AGREEMENT

         THIS  AGREEMENT  executed and  effective  as of July 20,  2000,  by THE
BETHLEHEM CORPORATION, its successors or assigns, hereinafter referred to as the
"Corporation," and THE BETHLEHEM CORPORATION EMPLOYEE  ASSOCIATION,  hereinafter
referred to as the  "Association,"  as the agent for and acting on behalf of the
Corporation's  "employees" as the term is defined in the  collective  bargaining
agreement witnesseth that the parties have agreed as follows:

         WHEREAS,   the  Corporation  and  the  Association  are  parties  to  a
collective  bargaining agreement effective for the period from August 1, 1998 to
July 31, 2001 (hereinafter  sometimes  referred to as the "Existing  Agreement";
and

         WHEREAS,  the Corporation as of April 1, 2000 has ceased all production
operations at its Palmer Township  facility which is the facility covered by the
Existing Agreement; and

         WHEREAS,  the parties have agreed to terminate  the Existing  Agreement
subject to the terms and conditions set forth herein.

         NOW THEREFORE,  in  consideration  of the foregoing and intending to be
legally bound hereby, the parties agree as follows:

     1.  Except  as  provided  by the  terms  of this  Agreement,  the  Existing
Agreement  shall be terminated  and its  provisions of no further  effect on the
date first above written.  The employment  with the Corporation of all employees
having

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seniority on that date under the Existing  Agreement  shall  terminate  and such
seniority shall likewise terminate.

     2.  Each  employee  has  received  payment on April 20,  2000 of his or her
accrued but unused  vacation for the vacation  year  beginning  June 1, 1998 and
ending May 31, 1999 in a lump sum payment in the amounts set forth on Schedule A
attached hereto and made a part hereof.  Accrued but unused vacation pay for the
vacation year  beginning June 1, 1999 and ending March 31, 2000 shall be paid on
June 16,  July 14, and August 11,  2000 in the  amounts  set forth on Schedule B
attached  hereto and made a part hereof.  The parties  agree that the amounts of
vacation  payments set forth on Schedules A and B are correct under the terms of
the Existing Agreement.

     3.  Eligible  employees  received  payment  on April 20,  2000 for the Good
Friday  holiday  in the  year  2000 in  accordance  with the  provisions  of the
Existing Agreement.

     4.  Coverage  under the  Corporation's  existing  group health care program
will be continued at the Corporation's  expense for those employees and/or their
dependents  entitled thereto on April 1, 2000 until April 30, 2000.  Thereafter,
coverage under the Corporation's  group health care program will be extended for
an  additional 90 days  pursuant to the  provisions  of the  insurance  contract
between the Corporation and U.S. Healthcare.  Upon the expiration of said ninety
day period on July 31, 2000 any coverage for medical insurance will be solely in
accordance with the provisions of the Consolidated Omnibus Budget Reconciliation
Act of 1985 (COBRA).  On or after July 31, 2000, the  Corporation  shall have no
further  obligation  to  provide  health  insurance  coverage  for any  laid off
employee under any collective  bargaining  agreement between the Corporation and
the Association.

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     Notwithstanding  the  provisions  of this  Section 4 the  Corporation  will
provide the existing health insurance  coverage for Thomas Sabatine for a period
of two years from the date of this Agreement.

     5.  The  provisions  of  Article  XVI  Insurance  and  Pensions,  Section C
Subsections  (1),  (2) and (3) of the  Existing  Agreement  shall remain in full
force and effect until 11:59 p.m. on July 31, 2001 for those  employees who have
retired on or before May 1, 2000.  On or after July 31,  2001,  the  Corporation
shall have no further  obligation to provide health  insurance  coverage for any
retired  employee  under  any  collective   bargaining   agreement  between  the
Corporation and the Association.

     6.  Those  employees who have retired from the Corporation on or before May
1, 2000 shall  continue to receive life  insurance  coverages in the amounts set
forth in the fifth (5th) and sixth (6th) subparagraphs of Article XVI, Section A
of the Existing  Agreement.  However,  the Corporation  shall have the option of
providing  such  coverages  by means of paid up life  insurance  policies  or by
paying the premiums necessary to keep such coverages in effect.

     7.  Distributions from the two defined benefit Pension Agreements described
below between the Corporation  and the Association  occurring as a result of the
cessation  of  production  operations  at the  Easton  Plant  shall  be  made in
accordance with the terms and conditions of the aforesaid Pension Agreements and
the Existing Agreement with the following modifications:

         a.   The Easton Hourly  Pension Plan and the Bethlehem  Hourly  Pension
              Plan,  both as  described  below shall be merged into one Plan and
              terminated in accordance with applicable law and regulations.

