

Attention:   Ricardo de Alencar

Telephone:   55-11-3118-6622
Facsimile:   55-11-3118-5699

<PAGE>
                                    - 135 -



THE BANK OF NOVA SCOTIA


By:
    -------------------------------


By:
     ------------------------------


THE BANK OF NOVA SCOTIA
40 King Street West, 62nd Floor
Toronto, Ontario   M5W 2X6

Attention:   Rob Lockie / Anastasia Kotsidis

Telephone:   (416) 866-3821 / 6983
Facsimile:   (416) 866-2010


COMERICA BANK - Canada Branch


By:
     ------------------------------


By:
     ------------------------------



COMERICA BANK - Canada Branch
Royal Bank Plaza, South Tower
Suite #2210
P.O. Box 62
Toronto, Ontario   M5J 2J2

Attention:   Geoff Morphy / Phillip Buxton

Telephone:   (416) 367-3113 ext. #242 / 222
Facsimile:   (416) 367-2460
<PAGE>
                                    - 136 -




LAURENTIAN BANK OF CANADA


By:
    -------------------------------


By:
    -------------------------------


LAURENTIAN BANK OF CANADA
130 Adelaide Street West
Toronto, Ontario   M5H 3P5

Attention:   Bill Galbraith

Telephone:   (416) 947-7477
Facsimile:   (416) 865-5717


BANK ONE, NA
CANADA BRANCH


By:
     ------------------------------


By:
    -------------------------------


BANK ONE, NA
CANADA BRANCH
BCE Place, P.O. Box 613
161 Bay Street, Suite 4240
Toronto, Ontario   M5J 2S1

Attention:   Michael Bauer / Jeffrey Coleman

Telephone:   (416) 365-8286 / 8278
Facsimile:   (416) 363-7574

<PAGE>
                                    - 137 -


NATIONAL BANK OF CANADA


By:
    -------------------------------

By:
    -------------------------------


NATIONAL BANK OF CANADA
130 King Street West, #3200
Toronto, Ontario M5X 1J9

Attention:   Ian Gillespie

Telephone:   (416) 869-6436
Facsimile:   (416) 869-6545


BANK OF CHINA (CANADA)


By:
    -------------------------------


By:
    -------------------------------


BANK OF CHINA (CANADA)
The Exchange Tower
130 King Street West, #2730
Toronto, Ontario M5X 1E1

Attention:   Don Bridge / Chunhua Gu

Telephone:   (416) 369-6029 / 6009
Facsimile:   (416) 362-3047

<PAGE>
                                    - 138 -



THE AGENT:
                                        THE TORONTO-DOMINION BANK


                                        By:
                                            ------------------------------------
                                            Vice President, Loan Syndications


<PAGE>
                                    - 139 -


                                 SCHEDULE A
                    LENDERS, LENDING OFFICES AND COMMITMENTS
<TABLE>
<CAPTION>

                                  REVOLVER                     TERM
           LENDER                COMMITMENT                 COMMITMENT                     LENDING OFFICE
           ------                ----------                 ----------                     --------------
<S>                           <C>                        <C>                        <C>
The Toronto-Dominion Bank     Cdn.$19,500,000            Cdn.$11,151,247.55         TD Centre Branch, 2nd Floor
                                                                                    55 King Street West, 2nd Floor
                                                                                    Toronto, Ontario   M5K 1A2
                                                                                    Attn:   Relationship Manager,
                                                                                            Corporate & Financial
                                                                                            Institutions Group
                                                                                    Tel:    (416) 982-7772
                                                                                    Fax:    (416) 982 6076

Citibank N.A.                 Cdn.$5,166,666.67          Cdn.$5,333,205.35          123 Front Street West
Canadian Branch                                                                     Suite 1900
                                                                                    Toronto, Ontario   M5J 2M3
                                                                                    Attn:    Vice President
                                                                                    Tel:     (416) 947-2917
                                                                                    Fax:     (416) 947-5674

JPMorgan Chase Bank,          Cdn.$7,633,333.33          Cdn.$7,127,101.70          Royal Bank Plaza
Toronto Branch                                                                      South Tower, Suite 1800
                                                                                    Toronto, Ontario   M5J 2J5
                                                                                    Attn:    Vice President
                                                                                    Tel:     (416) 981-9123
                                                                                    Fax:     (416) 981-9138

General Electric Capital      Cdn.$9,800,000             Cdn.$13,429,980.75         c/o GE Capital - SFG
Canada, Inc.                                                                        120 Long Ridge Road, 3rd Floor
                                                                                    Stamford, CT   06927
                                                                                    Attn:    Douglas Anderson /
                                                                                             Maria Maslennikova
                                                                                    Tel:     (203) 357-4636 /
                                                                                             (203) 357-4012
                                                                                    Fax:     (203) 961-2343 /
                                                                                             (203) 357-3962
</TABLE>
<PAGE>
                                    - 140 -


<TABLE>
<CAPTION>

                                  REVOLVER                     TERM
           LENDER                COMMITMENT                 COMMITMENT                     LENDING OFFICE
           ------                ----------                 ----------                     --------------
<S>                           <C>                        <C>                        <C>
IntesaBci Canada              Cdn.$5,000,000             Cdn.$9,939,155.43          One Financial Place
                                                                                    1 Adelaide Street East
                                                                                    Toronto, Ontario  M5C 2V9
                                                                                    Attn:    Glenn J. Hubert /
                                                                                             Judy Ellis
                                                                                    Tel:     (416) 313-4775
                                                                                             (416) 313-4753
                                                                                    Fax:     (416) 366-6041

Boston Latin America          Cdn.$7,000,000             Cdn.$9,939,155.43          c/o BankBoston
Finance Company (BLAFCO)                                                            Rua Libero Badaro,
Grand Cayman                                                                        487 - 9th Floor
                                                                                    San Paulo, SP
                                                                                    Brazil, 09009-000
                                                                                    Attn:    Ricardo de Alencar
                                                                                    Tel:     55-11-3118-6622
                                                                                    Fax:     55-11-3118-5699

The Bank of Nova Scotia       Nil                        Cdn.$9,939,155.43          40 King Street West, 62nd Floor
                                                                                    Toronto, Ontario,  M5W 2X6
                                                                                    Attn:    Rob Lockie /
                                                                                             Anastasia Kotsidis
                                                                                    Tel:     (416) 866-3821 / 6983
                                                                                    Fax:     (416) 866-2010

Comerica Bank - Canada        Cdn.$5,300,000             Cdn.$7,127,101.70          Royal Bank Plaza
Branch                                                                              South Tower, Suite #2210
                                                                                    P.O. Box 62
                                                                                    Toronto, Ontario  M5J 2J2
                                                                                    Attn:    Geoff Morphy /
                                                                                             Phillip Buxton
                                                                                    Tel:     (416) 367-3113
                                                                                             ext.#242 / #222
                                                                                    Fax:     (416) 367-2460

Laurentian Bank of Canada     Cdn.$5,300,000             Cdn.$7,127,101.70          130 Adelaide Street West
                                                                                    Toronto, Ontario  M5H 3P5
                                                                                    Attn:    Bill Galbraith
                                                                                    Tel:     (416) 947-7477
                                                                                    Fax:     (416) 865-5717

</TABLE>

<PAGE>
                                    - 141 -


<TABLE>
<CAPTION>

                                  REVOLVER                     TERM
           LENDER                COMMITMENT                 COMMITMENT                     LENDING OFFICE
           ------                ----------                 ----------                     --------------
<S>                           <C>                        <C>                        <C>
Bank One, NA                  Cdn.$4,000,000             Cdn.$5,333,205.35          BCE Place, PO Box 613
Canada Branch                                                                       161 Bay Street, Suite 4240
                                                                                    Toronto, Ontario   M5J 2S1
                                                                                    Attn:    Michael Bauer /
                                                                                             Jeffrey Coleman
                                                                                    Tel:     (416) 365-8286 / 8278
                                                                                    Fax:     (416) 363-7574

National Bank of Canada       NIL                        Cdn.$5,333,205.35          130 King Street West, #3200
                                                                                    Toronto, Ontario   M5X 1J9
                                                                                    Attn:    Ian Gillespie
                                                                                    Tel:     (416) 869-6436
                                                                                    Fax:     (416) 869-6545

Bank of China (Canada)        Cdn.$4,300,000             Cdn.$5,187,754.30          The Exchange Tower
                                                                                    130 King Street West, #2730
                                                                                    Toronto, Ontario   M5X 1E1
                                                                                    Attn:       Don Bridge /
                                                                                                Chunhua Gu
                                                                                    Tel:        (416) 369-6029 / 6009
                                                                                    Fax:        (416) 362-3047

</TABLE>



<PAGE>
                                    - 142 -


                                   SCHEDULE B
                                 DRAWDOWN NOTICE

TO:       The Toronto-Dominion Bank
          66 Wellington Street West, 38th Floor
          Toronto Dominion Bank Tower
          Toronto, Ontario
          M5K 1A2

          Attention: Vice President, Loan Syndications - Agency

RE:       GERDAU STEEL INC.

          Reference is made to an amended and restated loan agreement (the "LOAN
AGREEMENT") initially dated as of November 8, 1996, as further amended and
restated by agreement dated as of October 22, 2002, and as further amended,
supplemented, restated or novated from time to time, among Gerdau Steel Inc. and
Gerdau Courtice Steel Inc., Gerdau MRM Steel Inc. and GUSAP Partners, as
Borrowers, the Institutions named therein as Lenders and The Toronto-Dominion
Bank as Agent. All terms used in this Drawdown Notice which are defined in the
Loan Agreement have the respective meanings attributed to them in the Loan
Agreement.

          Pursuant to Section [     ] of the Loan Agreement, the undersigned
hereby requests an Advance as follows:

          1    Type of Advance:

          2    Amount of Advance:

          3    Currency of Advance:

          4    Drawdown Date:

          5    [Interest Period/Maturity Date]:

          6    Payment instructions (if any):

          The undersigned acknowledges and agrees that prior to obtaining the
Advance requested by this Drawdown Notice, it shall satisfy and comply with all
of the conditions in Section 6.1 of the Loan Agreement.

