Document:

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                                                                   Exhibit 10.1

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                           WEIRTON STEEL CORPORATION,
                 AS CHAPTER 11 DEBTOR AND DEBTOR-IN-POSSESSION,
                                   AS BORROWER
               --------------------------------------------------

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

                              DEBTOR-IN-POSSESSION
                           LOAN AND SECURITY AGREEMENT

                            Dated: As of May 20, 2003

                                  $225,000,000
               ==================================================

               --------------------------------------------------

                            FLEET CAPITAL CORPORATION
                INDIVIDUALLY AND AS AGENT FOR ANY LENDER WHICH IS
                            OR BECOMES A PARTY HERETO

               --------------------------------------------------

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                                TABLE OF CONTENTS

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SECTION 1.  CREDIT FACILITY.......................................................................................1
   1.1.      Loans................................................................................................1
   1.2.      Letters of Credit; LC Guaranties.....................................................................3
   1.3.      Term Loan............................................................................................4

SECTION 2.  INTEREST, FEES AND CHARGES............................................................................5
   2.1.      Interest.............................................................................................5
   2.2.      Computation of Interest and Fees.....................................................................6
   2.3.      Closing Fees.........................................................................................6
   2.4.      Letter of Credit and LC Guaranty Fees................................................................6
   2.5.      Unused Line Fee......................................................................................6
   2.6.      Term Loan Prepayment Fee.............................................................................7
   2.7.      Audit Fees...........................................................................................7
   2.8.      Reimbursement of Expenses............................................................................7
   2.9.      Bank Charges.........................................................................................8
   2.10.     Collateral Protection Expenses; Appraisals...........................................................8
   2.11.     Payment of Charges...................................................................................9
   2.12.     No Deductions........................................................................................9
   2.13.     Certain Administrative Fees..........................................................................9
   2.14.     Deferred Fee........................................................................................10

SECTION 3.  LOAN ADMINISTRATION..................................................................................10
   3.1.      Manner of Borrowing Loans/LIBOR Option..............................................................10
   3.2.      Payments............................................................................................14
   3.3.      Reductions/Prepayments..............................................................................16
   3.4.      Application of Payments and Collections.............................................................19
   3.5.      All Loans to Constitute One Obligation..............................................................20
   3.6.      Loan Account........................................................................................21
   3.7.      Statements of Account...............................................................................21
   3.8.      Increased Costs.....................................................................................21
   3.9.      Basis for Determining Interest Rate Inadequate......................................................22
   3.10.     Sharing of Payments, Etc............................................................................23
   3.11.     Estoppel Certificate................................................................................23

SECTION 4.  TERM AND TERMINATION.................................................................................24
   4.1.      Term of Agreement...................................................................................24
   4.2.      Termination.........................................................................................24

SECTION 5.  SECURITY INTERESTS...................................................................................25
   5.1.      Security Interest in Collateral.....................................................................25
</TABLE>

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<S>                                                                                                           <C>

   5.2.      Other Collateral....................................................................................26
   5.3.      Lien Perfection; Further Assurances.................................................................27
   5.4.      Lien on Realty......................................................................................27

SECTION 6.  COLLATERAL ADMINISTRATION............................................................................28
   6.1.      General.............................................................................................28
   6.2.      Administration of Accounts..........................................................................30
   6.3.      Administration of Inventory.........................................................................32
   6.4.      Records and Schedules of Equipment..................................................................32
   6.5.      Payment of Charges..................................................................................32

SECTION 7.  REPRESENTATIONS AND WARRANTIES.......................................................................32
   7.1.      General Representations and Warranties..............................................................32
   7.2.      Continuous Nature of Representations and Warranties.................................................42
   7.3.      Survival of Representations and Warranties..........................................................42

SECTION 8.  COVENANTS AND CONTINUING AGREEMENTS..................................................................43
   8.1.      Affirmative Covenants...............................................................................43
   8.2.      Negative Covenants..................................................................................48
   8.3.      Specific Covenants..................................................................................56

SECTION 9.  CONDITIONS PRECEDENT.................................................................................57
   9.1.      Conditions to Effectiveness of this Agreement.......................................................57
   9.2.      Conditions to Future Advances.......................................................................58

SECTION 10.  EVENTS OF DEFAULT; RIGHTS AND REMEDIES ON DEFAULT...................................................59
   10.1.     Events of Default...................................................................................59
   10.2.     Acceleration of the Obligations.....................................................................63
   10.3.     Other Remedies......................................................................................64
   10.4.     Set Off and Sharing of Payments.....................................................................65
   10.5.     Remedies Cumulative; No Waiver......................................................................66

SECTION 11.  THE AGENT...........................................................................................66
   11.1.     Authorization and Action............................................................................66
   11.2.     Agent's Reliance, Etc...............................................................................67
   11.3.     Fleet and Affiliates................................................................................68
   11.4.     Lender Credit Decision..............................................................................68
   11.5.     Indemnification.....................................................................................68
   11.6.     Rights and Remedies to be Exercised by Agent Only...................................................69
   11.7.     Agency Provisions Relating to Collateral............................................................69
   11.8.     Agent's Right to Purchase Commitments...............................................................70
   11.9.     Right of Sale, Assignment, Participations...........................................................70
   11.10.    Amendment...........................................................................................72
   11.11.    Resignation of Agent; Appointment of Successor......................................................74
</TABLE>

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<TABLE>
<S>                                                                                                           <C>

   11.12.    Term Loan Representative............................................................................74

SECTION 12.  MISCELLANEOUS.......................................................................................74
   12.1.     Power of Attorney...................................................................................74
   12.2.     Indemnity...........................................................................................76
   12.3.     Sale of Interest....................................................................................76
   12.4.     Severability........................................................................................76
   12.5.     Successors and Assigns..............................................................................76
   12.6.     Cumulative Effect; Conflict of Terms................................................................77
   12.7.     Execution in Counterparts...........................................................................77
   12.8.     Notice..............................................................................................77
   12.9.     Consent.............................................................................................78
   12.10.    Credit Inquiries....................................................................................79
   12.11.    Time of Essence.....................................................................................79
   12.12.    Entire Agreement....................................................................................79
   12.13.    Interpretation......................................................................................79
   12.14.    Confidentiality.....................................................................................79
   12.15.    GOVERNING LAW; CONSENT TO FORUM.....................................................................79
   12.16.    WAIVERS BY BORROWER.................................................................................81
   12.17.    Advertisement.......................................................................................81
   12.18.    Marshalling of Payments.............................................................................81
   12.19.    Independence of Covenants...........................................................................82
   12.20.    Obligations Several; Independence of Lenders' Obligations; Damages Waiver...........................82
</TABLE>

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                              DEBTOR-IN-POSSESSION
                           LOAN AND SECURITY AGREEMENT

     THIS DEBTOR-IN-POSSESSION LOAN AND SECURITY AGREEMENT is made as of this
20th day of May, 2003, by and among FLEET CAPITAL CORPORATION ("Fleet"), a Rhode
Island corporation with an office at One South Wacker Drive, Suite 1400,
Chicago, Illinois 60606, individually as a Lender and as Agent ("Agent") for
itself and any other financial institution which is or becomes a party hereto
(each such financial institution, including Fleet, is referred to hereinafter
individually as a "Lender" and collectively as the "Lenders"), the LENDERS and
WEIRTON STEEL CORPORATION, Chapter 11 Debtor and Debtor-In-Possession, a
Delaware corporation with its principal executive office at 400 Three Springs
Drive, Weirton, West Virginia 26062 ("Borrower"). Capitalized terms used in this
Agreement have the meanings assigned to them in Appendix A, General Definitions.
Accounting terms not otherwise specifically defined herein shall be construed in
accordance with GAAP consistently applied.

                           SECTION 1. CREDIT FACILITY

     Subject to the terms and conditions of, and in reliance upon the
representations and warranties made in, this Agreement and the other Loan
Documents, Lenders agree to make a Total Credit Facility of up to $225,000,000
available upon Borrower's request therefor, as follows:

     1.1. Loans.

          1.1.1. Revolving Credit Loans. Each Revolving Lender agrees, severally
     and not jointly, for so long as no Default or Event of Default exists, to
     make Revolving Credit Loans to Borrower from time to time during the period
     from the date hereof to but not including the last day of the Term, as
     requested by Borrower in the manner set forth in subsection 3.1.1 hereof,
     up to a maximum principal amount at any time outstanding equal to the
     lesser of (i) such Revolving Lender's Revolving Loan Commitment minus the
     product of such Revolving Lender's Revolving Loan Percentage and the LC
     Amount minus the product of such Revolving Lender's Revolving Loan
     Percentage and reserves, if any or (ii) the product of such Revolving
     Lender's Revolving Loan Percentage and an amount equal to the Borrowing
     Base at such time minus the LC Amount minus reserves, if any. Agent shall
     have the right to establish reserves in such amounts, and with respect to
     such matters, as Agent shall deem necessary or appropriate in its judgment,
     against the amount of Revolving Credit Loans which Borrower may otherwise
     request under this subsection 1.1.1, including without limitation with
     respect to (i) price adjustments, damages, unearned discounts, returned
     products or other matters for which credit memoranda are issued in the
     ordinary course of Borrower's business; (ii) potential dilution related to
     Accounts; (iii) shrinkage and obsolescence of Borrower's Inventory; (iv)
     slow moving, damaged or defective Inventory; (v) other sums chargeable
     against Borrower's Loan Account as Revolving Credit Loans under any section
     of this

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     Agreement; (vi) amounts owing by Borrower to any Person to the extent
     secured by a Lien on, or trust over, any Property of Borrower; (vii)
     amounts that may be owing by Borrower in connection with Product
     Obligations; (viii) the amount of the Carveout; (ix) the amount of Proceed
     Receipts under subsection 3.3.1; (x) the amount of accrued and unpaid
     interest in respect of the Exchange Indentures; and (xi) such other
     specific events, conditions or contingencies as to which Agent, in its
     reasonable credit judgment, determines reserves should be established from
     time to time hereunder. Notwithstanding the foregoing, Agent shall not
     establish any reserves in respect of any matters relating to any items of
     Collateral that have been taken into account in determining Eligible
     Inventory or Eligible Accounts, as applicable. The Revolving Credit Loans
     shall be repayable in accordance with the terms of the Revolving Notes and
     shall be secured by all of the Collateral. The Revolving Credit Loans may
     be repaid and reborrowed without penalty, subject to the provisions of
     subsection 3.2.5.

          1.1.2. Intentionally Omitted.

          1.1.3. Use of Proceeds. On the Effective Date, Revolving Lenders shall
     make Revolving Credit Loans in an amount sufficient to repay in full the
     Prepetition Obligations outstanding as of the Filing Date. Subsequent
     advances of the Revolving Credit Loans shall be used solely for Borrower's
     general operating capital needs in a manner consistent with the provisions
     of this Agreement and all applicable laws, and for other purposes permitted
     under this Agreement. In particular, Borrower shall be entitled to use such
     proceeds of the Revolving Credit Loans to pay all fees and professional
     fees and expenses payable to Agent and Lenders hereunder, whether or not
     incurred prior to or after the Filing Date. In no event shall any portion
     of the Revolving Credit Loans be used to pay costs or expenses incurred in
     connection with any prosecution or other action regarding, or any objection
     to, (a) any claims under the Prepetition Loan Documents or any Liens
     securing the Prepetition Obligations or against the Prepetition Agent or
     any Prepetition Lender or (b) any claims under the Loan Documents or any
     Liens securing the Obligations or against the Agent or any Lender.

          1.1.4. Collateral Protection Loans. Upon the occurrence and during the
     continuance of an Event of Default, Agent, in its sole discretion, may make
     Revolving Credit Loans, in an aggregate amount not to exceed $7,000,000, if
     Agent deems that such Revolving Credit Loans are necessary to protect all
     or any portion of the Collateral (hereinafter, "Collateral Protection
     Loans"). Each Revolving Lender shall be obligated to advance its Revolving
     Loan Percentage of each such Collateral Protection Loan. If Collateral
     Protection Loans are made pursuant to the preceding sentence, then (a) the
     Borrowing Base shall be deemed increased by the amount of such permitted
     Collateral Protection Loans, but only for so long as Agent allows such
     Collateral Protection Loans to be outstanding, and (b) all Revolving
     Lenders shall be bound to make, or permit to remain outstanding, such
     Collateral Protection Loans based upon their Revolving Loan Percentages in
     accordance with the terms of this Agreement. In no event shall Agent make
     Collateral Protection Loans under this subsection 1.1.4 to the extent such
     Collateral Protection Loans would cause a

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     Revolving Lender's share of the Revolving Credit Loans (inclusive of
     such Collateral Protection Loans) to exceed such Revolving Lender's
     Revolving Loan Commitment minus the product of such Revolving Lender's
     Revolving Loan Percentage and the LC Amount minus the product of such
     Revolving Lender's Revolving Loan Percentage and reserves, if any.
     Notwithstanding the foregoing, if Agent declines to make any Collateral
     Protection Loans after request therefor by Majority Term Lenders, Term Loan
     Representative shall have the right to do so after notice thereof to Agent
     and the amount thereof shall be treated as Collateral Protection Loans for
     all purposes of this Agreement; provided, that such Collateral Protection
     Loans shall not increase the Borrowing Base and Revolving Credit Lenders
     shall have no obligation to make any portion of such Collateral Protection
     Loans. Collateral Protection Loans shall be repaid out of the proceeds of
     the assets with respect to which such Collateral Protection Loans were
     incurred, as provided in subsection 3.3.2.

          1.1.5. Swingline Loans. In order to reduce the frequency of transfers
     of funds from Revolving Lenders to Agent for making Revolving Credit Loans
     and for so long as no Default or Event of Default exists, Agent shall be
     permitted (but not required) to make Revolving Credit Loans to Borrower
     upon request by Borrower (such Revolving Credit Loans to be designated as
     "Swingline Loans") provided that the aggregate amount of Swingline Loans
     outstanding at any time will not (i) exceed $10,000,000; (ii) when added to
     the principal amount of all other Revolving Credit Loans then outstanding
     plus the LC Amount, exceed the total Revolving Credit Commitments of all
     Revolving Lenders; or (iii) when added to the principal amount of all other
     Revolving Credit Loans then outstanding plus the LC Amount plus reserves,
     if any, exceed the Borrowing Base. Within the foregoing limits, Borrower
     may borrow, repay and reborrow Swingline Loans. All Swingline Loans shall
     be treated as Revolving Credit Loans for purposes of this Agreement, except
     that all Swingline Loans shall be Base Rate Portions. Revolving Lenders
     shall reimburse Agent for their pro rata portions of the Swingline Loans on
     a weekly (or more frequently, as determined by Agent in its sole
     discretion) basis, in accordance with their respective Revolving Loan
     Percentages.

