<PAGE>   1
                                                                    EXHIBIT 99

                        [ACME METALS INCORPORATED LOGO]

               September 7, 2000

WCI Steel, Inc.
1040 Pine Avenue, SE
Warren, OH 44483-6528

Gentlemen:

     This letter (this "Letter") will confirm the discussions among Acme Steel
Company ("Acme"), Acme Metals Incorporated ("Metals") and WCI Steel, Inc.
("Purchaser") regarding the proposed sale by Acme to Purchaser of Acme's
integrated coke, iron and steel production business (but excluding Acme's cold
reduction mill, that certain R-67 slitting machine and the steel fabricating
business of Acme's affiliates) (the "Acquired Assets") (the "Transaction").

     1.   Material Terms of the Transaction. Certain material terms of the
Transaction are summarized in the Term Sheet attached hereto as Exhibit A.
Capitalized terms used herein and not defined shall have the respective meanings
set forth in the Term Sheet. The parties intend to negotiate in good faith
towards the execution of a mutually satisfactory definitive purchase agreement
(a "Purchase Agreement") by October 23, 2000 or as soon as practicable
thereafter. However, the parties understand that this Letter is preliminary, and
that neither this Letter nor the Term Sheet hereto contains all matters that
will be set forth in a Purchase Agreement. In any event, this Letter and the
Term Sheet do not constitute a binding agreement or commitment with respect to
the Transaction. A binding commitment of the parties with respect to the
Transaction will arise only upon execution of, and as set forth in (and subject
to the terms and conditions set forth in), a Purchase Agreement. Either Acme and
Metals, on the one hand, or Purchaser, on the other, may discontinue
negotiations at any time. Notwithstanding the foregoing, paragraphs 2(C), and 3
through 7, of this Letter are binding on the parties hereto.

     2.   Certain Bankruptcy Matters.

          (A) The sale contemplated by a Purchase Agreement will be subject to
Acme's right to propose and confirm a chapter 11 plan of reorganization that
does not include a sale of the Acquired Assets (a "Stand Alone Plan") or a plan
or sale transaction involving a Competing Bid (as defined below). The Interim
Order (defined below) will provide for a break-up fee in the amount of
$5,000,000 (the "Break-Up Fee"), or for the Alternate Fee (as defined and
provided for below), plus reimbursement of all reasonable out-of-pocket costs
and expenses, including reasonable attorneys fees (but in any event excluding
internal costs such as wages and salaries of employees and overhead), incurred
by Purchaser at any time subsequent to April 24, 2000 in connection with the
negotiation, execution or consummation of the Transaction (including



<PAGE>   2
                                                                               2

performance of due diligence), up to an aggregate amount of $500,000 (the
"Expense Reimbursement"). The Break-Up Fee or Alternate Fee, as applicable, and
Expense Reimbursement shall be earned by and payable to the Purchaser only as
follows:

               (i)  Competing Bid. (a) Except as otherwise provided in
     subparagraphs (i)(b), (iii), and (iv) below, in the event the Bankruptcy
     Court for the District of Delaware (the "Court") approves a higher or
     better competing bid on the Acquired Assets (a "Competing Bid"), Purchaser
     shall earn the Break-Up Fee and Expense Reimbursement upon entry of the
     order approving such Competing Bid.

               (b)  Notwithstanding subparagraph (i)(a) above, the Break-Up Fee
     shall not be earned by or payable to Purchaser in any of the following
     situations:

                    (1) the Court has approved a Competing Bid submitted by the
United Steelworkers of America ("USWA"); or

                    (2) either the Purchaser or Acme terminates negotiations
pursuant to a Notice Letter (as defined below), but only if the Acme companies
have negotiated with the Purchaser in good faith, and if the Purchaser has
requested any material change in (or requested any provision in a Purchase
Agreement that is inconsistent in any material respect with) the provisions of
the Term Sheet, except for any such request made in good faith as a result of
information first learned by the Purchaser, or events or changes occurring,
after the date of this letter, or the Purchaser has otherwise not negotiated in
good faith with the Acme companies or the USWA; or

                    (3) a period of 9 months or more elapses between the date on
which the Court enters the Interim Order (defined below) and the date on which a
Competing Bid, is submitted to the Court for approval.

     As used herein, a "Notice Letter" means a written notice by either Acme or
     Purchaser to the other party terminating the negotiation of a Purchase
     Agreement.

               (ii) Stand Alone Plan. (a) Except as otherwise provided in the
     following sentence and in subparagraphs (ii)(b), (iii) and (iv) below, in
     the event the Court confirms a Stand Alone Plan, the Purchaser shall earn
     the full $5,000,000 Break-Up Fee and Expense Reimbursement. Except as
     otherwise provided in subparagraphs (ii)(b), (iii) and (iv) below, if no
     Purchase Agreement is executed and the Court thereafter confirms a Stand
     Alone Plan, the Purchaser shall not earn or be paid the full $5,000,000
     Break-Up Fee, but shall instead earn an alternate break-up fee (the
     "Alternate Fee") in the amount of $2,000,000 and Expense Reimbursement.

               (b)  Notwithstanding subparagraph (ii)(a) above, neither the
     Break-Up Fee nor the Alternate Fee shall be earned by or payable to the
     Purchaser in any of the following situations:

<PAGE>   3
                                                                               3

                     (1) Acme has negotiated with Purchaser in good faith and no
Purchase Agreement is executed by Acme and the Purchaser because (in whole or in
part) (x) either Acme or the Purchaser determines in good faith that one or more
conditions precedent (to its or the other party's obligations) or deadlines
contemplated by the Term Sheet, other than the condition identified in paragraph
16(h) of the Term Sheet, will not timely be satisfied or met and has not been
waived, or (y) the Purchaser requests any material change in (or requests any
provision in a Purchase Agreement that is inconsistent in any material respect
with) the provisions of the Term Sheet; or

                     (2) a Purchase Agreement is executed and delivered by Acme
and the Purchaser but the Closing does not occur for any reason other than a
material inaccuracy in any of the representations or warranties made by Acme in
such Purchase Agreement or a material breach by Acme of any of its covenants in
such Purchase Agreement.

               (iii) Expense Reimbursement Limitations. The Expense
     Reimbursement shall be earned by Purchaser upon entry of the Interim Order
     and shall be payable to Purchaser in accordance with subparagraph 2(A)(v)
     below unless a Purchase Agreement is not executed by Acme and the Purchaser
     because (in whole or in part) (a) the Purchaser failed to negotiate in good
     faith with the Acme companies or the USWA or (b) without limitation of
     clause (a) hereof, the Purchaser requests any material change in (or
     requests any provision in a Purchase Agreement that is inconsistent in any
     material respect with) the provisions of the Term Sheet, except for any
     such request made in good faith as a result of information first learned by
     the Purchaser, or events or changes occurring, after the date of this
     letter.

               (iv)  General Limitation. In any event, however, neither the
     Break-Up Fee, nor the Alternate Fee, nor Expense Reimbursement will be
     payable if (a) the Closing occurs, or (b) the Closing does not occur due in
     whole or in part to any material breach of any representation, warranty or
     covenant by the Purchaser, or (c) Purchaser does not proceed in good faith
     to negotiate the Purchase Agreement.