          DATED this [   ] day of [          ], [     ].

                                        ----------------------------------------


                                        By:
                                            ------------------------------------
                                        Title:


                                        ----------------------------------------


                                        By:
                                            ------------------------------------
                                        Title:



<PAGE>
                                    - 143 -


                           APPENDIX TO DRAWDOWN NOTICE

TO:       The Toronto-Dominion Bank
          66 Wellington Street West, 38th Floor
          Toronto Dominion Bank Tower
          Toronto, Ontario
          M5K 1A2

          Attention: Vice President, Loan Syndications - Agency

RE:       GERDAU STEEL INC.

          Reference is made to an amended and restated loan agreement (the "LOAN
AGREEMENT") initially dated as of November 8, 1996, as further amended and
restated by agreement dated as of October 22, 2002, and as further amended,
supplemented, restated or novated from time to time, among Gerdau Steel Inc. and
Gerdau Courtice Steel Inc., Gerdau MRM Steel Inc. and GUSAP Partners, as
Borrowers, the Institutions named therein as Lenders and The Toronto-Dominion
Bank as Agent. All terms used in this Appendix which are defined in the Loan
Agreement have the respective meanings attributed to them in the Loan Agreement.

          Pursuant to Section 6.1 of the Loan Agreement, the undersigned hereby
certifies to the Lenders:

          (a)  The representations and warranties made in Section 10.1 of the
               Loan Agreement are true and accurate, except to the extent
               modified by Section 10.2, with the same effect as if such
               representations and warranties had been made on and as of the
               date hereof and on the requested Borrowing Date.

          (b)  No Default or Event of Default has occurred and is continuing on
               the date hereof or will result from the Borrowing requested
               herein.

          (c)  To the knowledge of the undersigned, there is no Litigation
               referred to in Section 10.1.12 in progress or threatened which
               has not been disclosed to the Agent in writing.

          (d)  The undersigned will immediately notify you if it becomes aware
               of the occurrence of any event between the date hereof and the
               Borrowing Date which would mean that the statements in the
               immediately preceding paragraphs (a), (b) and (c) would not be
               true if made on the Borrowing Date.

          (e)  All other conditions precedent set out in Section 6.1 of the Loan
               Agreement have been fulfilled or waived in writing by the
               Lenders.


<PAGE>
                                    - 144 -


                  DATED this   o  day of   o   ,   o   .

                                        ----------------------------------------


                                        By:
                                            ------------------------------------
                                        Title:


                                        ----------------------------------------


                                        By:
                                            ------------------------------------
                                        Title:

<PAGE>
                                    - 145 -


                                   SCHEDULE C
                            FORM OF CONVERSION NOTICE

TO:       The Toronto-Dominion Bank
          66 Wellington Street West, 38th Floor
          Toronto Dominion Bank Tower
          Toronto, Ontario
          M5K 1A2

          Attention: Vice President, Loan Syndications - Agency

RE:       GERDAU STEEL INC.

          Reference is made to an amended and restated loan agreement (the "LOAN
AGREEMENT") initially dated as of November 8, 1996, as further amended and
restated by agreement dated as of October 22, 2002, and as further amended,
supplemented, restated or novated from time to time, among Gerdau Steel Inc. and
Gerdau Courtice Steel Inc., Gerdau MRM Steel Inc. and GUSAP Partners, as
Borrowers, the Institutions named therein as Lenders and The Toronto-Dominion
Bank as Agent. All terms used in this Conversion Notice which are defined in the
Loan Agreement have the respective meanings attributed to them in the Loan
Agreement.

          Notice is hereby given in accordance with Section   o   of the Loan
Agreement that the undersigned wishes to convert an Advance, and, in connection
therewith the undersigned hereby advises the Agent that the Advance made
[specify date of Advance] in the amount of [specify amount and Currency of
Advance] by way of [specify Type of Loan] and which has a Maturity Date of
[specify date] is hereby requested to be converted on such Maturity Date to a
[specify type of Advance] as follows:

          (i)   Amount of Advance:

          (ii)  Conversion Date:

          (iii) [Interest Period/new Maturity Date]:

          (iv)  Payment instructions (if any):


<PAGE>
                                    - 146 -


          The undersigned acknowledges and agrees that prior to obtaining the
Conversion requested by this Conversion Notice, it shall satisfy and comply with
all of the conditions in Section 6.1 of the Loan Agreement.

          DATED this    o    day of   o  ,   o  .


                                        ----------------------------------------


                                        By:
                                            ------------------------------------
                                        Title:


                                        ----------------------------------------


                                        By:
                                            ------------------------------------
                                        Title:

<PAGE>
                                    - 147 -





                          APPENDIX TO CONVERSION NOTICE

TO:       The Toronto-Dominion Bank
          66 Wellington Street West, 38th Floor
          Toronto Dominion Bank Tower
          Toronto, Ontario
          M5K 1A2

          Attention: Vice President, Loan Syndications - Agency

RE:       GERDAU STEEL INC.

          Reference is made to an amended and restated loan agreement (the "LOAN
AGREEMENT") initially dated as of November 8, 1996, as further amended and
restated by agreement dated as of October 22, 2002, and as further amended,
supplemented, restated or novated from time to time, among Gerdau Steel Inc. and
Gerdau Courtice Steel Inc., Gerdau MRM Steel Inc. and GUSAP Partners, as
Borrowers, the Institutions named therein as Lenders and The Toronto-Dominion
Bank as Agent. All terms used in this Appendix which are defined in the Loan
Agreement have the respective meanings attributed to them in the Loan Agreement.

          Pursuant to Section 6.1 of the Loan Agreement, the undersigned hereby
certifies to the Lenders:

          (a)  The representations and warranties made in Section 10.1 of the
               Loan Agreement are true and accurate, except to the extent
               modified by Section 10.2, with the same effect as if such
               representations and warranties had been made on and as of the
               date hereof and on the requested Borrowing Date.

          (b)  No Default or Event of Default has occurred and is continuing on
               the date hereof or will result from the Borrowing requested
               herein.

          (c)  To the knowledge of the undersigned, there is no Litigation
               referred to in Section 10.1.12 in progress or threatened which
               has not been disclosed to the Agent in writing.

          (d)  The undersigned will immediately notify you if it becomes aware
               of the occurrence of any event between the date hereof and the
               Borrowing Date which would mean that the statements in the
               immediately preceding paragraphs (a), (b) and (c) would not be
               true if made on the Borrowing Date.

          (e)  All other conditions precedent set out in Section 6.1 of the Loan
               Agreement have been fulfilled or waived in writing by the
               Lenders.
<PAGE>
                                    - 148 -


                  DATED this [   ] day of [         ], [     ].


                                        ----------------------------------------


                                        By:
                                            ------------------------------------
                                        Title:


                                        ----------------------------------------


                                        By:
                                            ------------------------------------
                                        Title:

<PAGE>
                                    - 149 -




                                   SCHEDULE D
                             FORM OF ROLLOVER NOTICE

TO:       The Toronto-Dominion Bank
          66 Wellington Street West, 38th Floor
          Toronto Dominion Bank Tower
          Toronto, Ontario
          M5K 1A2

          Attention: Vice President, Loan Syndications - Agency

RE:       GERDAU STEEL INC.

          Reference is made to an amended and restated loan agreement (the "LOAN
AGREEMENT") initially dated as of November 8, 1996, as further amended and
restated by agreement dated as of October 22, 2002, and as further amended,
supplemented, restated or novated from time to time, among Gerdau Steel Inc. and
Gerdau Courtice Steel Inc., Gerdau MRM Steel Inc. and GUSAP Partners, as
Borrowers, the Institutions named therein as Lenders and The Toronto-Dominion
Bank as Agent. All terms used in this Rollover Notice which are defined in the
Loan Agreement have the respective meanings attributed to them in the Loan
Agreement.

          Notice is hereby given in accordance with Section [         ] of the
Loan Agreement that the undersigned wishes to Rollover an Advance, and, in
connection therewith the undersigned hereby advises the Agent that the Advance
made [specify date of Advance] in the amount of [specify amount and Currency of
Advance] by way of [specify type of Advance] and which has a Maturity Date of
[specify date] is hereby requested to be rolled-over on such Maturity Date as
follows:

          (i)  Amount of Advance:

          (ii) Rollover Date:

          (iii) [Interest Period/new Maturity Date]:

          (iv) Payment instructions (if any):

          The undersigned acknowledges and agrees that prior to obtaining the
Rollover requested by this Rollover Notice, it shall satisfy and comply with all
of the conditions in Section 6.1 of the Loan Agreement.

<PAGE>
                                    - 150 -


          DATED this [   ] day of [         ], [    ].


                                        ----------------------------------------


                                        By:
                                            ------------------------------------
                                        Title:


                                        ----------------------------------------


                                        By:
                                            ------------------------------------
                                        Title:


<PAGE>
                                    - 151 -



                           APPENDIX TO ROLLOVER NOTICE

TO:       The Toronto-Dominion Bank
          66 Wellington Street West, 38th Floor
          Toronto Dominion Bank Tower
          Toronto, Ontario
          M5K 1A2

          Attention: Vice President, Loan Syndications - Agency

RE:       GERDAU STEEL INC.

          Reference is made to an amended and restated loan agreement (the "LOAN
AGREEMENT") initially dated as of November 8, 1996, as further amended and
restated by agreement dated as of October 22, 2002, and as further amended,
supplemented, restated or novated from time to time, among Gerdau Steel Inc. and
Gerdau Courtice Steel Inc., Gerdau MRM Steel Inc. and GUSAP Partners, as
Borrowers, the Institutions named therein as Lenders and The Toronto-Dominion
Bank as Agent. All terms used in this Appendix which are defined in the Loan
Agreement have the respective meanings attributed to them in the Loan Agreement.