     1.2. Letters of Credit; LC Guaranties.

     Agent agrees, for so long as no Default or Event of Default exists and if
requested by Borrower, to (i) issue its, or cause to be issued by Bank or
another Affiliate of Agent, on the date requested by Borrower, Letters of Credit
for the account of Borrower or (ii) execute LC Guaranties by which Agent, Bank,
or another Affiliate of Agent, on the date requested by Borrower, shall guaranty
the payment or performance by Borrower of its reimbursement obligations with
respect to Letters of Credit and standby letters of credit issued for Borrower's
account by other Persons in support of Borrower's obligations (other than
obligations for the repayment of Money Borrowed); provided that the LC Amount
shall not exceed $5,000,000 at any time. No Letter of Credit or LC Guaranty may
have an expiration date after the 30th day prior to the last scheduled day of
the Term. Notwithstanding anything to the contrary contained herein, Borrower,
Agent and Revolving Lenders hereby agree that all LC Obligations and all
obligations of Borrower relating thereto shall be satisfied by the prompt

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issuance of one or more Revolving Credit Loans that are Base Rate Portions,
which Borrower hereby acknowledges are requested and Revolving Lenders hereby
agree to fund. In the event that Revolving Credit Loans are not, for any reason,
promptly made to satisfy all then existing LC Obligations, each Revolving Lender
hereby agrees to pay to Agent, on demand, an amount equal to such LC Obligations
multiplied by such Revolving Lender's Revolving Loan Percentage, and until so
paid, such amount shall be secured by the Collateral and shall bear interest and
be payable at the same rate and in the same manner as Base Rate Portions.
Immediately upon the issuance of a Letter of Credit or an LC Guaranty under this
Agreement, each Revolving Lender shall be deemed to have irrevocably and
unconditionally purchased and received from Agent, without recourse or warranty,
an undivided interest and participation therein equal to such LC Obligations
multiplied by such Revolving Lender's Revolving Loan Percentage. As of the
Effective Date, certain letters of credit and letter of credit guaranties are
outstanding under the Prepetition Loan Agreement, as described on Exhibit 1.2
(the "Existing Letters of Credit"). Borrower, Agent and Lenders agree that upon
the Effective Date, the Existing Letters of Credit shall be deemed for all
purposes hereunder to be Letters of Credit or LC Guaranties, as applicable,
issued under this Agreement.

     1.3. Term Loan.

     Each Term Lender, severally and not jointly, agrees to make a term loan
(collectively, the "Term Loan") to Borrower on the Effective Date, in the
aggregate principal amount of such Term Lender's Term Loan Commitment, which
shall be repayable in accordance with the terms of this Agreement and the Term
Notes and shall be secured by all of the Collateral. The aggregate amount of the
Term Loan Commitments is $25,000,000. The proceeds of the Term Loan, less the
amount of the Term Loan Closing Fee paid on the Effective Date pursuant to
Section 2.3, shall be funded directly into a cash Collateral account at Bank,
which shall be pledged to Agent as security for the Obligations (the "Term Loan
Cash Collateral"). Upon the satisfaction in full of the Conditions to Release on
or prior to the 30th day after the Filing Date, unless extended by all Lenders,
the Term Loan Cash Collateral shall be released to Agent for application against
the Revolving Credit Loans (but such application shall not reduce the Revolving
Loan Commitments). The proceeds of the Term Loan, once so paid to Agent , shall
be used for the purposes and subject to the limitations set forth for Revolving
Credit Loans in subsection 1.1.3; notwithstanding the foregoing, no portion of
the proceeds of the Term Loan shall be used to repay Prepetition Obligations. If
the Conditions to Release have not been satisfied in full on or prior to the
30th day after the Filing Date, unless extended by all Lenders, the Term Loan
Cash Collateral shall be promptly paid to the Term Lenders for application
first, to all accrued and unpaid interest on the Term Loan and then to prepay
the principal balance of the Term Loan. Concurrently with any such repayment,
Borrower shall be required to pay to the Term Lenders all remaining outstanding
principal of, and all accrued interest on, the Term Loan, and all other amounts
then due and owing to the Term Lenders; provided, however, that without the
consent of Agent and the Revolving Lenders, no such amounts shall be paid out of
any source other than proceeds of the Term Loan Primary Collateral.
Notwithstanding the foregoing, the Term Loan Commitment of the Term Lenders
shall expire immediately if the Term Loan is not made within 2 Business Days
after the entry of the Interim Financing Order and in any event, on or before
May 23, 2003.

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                      SECTION 2. INTEREST, FEES AND CHARGES

     2.1. Interest.

          2.1.1. Rates of Interest.

               (a) Interest shall accrue on the principal amount of the Base
          Rate Portions outstanding at the end of each day at a fluctuating rate
          per annum equal to the Applicable Margin then in effect plus the Base
          Rate. Said rate of interest shall increase or decrease by an amount
          equal to any increase or decrease in the Base Rate, effective as of
          the opening of business on the day that any such change in the Base
          Rate occurs. If Borrower exercises its LIBOR Option as provided in
          Section 3.1, interest shall accrue on the principal amount of the
          LIBOR Portions outstanding at the end of each day at a rate per annum
          equal to the Applicable Margin then in effect plus the LIBOR
          applicable to each LIBOR Portion for the corresponding Interest
          Period.

               (b) Subject to the provisions of subsection 2.1.2, the Term Loan
          shall bear interest on the unpaid principal amount thereof from the
          date made through maturity (whether by acceleration or otherwise) at a
          rate per annum equal to 14.5%.

          2.1.2. Default Rates of Interest. At the option of Agent or upon
     direction from the Majority Revolving Lenders, upon and after the
     occurrence of an Event of Default, and during the continuation thereof, the
     principal amount of all Revolving Loans shall bear interest at a rate per
     annum equal to 2.0% plus the interest rate otherwise applicable thereto.
     Upon and after the occurrence of an Event of Default, and during the
     continuation thereof, the principal amount of the Term Loan and, to the
     extent permitted by applicable law, any interest payments thereon not paid
     when due and any fees and other amounts then due and payable hereunder to
     the Term Lenders, shall thereafter bear interest payable upon demand at a
     rate that is 3.0% per annum in excess of the interest rate otherwise
     payable under this Agreement with respect to the Term Loan (or, in the case
     of any such fees and other amounts, at a rate which is 3.0% per annum in
     excess of the rate otherwise payable under this Agreement for the Term
     Loan). Payment or acceptance of the increased rates of interest provided
     for in this subsection is not a permitted alternative to timely payment and
     shall not constitute a waiver of any Event of Default or otherwise
     prejudice or limit any rights or remedies of Agent or any Lender.

          2.1.3. Maximum Interest. In no event whatsoever shall the aggregate of
     all amounts deemed interest hereunder or under the Notes and charged or
     collected pursuant to the terms of this Agreement or pursuant to the Notes
     exceed the highest rate permissible under any law which a court of
     competent jurisdiction shall, in a final determination, deem applicable
     hereto (the "Maximum Rate"). If at any time, the amount of interest paid
     hereunder is limited by the Maximum Rate, and the amount at which interest
     accrues hereunder is subsequently below the Maximum Rate, the rate

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     at which interest accrues hereunder shall remain at the Maximum Rate, until
     such time as the aggregate interest paid hereunder equals the amount of
     interest that would have been paid had the Maximum Rate not applied. If any
     provisions of this Agreement or the Notes are in contravention of any such
     law, such provisions shall be deemed amended to conform thereto.

     2.2. Computation of Interest and Fees.

     Interest, Letter of Credit and LC Guaranty fees and Unused Line Fees
hereunder shall be calculated daily and shall be computed on the actual number
of days elapsed over a year of 360 days.

     2.3. Closing Fees.

     Borrower shall pay to Agent on the Effective Date, Revolving Credit Loan
closing fees (the "Revolving Loan Closing Fees") equal to (a) 1.25% of the
amount of Fleet's Revolving Loan Commitment, which portion of the Revolving Loan
Closing Fee shall be for Fleet's own account and (b) 1.00% of the aggregate
amount of the Revolving Loan Commitments other than Fleet's Revolving Loan
Commitment, which portion of the Revolving Loan Closing Fee shall be for the
ratable benefit of each Revolving Lender other than Fleet. Borrower shall also
pay to Agent on the Effective Date, for the ratable benefit of the Term Lenders,
a Term Loan closing fee (the "Term Loan Closing Fee") equal to $750,000, subject
to a credit for a portion of the "Commitment Fee" (less the "Manchester Costs")
in accordance with the terms of the Term Loan Commitment Letter. The Term Loan
Closing Fee and the Revolving Loan Closing Fees shall be fully earned when due
and payable and shall not be subject to rebate, refund or proration for any
reason.

     2.4. Letter of Credit and LC Guaranty Fees.

     Borrower shall pay to Agent for standby Letters of Credit and LC Guaranties
of standby letter of credit, for the ratable benefit of Revolving Lenders, a per
annum fee equal to the Applicable Margin then in effect for LIBOR Portions, of
the aggregate face amount of such Letters of Credit and LC Guaranties
outstanding from time to time during the term of this Agreement, plus all normal
and customary charges associated with the issuance thereof, which fees and
charges shall be deemed fully earned upon issuance of each such Letter of Credit
or LC Guaranty, shall be due and payable on the first Business Day of each month
and shall not be subject to rebate, refund or proration for any reason.
Notwithstanding the foregoing, of the fee described above, a portion thereof
equal to .25% per annum shall be payable to the issuer of the Letter of Credit
or LC Guaranty as applicable, and the balance shall be retained, ratably, by the
Revolving Lenders.

     2.5. Unused Line Fee.

     Borrower shall pay to Agent, for the ratable benefit of Revolving Lenders,
a per annum fee (the "Unused Line Fee") equal to .50% multiplied by the average
daily amount by which $200,000,000 exceeds the sum of (i) the outstanding
principal balance of the Revolving

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Loans plus (ii) the LC Amount; provided, that for purposes of allocating
the Unused Line Fee among Revolving Lenders, outstanding Swingline Loans shall
not be included as part of the outstanding principal balance of the Loans for
purposes of calculating such fees owed to Revolving Lenders other than Agent).
The Unused Line Fee shall be payable monthly in arrears on the first day of each
month hereafter.

     2.6. Term Loan Prepayment Fee.

     If, prior to the last day of the Term, Borrower prepays any portion of the
Term Loan for any reason (but excluding (i) any mandatory prepayment made with
the Term Loan Cash Collateral as described in Section 1.3 and (ii) any mandatory
prepayment of the Term Loan pursuant to subsection 3.3.2 due to the loss,
damage, destruction or condemnation of Collateral other than such mandatory
prepayment made upon the occurrence or during the continuance of an Event of
Default), Borrower shall pay to Agent, for the ratable benefit of the Term
Lenders (in addition to any other amounts due and owing pursuant to this
Agreement), an amount equal to 3% of the amount of the Term Loan so prepaid if
such prepayment occurs on or before November 20, 2003 and 1.5% of the amount of
the Term Loan so prepaid if such prepayment occurs after November 20, 2003.

     2.7. Audit Fees.

     Borrower shall pay to Agent audit fees in accordance with Agent's schedule
of fees in effect from time to time in connection with audits of the books and
records and Properties of Borrower and its Subsidiaries and such other matters
as Agent shall deem appropriate in its judgment, plus all reasonable
out-of-pocket expenses incurred by Agent in connection with such audits, whether
such audits are conducted by employees of Agent or by third parties hired by
Agent. As of the date hereof, Agent is charging audit fees at a rate equal to
$750 per auditor work day, plus all reasonable out-of-pocket expenses. Such
audit fees and out-of-pocket expenses shall be payable immediately upon demand
therefor by Agent from time to time. Agent may, in its discretion, provide for
the payment of such amounts by making appropriate Revolving Credit Loans to
Borrower and charging Borrower's Loan Account therefor.

     2.8. Reimbursement of Expenses.

     If, at any time or times regardless of whether or not an Event of Default
then exists, (a) Agent or Term Loan Representative incurs reasonable legal or
accounting expenses or any other reasonable costs or out-of-pocket expenses in
connection with (i) the negotiation and preparation of this Agreement or any of
the other Loan Documents, any amendment of or modification of this Agreement or
any of the other Loan Documents, or any syndication or attempted syndication of
the Obligations (including, without limitation, printing and distribution of
materials to prospective Lenders and all costs associated with bank meetings,
but excluding any closing fees paid to Lenders in connection therewith), (ii)
the Bankruptcy Case (including reasonable attorneys' fees and expenses incurred
in connection with any action to lift the automatic stay of Section 362 of the
Bankruptcy Code, any other action or participation by Agent or Term Loan
Representative in the Bankruptcy Case, or any defense or participation by

                                      -7-
<PAGE>

Agent or Term Loan Representative in any lender liability or other actions
in the Bankruptcy Case involving Agent or Term Loan Representative; or (iii) the
administration of this Agreement or any of the other Loan Documents and the
transactions contemplated hereby and thereby; (b) any Lender (other than Agent
or Term Loan Representative) incurs reasonable legal expenses on or prior to the
Effective Date in connection with the negotiation and preparation of this
Agreement or any of the other Loan Documents, up to an amount not to exceed
$7,500 for each such Lender; or (c) Agent or any Lender incurs reasonable legal
or accounting expenses or any other reasonable costs or out-of-pocket expenses
in connection with (i) any litigation, contest, dispute, suit, proceeding or
action (whether instituted by Agent, any Lender, Borrower or any other Person)
relating to the Collateral, this Agreement or any of the other Loan Documents or
Borrower's, any of its Subsidiaries' or any Guarantor's affairs; (ii) any
attempt to enforce any rights of Agent or any Lender against Borrower or any
other Person which may be obligated to Agent or any Lender by virtue of this
Agreement or any of the other Loan Documents, including, without limitation, the
Account Debtors; or (iii) any attempt to inspect, audit, verify, protect,
preserve, restore, collect, sell, liquidate or otherwise dispose of or realize
upon the Collateral; then all such legal and accounting expenses, other costs
and out of pocket expenses of Agent or any Lender, as applicable, shall be
charged to Borrower; provided, that Borrower shall not be responsible for such
costs and out-of-pocket expenses under clauses (a) and (b) hereof to the extent
incurred because of the gross negligence or willful misconduct of Agent or any
Lender. All amounts chargeable to Borrower under this Section 2.8 shall be
Obligations secured by all of the Collateral, shall be payable on demand to
Agent or such Lender, as the case may be, and shall bear interest from the date
such demand is made until paid in full, in each case subject to subsection
2.1.2, at the rate applicable to Base Rate Portions from time to time or, with
respect to amounts payable to the Term Lenders, at the rate applicable to the
Term Loan from time to time. Borrower shall also reimburse Agent for expenses
incurred by Agent in its administration of the Collateral to the extent and in
the manner provided in Sections 2.9 and 2.10 hereof.