               (v)   Time of Payment. The Break-Up Fee and Expense
     Reimbursement, once earned, shall be payable to the Purchaser upon the
     earlier to occur of either (a) the closing of the transaction contemplated
     by the Court-approved Competing Bid or (b) on the effective date of a
     confirmed Stand Alone Plan. The Alternate Fee, once earned, shall be
     payable to the Purchaser on the effective date of a confirmed Stand Alone
     Plan. Notwithstanding the two immediately preceding sentences, the Expense
     Reimbursement, once earned, shall be payable regardless of whether a
     Competing Bid or Stand Alone Plan occurs, unless Purchaser forfeits its
     right to such payment pursuant to subparagraphs 2(A)(iii)(a) or (b) or
     2(A)(iv) above.

               (B)   Pursuant to section 363 of the Bankruptcy Code, a Purchase
Agreement will require entry of an Approval Order (the "Approval Order") by the
Court, which will be substantially in a form annexed as an exhibit to such
Purchase Agreement and which Approval Order the parties will, subject to the
proviso set forth in paragraph 2(C)(i) below, use their reasonable best efforts
to cause the Court to enter on or before December 8, 2000. The Approval


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                                                                               4

Order shall approve and authorize the sale of the Acquired Assets to Purchaser
free and clear of all liens, claims, encumbrances and other interests, except
for any Permitted Liens, as defined and specified in a Purchase Agreement
(including without limitation the lease to NACME Steel Processing, LLC of a
portion of Acme's Riverdale, Illinois site), and shall authorize Acme to assume
and assign to Purchaser all unexpired, executory leases and contracts included
in the Acquired Assets. Purchaser shall be responsible for any cure payments
owed to any third party of such assigned leases and contracts pursuant to
section 365 of the Bankruptcy Code that are set forth in a schedule provided by
Acme on or before the date on which the Purchase Agreement is executed
evidencing the amount necessary to cure any default under such contracts or in
an order of the Court fixing such cure amounts.

               (C)   Acme and Purchaser will seek entry of an Interim Order (the
"Interim Order") by the Court, which shall be in a form mutually satisfactory to
Acme and Purchaser and which the parties shall use their reasonable best efforts
to cause the Court to enter on or before September 29, 2000. The Interim Order
shall, among other things:

                     (i)   schedule the date for the hearing regarding approval
     of a Purchase Agreement, provided that in no event will such hearing occur
     prior to the satisfaction or waiver of the condition identified in
     paragraph 16(g) of the Term Sheet;

                     (ii)  approve the payment of the Break-Up Fee, or the
     Alternate Fee, as the case may be, and Expense Reimbursement as specified
     in paragraph 2(A) as administrative expenses pursuant to section
     503(b)(1)(A) of the Bankruptcy Code entitled to the priority set forth in
     section 507(a)(1) of the Bankruptcy Code; and

                     (iii) set forth commercially reasonable bidding procedures
     and requirements regarding Competing Bids, including (among other things)
     (x) a minimum initial incremental bidding requirement of not less than $7
     million greater overall value to Acme than that provided by the Transaction
     (the "Initial Competing Bid Amount"), (y) subsequent incremental bidding
     requirements of at least $1 million in excess of the higher of (A) the last
     bid or (B) the Initial Competing Bid Amount, and (z) in the event a
     Competing Bid is chosen by Acme as the highest or best offer for the
     Acquired Assets, the making of a deposit by such Competing Bidder in an
     aggregate amount equal to $5,000,000; PROVIDED, HOWEVER, that any Competing
     Bid submitted by the USWA shall not be subject to the bidding requirements
     set forth in this paragraph 2(C)(iii).

     3.   Confidentiality Agreement. The parties hereto acknowledge and agree
that the Confidentiality Agreement dated May 24, 1999 between Metals and Renco
Group Inc. shall survive the execution and delivery of this Letter or any
termination hereof; PROVIDED, HOWEVER, that notwithstanding anything to the
contrary set forth therein, the parties agree that within two business days
after the date of this letter, the parties will jointly prepare and issue a
mutually satisfactory press release.

     4.   Counter parts. This Letter may be executed in one or more
counterparts, each of which shall be an original, but all of which together
shall constitute one and the same Letter.

<PAGE>   5
                                                                               5

     4.   Counterparts. This Letter may be executed in one or more counterparts,
each of which shall be an original, but all of which together shall constitute
one and the same Letter.

     5.   Amendments. This Letter may be amended only by an instrument in
writing signed by the parties.

     6.   Governing Law, This Letter shall be governed by and construed in
accordance with the laws of the State of Delaware.

     7.   Entire Agreement. Subject to Section 3 hereof, this Letter sets forth
the entire understanding between the parties hereto relating to the subject
matter hereof.

     If the terms of this Letter are acceptable to you, please sign and return
the enclosed counterpart to the undersigned.

                                        Very truly yours,

                                        ACME STEEL COMPANY

                                        By /s/ Stephen D. Bennett
                                           -------------------------------------
                                           Name: Stephen D. Bennett
                                           Title: Chairman

                                        ACME METALS INCORPORATED

                                        By /s/ Stephen D. Bennett
                                           -------------------------------------
                                           Name: Stephen D. Bennett
                                           Title: Chairman, President and Chief
                                           Executive Officer



Accepted and Agreed to
as of the date first written above

WCI STEEL, INC.

By
   ---------------------------------
   Name:
   Title:


<PAGE>   6
                                                                               5

     4.   Counterparts. This Letter may be executed in one or more counterparts,
each of which shall be an original, but all of which together shall constitute
one and the same Letter.

     5.   Amendments. This Letter may be amended only by an instrument in
writing signed by the parties.

     6.   Governing Law, This Letter shall be governed by and construed in
accordance with the laws of the State of Delaware.

     7.   Entire Agreement. Subject to Section 3 hereof, this Letter sets forth
the entire understanding between the parties hereto relating to the subject
matter hereof.

     If the terms of this Letter are acceptable to you, please sign and return
the enclosed counterpart to the undersigned.

                                        Very truly yours,

                                        ACME STEEL COMPANY

                                        By
                                           -------------------------------------
                                           Name:
                                           Title:

                                        ACME METALS INCORPORATED

                                        By
                                           -------------------------------------
                                           Name:
                                           Title:



Accepted and Agreed to
as of the date first written above

WCI STEEL, INC.

By /s/ John P. Jacunsk
   ---------------------------------
   Name: John P. Jacunsk
   Title: Vice President and
          Chief Financial Officer



<PAGE>   7
                                                                       EXHIBIT A

                       ACME STEEL COMPANY/WCI STEEL, INC.