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<PAGE>

         b.   The Plan  will be  amended  to  provide  a lump  sum  distribution
              payment  option  to  participants  in the  Plan  as of the  Plan's
              termination date.

         c.   If after all distributions, expenses of the merger and termination
              of said Plans and taxes have been paid out of the underlying  plan
              trust, any excess amount remains, all Participants will receive an
              equal  distribution  from  such  excess  amount  according  to the
              following schedules:

              - Up to $50,000                 - Participant will receive 100% of
                                                said sums equally
              - For sums in excess of         - Participants will receive 50% of
                $50,000 but less than           said sums equally
                $200,000
              - For sums in excess of         - Participants will receive 25% of
                $200,000                        said sums equally


         d.   Any remaining sums after said additional  distributions  have been
              made to the Participants will revert to the Corporation.


         The Pension Agreements referred to in this Paragraph 8 are as follows:

               One pension  agreement is The  Bethlehem  Corporation  Retirement
         Income Plan,  commonly  referred to as the Easton  Hourly  Pension Plan
         dated as of June 8, 1964 and as amended as of June 15,  1967,  June 15,
         1970,  June 22, 1974,  November 16, 1975, June 23, 1977, June 15, 1979,
         July 21, 1980,  June 12, 1984,  August 12, 1987, July 23, 1991 and July
         23, 1994.

               The  other  pension   agreement  is  The  Bethlehem   Corporation
         Employees'  Association  Pension  Plan,  commonly  referred  to as  The
         Bethlehem  Hourly  Pension Plan dated as of January 2, 1970 and amended
         as of

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<PAGE>

         October 1, 1970,  October 1, 1974,  June 23, 1977,  June 15, 1979, July
         21, 1980,  June 12, 1984,  August 12, 1987,  July 23, 1991 and July 23,
         1994.

     8.  The  401(k)  Plan  described  in  Article  XVI,  Section  E(3) shall be
terminated in accordance  with  applicable  laws and  regulations  by filing the
necessary plan termination information to the Internal Revenue Service (IRS) for
its approval. Following IRS approval,  distributions will be made to 401(k) Plan
participants  in  accordance  with the terms and  conditions of the Plan and the
provisions of the Existing Agreement.

     9.  The  Corporation  will  continue to recognize  the  Association  as the
exclusive bargaining  representative of the employees (including but not limited
to retired  employees)  covered under the Existing Agreement for the purposes of
administering the provisions of this Agreement.

     10. The Corporation  agrees that if it should reinstitute steel fabrication
operations  at its  facility  within a period of four (4) years from the date of
this Agreement, the Corporation will recognize the Association as the collective
bargaining representative for all employees hired for such operations having the
skills and experience of the employees covered under the Existing Agreement. The
parties agree that this Paragraph 10 shall not apply to  maintenance  operations
including but not limited to moving machinery at its Easton Plan.

     11. The Association  acknowledges that by entering into this Agreement, the
Corporation  has met all  requirements  of  applicable  federal  and  state  law
including but not limited to the Labor  Management  Relations  Act,  federal and
state  Civil  Rights  laws,  the Age  Discrimination  and  Employment  Act,  the
Pennsylvania Human Relations Act, the Americans With Disabilities Act (ADA), the
Occupational  Safety and Health  Act  (OSHA),  the  Employee  Retirement  Income

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<PAGE>

Security Act of 1974, as amended (ERISA),  the Internal Revenue Code of 1986, as
amended, as well as all requirements under the Existing Agreement.

     12. If a dispute  should arise as to the  interpretation  or application of
any of the terms of this  Agreement  until  such  terms  expire or are no longer
applicable,  or under any  applicable  federal  or state law  including  but not
limited to the statutes  referred to in Paragraph 12 hereof,  such dispute shall
be  initiated  by the  Association  at the  Step 3 level  of the  Grievance  and
Arbitration  provisions  of the  Existing  Agreement.  The  grievance  shall  be
processed and any arbitration  shall be conducted in accordance with Article XI,
Section A, Step 4, as well as Subsections B and C of the Existing Agreement.

         IN WITNESS  WHEREOF,  the  parties  have caused  this  Agreement  to be
executed by their duly authorized representatives this 20th day of July, 2000.

THE BETHLEHEM CORPORATION                      THE BETHLEHEM CORPORATION
EMPLOYEES ASSOCIATION


By:____________________________                By:___________________________

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