     2.9. Bank Charges.

     Borrower shall pay to Agent, on demand, any and all fees, costs or expenses
which Agent or any Lender pays to a bank or other similar institution arising
out of or in connection with (i) the forwarding to Borrower or any other Person
on behalf of Borrower, by Agent or any Lender, of proceeds of Loans made to
Borrower pursuant to this Agreement and (ii) the depositing for collection by
Agent or any Lender of any check or item of payment received or delivered to
Agent or any Lender on account of the Obligations.

     2.10. Collateral Protection Expenses; Appraisals.

     All out-of-pocket expenses incurred in protecting, storing, warehousing,
insuring, handling, selling, disposing of, maintaining and shipping the
Collateral, and any and all excise, property, sales, and use taxes imposed by
any state, federal, or local authority on any of the Collateral or in respect of
the sale thereof shall be borne and paid by Borrower. If Borrower fails to
promptly pay any portion thereof when due, Agent may, at its option, but shall
not be required to, pay the same and charge Borrower therefor. Additionally,
from time to time, Agent may, at Borrower's expense, obtain appraisals from
appraisers (who may be personnel of

                                      -8-
<PAGE>

Agent), stating the then current fair market value of all or any portion of
the real estate or personal Property of Borrower or any of its Subsidiaries.
Borrower acknowledges that as of the date hereof, Agent intends to obtain new
appraisals of Borrower's Inventory at least four times annually. Any expenses
paid by Agent under this Section 2.10 shall be deemed to be Collateral
Protection Loans relating to the particular Collateral with respect to which
such expenses were incurred, and shall be repaid as provided in this Agreement.

     2.11. Payment of Charges.

     All amounts chargeable to Borrower under this Agreement shall be
Obligations secured by all of the Collateral, shall be, unless specifically
otherwise provided, payable on demand and shall bear interest from the date
demand was made or such amount is due, as applicable, until paid in full at the
rate applicable to Base Rate Portions from time to time.

     2.12. No Deductions.

     Any and all payments or reimbursements made hereunder shall be made free
and clear of and without deduction for any and all taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect thereto;
excluding, however, the following: taxes imposed on the income of Agent or any
Lender or franchise taxes by the jurisdiction under the laws of which Agent or
any Lender is organized or doing business or any political subdivision thereof
and taxes imposed on its income by the jurisdiction of Agent's or such Lender's
applicable lending office or any political subdivision thereof or franchise
taxes (all such taxes, levies, imposts, deductions, charges or withholdings and
all liabilities with respect thereto excluding such taxes imposed on net income,
herein "Tax Liabilities"). If Borrower shall be required by law to deduct any
such Tax Liabilities from or in respect of any sum payable hereunder to Agent or
any Lender, then the sum payable hereunder shall be increased as may be
necessary so that, after all required deductions are made, Agent or such Lender
receives an amount equal to the sum it would have received had no such
deductions been made.

     2.13. Certain Administrative Fees.

     Borrower shall pay to Agent the following administrative fees:

          (a) for the sole account of Agent, an annual Revolving Loan
     administrative fee (the "Revolving Loan Administrative Fee") equal to
     $300,000, payable on each of the Effective Date and the first anniversary
     of the Effective Date; and

          (b) for the ratable benefit of the Term Lenders, a quarterly Term Loan
     monitoring fee (the "Term Loan Monitoring Fee") equal to $62,500, payable
     on the first Business Day of each fiscal quarter hereafter, commencing on
     July 1, 2003.

Each portion of the Revolving Loan Administrative Fee and the Term Loan
Monitoring Fee shall be fully earned when due and payable and shall not be
subject to rebate, refund or proration for any reason.

                                      -9-
<PAGE>

     2.14. Deferred Fee.

     Borrower shall pay to Agent, for the ratable benefit of the Revolving
Lenders, a deferred fee (the "Deferred Fee") equal to $2,000,000, payable on the
earliest to occur of (a) the effective date of a confirmed Bankruptcy Plan, (b)
the sale of all or substantially all of the Properties of Borrower, (c) the
repayment in full of all Obligations and the termination of all Revolving Loan
Commitments, (d) the occurrence of an Event of Default in consequence of which
Agent, Majority Lenders or Majority Term Lenders (to the extent permitted under
Section 10.2(c)) elect to accelerate the maturity and payment of the
Obligations, or (e) November 20, 2004. The Deferred Fee shall be fully earned
when due and payable and shall not be subject to rebate, refund or proration for
any reason. Each Revolving Lender that participates (either directly, or
indirectly through an Affiliate) in any exit financing of Borrower in connection
with a confirmed Bankruptcy Plan hereby agrees to apply its ratable portion of
the Deferred Fee against its ratable portion of any closing or facility fee
payable to such Revolving Lender or any of its Affiliates in connection with the
closing of such exit financing.

                         SECTION 3. LOAN ADMINISTRATION.

     3.1. Manner of Borrowing Loans/LIBOR Option.

     Borrowings under the credit facility established pursuant to Section 1
hereof shall be as follows:

          3.1.1. Loan Requests. A request for a Revolving Credit Loan (including
     without limitation a Swingline Loan) or the Term Loan shall be made, or
     shall be deemed to be made, in the following manner: (i) Borrower may give
     Agent notice of its intention to borrow, in which notice Borrower shall
     specify the amount of the proposed borrowing and the proposed borrowing
     date, no later than 11:00 a.m. (Chicago, Illinois time) on the proposed
     borrowing date (or in accordance with subsection 3.1.7, 3.1.8 or 3.1.9, as
     applicable, in the case of a request for a LIBOR Portion), provided,
     however, that no such request may be made at a time when there exists a
     Default or an Event of Default; and (ii) the becoming due of any amount
     required to be paid under this Agreement, or the Notes, whether as interest
     or for any other Obligation, shall be deemed irrevocably to be a request
     for a Revolving Credit Loan on the due date in the amount required to pay
     such interest or other Obligation. Each written request for a borrowing of
     a Loan hereunder shall include a written certification to the effect that
     (a) the proposed Loan and its intended use are consistent with the terms of
     this Agreement and the Final Budget, and is necessary, after utilization
     and application of Borrower's available cash, in order to satisfy
     Borrower's obligations in the ordinary course of business or as otherwise
     permitted under the Loan Documents, (b) all conditions to borrowing
     contained in this Agreement and the other Loan Documents have been
     satisfied in all material respects, and (c) to the best knowledge of
     Borrower, no Event of Default or Default is in existence, and such request
     shall be in the form attached hereto as Exhibit 3.1.1.

                                      -10-
<PAGE>

          3.1.2. Disbursement. Borrower hereby irrevocably authorizes Agent to
     disburse the proceeds of each Revolving Credit Loan requested, or deemed to
     be requested, pursuant to subsection 3.1.1 as follows: (i) the proceeds of
     each Revolving Credit Loan requested under subsection 3.1.1(i) shall be
     disbursed by Agent in lawful money of the United States of America in
     immediately available funds, in the case of the initial borrowing, in
     accordance with the terms of the written disbursement letter from Borrower,
     and in the case of each subsequent borrowing, by wire transfer to such bank
     account as may be agreed upon by Borrower and Agent from time to time or
     elsewhere if pursuant to a written direction from Borrower; and (ii) the
     proceeds of each Revolving Credit Loan deemed requested under subsection
     3.1.1(ii) shall be disbursed by Agent by way of direct payment of the
     relevant interest or other Obligation. If at any time a Revolving Credit
     Loan is funded by Agent or Revolving Lenders in excess of the amount
     requested or deemed requested by Borrower, Borrower agrees to repay the
     excess to Agent immediately upon the earlier to occur of (a) Borrower's
     discovery of the error and (b) notice thereof to Borrower from Agent or any
     Revolving Lender.

          3.1.3. Payment by Revolving Lenders. Agent shall give to each
     Revolving Lender prompt written notice by facsimile, telex or cable of the
     receipt by Agent from Borrower of any request for Revolving Credit Loans.
     Each such notice shall specify the requested date and the aggregate amount
     of such requested Revolving Credit Loans, whether such Revolving Credit
     Loan shall be subject to the LIBOR Option, and the amount of each Revolving
     Lender's Revolving Credit Loans thereunder (in accordance with its
     applicable Revolving Loan Percentage). Each Revolving Lender shall, not
     later than 12:00 p.m. (Chicago time) on such requested date, wire to a bank
     designated by Agent the amount of that Revolving Lender's Revolving Loan
     Percentage of the requested Revolving Credit Loans. The failure of any
     Revolving Lender to make any Revolving Credit Loans to be made by it shall
     not release any other Revolving Lender of its obligations hereunder to make
     its Revolving Credit Loans. Neither Agent nor any other Revolving Lender
     shall be responsible for the failure of any other Revolving Lender to make
     the Revolving Credit Loans to be made by such other Revolving Lender. The
     foregoing notwithstanding, Agent, in its sole discretion, may from its own
     funds make a Revolving Credit Loan on behalf of any Revolving Lender. In
     such event, the Revolving Lender on behalf of whom Agent made the Revolving
     Credit Loan shall reimburse Agent for the amount of such Revolving Credit
     Loan made on its behalf, on a weekly (or more frequent, as determined by
     Agent in its sole discretion) basis. On each such settlement date, Agent
     will pay to each Revolving Lender the net amount owing to such Revolving
     Lender in connection with such settlement, including without limitation
     amounts relating to Loans, fees, interest and other amounts payable
     hereunder. Swingline Loans will be settled between Agent and Revolving
     Lenders at the same time as other Revolving Credit Loans. The entire amount
     of interest attributable to each Revolving Credit Loan (including Swingline
     Loans) for the period from the date on which such Revolving Credit Loan was
     made by Agent on such Revolving Lender's behalf until

                                      -11-
<PAGE>

     Agent is reimbursed by such Revolving Lender, shall be paid to Agent for
     its own account.

          3.1.4. Authorization. Borrower hereby irrevocably authorizes Agent, in
     Agent's sole discretion, to advance to Borrower, and to charge to
     Borrower's Loan Account hereunder as a Revolving Credit Loan (which shall
     be a Base Rate Portion), a sum sufficient to pay all interest accrued on
     the Obligations during the immediately preceding month and to pay all fees,
     costs and expenses and other Obligations at any time owed by Borrower to
     Agent or any Lender hereunder.

          3.1.5. Letter of Credit and LC Guaranty Requests. A request for a
     Letter of Credit or LC Guaranty shall be made in the following manner:
     Borrower may give Agent and Bank a written notice of its request for the
     issuance of a Letter of Credit or LC Guaranty, not later than 11:00 a.m.
     (Chicago, Illinois time), one Business Day before the proposed issuance
     date thereof, in which notice Borrower shall specify the proposed issuer,
     issuance date and format and wording for the Letter of Credit or LC
     Guaranty being requested (which shall be satisfactory to Agent and the
     Person being asked to issue such Letter of Credit or LC Guaranty) and which
     request shall also include similar certifications to those described in
     subsection 3.1.1; provided, that no such request may be made at a time when
     there exists a Default or Event of Default. Such request shall be
     accompanied by an executed application and reimbursement agreement in form
     and substance satisfactory to Agent and the Person being asked to issue the
     Letter of Credit or LC Guaranty, as well as any required resolutions.

          3.1.6. Method of Making Requests. As an accommodation to Borrower,
     unless a Default or an Event of Default is then in existence, (i) Agent
     shall permit telephonic or electronic requests for Revolving Credit Loans
     to Agent, (ii) Agent and Bank may, in their discretion, permit electronic
     transmittal of requests for Letters of Credit and LC Guaranties to them,
     and (iii) Agent may, in Agent's discretion, permit electronic transmittal
     of instructions, authorizations, agreements or reports to Agent. Unless
     Borrower specifically directs Agent or Bank in writing not to accept or act
     upon telephonic or electronic communications from Borrower, neither Agent
     nor Bank shall have any liability to Borrower for any loss or damage
     suffered by Borrower as a result of Agent's or Bank's honoring of any
     requests, execution of any instructions, authorizations or agreements or
     reliance on any reports communicated to it telephonically or electronically
     and purporting to have been sent to Agent or Bank by Borrower, and neither
     Agent nor Bank shall have any duty to verify the origin of any such
     communication or the authority of the Person sending it. Each telephonic
     request for a Revolving Credit Loan, Letter of Credit or LC Guaranty
     accepted by Agent and Bank, if applicable, hereunder shall be promptly
     followed by a written confirmation of such request from Borrower to Agent
     and Bank, if applicable.

          3.1.7. LIBOR Portions. Notwithstanding the provisions of subsection
     3.1.1, and provided that as of both the date of the LIBOR Request and the
     first day of the Interest Period, no Default or Event of Default exists, in
     the event Borrower desires to obtain a LIBOR Portion, Borrower shall give
     Agent a LIBOR Request no later than

                                      -12-
<PAGE>

     11:00 a.m. (Chicago, Illinois time) on the third Business Day prior to
     the requested borrowing date. Each LIBOR Request shall be irrevocable and
     binding on Borrower. In no event shall Borrower be permitted to have
     outstanding at any one time LIBOR Portions with more than five (5)
     different Interest Periods.

          3.1.8. Conversion of Base Rate Portions. Provided that as of both the
     date of the LIBOR Request and the first day of the Interest Period, no
     Default or Event of Default exists, Borrower may, on any Business Day,
     convert any Base Rate Portion into a LIBOR Portion. If Borrower desires to
     convert a Base Rate Portion, Borrower shall give Agent a LIBOR Request no
     later then 11:00 a.m. (Chicago, Illinois time) on the third Business Day
     prior to the requested conversion date. After giving effect to any
     conversion of Base Rate Portions to LIBOR Portions, Borrower shall not be
     permitted to have outstanding at any one time LIBOR Portions with more than
     five (5) different Interest Periods.

          3.1.9. Continuation of LIBOR Portions. Provided that as of both the
     date of the LIBOR Request and the first day of the Interest Period, no
     Default or Event of Default exists, Borrower may, on any Business Day,
     continue any LIBOR Portions into a subsequent Interest Period of the same
     or a different permitted duration. If Borrower desires to continue a LIBOR
     Portion, Borrower shall give Agent a LIBOR Request no later than 11:00 a.m.
     (Chicago, Illinois time) on the third Business Day prior to the requested
     continuation date. After giving effect to any continuation of LIBOR
     Portions, Borrower shall not be permitted to have outstanding at any one
     time separate LIBOR Portions with more than five (5) different Interest
     Periods. If Borrower shall fail to give timely notice of its election to
     continue any LIBOR Portion or portion thereof as provided above, or if such
     continuation shall not be permitted, such LIBOR Portion or portion thereof,
     unless such LIBOR Portion shall be repaid, shall automatically be converted
     into a Base Rate Portion at the end of the Interest Period then in effect
     with respect to such LIBOR Portion.