             TERM SHEET FOR AN AGREEMENT (THE "PURCHASE AGREEMENT")

                    FOR THE SALE OF THE STEEL MAKING SEGMENT

                               SEPTEMBER 7, 2000

     1.   Parties. The seller will be Acme Steel Company ("Acme"). The acquiror
will be WCI Steel, Inc. ("Purchase").

     2.   Acquired Assets. The "Business" means Acme's integrated coke, iron and
steel production business, but excluding Acme's cold reduction mill, that
certain R-67 slitting machine and the steel fabricating business of Acme's
affiliates. "Related to the Business" means used or held for use, or entered
into, by Acme primarily in connection with, or arising primarily out of, the
conduct of the Business in the ordinary course. Purchaser will Acquire, as they
exist as of the closing of the acquisition (the "Closing"), (i) all assets of
Acme Related to the Business and (ii) in any event, all of the following:

                     (1) (x) all of the parcels of real property owned in fee
by Acme as of the date of this Term Sheet and described in Schedule I annexed
hereto (it being understood that such maps are not intended as precise
descriptions of the areas indicated thereon (or of the size thereof)), the
undeveloped property, adjoining the "Pickling & Slitting Facility" shown on
Schedule 1, owned by Acme, and the platted residential lots around the blast
furnace and the coke plant owned by Acme, and (y) all buildings and improvements
located thereon and owned by Acme, ((x) and (y) collectively, the "Acme Real
Property"), the Acme Real Property to be conveyed subject to a retained right to
use a portion of the Riverdale site as described in Section 13 below, and
(except for the Excluded Assets described in clause (iii) of Section 3) all of
the machinery and equipment of Acme located in such buildings, in each case
regardless of the extent, if any, to which such assets are Related to the
Business on the date of the Purchase Agreement or the Closing date;

                     (2) forth on Schedule 2 annexed hereto; the leases of real
property leased by Acme as lessee, set

                     (3) Acme's interests in NACME Steel Processing, LLC
("NACME") and Wabush Iron Co., Ltd. ("Wabush");

                     (4) all contracts (including binding bids) of Acme Related
to the Business (x) entered into prior to September 28, 1998 (the "Petition
Date") and assumed by Acme pursuant to section 365 of the Bankruptcy Code prior
to or (with the consent of Purchaser,



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                                                                               2

not to unreasonably be withheld or delayed) after the execution of the Purchase
Agreement, including without limitation (and without the need for any such
consent by Purchaser) all contracts with, or relating to Acme's interests in,
NACME or Wabush, Acme's contracts with the United Plant Guard Workers of America
relating to the Chicago and Riverdale properties, Acme's power supply agreement
with ComEd (as presently in effect or as presently proposed to be modified and
assumed by Acme), the modified EIRB Bonds as described in clause (v) of Section
4 below and such other contracts as may be specified in the Purchase Agreement,
or (y) entered into on or after the Petition Date, including without limitation
(but subject to Section 12) all contracts relating to the contemplated future
relining of Acme's blast furnace (including without limitation replacement or
repair of the blast furnace bustle pipe currently scheduled for April 2001 and
the other mechanical, electrical or structural blast-furnace related work
outside of the interior of the blast furnace to be performed at the same time)
(the "Reline"). The Purchase Agreement will contain a schedule of all
then-outstanding Acme contracts (including leases) assigned to Purchaser
requiring future payments in excess, in the aggregate, of $50,000, and customary
negative covenants relating to Acme's entering into material contracts after the
date of the Purchase Agreement; and

                     (5) all accounts receivable, inventory, machinery and
equipment, intellectual property, business records and transferable permits of
Acme Related to the Business.

Acme also will cause to be conveyed certain desktop computer terminals and
similar equipment (but not servers) to be specified owned by Acme Metals
Incorporated ("Metals") but used by employees of Acme primarily in connection
with the Business. The parties are still in the process of identifying ownership
as among Metals and its Subsidiaries of certain limited shared assets such as
certain software and software licenses (other than Acme's and/or Metals' MIS
system, which will be an Excluded Asset), and certain fiber optics and
electrical wiring systems at the Riverdale and Chicago sites, and the status of
these assets will be clarified in the Purchase Agreement. The assets described
above in this Section 2 as to be acquired by the Purchaser, less the Excluded
Assets, may be referred to collectively as the "Acquired Assets".

     3.   Excluded Assets. The following assets (the "Excluded Assets"), as
they exist as of the Closing, will be excluded from the Acquired Assets and will
not be sold to Purchaser:

          (i)   cash or cash equivalents, security deposits of Acme with
     vendors, suppliers or other third parties and indebtedness for borrowed
     money (or similar obligations) ("Indebtedness") owed to Acme;

          (ii)  the name and mark "Acme", and any name or mark derived from or
     including "Acme" (provided that Acme and/or Metals may be required to
     recognize the right, as between the Acme companies and NACME, of NACME to
     continue to use the name "NACME" notwithstanding the incorporation therein
     of the word "Acme");

          (iii) Acme's properties and assets used or held for use as of the
     Closing primarily in connection with, Acme's cold reduction mill currently
     operated at the



<PAGE>   9
                                                                               3

     Riverdale, Illinois site (other than the Acme Real Property itself), and
     that certain R-67 slitting machine currently located at such site;

          (iv)   any subsidiary of Acme or any other equity interest of Acme in
     any other person, other than the NACME and Wabush investments;

          (v)    subject to the first sentence of the last paragraph of Section
     2, and to Section 14 below, Acme's and/or Metals' MIS system (including
     software and equipment);

          (vi)   accounts receivable from, or other rights or claims against,
     Metals or other wholly-owned subsidiaries of Metals, other than (1) any of
     the foregoing arising from intercompany sales in the ordinary course of
     business after the Petition Date and (2) other intercompany
     payables/receivables arising in the ordinary course of business after the
     Petition Date;

          (vii)  any contracts other than those described above to be included
     in the Acquired Assets, including without limitation (1) the letter of
     credit referred to in the notes to Metal's consolidated financial
     statements for the fiscal year ended December 26, 1999 (the "1999
     Financial Statement Notes") under the heading "Raytheon Engineers &
     Contractors, Inc.", (2) the related EPC contract with Raytheon, (3) the
     Agreement to Resolve Certain Claims dated as of June 30, 1998 among Acme,
     Raytheon and SMS Scholemann-Seimag AG (now known as SMS-Demag AG) and the
     related SMS letter of credit and (4) the indemnification agreements with
     Interlake Corporation described in the 1999 Financial Statement Notes under
     the heading "Interlake Corporation";

          (viii) any rights to refunds of taxes (other than non-income taxes
     arising after the Petition Date);

          (ix)   avoidance causes of action under the Bankruptcy Code; and

          (x)    any other assets so specified in the Purchase Agreement.

For the avoidance of doubt, it is understood that Acme will be entitled to
retain any dividends paid to it by NACME prior to the Closing. The Purchase
Agreement will contain appropriate provisions to be agreed concerning
outstanding Acme or Metals insurance policies to the extent they relate to the
Business.