          Pursuant to Section 6.1 of the Loan Agreement, the undersigned hereby
certifies to the Lenders:

          (a)  The representations and warranties made in Section 10.1 of the
               Loan Agreement are true and accurate, except to the extent
               modified by Section 10.2, with the same effect as if such
               representations and warranties had been made on and as of the
               date hereof and on the requested Borrowing Date.

          (b)  No Default or Event of Default has occurred and is continuing on
               the date hereof or will result from the Borrowing requested
               herein.

          (c)  To the knowledge of the undersigned, there is no Litigation
               referred to in Section 10.1.12 in progress or threatened which
               has not been disclosed to the Agent in writing.

          (d)  The undersigned will immediately notify you if it becomes aware
               of the occurrence of any event between the date hereof and the
               Borrowing Date which would mean that the statements in the
               immediately preceding paragraphs (a), (b) and (c) would not be
               true if made on the Borrowing Date.

          (e)  All other conditions precedent set out in Section 6.1 of the Loan
               Agreement have been fulfilled or waived in writing by the
               Lenders.

          DATED this  [        ] day of [          ], [     ].

<PAGE>
                                    - 152 -

                                        ----------------------------------------


                                        By:
                                            ------------------------------------
                                        Title:


                                        ----------------------------------------


                                        By:
                                            ------------------------------------
                                        Title:


<PAGE>
                                    - 153 -


                               SCHEDULE E - PART I
                     SUBSIDIARIES BEFORE THE EFFECTIVE TIME


                         (CORPORATE ORGANIZATION CHART)


<PAGE>
                                    - 154 -



                              SCHEDULE E - PART II
                      SUBSIDIARIES AFTER THE EFFECTIVE TIME

                              (ORGANIZATION CHART)


<PAGE>
                                    - 155 -


                                   SCHEDULE F
                              ADDRESSES FOR NOTICES

2.       if to Courtice:

               Orion Place
               Box 1734
               Cambridge, Ontario
               N1R 7G8

               Attention:        Glen Beeby
               Telecopier No.:   (519) 740-2601

3.       if to MRM:

               Orion Place
               Box 1734
               Cambridge, Ontario
               N1R 7G8

               Attention:        Glen Beeby
               Telecopier No.:   (519) 740-2601

4.       if to Gerdau Steel:

               Orion Place
               Box 1734
               Cambridge, Ontario
               N1R 7G8

               Attention:        Glen Beeby
               Telecopier No.:   (519) 740-2601

5.       if to USP:

               Orion Place
               Box 1734
               Cambridge, Ontario
               N1R 7G8

               Attention:        Glen Beeby
               Telecopier No.:   (519) 740-2601


<PAGE>
                                    - 156 -


6.       if to TD in its capacity as Swing Line Lender:

               Toronto-Dominion Centre Branch
               Commercial Banking
               King Street West and Bay Street
               Toronto, Ontario
               M5K 1A2

               Attention:        The Vice President & Manager
               Telecopier No.:   (416) 982-6076

7.       if to the Agent:

TO:            The Toronto-Dominion Bank
               66 Wellington Street West, 38th Floor
               Toronto Dominion Bank Tower
               Toronto, Ontario
               M5K 1A2

               Attention:        Vice President, Loan Syndications - Agency

               Telecopier No.:   (416) 982-5535


<PAGE>
                                    - 157 -

                                   SCHEDULE G
                          FORM OF BORROWING BASE REPORT

TO:       The Toronto-Dominion Bank
          66 Wellington Street West, 38th Floor
          Toronto Dominion Bank Tower
          Toronto, Ontario
          M5K 1A2

          Attention: Vice President, Loan Syndications - Agency

RE:       GERDAU STEEL INC.

          Reference is made to an amended and restated loan agreement (the "LOAN
AGREEMENT") initially dated as of November 8, 1996, as further amended and
restated by agreement dated as of October 22, 2002, and as further amended,
supplemented, restated or novated from time to time, among Gerdau Steel Inc. and
Gerdau Courtice Steel Inc., Gerdau MRM Steel Inc. and GUSAP Partners, as
Borrowers, the Institutions named therein as Lenders and The Toronto-Dominion
Bank as Agent. All terms used in this Borrowing Base Report which are defined in
the Loan Agreement have the respective meanings attributed to them in the Loan
Agreement.

          This Certificate is given to the Agent pursuant to Section 11.1.1.10
of the Loan Agreement in respect of the Fiscal Quarter ending on [           ],
[            ].

          The undersigned hereby certifies to the Syndicate that the attachment
to this Certificate shows the calculation of the Borrowing Base as [          ],
[            ] to be Cdn.$ [            ] which does [not] exceed the
Outstanding Amount of all Advances under the Operating Facility at that time.

          DATED this  [   ] day of [             ], [    ].


                                        By:
                                            ------------------------------------
                                        Title:



* same date as the fiscal month end


<PAGE>
                                    - 158 -



                                GERDAU STEEL INC.

(OUTSTANDING AMOUNT OF
    REVOLVER FACILITY NOT TO EXCEED SUM OF 80% ELIGIBLE
RECEIVABLES + LESSER OF
    $40,000,000 OR 50% ELIGIBLE
INVENTORY

<TABLE>
<CAPTION>
                                                         AUGUST '99
                                            ------------------------------------
                                            COURTICE       MRM      CONSOLIDATED
                                            --------    --------    ------------

<S>                                         <C>         <C>         <C>
ADVANCES UNDER REVOLVER:
Cdn.$ Concentration Acct
US$ Concentration Acct in Cdn.$
Short Term BA (net)
Tranche B
                                                                    ------------

Total

Accounts Receivable
Less:  > 90 days
Less:  intercompany
                                            --------    --------    ------------

% Allowed
                                            --------    --------    ------------


Add:  1/2 eligible inventory

Total Leverage

TOTAL MARGIN SURPLUS
</TABLE>



Attachments
A/R Reports
Payables Reports
Inventory Lists



<PAGE>
                                    - 159 -


                                   SCHEDULE H
                             LOAN TRANSFER AGREEMENT

                  THIS AGREEMENT is made the [   ] day of  [        ], [    ].

B E T W E E N :

                                     [    ]
                      (hereinafter called the "TRANSFEROR")

                                                               OF THE FIRST PART

                                     - and -


                                     [    ]
                      (hereinafter called the "TRANSFEREE")

                                                              OF THE SECOND PART

                                     - and -

                                     [    ]
        for its own benefit and in its capacity as agent for the rateable
          benefit of the Lenders under the Loan Agreement defined below

                        (hereinafter called the "AGENT")

                                                               OF THE THIRD PART

BACKGROUND

          Gerdau Steel Inc. and Gerdau Courtice Steel Inc., Gerdau MRM Steel
Inc. and GUSAP Partners, as Borrowers, the Institutions named therein as Lenders
and The Toronto-Dominion Bank as Agent entered into a loan agreement (the "LOAN
AGREEMENT") initially dated as of November 8, 1996, as further amended and
restated by agreement dated as of October 22, 2002, and as further amended,
supplemented, restated or novated from time to time. In addition, terms defined
in Sections 1.1 and 1.2 of the Loan Agreement (and not otherwise defined herein)
are used with the same respective defined meanings in this loan transfer
agreement.

          The Transferor is a Lender under the Loan Agreement with a Revolver
Commitment of Cdn.$[    ] and a Term Commitment of Cdn.$[    ], for a Total
Commitment of Cdn.$[     ]. The Transferor has agreed to transfer to the
Transferee [    ]% (the "REVOLVER TRANSFER PERCENTAGE") of its Revolver
Commitment and [    ]% (the "TERM TRANSFER PERCENTAGE") of its Term Commitment.
The portion of the Transferor's Commitment so transferred is hereinafter called
the "TRANSFERRED COMMITMENT".

<PAGE>
                                    - 160 -


          WITNESSETH THAT in consideration of the mutual covenants herein
contained and other valuable consideration now paid by each party hereto, the
one to the other, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto agree as follows:

1.        Transferred Commitment

          The Transferor confirms to each of the Transferee and the other
parties to the Loan Agreement that the Transferred Commitment relates to the
Revolver Transfer Percentage of its Revolver Commitment and the Term Transfer
Percentage of its Term Commitment (including the corresponding percentage of
each outstanding Loan under each such portion of its Commitment) represented as
of the date of this loan transfer agreement as set out in Appendix 1 to this
loan transfer agreement.

2.        Transfer

          As of and from [      ], [      ] (herein called the "EFFECTIVE DATE")
and subject to the terms and conditions herein contained:

          (a)  the Transferee assumes obligations identical to the obligations
               of the Transferor under the Loan Agreement arising on or after
               the Effective Date in relation to the Transferred Commitment
               (herein called the "TRANSFERRED OBLIGATIONS") and agrees to
               perform and be responsible for such obligations as if the
               Transferee were named in the Loan Agreement as an original party
               in substitution for the Transferor or its predecessor in title,
               as applicable, in respect of the Transferred Obligations;

          (b)  the Agent on behalf of each of the Lenders other than the
               Transferor (herein called the "OTHER LENDERS") hereby releases
               and forever discharges the Transferor of and from any and all
               losses and expenses and obligations arising on or after the
               Effective Date under, by reason of, or in connection with the
               Transferred Obligations;

          (c)  the Agent on behalf of each of the Other Lenders acknowledges and
               agrees that, except as otherwise provided in section 3 of this
               loan transfer agreement, the Transferee is hereby assigned and
               entitled to rights identical to the rights of the Transferor
               under the Loan Agreement existing on or arising after the
               Effective Date in relation to the Transferred Commitment (herein
               called the "TRANSFERRED RIGHTS");

          (d)  the Transferor hereby releases and forever discharges each of the
               Other Lenders of and from any and all losses and expenses and
               obligations arising under, by reason of, or in connection with
               the Transferred Rights or the Transferred Obligations.