          3.1.10. Inability to Make LIBOR Portions. Notwithstanding any other
     provision hereof, if any applicable law, treaty, regulation or directive,
     or any change therein or in the interpretation or application thereof,
     shall make it unlawful for any Revolving Lender (for purposes of this
     subsection 3.1.10, the term "Revolving Lender" shall include the office or
     branch where such Revolving Lender or any corporation or bank then
     controlling such Revolving Lender makes or maintains any LIBOR Portions) to
     make or maintain its LIBOR Portions, or if with respect to any Interest
     Period, Agent is unable to determine the LIBOR relating thereto, or adverse
     or unusual conditions in, or changes in applicable law relating to, the
     London interbank market make it, in the reasonable judgment of Agent,
     impracticable to fund therein any of the LIBOR Portions, or make the
     projected LIBOR unreflective of the actual costs of funds therefor to any
     Revolving Lender, the obligation of Agent and Revolving Lenders to make or
     continue LIBOR Portions or convert Base Rate Portions to LIBOR Portions
     hereunder shall forthwith be suspended during the pendency of such
     circumstances and Borrower shall, if any affected LIBOR Portions

                                      -13-
<PAGE>

     are then outstanding, promptly upon request from Agent, convert such
     affected LIBOR Portions into Base Rate Portions.

     3.2. Payments.

     The Obligations shall be payable as follows:

          3.2.1. Principal.

               (i) Revolving Credit Loans. Principal on account of Revolving
          Credit Loans shall be payable by Borrower to Agent for the ratable
          benefit of Revolving Lenders immediately upon the earliest of (a) the
          receipt by Agent or Borrower or any Subsidiary of Borrower of any
          proceeds of any of the Collateral pursuant to subsection 6.2.4, to the
          extent set forth in subsections 3.3.1, 3.3.2 and 3.4.2, subject to
          Borrower's rights to reborrow such amounts in compliance with
          subsection 1.1.1 hereof, (b) the occurrence of an Event of Default in
          consequence of which Agent or Majority Lenders or Majority Term
          Lenders (to the extent permitted under Section 10.2(c)) elect to
          accelerate the maturity and payment of the Obligations, or (c)
          termination of this Agreement pursuant to Section 4 hereof. Each
          payment (including principal prepayment) by Borrower on account of
          principal of the Revolving Credit Loans shall be applied first to Base
          Rate Portions and then to LIBOR Portions.

               (ii) Term Loan. Principal on account of the Term Loan shall be
          payable by Borrower to Agent for the ratable benefit of Term Lenders
          immediately upon the earliest of (a) the receipt by Agent, Borrower or
          any of Borrower's Subsidiaries of any proceeds of any of the
          Collateral to the extent set forth in subsections 3.3.2 and 3.4.2, to
          the extent of said proceeds, (b) the occurrence of an Event of Default
          in consequence of which Agent, Majority Lenders or Majority Term
          Lenders (to the extent permitted under Section 10.2(c)) elect to
          accelerate the maturity and payment of the Obligations, or (c)
          termination of this Agreement pursuant to Section 4 hereof. Each
          payment or prepayment of the Term Loan shall be accompanied by accrued
          interest and any applicable prepayment premium under Section 2.6 on
          the amounts so paid or prepaid.

               (iii) Overadvances. If an Overadvance shall exist at any time,
          Borrower shall, on demand, repay Revolving Credit Loans in the amount
          of the Overadvance.

          3.2.2.   Interest.

               (i) Base Rate Portion. Interest accrued on Base Rate Portions
          shall be due and payable in arrears (a) on the first calendar day of
          each month (for the immediately preceding month), computed through the
          last calendar day of

                                      -14-
<PAGE>

          the preceding month, (b) on the occurrence of an Event of Default
          in consequence of which Agent, Majority Lenders or Majority Term
          Lenders (to the extent permitted under Section 10.2(c)) elect to
          accelerate the maturity and payment of the Obligations, (c) on
          termination of this Agreement pursuant to Section 4 hereof and (d) at
          maturity.

               (ii) LIBOR Portion. Interest accrued on each LIBOR Portion shall
          be due and payable in arrears on each LIBOR Interest Payment Date and
          (a) on the occurrence of an Event of Default in consequence of which
          Agent, Majority Lenders or Majority Term Lenders (to the extent
          permitted under Section 10.2(c)) elect to accelerate the maturity and
          payment of the Obligations, (b) on termination of this Agreement
          pursuant to Section 4 hereof and (c) at maturity.

               (iii) Term Loan. Interest accrued on the Term Loan shall be due
          and payable in arrears (a) on the first calendar day of each month
          (for the immediately preceding month), computed through the last
          calendar day of the preceding month, (b) on the occurrence of an Event
          of Default in consequence of which Agent, Majority Lenders or Majority
          Term Lenders (to the extent permitted under Section 10.2(c)) elect to
          accelerate the maturity and payment of the Obligations, (c) on
          termination of this Agreement pursuant to Section 4 hereof, (d) on
          prepayment of any principal of the Term Loan (to the extent accrued on
          the amount being prepaid) and (e) at maturity.

          3.2.3. Costs, Fees and Charges. Costs, fees and charges payable
     pursuant to this Agreement shall be payable by Borrower to Agent, as and
     when provided in Section 2 or Section 3 hereof, as applicable to Agent or a
     Lender, as applicable, or to any other Person designated by Agent or such
     Lender in writing.

          3.2.4. Other Obligations. The balance of the Obligations requiring the
     payment of money, if any, shall be payable by Borrower to Agent for
     distribution to Lenders, as appropriate, as and when provided in this
     Agreement, the other Loan Documents or on demand, whichever is later.

          3.2.5. Prepayment of/Failure to Borrow LIBOR Portions. Borrower may
     prepay a LIBOR Portion only upon at least three (3) Business Days prior
     written notice to Agent (which notice shall be irrevocable). Borrower shall
     pay to each Revolving Lender, upon request of such Revolving Lender, such
     amount or amounts as shall be sufficient (in the reasonable opinion of such
     Revolving Lender) to compensate such Revolving Lender for any loss, cost,
     or expense incurred as a result of: (i) any payment of a LIBOR Portion on a
     date other than the last day of the Interest Period for such LIBOR Portion;
     (ii) any failure by Borrower to borrow a LIBOR Portion on the date
     specified by Borrower's LIBOR Request; or (iii) any failure by Borrower to
     pay a LIBOR Portion on the date for payment specified in Borrower's written
     notice. Without limiting the foregoing, Borrower shall pay to each
     Revolving Lender a "yield maintenance fee" in an amount computed as
     follows:

                                      -15-
<PAGE>

     the current rate for United States Treasury securities (bills on a
     discounted basis shall be converted to a bond equivalent) with a maturity
     date closest to the Interest Period chosen pursuant to the LIBOR Portion as
     to which the prepayment is made, shall be subtracted from the LIBOR in
     effect at the time of prepayment. If the result is zero or a negative
     number, there shall be no yield maintenance fee. If the result is a
     positive number, then the resulting percentage shall be multiplied by the
     amount of the principal balance being prepaid. The resulting amount shall
     be divided by 360 and multiplied by the number of days remaining in the
     Interest Period chosen pursuant to the LIBOR Portion as to which the
     prepayment is made. Said amount shall be reduced to present value
     calculated by using the above referenced United States Treasury securities
     rate and the number of days remaining in the term chosen pursuant to the
     LIBOR Portion as to which prepayment is made. The resulting amount shall be
     the yield maintenance fee due to the applicable Lender upon the prepayment
     of a LIBOR Portion. If by reason of an Event of Default, Agent, Majority
     Lenders or Majority Term Lenders (to the extent permitted under Section
     10.2(c)) elect to declare the Obligations to be immediately due and
     payable, then any yield maintenance fee with respect to a LIBOR Portion
     shall become due and payable in the same manner as though Borrower had
     exercised such right of prepayment.

     3.3. Reductions/Prepayments.

          3.3.1. Certain Payments. If Borrower or any of its Subsidiaries
     receives (a) a tax refund (other than in connection with a sale, transfer,
     lease, disposition, loss, damage, destruction or condemnation of any
     Collateral, which are addressed in subsection 3.3.2) in excess of the
     amount reflected in the Final Budget, (b) any proceeds of the sale of the
     nitrogen oxide emission allowances described in subsection 8.2.9(vi), (c)
     the proceeds of the sale of the common stock of Metals USA Inc. described
     in subsection 8.2.9(iv) or (d) the proceeds of a sale, transfer, lease,
     disposition, loss, damage, destruction or condemnation of any other
     Revolving Loan Primary Collateral not constituting Accounts or Inventory
     and not otherwise reflected in the Final Budget, the proceeds thereof (net
     of costs and taxes incurred in connection with such event) shall be applied
     to the Obligations in the manner set forth in the fourth sentence of
     subsection 3.3.2. Upon application of each such amount to the principal of
     the Revolving Credit Loans, the Agent will immediately create a permanent
     reserve under subsection 1.1.1 in the amount thereof (the "Proceeds
     Receipts") and the portion of the Availability Block that has not yet been
     put into effect will be reduced by the amount of the Proceeds Receipts,
     with such reduction being applied to such increases of the Availability
     Block in the order of their scheduled effect. In no event shall the
     Availability Block be reduced below $10,000,000 except in accordance with
     the provisions of subsection 11.10.

          3.3.2. Mandatory Prepayments. (1) If the Conditions to Release have
     not been satisfied in full on or prior to the 30th day after the Filing
     Date (unless such date has been extended by all Lenders), the Term Loan
     Cash Collateral shall be promptly paid to the Term Loan Representative for
     application to the interest and principal of

                                      -16-
<PAGE>

     the Term Loan, as set forth in Section 1.3. (2) Subject to any
     applicable consent requirements contained in subsection 8.2.9 with respect
     to any sale, lease, transfer or other disposition, if Borrower or one of
     its Subsidiaries (or Agent pursuant to Section 10) sells, transfers, leases
     or otherwise disposes of any of the Collateral (other than pursuant to a
     sale, transfer, lease or other disposition expressly permitted by
     subsection 8.2.9(i), (ii), (iii), (iv), or (v)), or if any of the
     Collateral is lost, damaged, destroyed or taken by condemnation, Borrower
     shall, unless otherwise agreed by all Lenders, pay to Agent, for the
     ratable benefit of Lenders, as and when received by Borrower or such
     Subsidiary (or Agent shall apply such proceeds as and when received
     pursuant to Section 10, as applicable) and as a mandatory prepayment of the
     Obligations, as herein provided, a sum equal to the proceeds (including
     insurance, condemnation payments and tax refunds, but net of costs and
     taxes incurred in connection with such event) received by Borrower or such
     Subsidiary for such sale, transfer, lease, disposition, loss, damage,
     destruction or condemnation. (3) To the extent that the Collateral sold,
     transferred, leased, lost, damaged, destroyed, condemned or otherwise
     disposed of consists of Term Loan Primary Collateral, the applicable
     prepayment shall be applied first, to any costs and expenses incurred by
     Agent or Term Loan Representative in connection with such transaction
     (including without limitation any applicable Collateral Protection Loans
     advanced pursuant to subsection 1.1.4 with respect to such Collateral),
     second, to the outstanding accrued interest on the Term Loan, third, to the
     outstanding principal of the Term Loan in an aggregate amount which when
     added to the fee payable by Borrower under Section 2.6 with respect to such
     transaction, if applicable, equals the lesser of (x) the remaining amount
     of the proceeds received by Borrower or such Subsidiary for such sale,
     transfer, lease, disposition, loss, damage, destruction or condemnation
     (after application in accordance with clauses first and second of this
     sentence) and (y) the aggregate amount of Term Loan outstanding, fourth to
     the payment of the prepayment fee pursuant to Section 2.6 with respect to
     such transaction, if applicable, fifth to any other amounts then owing with
     respect to the Term Loan and the Term Notes, until paid in full, and sixth,
     to repay outstanding principal of the Revolving Credit Loans, and all
     accrued interest thereon and any other amounts then owing with respect to
     the Revolving Credit Loans and the Revolving Notes until paid in full, and
     to provide cash Collateral for all outstanding LC Obligations in the amount
     of 110% thereof, but shall not permanently reduce the Revolving Loan
     Commitments. (4) To the extent that the Collateral sold, transferred,
     leased, lost, damaged, destroyed, condemned or otherwise disposed of
     consists of Revolving Loan Primary Collateral, the applicable prepayment
     shall be applied first, to any costs and expenses incurred by Agent in
     connection with such transaction (including without limitation any
     applicable Collateral Protection Loans advanced pursuant to subsection
     1.1.4 with respect to such Collateral), second, to reduce the outstanding
     principal balance of the Revolving Credit Loans, and all accrued interest
     thereon and any other amounts then owing with respect to the Revolving
     Credit Loans and the Revolving Notes, until paid in full, and to provide
     cash Collateral for all outstanding LC Obligations in the amount of 110%
     thereof, but shall not permanently reduce the Revolving Loan Commitments
     and third, to repay outstanding principal of the Term Loan and all accrued
     interest thereon

                                      -17-
<PAGE>

     and any other amounts then owing with respect to the Term Loan and the
     Term Notes. Notwithstanding the foregoing:

