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                                                                   Exhibit 10.49

               EMPLOYEE LEASING AND OVERHEAD ALLOCATION AGREEMENT

         THIS EMPLOYEE LEASING AND OVERHEAD ALLOCATION AGREEMENT ("Agreement")
is made in Massillon, Ohio as of this 8th day of March 1999, between REPUBLIC
ENGINEERED STEELS, INC., a Delaware corporation ("Republic") and BAR
TECHNOLOGIES, INC., a Delaware corporation ("BarTech").

                              PRELIMINARY RECITALS

         WHEREAS, Republic and BarTech are leading producers of special bar
quality steel, i.e. higher quality hot-rolled and cold-finished carbon and alloy
steel bars used primarily in automotive and industrial equipment.

         WHEREAS, in order to gain cost and operating efficiencies, Republic and
BarTech are currently sharing certain Shared Common Expenses (as hereinafter
defined), including, without limitation, expenses related to (i) sales and
marketing services, administrative services, and plant overhead services, and
(ii) the operation of certain common facilities;

         WHEREAS, certain salaried employees of BarTech and Republic are
currently providing services to both BarTech and Republic;

         WHEREAS, BarTech and Republic desire to more accurately allocate the
costs for such Shared Common Expenses between the two companies.

         WHEREAS, BarTech wishes to terminate the employment of certain salaried
employees and thereafter to lease-back the employment services provided by these
employees and coincident with such termination all such salaried employees will
thereafter become employees of Republic.

         WHEREAS, BarTech wishes to engage Republic, under the terms and
conditions stated in this Agreement, to provide BarTech with the administrative
services and common facilities as required by BarTech and such other services
currently rendered by certain of its salaried employees.

         WHEREAS, Republic and BarTech believe and agree that the proper and
most accurate method to allocate the cost of the Shared Common Expenses and
other services rendered by Republic employees should be a proration of the
actual costs incurred by Republic based upon total periodic trade revenues of
Republic and BarTech.

         In consideration of these mutual premises and the covenants contained
in this Agreement, the parties agree as follows:

         SECTION 1 - SERVICES.


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         (a)      Republic hereby agrees to furnish to BarTech, and BarTech
                  agrees to lease from Republic, the services of the personnel
                  necessary to fill the positions set forth on Schedule 1,
                  attached hereto and incorporated herein by reference. BarTech
                  acknowledges and agrees that the services rendered by such
                  Republic personnel shall be on a non-exclusive basis and that
                  such personnel may continue to render certain services to
                  Republic during the Term of this Agreement. BarTech shall have
                  the right to amend Schedule 1 upon reasonable notice to
                  Republic in order to change the level of services or the
                  number of employees provided to BarTech pursuant to this
                  Agreement; provided that parties agree to negotiate in good
                  faith a change in the fees payable to Republic hereunder
                  commensurate with the change in the employment services to be
                  rendered pursuant to this Agreement.

         (b)      To the extent practicable, Republic shall accommodate
                  BarTech's reasonable recommendations regarding the
                  discontinuation of services of any particular Republic
                  employee; provided, however, the determination to hire or
                  terminate any Republic employee shall be in Republic's sole
                  discretion. BarTech shall not be responsible for any of
                  Republic's financial obligations to any Republic employee
                  accruing after such discontinuation becomes effective by
                  reason of the services performed hereunder.

         SECTION 2 - SHARED COMMON EXPENSES. During the term of this Agreement,
BarTech and Republic shall share common overhead expenses related to (i) sales
and marketing services, administrative services, and plant overhead services,
and (ii) the operation of certain common facilities, as further described on
Schedule 2 attached hereto and incorporated herein (collectively the "Shared
Common Expenses"). BarTech and Republic shall establish an accounting method
which assigns costs and expenses to various "cost centers." For purposes of this
Agreement, "Cost Centers" shall mean various services, facilities, groups of
employees, management and other functions, wherein such functions or facilities
are performed or used jointly by or for the benefit of both BarTech and Republic
(e.g., payroll and accounting).