<PAGE>
                                    - 161 -


3.        Transitional Provisions

          Subject to the terms and conditions contained herein:

          (a)  any payments due and payable by the Borrowers on or before the
               Effective Date in respect of the Transferred Commitment; and

          (b)  any payments due and payable by the Borrowers after the Effective
               Date, but payable in respect of the Transferor's participation in
               any LIBOR Loan or issue of Bankers' Acceptances outstanding on
               the Effective Date,

shall, upon receipt by the Agent, be paid to the Transferor. For certainty, the
Transferee acknowledges that its participation in Advances outstanding under the
Credit Facilities as at the Effective Date is subject to the maturity of
existing contracts on their respective Maturity Dates (to the extent there are
Bankers' Acceptances and LIBOR Loans outstanding on the Effective Date), and
that the Transferee's participation in outstanding Advances will increase in
proportion to its Rateable Share as such existing contracts mature.

4.        Copy to the Borrower

          Each of the Transferor and Transferee hereby authorizes the Agent to
provide a signed copy of this loan transfer agreement (without the attached
Appendices) to Courtice (to be received by Courtice for itself, each of the
other Borrowers and the Guarantors) in acceptance of the offer contained in the
Loan Agreement of the Borrowers and the Guarantors to the Transferee to become a
party to the Loan Agreement in respect of the Transferred Commitment. Upon
receipt thereof by Courtice, the provisions of Section 14.5.4 of the Loan
Agreement in respect of the Transferred Commitment shall become effective and be
binding upon all parties to the Loan Agreement.

5.        Interpretation

          This agreement shall be governed by the laws of the Province of
Ontario and the laws of Canada applicable therein and shall be construed as
supplemental to and form part of the Loan Agreement.

6.        Counterparts

          This loan transfer agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
taken together shall be deemed to constitute one and the same instrument, and it
shall not be necessary in making proof of this loan transfer agreement to
produce or account for more than one such counterpart. Delivery of an executed
signature page of this loan transfer agreement by facsimile transmission shall
be effective as delivery of a manually executed counterpart hereof.


<PAGE>
                                    - 162 -


          IN WITNESS WHEREOF the parties hereto have executed this agreement as
of the day and year first above written.


                                        ----------------------------------------
                                        as Transferor

                                        By:
                                            ------------------------------------


                                        ----------------------------------------
                                         as Transferor

                                         By:
                                             -----------------------------------

                                        THE TORONTO-DOMINION BANK
                                        as Agent

                                        By:
                                            ------------------------------------
                                            Vice President, Loan Syndications

<PAGE>
                                    - 163 -


                                   APPENDIX 1

                             TRANSFEROR'S COMMITMENT

                               AS OF [INSERT DATE]
<TABLE>
<CAPTION>

                                                                                               OUTSTANDING
                                               OUTSTANDING          OUTSTANDING BANKERS'    PARTICIPATIONS IN
AMOUNT OF COMMITMENT       UNDRAWN                LOANS                 ACCEPTANCES          STANDBY CREDITS
--------------------  ------------------    ---------------------   --------------------    -----------------
REVOLVER FACILITY

<S>                   <C>                   <C>                     <C>                     <C>
Cdn.$[      ]         [stipulate portion    [stipulate types of     [stipulate              [stipulate
                      undrawn]              Advances outstanding,   outstanding             outstanding
                                            amount, interest rate   Acceptances, amount     participations in
                                            and maturity of         and maturity]           Standby Credits]
                                            current Interest
                                            Periods]


TERM FACILITY

Cdn.$[      ]         [stipulate portion    [stipulate types of     [stipulate              [stipulate
                        undrawn]            Advances outstanding,   outstanding             outstanding
                                            amount, interest rate   Acceptances, amount     participations in
                                            and maturity of         and maturity]           Standby Credits]
                                            current Interest
                                            Periods]

</TABLE>


<PAGE>
                                    - 164 -


                             TRANSFERRED COMMITMENT


<TABLE>
<CAPTION>
                                                                                                   OUTSTANDING
AMOUNT OF TRANSFERRED          UNDRAWN              OUTSTANDING         OUTSTANDING BANKERS'    PARTICIPATIONS IN
COMMITMENT                                             LOANS                ACCEPTANCES          STANDBY CREDITS
---------------------   -------------------    ----------------------   --------------------    -------------------
REVOLVER FACILITY

<S>                     <C>                    <C>                      <C>                      <C>
Cdn.$[      ]           *[stipulate portion    *[stipulate types of     *[stipulate              *[stipulate
                         undrawn]               Advances outstanding,    outstanding              outstanding
                                                amount, interest rate    Acceptances, amount      participations in
                                                and maturity of          and maturity]            Standby Credits]
                                                current Interest
                                                Periods]


TERM FACILITY

Cdn.$[      ]           **[stipulate portion   **[stipulate types of    **[stipulate             **[stipulate
                          undrawn]               Advances outstanding,    outstanding              outstanding
                                                 amount, interest rate    Acceptances, amount      participations in
                                                 and maturity of          and maturity]            Standby Credits]
                                                 current Interest
                                                 Periods]
</TABLE>



*AMOUNT DETERMINED AS THE REVOLVER TRANSFER PERCENTAGE X CORRESPONDING AMOUNT
SET OUT ABOVE WITH RESPECT TO THE TRANSFEROR'S REVOLVER COMMITMENT.

**AMOUNT DETERMINED AS THE TERM TRANSFER PERCENTAGE X CORRESPONDING AMOUNT SET
OUT ABOVE WITH RESPECT TO THE TRANSFEROR'S TERM COMMITMENT.

NOTE: EACH PORTION OF THE REVOLVER COMMITMENT AND THE TERM COMMITMENT
TRANSFERRED MUST BE IN A MINIMUM AMOUNT OF CDN.$5,000,000.



<PAGE>
                                    - 165 -


                                   SCHEDULE I
                        BORROWER'S COMPLIANCE CERTIFICATE

TO:       The Toronto-Dominion Bank
          66 Wellington Street West, 38th Floor
          Toronto Dominion Bank Tower
          Toronto, Ontario
          M5K 1A2

          Attention: Vice President, Loan Syndications - Agency

RE:       GERDAU STEEL INC.

          Reference is made to an amended and restated loan agreement (the "LOAN
AGREEMENT") initially dated as of November 8, 1996, as further amended and
restated by agreement dated as of October 22, 2002, and as further amended,
supplemented, restated or novated from time to time, among Gerdau Steel Inc. and
Gerdau Courtice Steel Inc., Gerdau MRM Steel Inc. and GUSAP Partners, as
Borrowers, the Institutions named therein as Lenders and The Toronto-Dominion
Bank as Agent. All terms used in this Compliance Certificate which are defined
in the Loan Agreement have the respective meanings attributed to them in the
Loan Agreement.

          This certificate is given pursuant to Section 11.1.1.10 of the Loan
Agreement.

          The Borrowers hereby certify as follows:

          (a)  CURRENT RATIO. The attachment hereto shows the calculations of
               the ratio referred to in Section 11.1.1.13.1 of the Loan
               Agreement.

          (b)  DEBT SERVICE COVERAGE RATIO. The attachment hereto shows the
               calculation of the ratio referred to in Section 11.1.1.13.2 of
               the Loan Agreement.

          (c)  INTEREST AVERAGE RATIO. The attachment hereto shows the
               calculation of the ratio referred to in Section 11.1.1.13.3 of
               the Loan Agreement.

          (d)  TOTAL DEBT/EBITDA RATIO. The attachment hereto shows the
               calculation of the ratio referred to in Section 11.1.1.13.4 of
               the Loan Agreement.

          (e)  TERM DEBT/CAPITALIZATION RATIO. The attachment hereto shows the
               calculation of the ratio referred to in Section 11.1.1.13.5 of
               the Loan Agreement.

          (f)  TANGIBLE NET WORTH. The attachment hereto shows the calculation
               of the amount referred to in Section 11.1.1.13.6 of the Loan
               Agreement.

          Each of the calculations in the attachment hereto demonstrates
compliance with the relevant financial tests listed above as at, or for the
relevant period ending on [     ]  [      ].
<PAGE>
                                    - 166 -


          In addition, the Borrowers confirm that the representations and
warranties contained in Article 10 of the Loan Agreement are true and correct as
if made on the date of this Certificate.

          DATED this [   ] day of [         ], [    ].

          Yours very truly,

GERDAU STEEL INC.                       GERDAU COURTICE STEEL INC.


By:                                     By:
    --------------------------------        ------------------------------------
    Title:                                  Title:


GERDAU MRM STEEL INC.                   GUSAP PARTNERS


By:                                     By:
    --------------------------------        ------------------------------------
    Title:                                  Title:


<PAGE>
                                    - 167 -


                                   SCHEDULE J
                                LEGAL DESCRIPTION

PIN No. 03826-0209(R)
Part Lot 3, Concession 11 (Eleven),
City of Cambridge (formerly, in the City of Galt), Regional Municipality of
Waterloo, designated as:

FIRSTLY:

Part 5 on Reference Plan 67R-3397, save and except Part 1 on Reference Plan
58R-10199 and save and except Parts 2 and 7 on Reference Plan 67R-3585;

Subject to an easement in favour of the Corporation of the City of Cambridge
over Parts 1, 2 and 3 on Reference Plan 67R-1595 as in Instrument No. 562772;

Subject to an easement in favour of the Corporation of the City of Cambridge
over Part 1 on Reference Plan 67R-2662, as set out in Instrument Nos. 672505 and
719705;

Subject to an easement in favour of Ontario Hydro over Parts 10, 11 and 13 on
Reference Plan 67R-2555 as set out in Instrument No. 519440;

Subject to an easement in favour of Ontario Hydro over Part 3 on Reference Plan
67R-2744 as set out in Instrument No. 672553;

Subject to an easement in favour of Ontario Hydro over Part 1 on Reference Plan
67R-2721 as set out in Instrument No. 675358;

Subject to the restrictive covenants more particularly set out in Instrument
Nos. 664863, 666649 and 657448;

SECONDLY:

Parts 3, 4 and 6 on Reference Plan 67R-3397, save and except Parts 5 and 6 on
Reference Plan 67R-3585;

Subject to an easement over part of the lands being part of Part 10 on Reference
Plan 67R-2555 in favour of Ontario Hydro, as set out in Instrument No. 519440;