               (a) if the proceeds of insurance (net of costs and taxes incurred
          and after paying any costs and expenses incurred by Agent or Term Loan
          Representative in connection with such loss or destruction (including
          without limitation any applicable Collateral Protection Loans advanced
          pursuant to subsection 1.1.4 with respect to any Term Loan Primary
          Collateral subject to such loss or destruction)) with respect to any
          loss or destruction of Term Loan Primary Collateral, including any
          insurance received by Agent as loss payee, (i) are less than $250,000
          for any occurrence or $1,500,000 in the aggregate, unless an Event of
          Default has then occurred and is continuing, Agent shall remit such
          proceeds to Borrower and Borrower shall promptly and diligently apply
          such proceeds to pay or reimburse the costs of repairing, restoring or
          replacing the assets in respect of which such proceeds were received
          or, to the extent not so applied, to prepay the Obligations as
          provided in the third sentence of this subsection 3.3.2, (ii) are
          equal to or greater than $250,000 per occurrence or $1,500,000 in the
          aggregate, then Agent shall hold such proceeds in a cash Collateral
          account at Bank as Term Loan Primary Collateral pursuant to the terms
          of Section 5 and, so long as the Borrower proceeds diligently to
          repair, restore or replace the assets of Borrower or the applicable
          Subsidiary in respect of which such proceeds were received, Agent
          shall, at the direction of Majority Term Lenders (which direction
          shall be made unless clause (A) or (B) below is applicable), from time
          to time disburse to Borrower from such cash Collateral account, to the
          extent of any such proceeds remaining therein in respect of the
          applicable covered loss, amounts necessary to pay the cost of such
          repair, restoration or replacement after the receipt by Agent of
          invoices or other documentation reasonably satisfactory to Majority
          Term Lenders relating to the amount of costs so incurred and the work
          performed (including, if required by Majority Term Lenders, lien
          releases and architects' certificates) or (iii) are equal to or
          greater than $10,000,000 in the aggregate, then Agent shall either (1)
          at the direction of Majority Term Lenders in their sole discretion,
          apply such proceeds to prepay the Obligations pursuant to the third
          sentence of subsection 3.3.2 or (2) hold such proceeds in a cash
          Collateral account at Bank as Term Loan Primary Collateral pursuant to
          the terms of Section 5 and, so long as the Borrower proceeds
          diligently to repair, restore or replace the assets of Borrower or the
          applicable Subsidiary in respect of which such proceeds were received,
          Agent, at the direction of Majority Term Lenders, shall from time to
          time disburse to Borrower from such cash Collateral account, to the
          extent of any such proceeds remaining therein in respect of the
          applicable covered loss, amounts necessary to pay the cost of such
          repair, restoration or replacement after the receipt by Agent of
          invoices or other documentation reasonably satisfactory to Majority
          Term Lenders relating to the amount of costs so incurred and the work
          performed (including, if required by Majority Term Lenders, lien
          releases and architects'

                                      -18-
<PAGE>

          certificates); provided, however that (x) at no time will
          Revolving Credit Loans or proceeds of Revolving Loan Primary
          Collateral be used to repair, replace or restore the applicable asset
          without the prior written consent of Majority Revolving Lenders and
          (y) if at any time under clause (ii) or (iii) of this paragraph (a),
          either an Event of Default has occurred and is continuing or Majority
          Term Lenders reasonably determine (A) that Borrower is not proceeding
          diligently with such repair, restoration or replacement or (B) that
          such repair, restoration or replacement cannot be completed with the
          proceeds then held by Agent for such purpose, together with funds
          otherwise available to Borrower for such purpose, or that such repair,
          restoration or replacement cannot be completed within 180 days after
          the receipt of such proceeds by Agent, Borrower or any Subsidiary,
          Agent shall, and Borrower hereby authorizes Agent to, apply such
          proceeds to prepay the Obligations as provided in the third sentence
          of this subsection 3.2.2 until paid in full.

               (b) no later than the first Business Day following the date of
          receipt by Agent or by Borrower or any of its Subsidiaries of proceeds
          from any business interruption insurance policy in respect of a
          covered loss thereunder, Borrower shall prepay the Obligations in the
          manner provided in the fourth sentence of this subsection 3.3.2.

               (c) if any sale, lease, transfer, disposition, loss, damage,
          destruction or condemnation of Collateral involves both Term Loan
          Primary Collateral and Revolving Loan Primary Collateral or if such
          sale involves a sale of all or substantially all of the capital stock
          or Property of Borrower, any Subsidiary of Borrower or any business
          line or division of Borrower or any Subsidiary of Borrower (a "Mixed
          Asset Transaction"), then (i) in the case of a Mixed Asset Transaction
          involving a sale, lease, transfer or disposition, the proceeds thereof
          will be allocated in the manner determined by Supermajority Revolving
          Lenders and Majority Term Lenders or (ii) in the case of a Mixed Asset
          Transaction involving loss, damage, destruction or condemnation, the
          proceeds of any award will be allocated as determined by the
          applicable insurance company or, if no such allocation is made, by
          Supermajority Revolving Lenders and Majority Term Lenders.

     3.4. Application of Payments and Collections.

          3.4.1. Collections. All items of payment received by Agent by 12:00
     noon, Chicago, Illinois, time, on any Business Day shall be deemed received
     on that Business Day. All items of payment received after 12:00 noon,
     Chicago, Illinois, time, on any Business Day shall be deemed received on
     the following Business Day. All interest payments credited against
     Borrower's Loan Account as Revolving Credit Loans hereunder on a day other
     than a Business Day, shall be disbursed by Agent to the appropriate Lenders
     on the next succeeding Business Day. If as the result of collections of
     Accounts as authorized by subsection 6.2.4 hereof or otherwise, a credit
     balance exists in the Loan Account in excess of necessary reserves for
     operating

                                      -19-
<PAGE>

     needs in accordance with the Final Budget and Subsequent Budgets, such
     credit balance shall not accrue interest in favor of Borrower, but shall be
     disbursed to Borrower or otherwise at Borrower's direction in the manner
     set forth in subsection 3.1.2, upon Borrower's request at any time, so long
     as no Default or Event of Default then exists. Agent may at its option,
     offset such credit balance against any of the Obligations upon and during
     the continuance of an Event of Default.

          3.4.2. Apportionment, Application and Reversal of Payments. Interest
     payments received by Agent on any date shall be apportioned between the
     Term Loan and the Revolving Credit Loan on a pro rata basis based on the
     total amount of interest then due on the Obligations as of such date.
     Principal and interest payments in respect of the Revolving Credit Loans or
     the Term Loan shall be apportioned ratably among the Revolving Lenders or
     the Term Lenders, as the case may be (according to the unpaid principal
     balance of the Loans to which such payments relate held by each Lender).
     Unless an Event of Default is in existence, all payments shall be remitted
     to Agent and all such payments not relating to principal or interest of
     specific Loans, or not constituting payment of specific fees, and all
     proceeds of Accounts, or, except as provided in Section 3.3, other
     Collateral received by Agent, shall be applied, ratably, subject to the
     provisions of this Agreement, first, to pay any fees, indemnities, or
     expense reimbursements (other than amounts related to Product Obligations)
     then due to Agent; second, to pay any fees, indemnities, or expense
     reimbursement (other than amounts related to Product Obligations) then due
     to any Lender; third, to pay interest due in respect of all Loans,
     including Swingline Loans and Collateral Protection Loans; fourth, to pay
     or prepay principal of Swingline Loans and Collateral Protection Loans;
     fifth, to pay or prepay principal of the Revolving Credit Loans (other than
     Swingline Loans and Collateral Protection Loans), unpaid reimbursement in
     respect of LC Obligations and any amounts due with respect to Product
     Obligations; sixth, to pay an amount to Agent equal to all outstanding LC
     Obligations in the amount of 110% thereof to be held as cash Collateral for
     such Obligations; seventh, to payment of principal of the Term Loan then
     due; eighth, to the payment of any other Obligation then due to Agent or
     any Lender. After the occurrence and during the continuance of an Event of
     Default (but subject to the third sentence of subsection 3.3.2), Agent, at
     the direction of the Majority Revolving Lenders, shall have the continuing
     exclusive right to apply and reapply any and all such payments and
     collections received at any time or times hereafter by Agent or its agent
     and paid to Agent or any Revolving Lender in repayment of Obligations, to
     the other Obligations owing to Agent or any Revolving Lender in such manner
     as Agent may deem advisable, notwithstanding any entry by Agent or any
     Revolving Lender upon any of its books and records.

     3.5. All Loans to Constitute One Obligation.

     The Loans, the LC Amount and the other Obligations shall constitute one
general obligation of Borrower, and shall be secured by Agent's Lien upon all of
the Collateral as provided in Section 5 hereof.

                                      -20-
<PAGE>

     3.6. Loan Account.

     Agent shall enter all Loans as debits to a loan account (the "Loan
Account") and shall also record in the Loan Account all payments made by
Borrower on any Obligations and all proceeds of Collateral which are finally
paid to Agent, and may record therein, in accordance with customary accounting
practice, other debits and credits, including interest and all charges and
expenses properly chargeable to Borrower.

     3.7. Statements of Account.

     Agent will account to Borrower monthly with a statement of Loans, charges
and payments made pursuant to this Agreement during the immediately preceding
month, and such account rendered by Agent shall be deemed final, binding and
conclusive upon Borrower absent demonstrable error unless Agent is notified by
Borrower in writing to the contrary within 30 days of the date each accounting
is received by Borrower. Such notice shall only be deemed an objection to those
items specifically objected to therein.

     3.8. Increased Costs.

     If any law or any governmental or quasi-governmental rule, regulation,
policy, guideline or directive (whether or not having the force of law) adopted
or implemented after the date of this Agreement and having general applicability
to all banks or finance companies within the jurisdiction in which any Lender
operates (excluding, for the avoidance of doubt, the effect of and phasing in of
capital requirements or other regulations or guidelines passed prior to the date
of this Agreement), or any interpretation or application thereof by any
governmental authority charged with the interpretation or application thereof,
or the compliance of such Lender therewith, shall:

          (i) (1) subject such Lender to any tax with respect to this Agreement
     (other than (a) any tax based on or measured by net income or otherwise in
     the nature of a net income tax, including, without limitation, any
     franchise tax or any similar tax based on capital, net worth or comparable
     basis for measurement and (b) any tax collected by a withholding on
     payments and which neither is computed by reference to the net income of
     the payee nor is in the nature of an advance collection of a tax based on
     or measured by the net income of the payee) or (2) change the basis of
     taxation of payments to such Lender of principal, fees, interest or any
     other amount payable hereunder or under any Loan Documents (other than in
     respect of (a) any tax based on or measured by net income or otherwise in
     the nature of a net income tax, including, without limitation, any
     franchise tax or any similar tax based on capital, net worth or comparable
     basis for measurement and (b) any tax collected by a withholding on
     payments and which neither is computed by reference to the net income of
     the payee nor is in the nature of an advance collection of a tax based on
     or measured by the net income of the payee);

                                      -21-
<PAGE>

          (ii) impose, modify or hold applicable any reserve (except any reserve
     taken into account in the determination of the applicable LIBOR), special
     deposit, assessment or similar requirement against assets held by, or
     deposits in or for the account of, advances or loans by, or other credit
     extended by, any office of such Lender, including (without limitation)
     pursuant to Regulation D of the Board of Governors of the Federal Reserve
     System; or

          (iii) impose on such Lender or the London interbank market any other
     condition with respect to any Loan Document;

and the result of any of the foregoing is to increase the cost to such Lender of
making, renewing or maintaining Loans hereunder, or the result of any of the
foregoing is to reduce the rate of return on such Lender's capital as a
consequence of its obligations hereunder, in either case by or to an amount that
such Lender deems to be material, or the result of any of the foregoing is to
reduce the amount of any payment (whether of principal, interest or otherwise)
in respect of any of the Loans, then, in any such case, Borrower shall pay such
Lender, upon demand and certification not later than sixty (60) days following
its receipt of notice of the imposition of such increased costs or such
reduction, such additional amount as will compensate such Lender for such
additional cost or such reduction, as the case may be, to the extent such Lender
has not otherwise been compensated. An officer of the applicable Lender shall
determine the amount of such additional cost or such reduction using reasonable
averaging and attribution methods and shall certify the amount of such
additional cost or such reduction to Borrower, which certification shall include
a written explanation of such additional cost or such reduction to Borrower.
Such certification shall be conclusive absent demonstrable error. If a Lender
claims any additional cost or reduced amount pursuant to this Section 3.8, then
such Lender shall use reasonable efforts (consistent with legal and regulatory
restrictions) to designate a different lending office or to file any certificate
or document reasonably requested by Borrower if the making of such designation
or filing would avoid the need for, or reduce the amount of, any such additional
cost or such reduction and would not, in the sole discretion of such Lender, be
otherwise disadvantageous to such Lender.

     3.9. Basis for Determining Interest Rate Inadequate.

     In the event that Agent or any Revolving Lender shall have determined that:

          (i) reasonable means do not exist for ascertaining the LIBOR for any
     Interest Period; or

          (ii) Dollar deposits in the relevant amount and for the relevant
     maturity are not available in the London interbank market with respect to a
     proposed LIBOR Portion, or a proposed conversion of a Base Rate Portion
     into a LIBOR Portion; then

Agent or such Revolving Lender shall give Borrower prompt written, telephonic or
electronic notice of the determination of such effect. If such notice is given,
(i) any such requested LIBOR Portion shall be made as a Base Rate Portion,
unless Borrower shall notify Agent no

                                      -22-
<PAGE>

later than 10:00 a.m. (Chicago, Illinois time) three (3) Business Days prior to
the date of such proposed borrowing that the request for such borrowing shall be
canceled or made as an unaffected type of LIBOR Portion, and (ii) any Base Rate
Portion which was to have been converted to an affected type of LIBOR Portion
shall be continued as or converted into a Base Rate Portion, or, if Borrower
shall notify Agent, no later than 10:00 a.m. (Chicago, Illinois time) three (3)
Business Days prior to the proposed conversion, shall be maintained as an
unaffected type of LIBOR Portion.

     3.10. Sharing of Payments, Etc.

     Subject to subsection 3.4.2, and the other provisions of this Agreement
relating to the application of funds received by Agent and the Lenders,
including without limitation subsection 3.3.2, if any Lender shall obtain any
payment or reduction of Obligations owing to it (whether voluntary, involuntary,
through the exercise of any right of set-off, or otherwise) on account of the
aggregate amount of Obligations then due and owing to such Lender (the
"Aggregate Amounts Due") in excess of its ratable share of the payments made on
account of the Aggregate Amounts Due to all Lenders, such Lender shall forthwith
purchase from each other Lender such participation in such Aggregate Amounts Due
to such other Lender as shall be necessary to cause such purchasing Lender to
share the excess payment ratably with each other Lender; provided, that if all
or any portion of such excess payment is thereafter recovered from such
purchasing Lender, such purchase from each Lender shall be rescinded and such
Lender shall repay to the purchasing Lenders the purchase price to the extent of
such recovery, together with an amount equal to such Lender's ratable share
(according to the proportion of (i) the amount of such Lender's required
repayment to (ii) the total amount so recovered from the purchasing Lender) of
any interest or other amount paid or payable by the purchasing Lender in respect
of the total amount so recovered. Borrower agrees that any Lender so purchasing
a participation from another Lender pursuant to this Section 3.10 may, to the
fullest extent permitted by law, exercise all its rights of payment (including
the right of set-off) with respect to such participation as fully as if such
Lender were the direct creditor of Borrower in the amount of such participation.
Notwithstanding anything to the contrary contained herein, all purchases and
repayments to be made under this Section 3.10 shall be made through Agent.