         SECTION 3 - TERM. With respect to the sharing of common overhead
expenses as set forth in Section 2 above, this Agreement shall be effective as
of October 1, 1998. With respect to the services leased by BarTech pursuant to
Section 1 above, this Agreement shall be effective as of January 1, 1999 (the
"Effective Date"). Subject to earlier termination pursuant to Section 12 below,
this Agreement shall remain in effect for a period of one (1) year from the
Effective Date and unless earlier terminated by either party, shall
automatically renew and be extended for additional terms of one (1) year each.
Notwithstanding the foregoing, either party may terminate this Agreement upon
thirty (30) days prior written notice. The parties agree and acknowledge that
BarTech shall have terminated the employment of certain specialized personnel as
agreed upon by BarTech and Republic effective as of the close of business on
December 31, 1998 and that the same personnel shall become employees of Republic
as of the Effective Date. Unless otherwise set forth in an employment agreement,
Republic shall have no obligation to employ such personnel for any period of
time in excess of sixty (60) days.


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         SECTION 4 - BARTECH PAYMENTS.


                  (a)      Every month during the term of this Agreement,
                           BarTech shall pay Republic for the services rendered
                           to BarTech by Republic employees and the Shared
                           Common Expenses incurred by Republic on behalf of
                           BarTech in an amount equal in the aggregate to the
                           following:

                           (i)     with respect to each position or service
                                   provided by Republic to BarTech which are set
                                   forth on Schedule 1, an amount equal to one
                                   hundred percent (100%) of the total cost of
                                   expense related thereto; plus

                           (ii)     with respect to the Shared Common Expenses
                                    incurred by Republic on behalf of BarTech,
                                    an amount equal to: (i) the BarTech
                                    Allocation Percentage (as hereinafter
                                    defined) multiplied by (ii) all costs and
                                    expenses, including salaries, benefits,
                                    fixed overhead expenses and other general
                                    administrative expenses charged to such Cost
                                    Center for the applicable period. The
                                    parties agree and acknowledge that the exact
                                    allocation of expenses for the Cost Centers
                                    is not capable of determination with
                                    mathematical precision and that the
                                    allocation set forth above is good faith
                                    estimate of the cost actually incurred by
                                    Republic on behalf of BarTech; plus

                           (iii)   a monthly administrative services fee equal
                                   to Two Thousand Five Hundred Dollars
                                   ($2,500.00) ("Administrative Fee").

                  (b)      Within thirty (30) days after the end of each month,
                           Republic shall provide BarTech with an invoice for
                           the fees set forth in Section 4(a) above. Republic
                           must receive payment in full at its office no later
                           than thirty (30) days following the date on which
                           BarTech receives such invoice. Time is of the essence
                           in making such payments to Republic. Neither the
                           failure of BarTech to perform any covenant,
                           obligation, or term in this Agreement nor the
                           termination of this Agreement by either party shall
                           affect or limit Republic's obligations to pay the
                           salaries of the employees leased to BarTech pursuant
                           to this Agreement as required by law. However,
                           BarTech agrees that interest may accrue, at
                           Republic's option, on all overdue payments due
                           Republic hereunder at a rate equal to up to ten
                           percent (10%) per annum. Republic reserves the right,
                           in its sole discretion, to layoff or terminate some
                           or all of the employees leased to BarTech pursuant to
                           this Agreement.


                  (c)      Republic shall determine, in its sole and absolute
                           discretion, the salary to be paid to each Republic
                           employee; provided that such salary shall in no event
                           be less than the current salary paid to such employee
                           by BarTech. Fringe benefits to be provided to said
                           employees shall be determined by


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                           Republic. In the event that seniority is a factor for
                           eligibility and/or vesting purposes in any benefit,
                           Republic employees shall be credited with their
                           service with BarTech prior to being employed by
                           Republic, unless such credit is inconsistent or
                           prohibited by any plan document governing such fringe
                           benefits. Notwithstanding anything herein to the
                           contrary, Republic hereby reserves the right to amend
                           or terminate any of the fringe benefits from time to
                           time, as determined by Republic in its sole and
                           absolute discretion.