Subject to an easement over part of the lands being part of Part 1 on Reference
Plan 67R-1075 (now Parts 12, 13 and 14 on Reference Plan 67R-2555 and Part 2 on
Reference Plan 58R-8029) in favour of the City of Cambridge, as set out in
Instrument No. 562772;

Subject to the restrictive covenants as contained in Instrument No. 731985;

THIRDLY:

Parts 1 and 2 on Reference Plan 58R-8029;


<PAGE>
                                    - 168 -


Subject to an easement in favour of the Corporation of the City of Cambridge
over Part 2 on Plan 58R-8029 as set out in Instrument No. 562772;

FOURTHLY:

Parts 1 and 2 on Reference Plan 67R-3567;

Subject to an easement over part of the lands being part of Part 5 on Reference
Plan 67R-1595, as set out in Instrument No. 519440;

Subject to an easement over part of the lands being part of Part 1 on Reference
Plan 67R-1075 in favour of Ontario Hydro, as set out in Instrument No. 562772;

Subject to an easement over part of the lands being part of Part 1 on Reference
Plan 67R-2721 in favour of Ontario Hydro as set out in Instrument No. 675358;

Subject to the restrictive covenants as contained in Instrument No. 1272674;

FIFTHLY:

Parts 1 and 2 on Reference Plan 58R-10049;

Subject to an easement over Part 2 on Reference Plan 58R-10049, as set out in
Instrument No. 562772;

SIXTHLY:

Part of Orion Place (closed by By-law No. 160-96 registered as Instrument No.
1306011), City of Cambridge and designated as Part 1 on Reference Plan 58R-8704;

SEVENTHLY:

Part of Orion Place being part of Lot 3, Concession 11 (closed by By-law No.
159-93 registered as Instrument No. 1181142), City of Cambridge, (formerly in
the City of Galt), Regional Municipality of Waterloo and designated as Part 2 on
Reference Plan 58R-8704;

Subject to an easement over that portion of the lands being composed of Part 1
on Reference Plan 58R-8785 in favour of Union Gas Limited, as set out in
Instrument No. 1181141;

Subject to the restrictive covenants contained in Instrument No. 1181143; and

EIGHTHLY:

Part of Orion Place being part of Lot 3, Concession 11 (closed by By-law No.
160-96 registered as Instrument No. 1306011), designated as PARTS 2 and 3 on
Reference Plan 58R-10199.

Subject to an easement in favour of the Corporation of the City of Cambridge
over Part 1 on Plan 58R-10566 as set out in Instrument No. 1353996;


<PAGE>
                                    - 169 -


Subject to an easement in favour of Bell Canada over Part 3 on Plan 58R-10199 as
set out in Instrument No. 1314826.

ENCUMBRANCES OUTSTANDING AGAINST COURTICE STEEL INC. REAL PROPERTY

          AFFECTING THE LANDS FIRSTLY DESCRIBED

          (g)  Subject to an easement in favour of the Corporation of the City
               of Cambridge over Parts 1, 2 and 3 on Reference Plan 67R-1595 as
               in Instrument No. 562772;

          (h)  Subject to an easement in favour of the Corporation of the City
               of Cambridge over Part 1 on Reference Plan 67R-2662, as set out
               in Instrument Nos. 672505 and 719705;

          (i)  Subject to an easement in favour of Ontario Hydro over Parts 10,
               11 and 13 on Reference Plan 67R-2555 as set out in Instrument No.
               519440;

          (j)  Subject to an easement in favour of Ontario Hydro over Part 3 on
               Reference Plan 67R-2744 as set out in Instrument No. 672553;

          (k)  Subject to an easement in favour of Ontario Hydro over Part 1 on
               Reference Plan 67R-2721 as set out in Instrument No. 675358

          AFFECTING THE LANDS SECONDLY DESCRIBED

          (l)  Subject to an easement over part of the lands being part of Part
               10 on Reference Plan 67R-2555 in favour of Ontario Hydro, as set
               out in Instrument No. 519440;

          (m)  Subject to an easement over part of the lands being part of Part
               1 on Reference Plan 67R-1075 (now Parts 12, 13 and 14 on
               Reference Plan 67R-2555 and Part 2 on Reference Plan 58R-8029) in
               favour of the City of Cambridge, as set out in Instrument No.
               562772;

          AFFECTING THE LANDS THIRDLY DESCRIBED

          (n)  Subject to an easement in favour of the Corporation of the City
               of Cambridge over Part 2 on Plan 58R-8029 as set out in
               Instrument No. 562772;

          AFFECTING THE LANDS FOURTHLY DESCRIBED

          (o)  Subject to an easement over part of the lands being part of Part
               5 on Reference Plan 67R-1595, as set out in Instrument No.
               519440;

          (p)  Subject to an easement over part of the lands being part of Part
               1 on Reference Plan 67R-1075 in favour of Ontario Hydro, as set
               out in Instrument No. 562772;

          (q)  Subject to an easement over part of the lands being part of Part
               1 on Reference Plan 67R-2721 in favour of Ontario Hydro as set
               out in Instrument No. 675358;


<PAGE>
                                    - 170 -


          AFFECTING THE LANDS FIFTHLY DESCRIBED

          (r)  Subject to an easement over Part 2 on Reference Plan 58R-10049,
               as set out in Instrument No. 562772;

          AFFECTING THE LANDS SEVENTHLY DESCRIBED

          (s)  Subject to an easement over that portion of the lands being
               composed of Part 1 on Reference Plan 58R-8785 in favour of Union
               Gas Limited, as set out in Instrument No. 1181141;

          AFFECTING THE LANDS EIGHTHLY DESCRIBED

          (t)  Subject to an easement in favour of the Corporation of the City
               of Cambridge over Part 1 on Plan 58R-10566 as set out in
               Instrument No. 1353996;

          (u)  Subject to an easement in favour of Bell Canada over Part 3 on
               Plan 58R-10199 as set out in Instrument No. 1314826;

          AFFECTING ALL LANDS

          (v)  a reservation of all mines and minerals to Her Majesty the Queen
               registered as Instrument No. 16907;

          (w)  Instrument No. 1113692 is a site plan agreement registered April
               9, 1992 made between the Corporation of the City of Cambridge and
               Courtice Steel Inc. (affecting the lands FIRSTLY and SECONDLY
               described);

          (x)  Instrument No. 1186874 registered September 28, 1993 being a site
               plan control agreement made between the Corporation of the City
               of Cambridge and Courtice Steel Inc. (affecting the lands FIRSTLY
               and SECONDLY described);

          (y)  Instrument No. 1193190 registered November 18, 1993 being a site
               plan agreement made between the Corporation of the City of
               Cambridge and Courtice Steel Inc. (affecting the lands FIRSTLY
               and SECONDLY described);

          (z)  restrictive covenants registered as Instrument Nos. 593522,
               657448, 664863, 666649, 672553, 719704, 731985, 1181143 and
               1272674;

          (aa) Instrument No. 718821 is a demand debenture registered October
               31, 1989 made between Courtice Steel Inc. and The
               Toronto-Dominion Bank securing an original principal sum of
               $50,000,000 as amended by a supplemental debenture registered as
               Instrument No. 1258106 on June 28, 1995 and further amended by a
               debenture amending agreement registered as Instrument No. 1314747
               on November 12, 1996 (collectively, the "Courtice Original
               Debenture")

          (bb) Instrument No. 732365 is a demand debenture registered June 28,
               1990 made between Courtice Steel Inc. and The Toronto-Dominion
               Bank as amended by


<PAGE>
                                    - 171 -


               a supplemental debenture registered as Instrument No. 1258107
               registered June 28, 1995 (collectively the "Courtice Supplemental
               Debenture");

          (cc) Instrument No. 1342135 registered June 23, 1997 is an
               encroachment agreement made between the Corporation of the City
               of Cambridge and Gerdau Courtice Steel Inc. with respect to a
               right to allow Gerdau Courtice Steel's storm sewer pipe to
               encroach on the southerly limit of the public road allowance;

          (dd) Any reservations, limitations, provisos and conditions expressed
               in the original grant from the Crown, as the same may be varied
               by statute;

          (ee) Any right of expropriation, access or user or any similar rights
               conferred or reserved by or in any Statutes of Canada or the
               Province of Ontario;

          (ff) Any unregistered easements, rights of access or rights-of-way,
               not disclosed by the registered title;

          (gg) Any governing municipal by-laws other than those disclosed in
               this opinion;

          (hh) The rights of persons having unperfected liens under the
               Construction Lien Act to the extent of any deficiency in
               holdbacks required to be retained by the owner of the Property
               under that Act;

          (ii) Any unregistered statutory charge arising under the Bankruptcy
               and Insolvency Act (Canada) in respect of amounts expended by any
               governmental authority to remediate any environmental condition;

          (jj) Liens for taxes not due or payable.

          (kk) Liens for public utility accounts not due or payable.

          (ll) Any errors, omissions, encroachments or discrepancies which may
               be revealed by an up-to-date survey of the Property.



<PAGE>
                                    - 172 -


                                   SCHEDULE K
                                THE REAL PROPERTY

                           THE MANITOBA REAL PROPERTY

                 LEGAL DESCRIPTIONS AND REGISTERED ENCUMBRANCES

                   (all information is based upon Certified Titles dated
                 December 15, 1998, and all C/T's listed below evidence
                 registered ownership in "Gerdau MRM Steel Inc.")