     4.   Assumed Liabilities. At the Closing, Purchaser will assume the
Assumed Liabilities. The "Assumed Liabilities" will include all liabilities and
obligations (of whatever nature, known or unknown) ("Liabilities") of Acme,
arising out of the conduct of the Business in the ordinary course on or after
the Petition Date, as they exist as of the Closing, other than Excluded
Liabilities. Without limitation of the foregoing, and without regard to clause
(i) of the definition of Excluded Liabilities, the Assumed Liabilities in any
event will include the following as they exist as of the Closing:


<PAGE>   10
                                                                               4

          (i)    all Liabilities of Acme under the contracts included in the
     Acquired Assets;

          (ii)   without limitation of Section 8 below, all Liabilities of Acme
     in respect of any and all products sold by the Business in the ordinary
     course after the Petition Date;

          (iii)  all Liabilities, including without limitation
     environmental/health and safety (including without limitation potential
     remediation) Liabilities ("Environmental Liabilities"), of Acme or any of
     its affiliates associated with any owned or leased real property included
     in the Acquired Assets (or any buildings, improvements, machinery or
     equipment located thereon), other than Fabricating Environmental
     Liabilities (as defined in the Riverdale Retained Use and Services
     Agreement) (the Liabilities described in this clause (iii), the "Properties
     Environmental Liabilities");

          (iv)   all Plan Liabilities and all Employee Liabilities (each as
     defined below);

          (v)    all Liabilities of Acme and Metals under the 7.95%
     Environmental Improvement Bonds due April 2025 and the 7.90% Environmental
     Improvement Bonds due April 2024, each issued by the Village of Riverdale,
     Illinois, the related Loan Agreements between Acme and the Village of
     Riverdale and the other related contracts (collectively, the "EIRB Bonds"),
     after giving effect to, but excluding any special fees, expenses, penalties
     or other amounts that may be payable under the EIRB Bonds in connection
     with, any EIRB Settlement referred to in Section 6(i) below; and

          (vi)   subject to Section 12, all Liabilities incurred in connection
     with the Reline.

     5.   Excluded Liabilities. The "Excluded Liabilities" are:

          (i)    Liabilities that (in the case of Liabilities that are unknown
     or are not quantifiable, assuming such Liabilities were known and were
     quantifiable) would be classified as long-term liabilities on a balance
     sheet of Acme prepared in accordance with generally accepted accounting
     principles (and prepared and presented in a manner consistent with past
     practice of Acme), including all Indebtedness of Acme and its affiliates,
     all of this clause (i) being subject to and not in limitation of the
     specified Assumed Liabilities described in clauses (i) through (vi) of
     Section 4;

          (ii)   accounts payable, and other obligations, of Acme to Metals or
     any of Metals' other wholly-owned subsidiaries, in each case other than (1)
     any of the foregoing arising from intercompany sales in each case in the
     ordinary course of business after the Petition Date and (2) other
     intercompany payables/receivables arising in the ordinary course of
     business after the Petition Date; and

          (iii)  all Liabilities of Acme and its affiliates in respect of income
     taxes with respect to periods prior to the Closing.

<PAGE>   11
                                                                               5

For the avoidance of doubt, the Assumed Liabilities shall not include (1) the
potential liability of Acme to the Internal Revenue Service described in the
1999 Financial Statement Notes under the heading "Interlake Corporation", and
(2) the potential liability of Acme described in such Notes under the heading
"Raytheon Engineers & Contractors, Inc." Purchaser shall not assume any
Liabilities other than the Assumed Liabilities, provided that this does not
limit any express obligation of Purchaser contemplated by this Term Sheet (or
the letter to which this Term Sheet is attached (the "Letter") or set forth in
the Purchase Agreement.

     6.   Purchase Price. The purchase price for the Acquired Assets (the
"Purchase Price") shall consist of:

          (i)    the "Cash Component," which shall be payable by Purchaser in
     full at the Closing to Acme (or its designee) and shall consist of:

               (x) for Acme's interests in Wabush, a sum to be specified in the
          Purchase Agreement (the "Wabush Amount"); plus

               (y) for Acme's interests in NACME, a sum to be specified in the
          Purchase Agreement (the "NACME Base Amount"); plus

               (z) for the other Acquired Assets, the sum of (A) $116,400,000,
          minus (B) the sum of the Wabush Amount and the NACME Base Amount, plus
          (C) an amount equal to the product of (1) the excess (if any) of
          $15,519,852 over the amount of the allowed secured claim in respect of
          the EIRB Bonds as of the Closing date after giving effect to any
          agreement or stipulation heretofore or hereafter entered into with the
          indenture trustee and/or the holders of the EIRB Bonds and approved by
          the Bankruptcy Court which has the effect of fixing the amount of such
          allowed secured claim as of such date at an amount less than
          $19,930,000 (an "EIRB Settlement"), multiplied by (II) 0.533; and

          (ii)   delivery and assignment to Acme (or its designee) at the
     Closing of all of the 10.875% Senior Unsecured Notes of Metals owned
     beneficially or of record by Purchaser or any of its affiliates as of the
     date of this Term Sheet, but in any event not less than $59,425,000
     aggregate unpaid principal amount (as of the Closing) of such Notes; and

          (iii)  assumption of the Assumed Liabilities.

In addition to the foregoing, Purchaser understands that it is Acme's position,
and agrees in principle, that the Purchase Price does not compensate Acme for,
and Acme is entitled to be compensated for, any NACME 2000 Earnings (as defined
below). Accordingly, it is contemplated that after the execution of the Letter,
Purchaser, Acme and the National Entities (as defined below) will negotiate
arrangements satisfactory to all such persons with respect to the NACME 2000
Earnings. The term "NACME 2000" Earnings means an amount equal to the excess, if
any, of (1) 40% of the net earnings from operations of NACME for the period of
January 1, 2000 through the Closing Date over (2) the sum of (x) any dividends
paid to Acme by

<PAGE>   12
                                                                               6

NACME during such period, other than the dividends paid in February and June of
2000, plus (y) $91,200.

     7.   Deposit. Purchaser will deposit the amount of $5,000,000 into escrow
upon signing of the Purchase Agreement (the "Deposit"). In the event the Closing
occurs, the Deposit, plus accrued interest thereon, would be released to Acme
(or its designee), but Purchaser would receive a credit therefor against the
Cash Component. In the event that the Closing does not occur, the Deposit, and
accrued interest thereon, would be released to Purchaser unless the failure of
the Closing to occur is attributable in whole or in part to a material breach or
material inaccuracy of any representation, warranty or covenant of Purchaser, in
which case (and without limitation of any remedy Acme may have with respect to
such breach or inaccuracy) such funds would be released to Acme.

     8.   Purchase Price Adjustments; Special Reserve Account. (a) The Cash
Component shall be increased by the amount by which Working Capital exceeds the
Target Amount, and the Cash Component shall be decreased by the amount by which
Working Capital is less than the Target Amount. Subject to Section 12, the Cash
Component also shall be increased by an amount equal to Aggregate Reline Costs.