                  (d)      The "BarTech Allocation Percentage" shall equal the
                           following quotient (expressed as a percentage): the
                           amount of steel shipped to trade customers by BarTech
                           divided by the sum of the (i) the amount of steel
                           shipped to trade customers by BarTech, plus (ii) the
                           amount of steel shipped to trade customers by
                           Republic. The BarTech Allocation Percentage shall be
                           calculated monthly based on the shipments of the
                           parties for the current calendar month.

                  (e)      Republic agrees to permit BarTech to offset the
                           amounts due Republic pursuant to this Section 5
                           against the amounts due Republic pursuant to Section
                           6 below.

         SECTION 5 - REPUBLIC PAYMENTS.

                  (a)      Every month during the term of this Agreement,
                           Republic shall pay BarTech for the Shared Common
                           Expenses incurred by BarTech on behalf of Republic in
                           an amount equal in the aggregate to the following:
                           (i) the Republic Allocation Percentage (as
                           hereinafter defined) multiplied by (ii) all costs and
                           expenses, including salaries, benefits, fixed
                           overhead expenses and other general administrative
                           expenses charged to such Cost Center for the
                           applicable period. The parties agree and acknowledge
                           that the exact allocation of expenses for the Cost
                           Centers is not capable of determination with
                           mathematical precision and that the allocation set
                           forth above is good faith estimate of the cost
                           actually incurred by BarTech on behalf of Republic.

                  (b)      Within thirty (30) days after the end of each month,
                           BarTech shall provide Republic with an invoice for
                           the fees set forth in Section 5(a) above. BarTech
                           must receive payment in full at its office no later
                           than thirty (30) days following the date on which
                           Republic receives such invoice. Time is of the
                           essence in making such payments to BarTech. Republic
                           agrees that interest may accrue, at BarTech's option,
                           on all overdue payments due BarTech hereunder at a
                           rate equal to up to ten percent (10%) per annum.


                  (c)      The "Republic Allocation Percentage" shall equal the
                           following quotient (expressed as a percentage): the
                           amount of steel shipped to trade


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                           customers by Republic divided by the sum of the (i)
                           the amount of steel shipped to trade customers by
                           BarTech, plus (ii) the amount of steel shipped to
                           trade customers by Republic. The Republic Allocation
                           Percentage shall be calculated monthly based on the
                           shipments of the parties for the current calendar
                           month.]

                  (d)      BarTech agrees to permit Republic to offset the
                           amounts due BarTech pursuant to this Section 6
                           against the amounts due Republic pursuant to Section
                           5 above.

         SECTION 6 - PLACE OF PERFORMANCE.

                  (a)      All work and services to be performed for BarTech
                           shall be performed by Republic employees at BarTech
                           or Republic facilities identified by BarTech.

                  (b)      To the extent that any work or services are performed
                           at BarTech facilities, BarTech shall comply with all
                           health and safety laws, regulations, ordinances,
                           directives, and rules imposed by controlling federal,
                           state and local government. BarTech shall promptly
                           report any accidents and injuries to Republic.

                  (c)      BarTech agrees to comply within a reasonable period
                           of time, at its expense, with any specific and
                           reasonable health and safety directives from
                           Republic, Republic's workers' compensation carrier,
                           or any government agency having jurisdiction over
                           work place health and safety.

         SECTION 7 - OBLIGATIONS.

                  (a)      The parties acknowledge and agree that Republic is an
                           independent contractor, and that all of the personnel
                           assigned by Republic to provide services to BarTech
                           are employees of Republic and only of Republic.
                           Republic acknowledges that it is responsible for the
                           payment of federal, state and local payroll taxes,
                           workers' compensation insurance, unemployment
                           compensation, salaries and fringe benefits for its
                           employees and for the preparing and filing of all
                           returns and reports concerning all of its employees,
                           including without limitation the employees leased to
                           BarTech pursuant to this Agreement. Republic shall
                           indemnify and hold BarTech harmless for any penalty,
                           claim, liability, deficiency or damages, including,
                           without limitation reasonable attorneys fees, arising
                           as a result of Republic's failure to fulfill its
                           duties as set forth in the preceding sentence;
                           provided, however, BarTech expressly acknowledges,
                           however, that Republic shall not be liable for
                           BarTech's loss of business goodwill, lost profits or
                           other consequential, special or incidental damages.
                           At Republic's request, BarTech may assist in


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                           recruiting, hiring, evaluating, replacing,
                           supervising, disciplining and firing Republic
                           employees; however, Republic shall retain ultimate
                           control over such matters.