C/T NO. 1398757

     ALL THOSE PORTIONS OF RL 21, 22 AND 24, PARISH OF ST CLEMENTS WHICH LIE TO
     THE WEST OF A LINE DRAWN WEST OF, PARALLEL WITH AND PERPENDICULARLY DISTANT
     1610 FEET FROM THE WESTERN LIMIT OF RIGHT OF WAY OF RLY PLAN 380 WLTO

REGISTERED ENCUMBRANCES

     Mortgage No. 1922866 in favour of The Toronto-Dominion Bank (the "TD
     Mortgage") Mortgage No. 1922867 in favour of The Canam Manac Group Inc.
     (the "Canam Mortgage")

C/T NO. 1398762

     ALL THAT PORTION OF RL 23, PARISH OF ST CLEMENTS WHICH LIES TO THE WEST OF
     A LINE DRAWN WEST OF, PARALLEL WITH AND PERPENDICULARLY DISTANT 1610 FEET
     PERP FROM THE WESTERN LIMIT OF RIGHT OF WAY OF RLY PLAN 380 WLTO

     REGISTERED ENCUMBRANCES
     The TD Mortgage and the Canam Mortgage (hereinafter together referred to as
     the "Permitted Mortgages")

C/T NO. 1398763

     FIRSTLY: ALL THAT PORTION OF RL 20, PARISH OF ST CLEMENTS LYING TO THE EAST
     OF THE EASTERN LIMIT OF RLY PLAN 380 WLTO, WHICH LIES TO THE WEST OF THE
     STRAIGHT PRODUCTION SLY OF THE EASTERN LIMIT OF LOT 8 PLAN 3527 WLTO EXC,
     PARCEL "A" PLAN 10373 WLTO

     SECONDLY: LOT 2 PLAN 21763 WLTO IN RL 19 PARISH OF ST CLEMENTS

     REGISTERED ENCUMBRANCES
     Easement No. J23544
     Caveat No. 217089
     The Permitted Mortgages

<PAGE>
                                    - 173 -


C/T NO. 1416136

     FIRSTLY:  LOTS 1, 2 AND 3 PLAN 3527 WLTO
               IN RL 21 AND 22 PARISH OF ST CLEMENTS

     SECONDLY: PARCELS 1 TO 5 PLAN 6736 WLTO
               EXC OUT OF SAID PARCELS 4 AND 5: PLAN 32978 WLTO
               IN RL 21 TO 28 PARISH OF ST CLEMENTS

     REGISTERED ENCUMBRANCES
     Caveat No. 144534
     Caveat No. 217089
     The Permitted Mortgages
     Caveat No. 2217728
     Caveat No. 2264931
     Builders Lien Nos. 2296942, 2311566 and 2312510

C/T NO. 1398765

     PARCEL 1: ALL THAT PORTION OF RL 24, PARISH OF ST CLEMENTS LYING TO THE
     WEST OF THE WESTERN LIMIT OF LORD SELKIRK HIGHWAY PLAN 3405 WLTO WHICH LIES
     TO THE EAST OF A LINE DRAWN SLY AT RIGHT ANGLES TO THE NORTHERN LIMIT OF
     SAID LOT, FROM A POINT IN THE SAME DISTANT WLY THEREON 660 FEET FROM SAID
     WESTERN LIMIT, EXC, FIRSTLY: PARCEL 3 PLAN 6736 WLTO AND SECONDLY: ROAD
     PLAN 10247 WLTO

     PARCEL 2: ALL THAT PORTION OF THE SLY 66 FEET PERP OF RL 25 OF SAID PARISH
     LYING TO THE WEST OF THE WESTERN LIMIT OF SAID HIGHWAY PLAN 3405 WLTO WHICH
     LIES TO THE EAST OF A LINE DRAWN NLY AT RIGHT ANGLES TO THE SOUTHERN LIMIT
     OF SAID LOT 25 FROM A POINT IN THE SAME DISTANT WLY THEREON 660 FEET FROM
     SAID WESTERN LIMIT.

     REGISTERED ENCUMBRANCES
     The Permitted Mortgages

C/T NO. 1398786

     LOT 9 PLAN 3527 WLTO IN RL 21 AND 22 PARISH OF ST CLEMENTS

     REGISTERED ENCUMBRANCES
     The Permitted Mortgages

C/T NO. 1398787

     LOTS 4, 5 AND 6 PLAN 3527 WLTO IN RL 21 AND 22 PARISH OF ST CLEMENTS
<PAGE>
                                    - 174 -


     REGISTERED ENCUMBRANCES
     The Permitted Mortgages

C/T NO. 1398788

     E 1/2 OF LOT 7 PLAN 3527 WLTO IN RL 21 AND 22 PARISH OF ST CLEMENTS

     REGISTERED ENCUMBRANCES
     The Permitted Mortgages

C/T NO. 1398804

     W 1/2 OF LOT 7 PLAN 3527 WLTO IN RL 21 AND 22 PARISH OF ST CLEMENTS

     REGISTERED ENCUMBRANCES
     The Permitted Mortgages

C/T NO. 1398805

     ALL THAT PORTION OF RL 23, PARISH OF ST CLEMENTS, BOUNDED AS FOLLOWS: ON
     THE NORTH BY A LINE DRAWN SOUTH OF, PARALLEL WITH AND PERPENDICULARLY
     DISTANT 99 FEET FROM THE NORTHERN LIMIT OF SAID LOT ON THE EAST BY THE
     WESTERN LIMIT OF PARCEL 3 PLAN 6736 WLTO ON THE SOUTH BY A LINE DRAWN NORTH
     OF, PARALLEL WITH AND PERPENDICULARLY DISTANT 66 FEET FROM THE SOUTHERN
     LIMIT OF SAID LOT AND ON THE WEST BY THE EASTERN LIMIT OF PARCEL 4 PLAN
     6736 WLTO

     REGISTERED ENCUMBRANCES
     The Permitted Mortgages

C/T NO. 1398806

     ALL THAT PORTION OF THE SLY 66 FEET PERP OF RL 23 PARISH OF ST CLEMENTS,
     LYING TO THE WEST OF THE WESTERN LIMIT OF THE LORD SELKIRK HIGHWAY PLAN
     3405 WLTO WHICH LIES TO THE EAST OF A STRAIGHT LINE DRAWN SLY AT RIGHT
     ANGLES TO THE NORTHERN LIMIT OF RL 24 OF SAID PARISH, FROM A POINT THEREIN
     DISTANT WLY THEREON 660 FEET FROM THE WESTERN LIMIT OF SAID HIGHWAY EXC,
     PARCEL 3 PLAN 6736 WLTO

     REGISTERED ENCUMBRANCES
     The Permitted Mortgages

C/T NO. 1398808

     LOT 8 PLAN 3527 WLTO IN RL 21 AND 22 PARISH OF ST CLEMENTS


<PAGE>
                                    - 175 -


     REGISTERED ENCUMBRANCES
     The Permitted Mortgages

C/T NO. 1398809

     ALL THAT PORTION OF THE SLY 66 FEET PERP OF RL 25 PARISH OF ST CLEMENTS
     WHICH LIES BETWEEN 2 LINES DRAWN AT RIGHT ANGLES TO THE SOUTHERN LIMIT OF
     SAID LOT FROM POINTS IN THE SAME DISTANT WLY THEREON 660 FEET AND 666 FEET
     FROM THE WESTERN LIMIT OF THE LORD SELKIRK HIGHWAY PLAN 3405 WLTO

     REGISTERED ENCUMBRANCES
     The Permitted Mortgages

C/T NO. 1398811

     ALL THAT PORTION OF RL 21, PARISH OF ST CLEMENTS, TAKEN FOR SUNNYSIDE ROAD
     PLAN 3527 (NOW CLOSED) WHICH LIES TO THE WEST OF THE STRAIGHT PRODUCTION
     SLY OF THE WESTERN LIMIT OF LOT 8 PLAN 3527 WLTO EXC, ALL MINES AND
     MINERALS

     REGISTERED ENCUMBRANCES
     Caveat No. 217089
     The Permitted Mortgages

C/T NO. 1398813

     PARCEL 1: ALL THAT PORTION OF RL 23, PARISH OF ST CLEMENTS BOUNDED AS
     FOLLOWS: ON THE NORTH AND SOUTH BY 2 LINES DRAWN SOUTH OF, PARALLEL WITH
     AND PERPENDICULARLY DISTANT 99 FEET AND 149 FEET FROM THE NORTHERN LIMIT OF
     SAID RL, ON THE EAST BY THE WESTERN LIMIT OF THE LORD SELKIRK HIGHWAY PLAN
     3405 WLTO AND ON THE WEST BY A LINE DRAWN SLY AT RIGHT ANGLES TO THE
     NORTHERN LIMIT OF THE HEREIN DESCRIBED PARCEL OF LAND FROM A POINT IN THE
     SAME DISTANT WLY THEREON 80 FEET FROM WESTERN LIMIT OF SAID HIGHWAY EXC,
     ROAD PLAN 10247 WLTO.

     PARCEL 2: ALL THAT PORTION OF THE NLY 99 FEET PERP OF SAID RL 23 LYING TO
     THE WEST OF THE WESTERN LIMIT OF THE LORD SELKIRK HIGHWAY PLAN 3405 WLTO
     WHICH LIES TO THE EAST OF A LINE DRAWN AT RIGHT ANGLES TO THE NORTHERN
     LIMIT OF RL 24 OF SAID PARISH FROM A POINT THEREIN DISTANT WLY THEREON 660
     FROM THE FEET SAID WESTERN LIMIT EXC OUT OF PARCEL 2, FIRSTLY: PARCEL 3
     PLAN 6736 WLTO AND SECONDLY: ROAD PLAN 10247 WLTO.