     "Working Capital" shall mean:

          (i) all current assets included in the Acquired Assets, excluding from
     such computation current assets on account of retiree medical, retiree life
     insurance or pensions and provided that, in light of Section 8(b) below,
     there shall not be any reserve against (or other diminution in) current
     assets on account of possible returns/credits with respect to Near-Closing
     Steel Orders, minus

          (ii) all current liabilities included in the Assumed Liabilities, but
     in any event excluding from such computation of current liabilities (1) any
     Properties Environmental Liabilities (or, for the avoidance of doubt, any
     Fabricating Environmental Liabilities), (2) current liabilities on account
     of retiree medical, retiree life insurance or pensions, (3) for the
     avoidance of doubt, any Liabilities under the Key Employee Retention Plan,
     or any Plan Liabilities or Employee Liabilities that will be incurred by
     reason of consummation of the Closing (including without limitation as a
     result of termination of employment upon consummation of the Closing), (4)
     subject to Section 12, any current liabilities to the extent attributable
     to the Reline, (5) any current liabilities as a result of any deferral or
     cancellation of Reline-related contracts pursuant to the last sentence of
     Section 12, (6) any current liabilities relating to the EIRB Bonds, (7) any
     current liabilities related to preparing for implementation of the
     Transition Services Agreement described in Section 14 below, and (8) any
     current liability for "cure costs" for which Purchaser is to be responsible
     as described in Section 2 of the Letter,

all as would be reflected on the face of a balance sheet of Acme as of
immediately prior to the Closing.


<PAGE>   13
                                                                               7

     Working Capital shall be determined using the same accounts, accounting
methods, accounting practices, assumptions (including without limitation
discount rates), policies and methodologies as were used by Metals in connection
with the consolidated financial statements of Metals included in Metal's 10-K
for the year ended December 26, 1999 (including without limitation those
specified in the Purchase Agreement), except that inventories shall be valued at
current "standard cost" (determined in the manner historically used by Metals)
unadjusted for any LIFO reserve. In any event, Working Capital shall be
determined based solely on facts and circumstances existing as of immediately
prior to the Closing, as known to Acme as of immediately prior to the Closing.

     The "Target Amount" means $91,812,000.

     "Aggregate Reline Costs" shall mean all out-of-pocket costs and expenses
(including without limitation for preparation of drawings and designs and the
like) incurred by Acme at any time prior to the Closing in connection with the
Reline, except to the extent that such costs and expenses are dollar-for-dollar
reflected in Working Capital current assets.

     Acme shall be responsible for the preparation of the initial calculations
of Working Capital and Aggregate Reline Costs, and Purchaser shall cooperate
fully with Acme in connection therewith. The Purchase Agreement shall contain
other customary provisions concerning the determination of Working Capital and
Aggregate Reline Costs (including independent accounting firm resolution of
disputes). Any adjustment of the Cash Component pursuant to this Section 8(a)
shall be paid together with interest accruing from the Closing date.

          (b) $250,000 of the Cash Component shall be placed into an escrow
account at the Closing (the "Escrowed Funds"). To the extent that, during the
first 90 days after the Closing, steel orders from the Business filled within
90 days prior to the Closing ("Near-Closing Steel Orders") are rightfully
returned to Purchaser (by Acme Packaging or any other third party) for
non-conformance of the steel with the specifications of the relevant order, and
the amount of money which must be paid to the relevant customers with respect to
such returns (less the fair value of the returned steel (which shall at a
minimum equal the scrap value of such returned steel) and the fair value of any
other consideration received by Purchaser or its affiliates in connection with
such return) exceeds the Return Threshold, Purchaser shall be entitled to be
reimbursed for such excess from (and only from and to the extent of) the
Escrowed Funds. Purchaser shall be obligated to act with respect to customer
claims in respect of Near-Closing Steel Orders as if such claims were solely for
Purchaser's own account (and no recourse against the Escrowed Funds (or Acme)
existed with respect to such claims), and otherwise in good faith. The entire
amount of the Escrowed Funds, together with all earnings thereon but less any
amount paid over to Purchaser pursuant to the preceding sentence, shall be paid
over to Acme (or its designee) on the 91st day after the Closing. The "Return
Threshold" shall equal the product of (i) the quotient of the aggregate dollar
amount of steel order credits issued by the Business during the first six fiscal
months of fiscal year 2000, divided by the aggregate number of tons of steel
orders shipped during such period, multiplied by (ii) the aggregate number of
tons of Near-Closing Steel Orders.




<PAGE>   14
                                                                               8

     9.   Supply Agreements. At the Closing, Purchaser, and Acme Packaging
Corporation ("Acme Packaging") and Alpha Tube Corporation ("Alpha Tube"),
respectively, shall enter into contracts for the supply of steel products by
Purchaser after the Closing (the "Supply Agreements"). It currently is
contemplated that the definitive Supply Agreements will be attached to the
Purchase Agreement as exhibits. Certain principal terms of the Supply Agreements
are set forth in Annex A hereto.

     10.  Employee Matters. (a) "Active Employee" means (i) an employee on the
Closing date of Acme who at such time renders services primarily to the Business
or to NACME (pursuant to the Leased Services Agreement with NACME) and is
actively at work, on vacation or on short-term disability leave, and (ii) an
employee of Metals who renders services primarily to the Business and who is
listed on a schedule of such employees delivered to Purchaser on even date
herewith (the "Transferred Metals Employee Schedule"). "Inactive Employee" means
an employee on the Closing date of Acme who is not actively at work on the
Closing date (including any such individual on leave of absence, long-term
disability leave, military leave or layoff with recall rights) but who, when
last actively at work, rendered services primarily to the Business or to NACME
(pursuant to the Leased Services Agreement with NACME). "Business Employee"
means (i) any Active Employee, (ii) any Inactive Employee, (iii) any individual
(other than an Active Employee or Inactive Employee), listed on a schedule
delivered to Purchaser on even date herewith (the "Former Employee Schedule"),
(iv) any individual who retires or whose employment by Acme otherwise terminated
or terminates on or after January 1, 2000 and prior to the Closing date who is
listed in the Former Employee Schedule, as updated by Acme and delivered to
Purchaser on the Closing date (it being understood that the allocation to the
Business of such additional former employees in the Former Employee Schedule, as
updated, will be made in the same manner as used to allocate former employees on
the Former Employee Schedule as delivered to Purchaser on even date herewith),
and (v) any current or former spouse, dependent or beneficiary of any of the
foregoing.

          (b) Purchaser may offer employment to Active Employees and Inactive
Employees, effective as of the Closing date, as shall be determined by Purchaser
and specified to Acme prior to the Closing date.

          (c) Purchaser shall assume the Liabilities relating to the employment
or termination of employment of any Business Employee ("Employee Liabilities"),
whether arising at, prior to or following the Closing date, including without
limitation any Plan Liabilities (as defined below); provided however that Acme
shall remain responsible for any severance payments to Business Employees who
are not offered employment by Purchaser, and for any retention payments to
Business Employees regardless of whether they are offered employment by
Purchaser, all up to an aggregate amount of $1,600,000; and provided further
that, except with respect to post-retirement medical and life benefits
(including benefits under the Program of Hospital and Physicians' Services),
long-term disability benefits, COBRA benefits, and pension and savings plan
liabilities assumed pursuant to Sections 11(d) and (e) hereof, Purchaser shall
not assume or be responsible for Employee Liabilities or Plan Liabilities
arising prior to the Petition Date that (i) are not "retiree benefits" as
defined in section II 14(a) of the Bankruptcy Code, and (ii) do not constitute
or give rise to a claim entitled to priority under section 503(b), 507(a)(3) or
507(a)(4) of the Bankruptcy Code.