                  (b)      In order to carry out its obligations hereunder,
                           Republic may designate one or more "on-site
                           supervisors" from among the employees assigned to
                           provide services to BarTech. The on-site supervisors
                           shall oversee administrative and managerial matters
                           relating to Republic's leased employees and shall be
                           under the direct supervision of the officers of
                           Republic. If Republic does not designate on-site
                           supervisors, Republic's leased employees who are
                           assigned to BarTech shall be responsible to the
                           officers of Republic. The on-site supervisors or the
                           management team shall determine the policies and
                           procedures to be followed by Republic's leased
                           employees regarding the time and performance of their
                           duties. BarTech shall cooperate with Republic in the
                           formation of such policies and procedures and shall
                           permit Republic to implement the same.

                  (c)      All Republic employees who are engaged in
                           Environmental Activities (as hereinafter defined) at
                           or in facilities, vessels or vehicles owned, operated
                           or occupied by BarTech shall conduct such
                           Environmental Activities under the policy,
                           supervision and direction of the Board of Directors
                           of BarTech. "Environmental Activities" shall mean the
                           handling, storage, maintenance, treatment, disposal,
                           emission, spill or release of substances or materials
                           regulated by Governmental Requirements (as
                           hereinafter defined). "Governmental Requirements"
                           shall mean all laws, ordinances, rules, statutes, and
                           regulations of the United States, of the state in
                           which each BarTech facility, vessel or vehicle is
                           located, and of any other political subdivision,
                           agency or instrumentality exercising jurisdiction
                           over a particular BarTech facility, vessel or
                           vehicle, which laws, ordinances, statutes, rules and
                           regulations govern, regulate, or otherwise pertain to
                           health, industrial hygiene or the environment,
                           including without limitation, the Comprehensive
                           Environmental Response Compensation and Liability Act
                           of 1980 ("CERCLA") (42 U.S.C.  Section 9601 et.
                           seq.), the Resource, Conservation and Recovery Act of
                           1976 ("RCRA") (42 U.S.C. Section 6901 et. seq.), the
                           Toxic Substance Control Act ("TSCA") (15 U.S.C.
                           Section 2601 et. seq.), the Clear Water Act ("CWA")
                           (33 U.S.C. Section 1251 et. seq.), the Clear Air Act
                           ("CAA") (42 U.S.C. Section 7401 et. seq..) as well as
                           any other federal, state or local "Superfund" or
                           "Superlien" statutes, laws or regulations.

         SECTION 8 - BILLING INFORMATION. All invoices provided to either party
shall be accompanied by a detailed summary of information used to calculate the
amounts due thereunder, including, when applicable, detailed calculations
setting forth the new Allocation Percentage for each calendar month. In the
event that either fails to provide written notice to the other within thirty
(30) days of receipt of such invoice, such party shall be precluded from


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questioning the correctness of the invoice or the calculations used to support
the invoice. In addition and notwithstanding the foregoing, within ninety (90)
days after the end of each calendar year during the term of this Agreement, both
parties shall provide the other with a detailed statement of all revenues and
costs necessary to calculate the amounts due the other during the previous
calendar year, or portion thereof. If the annual report reveals any
underpayments by either party, the parties agree to make the appropriate
payments to the other within fifteen (15) days of notice thereof. Additionally,
BarTech shall provide periodic reports concerning the quality of performance of
each of Republic's employees, as BarTech deems necessary or as Republic may
reasonably request. BarTech and Republic shall also make available to each other
such other employee information in their possession as may be reasonably
requested from time to time by the other party.

         SECTION 9 - INDEMNIFICATION.

                  (a)      To the extent permitted by applicable law, BarTech
                           shall indemnify, defend, and hold Republic and its
                           officers, directors, employees, agents and
                           representatives harmless from all claims arising out
                           of the rendering of services for BarTech by Republic
                           employees and the incurrence of the Shared Common
                           Expenses on behalf of BarTech. BarTech shall
                           indemnify, defend, and hold Republic harmless from
                           all claims arising out of the incurrence of the
                           Shared Common Expenses on behalf of Republic.