     REGISTERED ENCUMBRANCES
     The Permitted Mortgages
<PAGE>
                                    - 176 -


C/T NO. 1398815

     LOT 10 PLAN 3527 WLTO EXC, THE WLY 134 FEET OF THE SLY 150 FEET IN RL 21
     AND 22 PARISH OF ST CLEMENTS

     REGISTERED ENCUMBRANCES
     The Permitted Mortgages

C/T NO. 1398818

     ALL THAT PORTION OF RL 23, PARISH OF ST CLEMENTS, BOUNDED AS FOLLOWS: ON
     THE EAST BY THE WESTERN LIMIT OF THE LORD SELKIRK HIGHWAY PLAN 3405 WLTO ON
     THE WEST BY THE EASTERN LIMIT OF PARCEL 3 PLAN 6736 WLTO ON THE SOUTH BY A
     LINE DRAWN NORTH OF, PARALLEL WITH AND PERPENDICULARLY DISTANT 66 FEET FROM
     THE SOUTHERN LIMIT OF SAID RL AND ON THE NORTH BY A LINE DRAWN SOUTH OF,
     PARALLEL WITH AND PERPENDICULARLY DISTANT 99 FEET FROM THE NORTHERN LIMIT
     OF SAID RL EXC, FIRSTLY: ALL THAT PORTION OF THE NLY 50 FEET PERP WHICH
     LIES TO THE EAST OF A LINE DRAWN AT RIGHT ANGLES TO THE NORTHERN LIMIT OF
     THE LAND ABOVE DESCRIBED FROM A POINT IN THE SAME DISTANT WLY THEREON 80
     FEET FROM SAID WESTERN LIMIT AND SECONDLY: PUBLIC ROAD PLAN 10247 WLTO

     REGISTERED ENCUMBRANCES
     The Permitted Mortgages

C/T NO. 1398819

     ALL THAT PORTION OF RL 21, PARISH OF ST CLEMENTS TAKEN FOR SUNNYSIDE ROAD
     (NOW CLOSED) CONTAINED WITHIN THE LIMITS SHOWN PINK ON PLAN 3527 WLTO,
     LYING TO THE EAST OF THE STRAIGHT PRODUCTION SLY OF THE WESTERN LIMIT OF
     LOT 8 PLAN 3527 WLTO, WHICH LIES TO THE WEST OF THE STRAIGHT PRODUCTION SLY
     OF THE WESTERN LIMIT OF ELY 55 FEET OF SAID LOT 8 EXC, ALL MINES AND
     MINERALS

     REGISTERED ENCUMBRANCES
     The Permitted Mortgages

C/T NO. 1398820

     LOT 1 PLAN 20926 WLTO IN RL 28 AND 29 PARISH OF ST CLEMENTS

     REGISTERED ENCUMBRANCES
     The Permitted Mortgages

<PAGE>
                                    - 177 -


C/T NO. 1398821

     ALL THOSE PORTIONS OF RL 26 AND 27, PARISH OF ST CLEMENTS LYING TO THE WEST
     OF PARCEL 5 PLAN 6736 WLTO WHICH LIE TO THE EAST OF THE EASTERN LIMIT OF
     THE RIGHT OF WAY OF RLY PLAN 380 WLTO

     REGISTERED ENCUMBRANCES
     Caveat No. 198384
     The Permitted Mortgages
     Builders Lien Nos. 2296942, 2311566 and 2312510

C/T NO. 1398824

     ALL THOSE PORTIONS OF RL 19 AND 20, PARISH OF ST CLEMENTS WHICH LIE TO THE
     WEST OF THE WESTERN LIMIT OF THE RIGHT OF WAY OF RLY PLAN 380 WLTO

     REGISTERED ENCUMBRANCES
     The Permitted Mortgages

C/T NO. 1398826

     ALL THAT PORTION OF RL 25, PARISH OF ST CLEMENTS LYING TO THE WEST OF THE
     WESTERN LIMIT OF THE RIGHT OF WAY OF RLY PLAN 380 WLTO WHICH LIES TO THE
     EAST OF A LINE DRAWN WEST OF, PARALLEL WITH AND PERPENDICULARLY DISTANT
     1082 FEET FROM SAID WESTERN LIMIT

     PERMITTED LIENS
     The Permitted Mortgages

C/T NO. 1398827

     LOT 1 PLAN 18880 WLTO IN RL 21 TO 25 PARISH OF ST CLEMENTS

     REGISTERED ENCUMBRANCES
     The Permitted Mortgages

C/T NO. 1398830

     LOT 1 PLAN 16426 WLTO IN RL 27 AND 28 PARISH OF ST CLEMENTS

     REGISTERED ENCUMBRANCES
     The Permitted Mortgages

C/T NO. 1398831

     LOT 1 PLAN 26644 WLTO IN RL 27 TO 30 PARISH OF ST CLEMENTS

<PAGE>
                                    - 178 -


     REGISTERED ENCUMBRANCES
     The Permitted Mortgages

C/T NO. 1398833

     ALL THOSE PORTIONS OF RL 26, 27 AND 28, PARISH OF ST CLEMENTS LYING TO THE
     WEST OF A LINE DRAWN PARALLEL WITH THE WESTERN LIMIT OF THE RIGHT OF WAY OF
     RLY PLAN 380 WLTO AND ITS STRAIGHT PRODUCTIONS AND PERPENDICULARLY DISTANT
     WLY THEREFROM 99 FEET EXC OUT OF RL 27 AND 28, PLANS 16426 AND 26644 WLTO

     REGISTERED ENCUMBRANCES
     The Permitted Mortgages

C/T NO. 1398835

     LOT 1 PLAN 21763 WLTO IN RL 19 PARISH OF ST CLEMENTS

     REGISTERED ENCUMBRANCES
     Easement No. J23544
     The Permitted Mortgages

C/T NO. 1507428

     LOT 2 PLAN 34782 WLTO IN RL 28 TO 31 PARIS OF ST CLEMENTS

     REGISTERED ENCUMBRANCES
     The Permitted Mortgages
     Caveat No. 2059433
     Caveat No. 2059434
     Caveat No. 2087192
     Caveat No. 2162371

C/T NO. 1507432

     LOT 3 PLAN 34782 WLTO IN RL 28 TO 31 PARISH OF ST CLEMENTS

     REGISTERED ENCUMBRANCES
     The Permitted Mortgages
     Caveat No. 2059433
     Caveat No. 2059434
     Caveat No. 2087192
<PAGE>
                                    - 179 -


ENCUMBRANCES OUTSTANDING AGAINST GERDAU MRM STEEL INC. REAL PROPERTY


<TABLE>

<S>                                     <C>
1.   Secured Party:                     Greater Winnipeg Gas Company
     Date Registered:                   May 7, 1969
     Registration Number:               J23544
     Consideration:                     0
     Comments:                          Easement

2.   Secured Party:                     Manitoba Hydro Electric Board
     Date Registered:                   217089
     Registration Number:               September 23, 1970
     Consideration:                     0
     Comments:                          Caveat

3.   Secured Party:                     Manitoba Power Commission
     Date Registered:                   October 26, 1942
     Registration Number:               144534
     Consideration:                     0
     Comments:                          Caveat

4.   Secured Party:                     Manitoba Hydro Electric Board
     Date Registered:                   July 14, 1965
     Registration Number:               198384
     Consideration:                     0
     Comments:                          Caveat

5.   Secured Party:                     The Canam Manac Group Inc.
     Date Registered:                   June 29, 1995
     Registration Number:               1922867
     Consideration:                     $30,000,000
     Comments:                          Mortgage

6.   Secured Party:                     Royal Bank of Canada
     Date Registered:                   September 10, 1996
     Registration Number:               2059433
     Consideration:                     0
     Comments:                          Caveat as to equitable mortgage and
                                        charge of the interest of 658817 Alberta
                                        Ltd., as lessee

7.   Secured Party:                     Royal Bank of Canada
     Date Registered:                   September 10, 1996
     Registration Number:               2059434
     Consideration:                     0
     Comments:                          Caveat as to equitable mortgage and
                                        charge by virtue of Mortgage of Lease by
                                        way of Sub-lease, executed by 658817
                                        Alberta Ltd.

</TABLE>

<PAGE>
                                    - 180 -


<TABLE>

<S>                                     <C>
8.   Secured Party:                     Manitoba Development Corporation
     Date Registered:                   November 29, 1996
     Registration Number:               2087192
     Consideration:                     0
     Comments:                          Charge granted by 658817 Alberta Ltd. to
                                        Manitoba Development Corporation over
                                        its interest in an Option Agreement to
                                        acquire title to lands described in
                                        C/T1507428

9.   Secured Party:                     658817 Alberta Ltd. and Black Cat Blades
                                        Ltd.
     Date Registered:                   July 15, 1997
     Registration Number:               2162371
     Consideration:                     0
     Comments:                          Option to purchase lands described in
                                        C/T150728 in favour of 658817 Alberta
                                        Ltd. and Black Cat Blades Ltd.

</TABLE>


<PAGE>
                                    - 181 -


                                   SCHEDULE L
                                SECURITY SCHEDULE

PRIOR SECURITY

1.   Given by Courtice

     (a)  Guarantee of MRM's obligations dated as of December 18, 1998

     (b)  Guarantee of Gerdau Steel's obligations dated as of December 18, 1998

     (c)  Cdn.$50,000,000 Debenture dated October 31, 1989

     (d)  Debenture Pledge Agreement dated October 31, 1989

     (e)  Cdn.$50,000,000 Supplemental Debenture dated June 27, 1990

     (f)  Debenture Pledge Agreement dated June 27, 1990

     (g)  Debenture Amending Agreement dated November 8, 1996

     (h)  Debenture Delivery Agreement dated November 8, 1996

2.   Given by MRM

     (a)  Guarantee of Courtice's obligations dated as of December 18, 1998

     (b)  Guarantee of Gerdau Steel's obligations dated as of December 18, 1998

     (c)  Cdn.$80,000,000 Fixed and Floating Charge Debenture dated June 27,
          1995

     (d)  Hypothecation and Pledge of Debenture dated June 27, 1995

     (e)  U.S.$20,000,000 Working Capital General Security Agreement (Inventory
          and Receivables) dated as of November 8, 1996

     (f)  Guarantee of Porter's obligations dated as of December 18, 1998

3.   Given by Gerdau Steel

     (a)  Guarantee of Courtice's obligations dated as of December 18, 1998

     (b)  Guarantee of MRM's obligations dated as of December 18, 1998

4.   Given by Gerdau S.A.

     (a)  Cdn.$50,000,000 Guarantee of Courtice's obligations dated as of
          December 18, 1998


<PAGE>
                                    - 182 -


     (b)  Cdn.$50,000,000 Guarantee of MRM's obligations dated as of December
          18, 1998

5.   Given by Porter

     (a)  Guarantee of MRM's obligations dated as of December 18, 1998

6.   Given by GTL

     (a)  Subordination by GTL in respect of Gerdau Steel and Courtice
          promissory notes