     3.11. Estoppel Certificate.

     Within 20 days after written request therefor by Borrower from time to time
(but not more frequently than once per calendar quarter), Agent agrees to
deliver to Borrower a written estoppel certificate executed by Agent stating (i)
the then outstanding amount of the Obligations, (ii) the date to which interest
and principal, in respect of the Obligations has been paid and (iii) the last
day of the Term, which certificate shall be accompanied by copies of (a) all
written amendments and modifications of this Agreement then in existence and (b)
all written notices of the existence of an Event of Default received by Agent
from Borrower through such date and all written notices delivered by Agent to
Borrower through such date asserting the existence of an Event of Default.

                                      -23-
<PAGE>

                         SECTION 4. TERM AND TERMINATION

     4.1. Term of Agreement.

     Subject to the right of Revolving Lenders to cease making Loans to Borrower
during the continuance of any Default or Event of Default, this Agreement shall
be in effect through and including the earlier to occur (the "Term") of (a)
November 20, 2004, (b) the occurrence of an Event of Default pursuant to
subsection 10.1.15 or (c) the effective date of a confirmed Bankruptcy Plan,
unless previously terminated as provided in Section 4.2 hereof.

     4.2. Termination.

          4.2.1. Termination by Lenders. Agent may, and at the direction of
     Majority Lenders or Majority Term Lenders (to the extent permitted under
     Section 10.2(c)) shall, terminate this Agreement without notice upon or
     after the occurrence and during the continuance of an Event of Default.

          4.2.2. Termination by Borrower. Upon at least 90 days prior written
     notice to Agent and Lenders, Borrower may, at its option, terminate this
     Agreement; provided, however, no such termination shall be effective until
     Borrower has paid or collateralized to Agent's satisfaction all of the
     Obligations in immediately available funds, all Letters of Credit and LC
     Guaranties have expired, terminated or have been cash collateralized to
     Agent's satisfaction and Borrower has complied with Section 2.6 and
     subsection 3.2.5. Any notice of termination given by Borrower shall be
     irrevocable unless all Lenders otherwise agree in writing and no Revolving
     Lender shall have any obligation to make any Loans or issue or procure any
     Letters of Credit or LC Guaranties on or after the termination date stated
     in such notice. Borrower may elect to terminate this Agreement in its
     entirety only. No section of this Agreement or type of Loan available
     hereunder may be terminated singly.

          4.2.3. Effect of Termination. All of the Revolving Loan Commitments
     shall automatically terminate and all Obligations shall be immediately due
     and payable upon any termination date under Section 4.1, any termination
     date under subsection 4.2.1 or any other termination date stated in any
     notice of termination of this Agreement. All undertakings,
     indemnifications, agreements, covenants, warranties and representations of
     Borrower contained in the Loan Documents shall survive any such termination
     and Agent shall retain its Liens in the Collateral and Agent and each
     Lender shall retain all of its rights and remedies under the Loan Documents
     notwithstanding such termination until all Obligations have been discharged
     or paid, in full, in immediately available funds, including, without
     limitation, all Obligations under Section 2.6, Section 2.8 and subsection
     3.2.5 resulting from such termination. Notwithstanding the foregoing or the
     payment in full of the Obligations, Agent shall not be required to
     terminate its then-existing Liens in the Collateral unless, with respect to
     any loss or damage Agent may incur as a result of dishonored checks or
     other items of payment received by Agent from Borrower or any Account
     Debtor and applied to the Obligations, Agent shall, at its

                                      -24-
<PAGE>

     option, (i) have received a written agreement satisfactory to Agent,
     executed by Borrower and by any Person whose loans or other advances to
     Borrower are used in whole or in part to satisfy the Obligations,
     indemnifying Agent and each Lender from any such loss or damage or (ii)
     have retained cash Collateral or other Collateral for such period of time
     as Agent, in its discretion, may deem necessary to protect Agent and each
     Lender from any such loss or damage.

                          SECTION 5. SECURITY INTERESTS

     5.1. Security Interest in Collateral.

     To secure the prompt payment and performance to Agent and each Lender of
all of the Obligations, Borrower hereby grants to Agent for the benefit of
itself and each Lender, in accordance with the priorities set forth herein, a
continuing security interest in all of the following Property and interests in
Property of Borrower, whether now owned or existing (and whether acquired or
generated prior or subsequent to the Filing Date) or hereafter created, acquired
or arising and wheresoever located:

          (i)    Accounts;

          (ii)   Certified Securities, including without limitation all
                 Securities of any Subsidiary held by Borrower;

          (iii)  Chattel Paper;

          (iv)   Computer Hardware and Software and all rights with respect
     thereto, including any and all licenses, options, warranties, service
     contracts, program services, test rights, maintenance rights, support
     rights, improvement rights, renewal rights and indemnifications, and any
     substitutions, replacements, additions or model concessions of any of the
     foregoing;

          (v)    Contract Rights;

          (vi)   Deposit Accounts;

          (vii)  Documents;

          (viii) Equipment;

          (ix)   Financial Assets;

          (x)    Fixtures;

          (xi)   General Intangibles, including Payment Intangibles and
                 Software;

                                      -25-
<PAGE>

          (xii) Goods (including all of its Equipment, Fixtures and Inventory),
     and all accessories, additions, attachments, improvements, substitutions
     and replacements thereto and therefor;

          (xiii)  Instruments;

          (xiv)   Intellectual Property;

          (xv)    Inventory;

          (xvi)   Investment Property;

          (xvii)  money (of every jurisdiction whatsoever);

          (xviii) Letter-of-Credit Rights;

          (xix)   Payment Intangibles;

          (xx)    Security Entitlements;

          (xxi)   Software;

          (xxii)  Supporting Obligations;

          (xxiii) Uncertified Securities; and

          (xxiv)  to the extent not included in the foregoing, all other
                  personal property of any kind or description;

together with all books, records, writings, data bases, information and other
similar property relating to, used or useful in connection with, or evidencing,
embodying, incorporating or referring to any of the foregoing, and all Proceeds,
products, rents, profits and returns of and from any of the foregoing.

Notwithstanding the foregoing, in no event shall Borrower be deemed to have
granted to Agent a Lien on or security interest in any Avoidance Action
Recoveries.

     5.2. Other Collateral.

          5.2.1. Commercial Tort Claims. Borrower shall promptly notify Agent in
     writing upon incurring or otherwise obtaining a Commercial Tort Claim after
     the date hereof against any third party and, upon request of Agent,
     promptly enter into an amendment to this Agreement and do such other acts
     or things deemed appropriate by Agent to give Agent a security interest in
     any such Commercial Tort Claim. Borrower represents and warrants that as of
     the date of this Agreement, to its knowledge, it does not possess any
     Commercial Tort Claims.

                                      -26-
<PAGE>

          5.2.2. Other Collateral. Borrower shall promptly notify Agent in
     writing upon acquiring or otherwise obtaining any Collateral after the date
     hereof consisting of Deposit Accounts, Investment Property,
     Letter-of-Credit Rights or Electronic Chattel Paper and, upon the request
     of Agent, promptly execute such other documents, and do such other acts or
     things deemed appropriate by Agent to deliver to Agent control with respect
     to such Collateral; promptly notify Agent in writing upon acquiring or
     otherwise obtaining any Collateral after the date hereof consisting of
     Documents or Instruments and, upon the request of Agent, will promptly
     execute such other documents, and do such other acts or things deemed
     appropriate by Agent to deliver to Agent possession of such Documents which
     are negotiable and Instruments, and, with respect to nonnegotiable
     Documents, to have such nonnegotiable Documents issued in the name of
     Agent; and with respect to Collateral in the possession of a third party,
     other than Certificated Securities and Goods covered by a Document, obtain
     an acknowledgement from the third party that it is holding the Collateral
     subject to the Agent's Lien thereon and subject to Agent's direction
     (except to the extent that such an acknowledgement has previously been
     obtained from such third party).

     5.3. Lien Perfection; Further Assurances.

     Borrower shall execute such UCC-1 financing statements as are required by
the UCC and such other instruments, assignments or documents as are necessary to
perfect Agent's Lien upon any of the Collateral and shall take such other action
as may be required to perfect or to continue the perfection of Agent's Lien upon
the Collateral. Unless prohibited by applicable law, and notwithstanding Section
362 of the Bankruptcy Code, Borrower hereby authorizes Agent to authenticate,
execute and file any such financing statement, including, without limitation,
financing statements that reflect the Collateral as all assets of Borrower or
words of similar effect or as being of an equal or lesser scope, or with greater
or lesser detail, than as set forth in Section 5.1, on Borrower's behalf.
Borrower also hereby ratifies its authorization for Agent to have filed in any
jurisdiction any like financing statements or amendments thereto if filed prior
to the date hereof. The parties agree that a carbon, photographic or other
reproduction of this Agreement shall be sufficient as a financing statement and
may be filed in any appropriate office in lieu thereof. At Agent's request, and,
with respect to Term Loan Primary Collateral, at the request of Term Loan
Representative, Borrower shall also promptly execute or cause to be executed and
shall deliver to Agent any and all documents, instruments and agreements
reasonably deemed necessary by Agent, to give effect to or carry out the terms
or intent of the Loan Documents, all at Borrower's sole cost and expense.

     5.4. Lien on Realty.

     To secure the due and punctual payment and performance of all of the
Obligations, Borrower hereby grants to Agent, for the benefit of itself and
Lenders, a first priority Lien on all of Borrower's real Property, subject to
certain Permitted Liens acceptable to Agent and Lenders. In furtherance of the
foregoing, Borrower shall execute and deliver to Agent, for the benefit of
itself and Lenders, Mortgages on all of its real Property existing on or after
the Filing Date. Each Mortgage shall be executed by Borrower in favor of Agent.
Each

                                      -27-
<PAGE>

Mortgage shall be duly recorded, at Borrower's expense, in each office
where such recording is required to constitute a fully perfected first Lien on
the real Property covered thereby. Borrower shall deliver to Agent, at
Borrower's expense, on or prior to the Effective Date, commitments for mortgagee
title insurance policies for the Hot Mill Real Property, Tandem Mill Real
Property, Tin Mill Real Property and the Additional Real Property, issued by a
title insurance company satisfactory to Agent and Majority Term Lenders, which
policies shall be in form and substance reasonably satisfactory to Agent and
Majority Term Lenders, and shall insure a valid first Lien in favor of Agent,
for the benefit of itself and the Lenders, on the Hot Mill Real Property, Tin
Mill Real Property, Tandem Mill Real property and the Additional Real Property
Parcels, subject only to those exceptions acceptable to Agent and its counsel
and Majority Term Lenders (collectively, the "Title Commitments"). Within 90
days after the Effective Date, Borrower shall deliver to Agent (a) property
drawings showing or depicting the metes and bounds and/or boundaries of the Hot
Mill Real Property, Tin Mill Real Property, Tandem Mill Real Property, and the
Additional Real Property, in form reasonably satisfactory to Agent and Majority
Term Lenders. From time to time after the Effective Date, Borrower shall deliver
such other documents as Agent and its counsel or Majority Term Lenders may
reasonably request relating to the real Property subject to each Mortgage.

                      SECTION 6. COLLATERAL ADMINISTRATION

     6.1. General.

          6.1.1. Location of Collateral. All Collateral, other than Inventory in
     transit, will at all times be kept by Borrower and its Subsidiaries at one
     or more of the business locations set forth in Exhibit 6.1.1 hereto, as
     updated by Borrower providing prior written notice to Agent of any new
     location.

          6.1.2. Insurance of Collateral. Borrower shall maintain and pay for
     insurance upon all Collateral wherever located and with respect to the
     business of Borrower and each of its Subsidiaries, covering casualty,
     hazard, public liability, workers' compensation and such other risks in
     such amounts and with such insurance companies as are reasonably
     satisfactory to Agent and, with respect to the Term Loan Primary
     Collateral, the Majority Term Lenders. Borrower shall deliver certified
     copies of such policies to Agent as promptly as practicable, with
     satisfactory lender's loss payable endorsements, naming Agent as a loss
     payee, assignee or additional insured, as appropriate, as its interest may
     appear, and showing only such other loss payees, assignees and additional
     insureds as are satisfactory to Agent and, with respect to the Term Loan
     Primary Collateral, the Majority Term Lenders. Each policy of insurance or
     endorsement shall contain a clause requiring the insurer to give not less
     than 10 days' prior written notice to Agent in the event of cancellation of
     the policy for nonpayment of premium and not less than 30 days' prior
     written notice to Agent in the event of cancellation of the policy for any
     other reason whatsoever and a clause specifying that the interest of Agent
     shall not be impaired or invalidated by any act or neglect of Borrower, any
     of its Subsidiaries or the owner of the Property or by the occupation of
     the premises for purposes more hazardous than are permitted by said policy.
     Borrower agrees to deliver to Agent and Term Loan Representative,

                                      -28-
<PAGE>

     promptly as rendered, true copies of all reports made in any reporting
     forms to insurance companies and promptly as received, copies of all
     notices it receives pursuant to any such policies or endorsements pursuant
     to this subsection 6.1.2. Agent agrees to use its best efforts to deliver
     to Term Loan Representative copies of any such notices that it receives
     pursuant to this subsection 6.1.2, but shall have no liability for its
     failure to do so.

          Unless Borrower provides Agent with evidence of the insurance coverage
     required by this Agreement, Agent may, and, with respect to the Term Loan
     Primary Collateral, at the direction of Majority Term Lenders, shall,
     purchase insurance at Borrower's expense to protect Agent's and Lenders'
     interests in the Properties of Borrower and its Subsidiaries. This
     insurance may, but need not, protect the interests of Borrower and its
     Subsidiaries. The coverage that Agent purchases may not pay any claim that
     Borrower or any Subsidiary makes or any claim that is made against Borrower
     or any such Subsidiary in connection with said Property. Borrower may later
     cancel any insurance purchased by Agent, but only after providing Agent
     with evidence that Borrower and its Subsidiaries have obtained insurance as
     required by this Agreement. If Agent purchases insurance, Borrower will be
     responsible for the costs of that insurance, including interest and any
     other charges Agent may impose in connection with the placement of
     insurance, until the effective date of the cancellation or expiration of
     the insurance. The costs of the insurance may be added to the Obligations.
     The costs of the insurance may be more than the cost of insurance that
     Borrower and its Subsidiaries may be able to obtain on their own.
     Notwithstanding anything to the contrary contained in this Agreement, if
     Agent or Term Loan Representative purchases insurance in respect of any
     Term Loan Primary Collateral, such amounts shall be deemed to be Collateral
     Protection Loans and Agent or Term Loan Representative, as applicable,
     shall be entitled to obtain reimbursement for such costs out of the first
     proceeds of any subsequent sale, transfer, lease, disposition, loss,
     damage, destruction or condemnation of any Term Loan Primary Collateral,
     prior to any application of such proceeds to any other Obligations.