                  (b)      To the extent permitted by applicable law, such
                           indemnification shall extend to any and all
                           liabilities, expenses, costs, damages and/or losses
                           of any kind, including reasonable attorneys' fees and
                           all expenses in connection with defending against any
                           claim arising out of any and all acts or omissions in
                           connection with the performance of services rendered
                           for either party by the employees of the other party.

                  (c)      To the extent permitted by applicable law and except
                           as set forth in Section 9(d) herein, BarTech shall
                           not, in the aggregate, sue, make any claim or demand,
                           or otherwise seek any damages from Republic for any
                           injuries arising out of any and all acts or omissions
                           of any Republic employee in connection with the
                           performance of services rendered for BarTech in
                           excess of the total Administrative Service Fees
                           received by Republic pursuant to this Agreement.


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         SECTION 10 - INSURANCE.

                  (a)      Republic shall furnish and keep in full force and
                           effect, at all times during the term of this
                           Agreement, workers' compensation insurance covering
                           all of Republic's leased employees who are providing
                           services to BarTech hereunder. Republic shall furnish
                           BarTech with a "Certificate of Insurance" naming
                           BarTech as Certificate Holder. Republic shall also
                           obtain a policy providing disability insurance
                           coverage for the same employees.

                  (b)      Republic shall maintain, at all times, the following
                           policies of insurance for actions arising out of acts
                           of Republic's leased employees occurring during the
                           course of their employment:

                           (i)     general liability; and

                           (ii)    automobile liability related to the use of
                                   automobiles by employees while on the job.

                  (c)      Each such policy shall provide liability coverage of
                           at least $1,000,000 per actionable occurrence.

                  (d)      Each such policy shall insure BarTech, Republic and
                           Republic's employees who perform services for BarTech
                           against any and all claims of any nature whatsoever,
                           regardless of the type of injury alleged, arising
                           from any act attributable to any Republic employee.

                  (e)      Each such policy shall be on an "occurrence" basis.
                           However, if an "occurrence" policy is not available,
                           Republic shall maintain an equivalent "claims made"
                           policy until the expiration of all statutes of
                           limitation applicable to any claim that could arise
                           under this Agreement by virtue of the acts of
                           Republic's leased employees.

                  (f)      BarTech shall be named as an insured on all such
                           policies of insurance. All such policies shall
                           require the insurer to provide BarTech with notice of
                           impending cancellation, in the same manner as it is
                           required to provide such notice to Republic. If
                           Republic shall fail to pay any premium when due,
                           BarTech, in its sole discretion, may pay the same,
                           and Republic shall reimburse BarTech for the full
                           amount of such premium within five (5) business days
                           after BarTech's payment. If reimbursement is not made
                           within such period, BarTech may deduct the full
                           amount from the next payment(s) BarTech is required
                           to make to Republic under Section 4 hereunder.

                  (g)      In the event that either party currently maintains a
                           policy of insurance covering employment practices
                           liability, such party shall continue to


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                           maintain such policy at all times during the term of
                           this Agreement at its own cost and take any steps
                           reasonably necessary to ensure that such policy be
                           amended or extended to cover the employees leased to
                           BarTech pursuant to this Agreement.

         SECTION 11 - CONFIDENTIALITY. The parties agree and acknowledge that in
order to successfully provide the services as contemplated by this Agreement,
either party may from time to time disclose to the other its confidential and
proprietary information. The parties further agree and acknowledge that but for
this Agreement, neither would disclose such confidential and proprietary
information which had been developed at such party's expense and which contains
such party's trade secrets. Accordingly, the parties agree as follows with
respect to all confidential and proprietary information disclosed to the other
pursuant to this Agreement:

         (a)      Identification of Confidential Information. Confidential
                  information for the purposes of this Agreement shall mean any
                  information (i) identified by either party in writing as
                  confidential information and (ii) not generally known to the
                  public. The restrictions contained in this Section 11 shall
                  not be enforceable against a party and such party shall not be
                  liable for disclosures if such party can demonstrate that the
                  Confidential Information so disclosed: (i) is already known to
                  such party and has properly been obtained as of the date of
                  this Agreement, as shown by contemporaneous written records;
                  (ii) is already in the possession of the public or becomes
                  publicly available without breach hereof by such party; (iii)
                  is lawfully acquired by such party from a person not under any
                  confidentiality obligation to the other party with respect to
                  disclosure of any Confidential Information; (iii) is disclosed
                  to any third party by or with the permission of the other
                  party without confidentiality restrictions; or (iv) is
                  independently developed by such party as shown by
                  contemporaneous written records, and was not acquired directly
                  or indirectly from the other party.