7.   Given by Oruscom S.A.

     (a)  Subordination by Oruscom S.A. in respect of Gerdau Steel promissory
          note

OTHER EXISTING SECURITY

8.   Given by Courtice

     (a)  Guarantee of obligations of MRM and Gerdau Steel

     (b)  Guarantee of MRM Holdings' obligations

     (c)  Cdn.$350,000,000 Fixed and Floating Demand Debenture

     (d)  Debenture Delivery Agreement

     (e)  Security under Section 427 of the Bank Act (Canada) in favour of
          Citibank Canada

     (f)  Security under Section 427 of the Bank Act (Canada) in favour of The
          Chase Manhattan Bank of Canada

     (g)  Security under Section 427 of the Bank Act (Canada) in favour of The
          Toronto-Dominion Bank

     (h)  Working Capital Security Agreement (Inventory and Receivables)

     (i)  Guarantee of obligations of USP

9.   Given by MRM

     (a)  Guarantee of obligations of Courtice and Gerdau Steel

     (b)  Guarantee of MRM Holdings' obligations

     (c)  Cdn.$350,000,000 Fixed and Floating Demand Debenture

     (d)  Debenture Delivery Agreement


<PAGE>
                                    - 183 -


     (e)  Security under Section 427 of the Bank Act (Canada) in favour of
          Citibank Canada

     (f)  Security under Section 427 of the Bank Act (Canada) in favour of The
          Chase Manhattan Bank of Canada

     (g)  Security under Section 427 of the Bank Act (Canada) in favour of The
          Toronto-Dominion Bank

     (h)  Working Capital Security Agreement (Inventory and Receivables)

     (i)  Stock Pledge of all issued Porter, MFT and MRM America shares, with
          deposit of stock certificates

     (j)  Guarantee of obligations of USP

10.  Given by Gerdau Steel

     (a)  Guarantee of obligations of Courtice and MRM

     (b)  Guarantee of MRM Holdings' obligations

     (c)  Cdn.$350,000,000 Fixed and Floating Demand Debenture

     (d)  Debenture Delivery Agreement

     (e)  Security under Section 427 of the Bank Act (Canada) in favour of
          Citibank Canada

     (f)  Security under Section 427 of the Bank Act (Canada) in favour of The
          Chase Manhattan Bank of Canada

     (g)  Security under Section 427 of the Bank Act (Canada) in favour of The
          Toronto-Dominion Bank

     (h)  Working Capital Security Agreement (Inventory and Receivables)

     (i)  Share Pledge of all issued Courtice and MRM Holdings shares, with
          deposit of share certificates

     (j)  Stock Pledge of all issued Gerdau USA shares, with deposit of stock
          certificates

     (k)  Guarantee of obligations of USP

11.  Given by MRM Holdings

     (a)  Guarantee of obligations of Gerdau Steel and MRM

     (b)  Cdn.$350,000,000 Fixed and Floating Charge Debenture


<PAGE>
                                    - 184 -


     (c)  Debenture Delivery Agreement

     (d)  Share Pledge of all issued MRM shares, with deposit of share
          certificates

12.  Given by Porter

     (a)  Cdn.$350,000,000 Guarantee of obligations of Courtice, MRM and Gerdau
          Steel

     (b)  Security Agreement

     (c)  Working Capital Security Agreement (Inventory and Receivables)

13.  Given by Gerdau USA

     (a)  Cdn.$350,000,000 Guarantee of Gerdau Steel's obligations

     (b)  Stock Pledge of all issued FLS shares held by Gerdau USA, with deposit
          of stock certificates

14.  Given by FLS

(a)  Cdn.$350,000,000 Guarantee of Gerdau Steel's obligations

(b)  Stock Pledge of all issued Capital Stock of AmeriSteel held by FLS, with
     deposit of stock certificate

15.  Given by Gerdau S.A.

(a)  Cdn.$350,000,000 Guarantee of obligations of Courtice, MRM and Gerdau Steel

(b)  Subordination Agreements

16.  Given by GTL Netherlands

     (a)  Subordination by GTL Netherlands in respect of Gerdau Canada Group
          Indebtedness

17.  Given by Oruscom S.A.

     (a)  Subordination by Oruscom S.A. in respect of Gerdau Steel promissory
          note

18.  Given by all Gerdau S.A. Group Members (excluding the Intermediate Holding
     Company, the Gerdau Canada Subgroup Interim Holding Company and the Gerdau
     Canada Subgroup Holding Company) and the Agent

     (a)  Security Co-ordination Agreement among all the aforesaid Gerdau S.A.
          Group Members and the Agent


<PAGE>
                                    - 185 -


19.  Given by the Gerdau Canada Group and Gerdau S.A.

     (a)  Confirmation of Security Agreement, among the Gerdau Canada Group and
          Gerdau S.A. in favour of the Agent

20.  Given by USP

     (a)  Guarantee of obligations of each of Gerdau Steel, Courtice and MRM

     (b)  Security Agreement

     (c)  Stock Pledge, with deposit of share certificates representing all
          shares in NSULC

21.  Given by NSULC

     (a)  Guarantee of obligations of each of Gerdau Steel, Courtice, MRM and
          USP

     (b)  Stock Pledge, with deposit of stock certificates representing all
          special shares in Gerdau USA and all shares in Finco

22.  Given by Finco

     (a)  Guarantee of obligations of each of Gerdau Steel, Courtice, MRM and
          USP

     (b)  Pledge, with deposit of U.S.$182,000,000 promissory notes issued by
          Gerdau USA

23.  Given by each of Gerdau S.A., Gerdau Steel, Courtice, USP, MRM, MRM
     Holdings, Porter, Gerdau USA, FLS, NSULC and Finco

     (a)  Confirmation of Security Agreements in favour of the Agent

24.  Given by Gerdau USA

     (a)  Confirmation of Deposit of Share Certificate.

NEW SECURITY


25.  To be given by Gerdau Canada Subgroup Interim Holding Company

     (a)  Guarantee of obligations of Courtice, MRM, Gerdau Steel and USP

     (b)  Delivery of share certificates representing the Exchanged Co-Steel
          Shares

26.  To be given by Gerdau Steel

     (a)  Delivery of share certificates representing the issued Capital Stock
          of the Gerdau Canada Subgroup Interim Holding Company and the
          Exchanged Co-Steel Shares


<PAGE>
                                    - 186 -


     to be held by the Agent pursuant to the Gerdau Steel Cdn.$350,000,000
     Debenture

27.  To be given by each applicable Gerdau S.A. Group Member

     (a)  Confirmation of Guarantees and Security Agreements in favour of the
          Agent

<PAGE>
                                    - 187 -


                                   SCHEDULE M
                      FORM OF REPAYMENT/CANCELLATION NOTICE

TO:       The Toronto-Dominion Bank
          66 Wellington Street West, 38th Floor
          Toronto Dominion Bank Tower
          Toronto, Ontario
          M5K 1A2

          Attention: Vice President, Loan Syndications - Agency

RE:       GERDAU STEEL INC.

          Reference is made to an amended and restated loan agreement (the "LOAN
AGREEMENT") initially dated as of November 8, 1996, as further amended and
restated by agreement dated as of October 22, 2002, and as further amended,
supplemented, restated or novated from time to time, among Gerdau Steel Inc. and
Gerdau Courtice Steel Inc., Gerdau MRM Steel Inc. and GUSAP Partners, as
Borrowers, the Institutions named therein as Lenders and The Toronto-Dominion
Bank as Agent. All terms used in this Repayment Notice which are defined in the
Loan Agreement have the respective meanings attributed to them in the Loan
Agreement.

          [Notice is hereby given in accordance with Section [      ] of the
Loan Agreement that the undersigned wishes to cancel the [Revolver/Term]
Facility by the amount of Cdn.$[      ].]*

          Notice is hereby given in accordance with Section [      ] of the Loan
Agreement that the undersigned wishes to repay a Borrowing, and in connection
therewith, the undersigned advises the Agent that the [specify type of
Borrowing] in the amount of [specify amount and currency] will be repaid on
[specify date].

                  DATED as of the [      ] day of [      ], [      ]. *
                                        ----------------------------------------


                                        By:
                                            ------------------------------------
                                        Title:


                                        ----------------------------------------


                                        By:
                                            ------------------------------------
                                        Title:


* AS APPLICABLE



<PAGE>
                                    - 188 -


                                   SCHEDULE N
                        ENVIRONMENTAL DISCLOSURE SCHEDULE



                                      None



<PAGE>
                                    - 189 -


                                   SCHEDULE O
                          INTELLECTUAL PROPERTY RIGHTS



1.   Courtice and MRM License the use of the Gerdau name and marks from an
     affiliate of Gerdau S.A. Beheer-en Beleggingsmaatshappij Hagrola B.V.

2.   Trade-Mark: GERDAU & Design - Registration No. 410,293 - Registered April
     2, 1993

     Owner: Courtice Steel Inc.

     This mark is registered for metal products, namely, pig iron, continuous
     casting billets, concrete reinforcing bars, angles, channels, galvanized
     wire, annealed wire, etc.



<PAGE>
                                    - 190 -


                                   SCHEDULE P
                             CHIEF EXECUTIVE OFFICES


<TABLE>
<CAPTION>

GERDAU S.A. GROUP MEMBER                                              LOCATION
------------------------                                            ------------
<S>                                                                 <C>
Courtice                                                               Ontario

MRM                                                                   Manitoba

Gerdau Steel                                                           Ontario

USP                                                                    Ontario

MRM Holdings                                                           Ontario

Gerdau Canada Subgroup Interim Holding Company                         Ontario

Gerdau Canada Subgroup Holding Company                               Nova Scotia

Gerdau USA                                                            Delaware

AmeriSteel                                                             Florida

NSULC                                                                Nova Scotia

Finco                                                                 Delaware

Porter                                                              North Dakota

Gerdau S.A.                                                            Brazil

MFT                                                                   Delaware

MRM America                                                           Delaware

AmeriSteel Bright Bar                                                   Ohio

</TABLE>