          6.1.3. Protection of Collateral. Neither Agent nor any Lender shall be
     liable or responsible in any way for the safekeeping of any of the
     Collateral or for any loss or damage thereto (except for reasonable care in
     the custody thereof while any Collateral is in Agent's or any Lender's
     actual possession) or for any diminution in the value thereof, or for any
     act or default of any warehouseman, carrier, forwarding agency, or other
     person whomsoever, but the same shall be at Borrower's sole risk.

          6.1.4. Certain Covenants. Borrower shall (i) not use or permit any
     Collateral to be used unlawfully or in violation of any provision of this
     Agreement or any applicable statute, regulation or ordinance or any policy
     of insurance covering the Collateral; (ii) if Agent gives value to enable
     Borrower to acquire rights in or the use of any Collateral, use such value
     for such purposes; and (iii) except as expressly permitted by this
     Agreement, pay promptly when due all property and other taxes, assessments
     and governmental charges or levies arising on or after the Filing Date
     imposed upon, and all claims arising on or after the Filing Date (including
     claims for

                                      -29-
<PAGE>

     labor, services, materials and supplies) against, the Collateral;
     provided that Borrower shall in any event pay such taxes, assessments,
     charges, levies or claims not later than five days prior to the date of any
     proposed sale under any judgment, writ or warrant of attachment entered or
     filed against Borrower or any of the Collateral as a result of the failure
     to make such payment.

     6.2. Administration of Accounts.

          6.2.1. Records, Schedules and Assignments of Accounts. Borrower shall
     keep accurate and complete records of its Accounts and all payments and
     collections thereon and shall submit to Agent on such periodic basis as
     Agent shall request a sales and collections report for the preceding
     period, in form acceptable to Agent. Weekly, or more frequently as
     requested by Agent, from and after the date hereof, Borrower shall deliver
     to Agent a detailed aged trial balance of all of its Accounts, specifying
     the names, addresses, face values, dates of invoices and due dates for each
     Account Debtor obligated on an Account so listed and separately identifying
     Accounts created prior to, and on or after, the Filing Date ("Schedule of
     Accounts"), and upon Agent's request therefor, copies of proof of delivery
     and the original copy of all documents, including, without limitation,
     repayment histories and present status reports relating to the Accounts so
     scheduled and such other matters and information relating to the status of
     then existing Accounts as Agent shall request. In addition, if Accounts in
     an aggregate face amount in excess of $750,000 become ineligible because
     they fall within one of the specified categories of ineligibility set forth
     in the definition of Eligible Accounts or otherwise established by Agent as
     provided therein, Borrower shall notify Agent of such occurrence on the
     first Business Day following Borrower's knowledge of such occurrence and
     the Borrowing Base shall thereupon be adjusted to reflect such occurrence.
     If requested by Agent, Borrower shall execute and deliver to Agent formal
     written assignments of all of its Accounts weekly or daily, which shall
     include all Accounts that have been created since the date of the last
     assignment, together with copies of invoices or invoice registers related
     thereto.

          6.2.2. Discounts, Allowances, Disputes. If Borrower grants any
     discounts, allowances or credits that are not shown on the face of the
     invoice for the Account involved, Borrower shall report such discounts,
     allowances or credits, as the case may be, to Agent as part of the next
     required Schedule of Accounts. If any amounts due and owing in excess of
     $750,000 are in dispute between Borrower and any Account Debtor, Borrower
     shall provide Agent with written notice thereof at the time of submission
     of the next Schedule of Accounts, explaining in detail the reason for the
     dispute, all claims related thereto and the amount in controversy.

          6.2.3. Account Verification. Any of Agent's officers, employees or
     agents shall have the right, at any time or times hereafter, in the name of
     Agent, any designee of Agent or Borrower, to verify the validity, amount or
     any other matter relating to any Accounts by mail, telephone, electronic
     communication or otherwise. Borrower shall cooperate fully with Agent in an
     effort to facilitate and promptly conclude any such verification process.

                                      -30-
<PAGE>

          6.2.4. Maintenance of Dominion Account. Borrower shall maintain a
     Dominion Account or Accounts pursuant to lockbox and blocked account
     arrangements acceptable to Agent. All of such lockbox and blocked account
     arrangements will be maintained with Bank. Borrower shall issue to any such
     banks an irrevocable letter of instruction directing such banks to deposit
     all payments or other remittances received in the lockbox and blocked
     accounts to the Dominion Account for application on account of the
     Obligations as provided in subsection 3.2.1. All funds deposited in any
     Dominion Account shall immediately become the funds of Agent, for the
     ratable benefit of Lenders as provided in this Agreement (but only for
     purposes of application on account of the Obligations or to stand as cash
     Collateral for the Obligations, each as provided hereunder), and Borrower
     shall obtain the agreement by such banks in favor of Agent to waive any
     recoupment, setoff rights, and any security interest in, or against, the
     funds so deposited. Agent assumes no responsibility for such lockbox and
     blocked account arrangements, including, without limitation, any claim of
     accord and satisfaction or release with respect to deposits accepted by any
     bank thereunder.

          6.2.5. Collection of Accounts, Proceeds of Collateral. Borrower agrees
     that all invoices rendered and other requests made by Borrower for payment
     in respect of Accounts shall contain a written statement directing payment
     in respect of such Accounts to be paid to a lockbox established pursuant to
     subsection 6.2.4. To expedite collection, Borrower shall endeavor in the
     first instance to make collection of its Accounts for Agent. All
     remittances received by Borrower on account of Accounts, together with the
     proceeds of any other Collateral, shall be held as Agent's property, for
     its benefit and the benefit of Lenders as provided in this Agreement, by
     Borrower as trustee of an express trust for Agent's benefit and Borrower
     shall immediately deposit same in kind in the Dominion Account. Agent
     retains the right at all times after the occurrence and during the
     continuance of a Default or an Event of Default to (i) notify Account
     Debtors that Borrower's Accounts have been assigned to Agent and to collect
     Borrower's Accounts directly in its own name, or in the name of Agent's
     agent, and to charge the collection costs and expenses, including
     attorneys' fees, to Borrower and (ii) to adjust, settle or compromise the
     amount or payment thereof, in the same manner and to the extent Borrower
     might have done.

          6.2.6. Taxes. If an Account includes a charge for any tax payable to
     any governmental taxing authority, Agent is authorized, in its sole
     discretion, to pay the amount thereof to the proper taxing authority for
     the account of Borrower and to charge Borrower therefor, except for taxes
     that (i) are being actively contested in good faith and by appropriate
     proceedings and with respect to which Borrower maintains reasonable
     reserves on its books therefor and (ii) would not reasonably be expected to
     result in any Lien other than a Permitted Lien. In no event shall Agent or
     any Lender be liable for any taxes to any governmental taxing authority
     that may be due by Borrower.

                                      -31-
<PAGE>

     6.3. Administration of Inventory.

     Borrower shall keep records of its Inventory which records shall be
complete and accurate and complete in all material respects. Borrower shall
furnish to Agent Inventory reports monthly (on or before the 15th day of the
following month), or more frequently as requested by Agent, which reports will
be in such format and detail as Agent shall request, shall include a current
list of all locations of Borrower's Inventory and shall separately identify
Inventory acquired prior to, and on or after, the Filing Date. Borrower shall
conduct a physical inventory no less frequently than annually and shall provide
to Agent a report based on each such physical inventory promptly thereafter,
together with such supporting information as Agent shall reasonably request.

     6.4. Records and Schedules of Equipment.

     Borrower shall keep records of its Equipment which shall be complete and
accurate in all material respects itemizing and describing the kind, type,
quality, quantity and book value of its Equipment and all dispositions made in
accordance with subsection 8.2.9 hereof, and Borrower shall, and shall cause
each of its Subsidiaries to, furnish Agent with a current schedule containing
the foregoing information on at least an annual basis and more often if
reasonably requested by Agent. Promptly after the request therefor by Agent,
Borrower shall deliver to Agent any and all evidence of ownership, if any, of
any of its Equipment.

     6.5. Payment of Charges.

     All amounts chargeable to Borrower under Section 6 hereof shall be
Obligations secured by all of the Collateral, shall be payable on demand and
shall bear interest from the date such advance was made until paid in full at
the rate applicable to Base Rate Portions from time to time (including pursuant
to subsection 2.1.2).

                    SECTION 7. REPRESENTATIONS AND WARRANTIES

     7.1. General Representations and Warranties.

     To induce Agent and each Lender to enter into this Agreement and to make
advances hereunder, Borrower warrants, represents and covenants to Agent and
each Lender that:

          7.1.1. Qualification. Borrower and each of its Subsidiaries is a
     corporation, limited partnership or limited liability company duly
     organized, validly existing and in good standing under the laws of the
     jurisdiction of its incorporation or organization. Borrower and each of its
     Subsidiaries is duly qualified and is authorized to do business and is in
     good standing as a foreign limited liability company, limited partnership
     or corporation, as applicable, in each state or jurisdiction listed on
     Exhibit 7.1.1 hereto, as updated by Borrower providing prompt written
     notice to Agent of each new state or jurisdiction, and in all other states
     and jurisdictions in which the failure of Borrower or any of its
     Subsidiaries to be so qualified could reasonably be expected to have a
     Material Adverse Effect.

                                      -32-
<PAGE>

          7.1.2. Power and Authority. Subject to the approval of the Bankruptcy
     Court, Borrower and each of its Subsidiaries is duly authorized and
     empowered to enter into, execute, deliver and perform this Agreement and
     each of the other Loan Documents to which it is a party. The execution,
     delivery and performance of this Agreement and each of the other Loan
     Documents have been duly authorized by all necessary corporate or other
     relevant action and do not and will not (i) require any consent or approval
     of the shareholders of Borrower or any of the shareholders, partners or
     members, as the case may be, of any Subsidiary of Borrower; (ii) contravene
     Borrower's or any of its Subsidiaries' charter, articles or certificate of
     incorporation, partnership agreement, certificate of formation, by-laws,
     limited liability agreement, operating agreement or other organizational
     documents (as the case may be); (iii) upon entry of the applicable
     Financing Orders, violate, or cause Borrower or any of its Subsidiaries to
     be in default under, any provision of any law, rule, regulation, order,
     writ, judgment, injunction, decree, determination or award in effect having
     applicability to Borrower or any of its Subsidiaries, the violation of
     which could reasonably be expected to have a Material Adverse Effect; (iv)
     result in a breach of or constitute a default under any indenture or loan
     or credit agreement or any other agreement, lease or instrument to which
     Borrower or any of its Subsidiaries is a party or by which it or its
     Properties may be bound or affected, the breach of or default under which
     could reasonably be expected to have a Material Adverse Effect; (v) result
     in, or require, the creation or imposition of any Lien (other than
     Permitted Liens) upon or with respect to any of the Properties now owned or
     hereafter acquired by Borrower or any of its Subsidiaries; or (vi) require
     any permit, license, registration, authorization, consent, order or consent
     decree of or from, or notice to, any governmental or regulatory, body
     agency or commission, whether federal, state, local or foreign, except the
     Financing Orders.

          7.1.3. Legally Enforceable Agreement. This Agreement is, and each of
     the other Loan Documents when delivered under this Agreement will be, a
     legal, valid and binding obligation of Borrower and each of its
     Subsidiaries party thereto, enforceable against it in accordance with its
     respective terms.

          7.1.4. Capital Structure. Exhibit 7.1.4 hereto states (i) as of the
     date hereof, the percentage of the Voting Stock of each of Borrower's
     Subsidiaries owned by Borrower, (ii) as of the date hereof, the name of
     Borrower's and each of its Subsidiaries' corporate or joint venture
     relationships and the nature of the relationship, (iii) as of the date
     hereof, the number, nature and holder of all outstanding Securities of each
     Subsidiary of Borrower and (iv) as of the most recent practicable date
     prior to the date hereof, the number of authorized and issued Securities of
     Borrower. Borrower has good title to all of the Securities it purports to
     own of each of such Subsidiaries, free and clear in each case of any Lien
     other than Permitted Liens. All of the Securities of the Borrower and each
     of its Subsidiaries have been duly issued and are fully paid and
     non-assessable. Except as set forth in the financial statements referred to
     in subsection 7.1.10, or in connection with the issuance of the Series D
     Preferred Stock, Borrower's reports and proxy statements filed pursuant to
     the

                                      -33-
<PAGE>

     Exchange Act, as of the date hereof, there are no outstanding options to
     purchase, or any rights or warrants to subscribe for, or any commitments
     or agreements to issue or sell any Securities or obligations convertible
     into, or any powers of attorney relating to any Securities of Borrower or
     any of its Subsidiaries. Except as set forth on Exhibit 7.1.4, as of the
     date hereof, there are no outstanding agreements or instruments binding
     upon any of Borrower's or any of its Subsidiaries' partners, members or
     shareholders, as the case may be, relating to the ownership of its
     Securities and that have not been disclosed in filings of any such Person
     made under the Exchange Act or are otherwise known to Borrower.

          7.1.5. Names; Organization. Neither Borrower nor any of its
     Subsidiaries has been known as or has used any legal, fictitious or trade
     names except those listed on Exhibit 7.1.5 hereto. Except as set forth on
     Exhibit 7.1.5, neither Borrower nor any of its Subsidiaries has been the
     surviving entity of a merger or consolidation or has acquired all or
     substantially all of the assets of any Person. Each of Borrower's and each
     of its Subsidiaries' state(s) of incorporation or organization, Type of
     Organization and Organizational I.D. Number is set forth on Exhibit 7.1.5,
     as updated by Borrower providing prior written notice to Agent pursuant to
     subsection 8.2.18 of any change therein. The exact legal name of Borrower
     and each of its Subsidiaries is set forth on Exhibit 7.1.5, as updated by
     Borrower providing prior written notice to Agent pursuant to subsection
     8.2.18 of any change therein.

          7.1.6. Business Locations; Agent for Process. Each of Borrower's and
     each of its Subsidiary's principal executive office, location of books and
     records and other places of business are as listed on Exhibit 6.1.1 hereto
     as updated from time to time by Borrower in accordance with the provisions
     of subsection 6.1.1. During the preceding one-year period, neither Borrower
     nor any of its Subsidiaries has had an office, place of business or agent
     for service of process, other than as listed on Exhibit 6.1.1. All tangible
     Collateral is and will at all times be kept by Borrower and its
     Subsidiaries in accordance with subsection 6.1.1. Except as shown on
     Exhibit 6.1.1, as of the date hereof, no Inventory is stored with a bailee,
     distributor, warehouseman, processor or similar party, nor is any Inventory
     consigned to any Person.