         (b)      Nondisclosure. The parties agree not to disclose any
                  Confidential Information of the other to any third party
                  without the prior consent of the disclosing party.

         (c)      Non-Interference. The parties agree that the Confidential
                  Information that they receive from the other party constitutes
                  valuable business information which could be unfairly used in
                  competition with the other party and which could give such
                  party a competitive advantage in the marketplace that it
                  otherwise would not possess. Accordingly, the parties agree
                  that they will not, directly or indirectly, whether acting on
                  their own behalf or in any other capacity, in concert with, or
                  on behalf of, any third party or entity, use the Confidential
                  information to interfere in any way with the business
                  operations, business relationships, contract rights, or
                  business opportunities of the other party.


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         (d)      Breach. In the event of a breach or threatened breach of the
                  provisions of this Section 11, the parties agree that the
                  non-breaching party shall be entitled to injunctive relief
                  restraining and enjoining the other party from violating any
                  provision of this Section 11. In addition, the non-breaching
                  party shall be entitled to any and all additional and
                  alternative legal and equitable remedies available to it,
                  including the recovery of attorney's fees incurred in the
                  enforcement of this Agreement.

         SECTION 12 - DEFAULT AND TERMINATION. Upon the occurrence of any event
of default, the non-defaulting party may, at its option, and without waiving its
rights under this Agreement or any other rights available at law or in equity,
including its rights to damages, terminate this Agreement effective immediately
upon the occurrence of an event of default or upon the lapse of the specified
period following an event of default.

         (a)      TERMINATION BY REPUBLIC. The occurrence of any one or more of
                  the following events shall constitute an event of default and
                  grounds for termination of this Agreement by Republic:

                  (i)      Upon written notice, if BarTech makes a general
                           assignment for the benefit of creditors, or, unless
                           otherwise prohibited by law, if a petition in
                           bankruptcy is filed by BarTech, or such a petition is
                           filed against and consented to by BarTech or not
                           dismissed within thirty (30) days of filing, or if a
                           bill in equity or other proceeding for the
                           appointment of a receiver of BarTech or other
                           custodian for BarTech's business or assets is filed
                           and consented to by BarTech, or if a receiver or
                           other custodian (permanent or temporary) of BarTech's
                           assets or property, or any part of BarTech's assets
                           or property, is appointed; or

                  (iii)    Upon written notice, if BarTech violates any covenant
                           of confidentiality or non-competition obligation
                           contained in this Agreement or otherwise discloses,
                           uses, permits the use of, copies, duplicates,
                           records, transmits or otherwise reproduces any
                           materials, or information designated by Republic as
                           confidential without Republic's prior written
                           approval; or

                  (iii)    If BarTech fails to perform or breaches any covenant,
                           obligation, or term in this Agreement and fails to
                           cure such non-compliance or deficiency within thirty
                           (30) days after Republic's written notice of such
                           non-compliance or deficiency.

         (b)      TERMINATION BY BARTECH. The occurrence of the following events
                  shall constitute an event of default and grounds for
                  termination of this Agreement by BarTech:


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                  (i)      Upon written notice, if Republic makes a general
                           assignment for the benefit of creditors, or, unless
                           otherwise prohibited by law, if a petition in
                           bankruptcy is filed by Republic, or such a petition
                           is filed against and consented to by Republic or not
                           dismissed within thirty (30) days of filing, or if a
                           bill in equity or other proceeding for the
                           appointment of a receiver of Republic or other
                           custodian for Republic's business or assets is filed
                           and consented to by Republic, or if a receiver or
                           other custodian (permanent or temporary) of
                           Republic's assets or property, or any part of
                           Republic's assets or property, is appointed;