<PAGE>   15
                                                                               9

     11.  Benefits. (a) Purchaser shall assume and be responsible for, and shall
indemnify Metals and its affiliates against, all Liabilities of Metals and its
affiliates relating to the Business Employees arising under or in connection
with any employee benefit plan, program or arrangement providing for pension,
savings, medical, dental, life insurance, disability, retention, severance pay,
incentive, workers' compensation or other employee benefits, including without
limitation post retirement benefits and COBRA benefits ("Plan Liabilities").
Without limiting the foregoing, Purchaser shall expressly assume and agree to
perform the Key Employee Retention Plan with respect to Business Employees as
may be required under the terms of such plan, subject to satisfaction of Acme's
obligation to pay severance and retention payments up to an aggregate amount of
$1,600,000 as provided in the first proviso clause in Section I 0(c) above.

          (b) Without limitation of Purchaser's other express obligations under
this Section 11, Purchaser shall provide compensation and benefits to those
Business Employees hired by Purchaser (other than Business Employees who are
represented by unions) at least comparable in the aggregate to the compensation
and benefits provided by Purchaser to its other similarly situated employees,
for a period of not less than one year following the Closing date. Business
Employees hired by Purchaser shall be given appropriate credit with respect to
any such compensation and benefits for service with Acme and its affiliates for
purposes of determining eligibility, vesting and amount of such compensation and
benefits.

          (c) Purchaser shall credit each Business Employee with the unused
vacation days and any personal days and sick days accrued in accordance with the
vacation and personnel policies and labor agreements applicable to Business
Employees as of the Closing date.

          (d) Effective as of the Closing date, Purchaser shall either (i)
provide evidence reasonably satisfactory to Acme as to the tax-qualified status
of a newly-formed defined benefit pension plan which shall cover Business
Employees who are participants under the Consolidated Pension Plan for Acme
Salaried and Hourly Employees ("Acme Pension Plan") or (ii) provide evidence
reasonably satisfactory to Acme as to the tax-qualified status of an existing
defined benefit pension plan maintained by Purchaser (such newly established or
existing plan, the "Purchaser's Pension Plan"). Acme shall provide evidence
reasonably satisfactory to Purchaser as to the tax-qualified status of the Acme
Pension Plan. As of the Closing date, Purchaser's Pension Plan shall assume all
liabilities and obligations of the Acme Pension Plan with respect to the
Business Employees. As soon as practicable following the Closing date, Acme or
its affiliates shall cause a transfer from the Acme Pension Plan (or, in the
case of certain PBGC premiums, Acme may pay directly) to Purchaser's Pension
Plan of the amount of the assets of the Acme Pension Plan attributable to the
benefits of the Business Employees, as determined by the actuary for the Acme
Pension Plan ("Acme's Actuary") in accordance with Annex B hereto. The
calculation of such transfer amount pursuant to Annex B may be reviewed solely
for accuracy of data and calculations by an actuary designated by Purchaser (it
being understood and represented by Purchaser and Purchaser's actuary that any
such review and any notice of error shall be made without regard to the
financial or other effect of the correction of such error to the respective
plans and parties). Purchaser shall provide indemnity in the event that the PBGC
imposes liability on Acme or its affiliates upon a subsequent termination of
Purchaser's Pension Plan.

<PAGE>   16
                                                                              10

          (e) Effective as of the Closing date, Purchaser shall either (i)
provide evidence reasonably satisfactory to Acme as to the tax-qualified status
of one or more newly-formed defined contribution plans which include a qualified
cash or deferred arrangement within the meaning of Section 401(k) of the
Internal Revenue Code of 1986, as amended (the "Tax Code") (a "401(k) Plan")
which shall cover Business Employees who are participants in the Acme Metals
Incorporated Salaried Employees' Retirement Savings Plan and the Acme Steel
Company Hourly Employees 401(k) Plan (the "Acme Savings Plans) or (ii) provide
evidence reasonably satisfactory to Acme as to the tax-qualified status of one
or more existing 401(k) Plans (such newly established or existing 401(k)
Plans, "Purchaser's Savings Plans"). Acme shall provide evidence reasonably
satisfactory to Purchaser as to the tax-qualified status of the Acme Savings
Plans. Business Employees in the Acme Savings Plans shall be fully vested in
their account balances at the Closing date. As of the Closing date, Purchaser's
Savings Plans shall assume all liabilities and obligations of the Acme Savings
Plans. As soon as practicable following the Closing date, Acme and its
affiliates and Purchaser shall arrange for the transfer of the accounts and
related liabilities and obligations with respect to the Business Employees under
the Acme Savings Plans to Purchaser's Savings Plans.

     12.  Reline Costs. Acme has provided Purchaser with a schedule listing its
outstanding contracts (including purchase orders) with respect to the Reline
which in the aggregate do not exceed $6,237,584. Anything in this Term Sheet to
the contrary notwithstanding, the Purchase Agreement will (unless otherwise
agreed by the parties during the course of negotiations of the Purchase
Agreement) provide that Purchaser will not be responsible for any other
contracts (including purchase orders) that Acme may enter into with respect to
the Reline (or any material or equipment acquired under any such contract)
without Purchaser's consent, provided that such consent will not unreasonably be
withheld with respect to any such contracts reasonably necessary in order for
the Business to be in a position timely to complete the repair or replacement of
the blast furnace bustle pipe currently scheduled for April 2001 or to complete
at the same time any other Reline work outside of the interior of the blast
furnace (such latter contracts, "Exterior Reline-Related Contracts"). Any such
Reline contracts for which Purchaser is not to be responsible, together with any
material or equipment acquired thereunder, shall constitute Excluded Assets and
Excluded Liabilities. The Purchase Agreement also will provide that Acme will
cooperate with Purchaser in terms of deferring and/or canceling currently
existing Reline contracts (other than currently existing Exterior Reline-Related
Contracts), all at the sole expense of Purchaser (regardless of whether or not
the Closing occurs).

     13.  Riverdale Retained Use and Services Agreement. The conveyance to
Purchaser of the Acme Real Property shall be subject to the right of Acme to
continue to use those portions of Acme's Riverdale, Illinois site (other than
the Riverdale office space, except perhaps on a temporary basis) currently used
by Metals or Acme Packaging in connection with their "Fabricating" segment and
cold reduction mill and slitting operations at the site. Acme will assign such
retained right to Acme Packaging, and at the Closing, Purchaser and Acme
Packaging shall enter into a contract governing such retained use, and also
providing for Purchaser continuing to make available to Metals and Acme
Packaging the utilities and other site services currently used by Metals or Acme
Packaging in connection with such above-described operations (the "Riverdale
Retained Use and Services Agreement"). The portions of the Riverdale site (other
than the above-mentioned office space) the use of which are to be retained

<PAGE>   17
                                                                              11

by Acme Packaging (as assignee of Acme) are those indicated in the Addendum to
Schedule I annexed hereto and such other areas as may be specified in the
definitive agreement. It currently is contemplated that the definitive Riverdale
Retained Use and Services Agreement will be attached to the Purchase Agreement
as an exhibit. Certain principal terms of the Riverdale Retained Use and
Services Agreement are set forth in Annex C hereto. Acme Packaging's rights
under the Riverdale Retained Use and Services Agreement shall not be subject to
any mortgage that Purchaser may place on the Riverdale site. Acme Packaging will
be permitted to grant a leasehold mortgage and security interest in its rights
under the Riverdale Retained Use and Services Agreement. Purchaser will waive
any rights that it otherwise might have against any property of Acme Packaging
from time to time located on the portions of the Riverdale site leased to the
use of which is retained under the Riverdale Retained Use and Services
Agreement, and will agree in any event to permit the removal (by Acme Packaging
or its creditors) of all or any portion of such property at any time.