                  (ii)     Upon written notice, if Republic violates any
                           covenant of confidentiality or non-competition
                           obligation contained in this Agreement or otherwise
                           discloses, uses, permits the use of, copies,
                           duplicates, records, transmits or otherwise
                           reproduces any materials, or information designated
                           by BarTech as confidential without BarTech's prior
                           written approval; or

                  (iii)    If Republic fails to perform or breaches any
                           covenant, obligation, or term in this Agreement and
                           fails to cure such non-compliance or deficiency
                           within thirty (30) days after Republic's written
                           notice of such non-compliance or deficiency.

         (c)      The rights and obligations set forth in Sections 9 and 11
                  shall survive the termination or expiration of this Agreement
                  without limitation.

         SECTION 13 - COMPLIANCE WITH LAWS. Both Republic and BarTech shall
comply with all applicable labor laws and laws regarding equal employment
opportunities, whether federal, state or local. Neither Republic nor BarTech
shall discriminate on the basis of national origin, race, color, religion, age,
handicap or sex.

         SECTION 14 - GOVERNING LAW & ARBITRATION. This Agreement shall be
governed by and construed in accordance with the domestic laws of the State of
Ohio without giving effect to any choice or conflict of law provision or rule
(whether of the State of Ohio or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of Ohio. Except
for any claim, controversy or dispute arising from or relating to this Agreement
for which a party is seeking, in whole or in part, any type of equitable remedy,
which may be brought against any of the parties in the courts of the State of
Ohio, County of Stark, or, if it has or can acquire jurisdiction, in the United
States District Court for the Northern District of Ohio, any claim, controversy
of dispute arising from or relating to this Agreement shall be heard and
resolved exclusively by binding arbitration in Cleveland, Ohio, under the
then-prevailing Commercial Arbitration Rules of the American Arbitration
Association (an "Arbitration"). For any Arbitration, each party shall use good
faith efforts to choose one (1) arbitrator who is experienced in commercial
arbitration. If the parties cannot agree upon one (1) arbitrator within fifteen
(15) days after a claim is submitted to Arbitration, each party shall have
fifteen (15) days to choose one (1) arbitrator who is experienced in 


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commercial arbitration, and such arbitrators shall collectively agree upon a
third arbitrator. The costs related to Arbitration, other than costs directly
attributable to either Republic or BarTech, shall be paid equally by the parties
provided, however, that if a claim presented to Arbitration by a party, or the
complete defense offered at Arbitration by a party, is not colorable or is
brought or offered solely to cause delay, obstruction or vexation, such party
shall be responsible for all of the other party's costs related to the
Arbitration, including reasonable attorney's fees. Any award of an Arbitration
may be entered into judgment in any court of competent jurisdiction. This
provision shall survive any termination of this Agreement. Process in any action
or proceeding referred to in this Section 14 may be served on any party anywhere
in the world.


         SECTION 15 - ENTIRE AGREEMENT. This Agreement contains the entire
understanding of the parties. No amendment of any provision of this Agreement
shall be valid unless the same shall be in writing and signed by the parties to
this Agreement. No waiver by any party of any default, misrepresentation, or
breach of warranty or covenant under this Agreement, whether intentional or not,
shall be deemed to extend to any prior or subsequent default, misrepresentation,
or breach of warranty or covenant under this Agreement or affect in any way any
rights arising by virtue of any prior or subsequent occurrence.

         SECTION 16 - NO THIRD-PARTY BENEFICIARIES. This Agreement shall not
confer any rights or remedies upon any person other than the parties and their
respective successors and permitted assigns.

         SECTION 17 - HEADINGS. Headings in this Agreement are for convenience
only and shall not be used to interpret or construe its provisions.

         SECTION 18 - COUNTERPARTS. This Agreement may be executed in two or
more counterparts, each of which shall constitute an original but all of which
together shall constitute one and the same instrument.

         SECTION 19 - SEVERABILITY. Any term or provision of this Agreement that
is invalid or unenforceable in any situation in any jurisdiction shall not
affect the validity or enforceability of the remaining terms and provisions of
this Agreement or the validity or enforceability of the offending term or
provision in any other situation or in any other jurisdiction.

         SECTION 20 - CONSTRUCTION. The parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties and no presumption or burden of proof shall
arise favoring or disfavoring any party by virtue of the authorship of any of
the provisions of this Agreement.

         SECTION 21 - NO PARTNERSHIP OR JOINT VENTURE. Republic does not, in any
way or for any purpose, become a partner of BarTech in the conduct of BarTech's
business or otherwise, or a joint venturer or member of a joint enterprise with
BarTech by reason or connection with this Agreement.


                                      -12-
<PAGE>   13

         SECTION 22 - EMPLOYMENT AGREEMENTS. The parties agree and acknowledge
that with respect to employees of BarTech that currently have valid and binding
employment agreements with BarTech, this Agreement shall be subject to BarTech
obtaining the appropriate consents to the novation and/or assignment of such
employment agreement. Unless otherwise set forth in a written employment
agreement, nothing contained herein shall be construed to guarantee employment
for any individual for any specific period or length of time, or to modify,
limit, or waive the right of either party to terminate employment with or
without cause or notice; employment for such employees shall at all times remain
at will.

         IN WITNESS WHEREOF, the parties have executed this Agreement on the
date first above written.
                                              REPUBLIC
                                       ENGINEERED STEELS, INC.,
                                        a Delaware corporation

                             By:                                         
                                  -------------------------------------
                                              Signature

                                  -------------------------------------
                                             Print Name
                             Its:                                        
                                  -------------------------------------
                                               Title



                                        BAR TECHNOLOGIES, INC.,
                                        a Delaware corporation

                             By:                                      
                                  -------------------------------------
                                              Signature

                                  -------------------------------------
                                             Print Name
                             Its:                                     
                                  -------------------------------------
                                               Title


                                      -13-

<PAGE>   14



                                   SCHEDULE 1

                              Employment Positions
<TABLE>
                                               
<S>                                                     <C>
Casting Supervisor                                      Manager, Utilities & Environmental 
Chief Chemist                                           Manager, Warehouse 
Compressed Air & Steam Supervisor                       Mechanical Engineer 
Electrical Engineer                                     Melter
Electronics Technician                                  Metallurgical Engineer 
Fuel/Environmental Engineer                             Metallurgical Practices Engineer 
General Manager                                         Operations Coordinator
Instrumentation Engr./Maint. Planner                    P-30 Coordinator 
Intern                                                  Primary Operations Metallurgist 
Lab Technician                                          Process Control Engineer
Ladle Met Supervisor                                    Process Engineer 
Load Coordinator/Dispatcher                             Process Metallurgist 
Maintenance Coordinator                                 Production Controller 
Maintenance Engineer                                    Project Engineer
Maintenance Supervisor                                  Purchased Fuel Administrator 
Manager, Billet Yard                                    Purchaser 
Manager, Continuous Casting                             Quality Assurance Technician 
Manager, Maintenance                                    Roller 
Manager, Manufacturing Services                         Scrap Coordinator 
Manager, Mill                                           Scrapyard Supervisor 
Manager, Primary Operations Tech.                       Shipper 
& Development                                           Shipping Supervisor
Manager, Process Controls                               Supervisor Electrical Maintenance 
Manager, Product End                                    Supervisor, Electronic Technicians 
Manager, Production                                     Supervisor, Product End 
Planning & Inventory Control                            Supervisor, System Development & Outside Processing 
Manager, Project Engineering                            Supervisor, Warehouse
Manager, Roll Shop and                                  Systems Technician
Roll Build-Up                                           
Manager, Safety Services                      
Manager, Shop Operations                                
Manager, Traffic                              
</TABLE>


                                      -14-
<PAGE>   15

                                   SCHEDULE 2

                             Shared Common Expenses:

                                   Purchasing
                                     Safety
                                  Environmental
                                     Quality
                               Technical Services
                               Production Planning
                                 Human Resources
                             Information Technology
                              Executive Management
                             Finance and Accounting
                               Sales and Marketing
                                Customer Service
                              Headquarters Expense
                                   Advertising






                                      -15-