     14.  Transition Services Agreement. At the Closing, Purchaser and Metals
will enter into a transition services agreement (the "Transition Services
Agreement") pursuant to which they will provide to each other, for a transition
period (or transition periods) to be agreed, those "corporate", administrative
or other support services (including MIS for up to a 24-month period) that (i)
prior to the Closing were provided to the Business using assets and/or employees
of Metals and its subsidiaries not being transferred to Purchaser or (ii) prior
to the Closing were provided to the businesses of Metals and its affiliates
other than the Business (including the non-transferred cold reduction mill and
slitting operations) using assets and/or employees being transferred to
Purchaser, as the case may be. The Transition Services Agreement will provide
that the party receiving transition services will pay a charge for such
services, which charge will be determined, to the greatest extent possible, in a
manner that is consistent with the manner in which such parties have
historically been charged for such services; however, it is understood and
agreed that the party receiving transition services in any event will (without
duplication) reimburse the providing party for all (or, with respect to the
matters described in clause (y) below (Purchaser being the reimbursing party in
such circumstances), two-thirds of the) incremental costs and expenses
(including allocable overhead) of providing such services, it being understood
that such incremental costs would include (without limitation) (x) costs
associated with personnel that, but for the obligation to provide transitional
services, would have been discharged and (y) costs (whether incurred prior to or
after the Closing) associated with preparing the MIS system for use by two
unaffiliated organizations such as (for example) "separating" the two
organizations with respect to the MIS system to such a degree that changes made
by one party to its system will not affect the other and inserting appropriate
firewalls between the systems.

     15.  Employee Non-Solicitation. The Purchase Agreement will contain mutual
restrictive covenants with respect to solicitation or hiring of transferred and
non-transferred employees.

     16.  Conditions to Closing. The Purchase Agreement will contain customary
Closing conditions concerning the absence of injunctions and the accuracy of
representations, and the performance of covenants, in all material respects.
Other than such conditions and the Bankruptcy Court orders mentioned in the
Letter, the only other material conditions to Closing under the Purchase
Agreement shall be the following:



<PAGE>   18
                                                                              12

          (a) Any waiting period under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, applicable to any of the transactions
contemplated hereby shall have expired or been earlier terminated.

          (b) Purchaser shall have (or is reasonably assured of obtaining,
forthwith after the Closing date), all material governmental permits (other than
any permits that by their nature cannot be obtained, and are not required to be
obtained, until after the Closing has occurred but may be obtained in the
ordinary course of business after the Closing) required for Purchaser
immediately following the Closing to conduct the Business in all material
respects in the manner conducted by Acme in the ordinary course. Purchaser shall
use its best efforts to obtain all such governmental permits (which may take the
form of an assignment or transfer of a license or permit from Acme to
Purchaser). It specifically is understood that final governmental approval of
the transfer, or re-issuance, of certain permits may take an extended period of
time, and that consummation of the Closing shall not be delayed pending the
securing of such final governmental approvals, so long as, either by operation
of law, as a result of securing temporary permits or otherwise, Purchaser
immediately following the Closing will be able lawfully to continue to conduct
the Business as set forth above.

          (c) Purchaser and the United Steelworkers of America (the "Union")
shall have entered into a mutually satisfactory collective bargaining agreement
covering hourly employees of the Business at the Chicago and Riverdale plants
(the "Purchaser CBA").

          The parties presently contemplate that prior to the execution of the
Purchase Agreement, Purchaser and the Union either shall have entered into the
definitive Purchaser CBA conditional upon consummation of the Closing or shall
have entered into a preliminary agreement that summarizes the substantive
content of all of the material terms and conditions of the Purchaser CBA. In any
event, the Purchase Agreement shall require Purchaser to negotiate in good
faith, and use its best efforts to enter into, the Purchaser CBA as soon as
possible.

          (d) From the date of the Purchase Agreement, there shall not have
occurred (i) any material adverse change in the Business, the Acquired Assets,
the Assumed Liabilities or the results of operations of the Business, in each
case when taken as a whole, disregarding for the purposes of this condition each
of the following, and any effects thereof; (A) seasonal changes; (B) changes in
general economic conditions; (C) events or changes to the extent that they
generally affect domestic integrated steel producers; (D) the transactions
contemplated by this Term Sheet becoming publicly known; (E) the identity of, or
actions taken by, Purchaser or its affiliates; and (F) any event or change to
the extent the effects thereof will not continue after the Closing or the
effects thereof will be reflected in Working Capital or Purchaser otherwise will
be compensated therefor through the provisions described in Section 8 hereof,
provided, however, that average EBITDA of the Business per month for the period
from the first day of Acme's September fiscal month to the second business day
prior to the Closing date (the "EBITDA Period") shall not be less than $750,000;
or (ii) any material damage, destruction or, casualty loss to the Business'
principal manufacturing facilities located in Chicago and Riverdale which (X)
would materially reduce the benefit to Purchaser of the transactions
contemplated by this Term Sheet and (y) has not been repaired or replaced.


<PAGE>   19
                                                                              13

          EBITDA will be calculated excluding (i) any LIFO adjustment, (ii)
non-cash, non-operating expenses, (iii) gain or loss from writedown or writeup
of assets, (iv) gain or loss from extraordinary items as determined in
accordance with GAAP (as historically applied by Metals) or from any
non-recurring transaction, (v) bankruptcy/reorganization costs and expenses,
(vi) restructuring costs and (vii) any other adjustments to the extent that they
relate to periods other than the EBITDA Period.

          (e) Anything in this Term Sheet to the contrary notwithstanding, it is
understood that inclusion of the Wabush-related assets is not a condition
precedent to consummation of the Closing and Acme will not be bound by execution
of the Purchase Agreement to sell such assets to Purchaser, provided, however,
that (1) Acme shall forthwith (on or after the Closing date) transfer its
interest in the Wabush-related assets if (A) all required consents (if any) of
the other equity owners of the Wabush Mines venture to the transfer of Acme's
interest in Wabush to Purchaser without complying with the right of first
refusal provisions, shall have been obtained, (B) the parties shall be
reasonably satisfied that, as a result of action by the Bankruptcy Court, such
transfer may be consummated without obtaining such consent or complying with
such right of first refusal provision or (C) Acme triggers the right of first
refusal and the period for exercise of such right of first refusal in favor of
such other equity owners without such right having been exercised expires and
(2) Acme shall not be required to trigger the right of first refusal provision
prior to the Closing, but if the conditions set forth in the preceding
subclauses (1)(A) or (1)(B) do not occur on or before the Closing, then Acme
shall immediately thereafter trigger the right of first refusal.

          In the event Acme triggers the right of first refusal and such right
of first refusal exercised, then the Wabush interest, and Acme's rights and
obligations under the Wabush-related contracts (other than any ordinary course
accounts receivable and accounts payable as of the Closing date), shall be
excluded from the Acquired Assets and Assumed Liabilities, and the Cash
Component shall be reduced by the Wabush Amount. Further, the Purchase Agreement
will contain provisions for the possible delayed inclusion of such
Wabush-related assets and liabilities after the Closing in the event that Acme
does not trigger the right of first refusal provisions until after the Closing,
or the right of first refusal provision is triggered by Acme, but the period for
exercise of first refusal rights has not expired, prior to the Closing
(including without limitation provisions concerning resale to Purchaser of
post-Closing deliveries from Wabush Mines).

          (f) (1) Either (i) all required consents (if any) of NPS Holding,
L.L.C. and/or National Material, L.P. (the "National Entities") to the transfer
of Acme's equity interest in NACME to Purchaser without compliance with the
right of first refusal provisions of the NACME Operating Agreement shall have
been obtained, (ii) the parties shall be reasonably satisfied that, as a result
of action by the Bankruptcy Court, such transfer may be consummated without
obtaining any such consent or complying with any such right of first refusal
provision, or (iii) if Acme in its sole discretion determines to trigger such
provision, the period for exercise of such right of first refusal by the
National Entities shall have expired without such right having been exercised.

               (2) Either (i) all required consents (if any) of the National
Entities to the substitution of Purchaser for Acme as a member in NACME shall
have been


<PAGE>   20
                                                                              14

obtained, or (ii) the parties shall be reasonably satisfied that, as a result of
action by the Bankruptcy Court, such substitution may be consummated without
obtaining any such consent.

               (3) If the conditions set forth in (f)(1) and (0(2) have been
satisfied or waived, (x) all required consents of the National Entities and/or
NACME to the release of Acme from its obligations under the NACME contracts
(upon assignment and assumption thereof to Purchaser) shall have been obtained
and (y) and the National Entities, Acme and Purchaser have agreed to the
mutually satisfactory arrangements described in the penultimate sentence of
Section 6 above.

          (g) It is understood that Purchaser intends to have an environmental
report prepared by a third party concerning environmental conditions at the Acme
Real Property. It will be a condition precedent that Purchaser is satisfied in
its discretion with the results of such environmental report, provided that
Purchaser shall be required to make such determination in good faith. The
Purchase Agreement shall provide that (i) this condition shall be deemed to have
been waived by Purchaser unless, prior to or on the 100th day after the date
the Interim Order (as defined in the Letter) is entered, Purchaser delivers to
Acme notice to the effect that it has determined that it is not satisfied with
such results and is not waiving this condition precedent (which notice shall be
irrevocable), (ii) without limitation of clause (i), (x) Purchaser in any event
forthwith shall notify Acme if and when it shall have made a final determination
with respect to the satisfaction or waiver of this condition (which notice shall
be irrevocable) and (y) Purchaser shall use all reasonable efforts to make such
final determination as soon as possible after receiving such environmental
report, and (iii) if Purchaser shall invoke this condition precedent, then
Purchaser shall (x) if requested by Acme, allow Acme and its representatives and
advisers reasonable opportunity to review such environmental report, and (y) if
requested by Acme and if Acme has paid the Expense Reimbursement (as defined in
the Letter), forthwith deliver to Acme a copy of such environmental report.

          (h) It is understood that (i) in connection with certain provisions
described in Annex C, Purchaser may identify to Acme prior to the Closing
certain possible Environmental Liabilities specified in the environmental report
referred to in Section 16(g) which Purchaser reserves its right to assert
constitute "Fabricating Environmental Liabilities", (ii) Acme may in its
discretion determine not to proceed with the Closing if Purchaser in fact
delivers any notice to it of the nature described in clause (i) and (iii)
neither any such notice to Acme by Purchaser described in clause (i), nor Acme's
failure to exercise its rights described in clause (ii), shall in any way imply,
or constitute an admission by Acme, Acme Packaging or Metals, that any such
identified possible Environmental Liabilities constitute Fabricating
Environmental Liabilities. Any notice pursuant to clause (i) shall describe in
reasonable detail the possible Environmental Liabilities in respect of which
Purchaser is so reserving its rights.

Conditions (a), (c), (d)(ii)(f)(1) and (f)(2) will be mutual conditions,
conditions (b), (d)(i) and (g) will be for the benefit of (and may be waived by)
Purchaser, and conditions (0(3) and (h) will be for the benefit of (and may be
waived by) Acme and Metals.


<PAGE>   21
                                                                              15

     17.  Termination. Either party will have the right to terminate the
Purchase Agreement if (other than as a result of a breach by the terminating
party) the Closing does not occur by January 31, 2001.

     18.  Survival, Indemnification. (a) The Purchase Agreement will contain
indemnification provisions customary for transactions of this nature (taking
into account Section 18(c) below).

          (b) The Purchase Agreement shall include representations, warranties
and accompanying schedules customary for the transactions of this type,
regarding, among other things, information about the Acquired Assets and Assumed
Liabilities, organization, authority to conduct business, absence of conflicts,
books and records, financial statements, employment benefit plans and employment
agreements, inter-company relations, material contracts, intellectual property,
insurance, litigation, owned and leased real and personal property, known
environmental liabilities, tax matters, licenses and permits, liens, and
customers and suppliers.

          (c) Sections 18(a) and (b) notwithstanding, the representations and
warranties of the parties (other than those relating to corporate authority to
execute, deliver and perform the Purchase Agreement and the ancillary documents,
due execution and enforceability) shall not survive the Closing.

     19.  Transfer Taxes. As between Acme and Purchaser, Purchaser shall be
responsible for all sales, transfer or similar taxes incurred in connection with
the transactions contemplated hereby, to the extent that the exemption provided
by section I 146(c) of the Bankruptcy Code is not available.

     20.  Certain Provisions Regarding Wabush and NACME. Since this Term Sheet
is non-binding, for the convenience of the parties, the acquisition of Acme's
interests in Wabush and NACME, and the acquisition of the other Acquired Assets,
are treated together in this single Term Sheet and the "Purchase Agreement" is
denominated as a single document. The parties understand that the "Purchase
Agreement" in fact may involve separate agreements with respect to Wabush, NACME
and the other Acquired Assets, respectively. Closing under such separate
agreements with respect to Wabush and NACME would be subject to consummation of
the "Closing" under the main Purchase Agreement.

     21.  Preparation of Definitive Documents. Purchaser's counsel shall draft
the Purchase Agreement and the Supply Agreements and Acme's counsel shall draft
the Riverdale Retained Use and Services Agreement and the Transition Services
Agreement.