          7.1.7. Title to Properties; Priority of Liens. Other than Property
     disposed of in compliance with subsection 8.2.9, Borrower and each of its
     Subsidiaries has good and marketable title to, or valid and subsisting
     leasehold interests in, all of its real Property, and good title to all of
     the Collateral and all of its other Property, in each case, free and clear
     of all Liens except Permitted Liens. The Liens granted to Agent under
     Section 5 hereof are first priority Liens, subject only to Permitted Liens.

          7.1.8. Accounts. Agent may rely, in determining which Accounts
     relating to the sale or lease of goods or the provision of services are
     Eligible Accounts, on all statements and representations made by Borrower
     with respect to any such Account or Accounts. With respect to each of
     Borrower's Accounts, whether or not such Account is an Eligible Account,
     unless otherwise disclosed to Agent in writing:

                                      -34-
<PAGE>

               (i) It is genuine and in all respects what it purports to be, and
          it is not evidenced by a judgment;

               (ii) It arises out of a completed, bona fide sale and delivery of
          goods or rendition of services by Borrower, in the ordinary course of
          its business and in accordance with the terms and conditions of all
          purchase orders, contracts or other documents relating thereto and
          forming a part of the contract between Borrower and the Account
          Debtor;

               (iii) It is for a liquidated amount maturing as stated in the
          duplicate invoice covering such sale or rendition of services, a copy
          of which has been furnished or is available to Agent;

               (iv) To the best of Borrower's knowledge, there are no facts,
          events or occurrences which in any way impair the validity or
          enforceability of any Accounts or tend to reduce the amount payable
          thereunder from the face amount of the invoice and statements
          delivered or made available to Agent with respect thereto;

               (v) To the best of Borrower's knowledge, the Account Debtor
          thereunder (1) had the capacity to contract at the time any contract
          or other document giving rise to the Account was executed and (2) such
          Account Debtor is Solvent; and

               (vi) To the best of Borrower's knowledge, there are no
          proceedings or actions which are threatened or pending against the
          Account Debtor thereunder which could reasonably be expected to result
          in any material adverse change in such Account Debtor's financial
          condition or the collectibility of such Account.

          7.1.9. Equipment. The Equipment and Fixtures of Borrower and its
     Subsidiaries is in satisfactory operating condition and repair for the
     purposes it is to be used, and all necessary replacements of and repairs
     thereto, consistent with Borrower's established practices prior to the date
     hereof, shall be made so that the operating efficiency thereof shall be
     maintained and preserved, reasonable wear and tear excepted.

          7.1.10. Financial Statements; Fiscal Year. The audited Consolidated
     balance sheets of Borrower and its Subsidiaries (including the accounts of
     all Subsidiaries of Borrower for the respective periods during which a
     Subsidiary relationship existed) as of December 31, 2002, and the related
     statements of income, changes in shareholder's equity, and changes in
     financial position for the periods ended on such dates, have been prepared
     in accordance with GAAP (subject, in the case of unaudited financial
     statements, to year-end adjustments, the absence of required footnotes and
     presentation of Subsidiary interests), and present fairly in all material
     respects the financial positions of Borrower and such Persons, taken as a

                                      -35-
<PAGE>

     whole, at such dates and the results of Borrower's and such Persons'
     operations, taken as a whole, for such periods. As of the date hereof, the
     fiscal year of Borrower and each of its Subsidiaries ends on December 31st
     of each year.

          7.1.11. Full Disclosure. The financial statements referred to in
     subsection 7.1.10 hereof do not, nor does this Agreement or any other
     document, certificate or written statement furnished to Agent or any Lender
     by or on behalf of Borrower for use in connection with the transactions
     contemplated by this Agreement contain, as of the respective date any such
     document, certificate or statement was given or made, any untrue statement
     of a material fact or omit a material fact necessary to make the statements
     contained therein or herein not misleading. There is no fact which Borrower
     has failed to disclose to Agent or any Lender in writing which could
     reasonably be expected to have a Material Adverse Effect.

          7.1.12. Final Budget; Subsequent Budgets. The Final Budget and each of
     the Subsequent Budgets, at the time prepared and delivered to Agent, were
     prepared by Borrower's financial personnel and represent the good faith
     belief of such Persons at such time as to the probable course of Borrower's
     business and financial affairs, over the periods shown therein, subject to
     the assumptions stated therein.

          7.1.13. Surety Obligations. Except as set forth on Exhibit 7.1.13, as
     of the date hereof, neither Borrower nor any of its Subsidiaries is
     obligated as surety or indemnitor under any surety or similar bond or other
     contract or has issued or entered into any agreement to assure payment,
     performance or completion of performance of any undertaking or obligation
     of any Person.

          7.1.14. Taxes. Borrower's federal tax identification number is
     06-1075442. The federal tax identification number of each Subsidiary of
     Borrower is shown on Exhibit 7.1.14 hereto. Borrower and each of its
     Subsidiaries has filed all federal, state and local tax returns and other
     reports relating to taxes it is required by law to file, and has paid, or
     made provision for the payment of, all taxes, assessments, fees, levies and
     other governmental charges upon it, its income and Properties as and when
     such taxes, assessments, fees, levies and charges are due and payable,
     unless and to the extent any thereof are being actively contested in good
     faith and by appropriate proceedings and Borrower and each of its
     Subsidiaries maintains reasonable reserves on its books therefor.

          7.1.15. Subsidiaries. None of Borrower's Subsidiaries other than FW,
     WVH, and Steel Strapping, has material assets, liabilities, contingent
     liabilities or obligations, other than de minimis assets of less than
     $10,000. As of the date hereof, FW is a wholly-owned Subsidiary of the
     Borrower. As of the date hereof, FW has no assets, liabilities, contingent
     liabilities or obligations, other than those assets acquired and
     liabilities or obligations incurred by FW pursuant to the MABCO Lease and
     related agreements, instruments and documents.

                                      -36-
<PAGE>

          7.1.16. Patents, Trademarks, Copyrights and Licenses. Borrower and
     each of its Subsidiaries owns, possesses or licenses or has the right to
     use all the patents, trademarks, service marks, trade names, copyrights,
     licenses and other Intellectual Property reasonably necessary for the
     conduct of its business, without any known conflict with the rights of
     others, except for such conflicts as could not reasonably be expected to
     have a Material Adverse Effect. All such patents, trademarks, service
     marks, tradenames, copyrights, licenses, and other similar rights are
     listed on Exhibit 7.1.16 hereto, as updated by Borrower providing written
     notice to Agent of the change therein at the end of each fiscal year
     hereafter. No claim has been asserted to Borrower or any of its
     Subsidiaries which is currently pending that their use of their
     Intellectual Property or the conduct of their business does or may infringe
     upon the Intellectual Property rights of any third party, except for such
     claims which, if adversely determined, could not reasonably be expected to
     have a Material Adverse Effect. To the knowledge of Borrower and except as
     set forth on Exhibit 7.1.16 hereto, as of the date hereof, no Person is
     engaging in any activity that infringes in any material respect upon
     Borrower's or any of its Subsidiaries' material Intellectual Property.
     Except as listed on Exhibit 7.1.16 and except as could not reasonably be
     expected to have a Material Adverse Effect, (i) neither Borrower nor any of
     its Subsidiaries is in breach of, or default under, any term of any license
     or sublicense with respect to any of its Intellectual Property, except for
     a breach caused by the Bankruptcy Case and (ii) to the knowledge of
     Borrower, no other party to such license or sublicense is in breach thereof
     or default thereunder, and such license is valid and enforceable. As of the
     date hereof, there is no Intellectual Property that is material to the
     business of Borrower or any of its Subsidiaries.

          7.1.17. Governmental Consents. Borrower and each of its Subsidiaries
     has, and is in good standing with respect to, all governmental consents,
     approvals, licenses, authorizations, permits, certificates, inspections and
     franchises necessary to continue to conduct its business as heretofore or
     proposed to be conducted by it and to own or lease and operate its
     Properties as now owned or leased by it, except where the failure to
     possess or so maintain such rights could not reasonably be expected to have
     a Material Adverse Effect.

          7.1.18. Compliance with Laws. Borrower and each of its Subsidiaries
     has duly complied, and its Properties, business operations and leaseholds
     are in compliance with, the provisions of all federal, state and local
     laws, rules and regulations applicable to Borrower or such Subsidiary, as
     applicable, its Properties or the conduct of its business, except for such
     non-compliance as could not reasonably be expected to have a Material
     Adverse Effect, and there have been no citations, notices or orders of
     noncompliance issued to Borrower or any of its Subsidiaries under any such
     law, rule or regulation, except where such noncompliance could not
     reasonably be expected to have a Material Adverse Effect. Borrower and each
     of its Subsidiaries has established and maintains an adequate monitoring
     system to insure that it remains in compliance in all material respects
     with all federal, state and local

                                      -37-
<PAGE>

     rules, laws and regulations applicable to it. No Inventory has been
     produced in violation of the Fair Labor Standards Act (29 U.S.C. Section
     201 et seq.), as amended.

          7.1.19. Restrictions. Neither Borrower nor any of its Subsidiaries is
     a party or subject to any contract or agreement which restricts its right
     or ability to incur Indebtedness, other than as set forth on Exhibit 7.1.19
     hereto, other than the Exchange Indentures, none of which prohibit the
     execution of or compliance with this Agreement or the other Loan Documents
     by Borrower or any of its Subsidiaries, as applicable.

          7.1.20. Litigation. Except as set forth on Exhibit 7.1.20 hereto,
     there are no actions, suits, proceedings or investigations pending, or to
     the knowledge of Borrower, threatened, against or affecting Borrower or any
     of its Subsidiaries, or the business, operations, Properties, prospects,
     profits or condition of Borrower or any of its Subsidiaries which, singly
     or in the aggregate, could reasonably be expected to have a Material
     Adverse Effect. Neither Borrower nor any of its Subsidiaries is in default
     with respect to any order, writ, injunction, judgment, decree or rule of
     any court, governmental authority or arbitration board or tribunal, which,
     singly or in the aggregate, could reasonably be expected to have a Material
     Adverse Effect.

          7.1.21. No Defaults. Other than the filing of the Bankruptcy Case, no
     event has occurred and no condition exists which would, upon the Effective
     Date, constitute a Default or an Event of Default. Neither Borrower nor any
     of its Subsidiaries is in default in (and no event has occurred and no
     condition exists which constitutes, or which the passage of time or the
     giving of notice or both would constitute, a default in) the payment of any
     Indebtedness to any Person for Money Borrowed in excess of $5,000,000
     (other than solely as a result of the Bankruptcy Case) or under any other
     agreement or contract (other than solely as a result of the Bankruptcy
     Case) a default under which could reasonably be expected to have a Material
     Adverse Effect. Except as a result of the filing of the Bankruptcy Case,
     neither Borrower nor any of its Subsidiaries is in default in the
     performance, observance or fulfillment of any of the obligations, covenants
     or conditions contained in any of its Contractual Obligations, and no
     condition exists that, with the giving of notice or the lapse of time or
     both, would constitute such a default, except where the consequences,
     direct or indirect, of such default or defaults, if any, could not
     reasonably be expected to result in a Material Adverse Effect.

          7.1.22. Leases. Exhibit 7.1.22 hereto is a complete listing of all
     capitalized and operating personal property leases of Borrower and its
     Subsidiaries and all real property leases of Borrower and its Subsidiaries
     in each case involving annual payments in excess of $1,000,000, as updated
     by Borrower providing prompt written notice to Agent of each new such
     lease. Borrower and each of its Subsidiaries is in compliance with all of
     the terms of each of its respective capitalized and operating leases,
     except where the failure to so comply could not reasonably be expected to
     have a Material Adverse Effect.

                                      -38-
<PAGE>

          7.1.23. Pension Plans. Except as disclosed on Exhibit 7.1.23 hereto,
     as updated by Borrower providing prompt written notice to Agent of each new
     Plan, neither Borrower nor any of its Subsidiaries sponsors, maintains,
     contributes to, or at any time in the preceding six years has sponsored,
     maintained or been required to contribute to, any Plan. Borrower and each
     of its Subsidiaries are in compliance with the requirements of ERISA and
     the Code with respect to each Plan, except as disclosed on Exhibit 7.1.23
     and where the failure to so comply could not reasonably be expected to have
     a Material Adverse Effect. Except as disclosed on Exhibit 7.1.23, no Plan
     has an "accumulated funding deficiency" (as defined in Section 412 of the
     Code or Section 302 of ERISA), whether or not waived. Except as disclosed
     on Exhibit 8.2.5, no Lien exists on any Property of the Borrower or any
     Subsidiary as a result of, or with respect to, any Plan. No fact or
     situation that could reasonably be expected to result in a material adverse
     change in the financial condition of Borrower and its Subsidiaries exists
     in connection with any Plan. Neither Borrower nor any of its Subsidiaries
     has any outstanding liability under Title IV of ERISA, except for premiums
     due the PBGC. Neither Borrower nor any of its Subsidiaries contributes to,
     or at any time in the preceding six years has contributed to or been
     obligated to contribute to, or has any withdrawal liability in connection
     with, a Multiemployer Plan.

          7.1.24. Trade Relations. There exists no actual or, to Borrower's
     knowledge, threatened termination, cancellation or limitation of, or any
     modification or change in, the business relationship between Borrower or
     any of its Subsidiaries and any customer or any group of customers whose
     purchases individually or in the aggregate are material to the business of
     Borrower and its Subsidiaries, or with any material supplier, except in
     each case, or in the aggregate, where the same could not reasonably be
     expected to have a Material Adverse Effect, and there exists no present
     condition or state of facts or circumstances (other than solely as a result
     of the Bankruptcy Case), to Borrower's knowledge, which would prevent
     Borrower or any of its Subsidiaries from conducting such business after the
     consummation of the transactions contemplated by this Agreement in
     substantially the same manner in which it has heretofore been conducted.

          7.1.25. Labor Relations. Except as described on Exhibit 7.1.25 hereto,
     (a) as of the date hereof, there is no collective bargaining agreement
     covering employees of Borrower or any of its Subsidiaries, (b) as of the
     date hereof, no such collective bargaining agreement or other labor
     contract is scheduled to expire during the term of this Agreement, (c)
     there are no material grievances, disputes or controversies with any union
     or any other organization of Borrower's or any of its Subsidiaries'
     employees, or any pending or, to the best of Borrower's knowledge,
     threatened strikes, work stoppages, in each case except those that could
     not reasonably be expected to have a Material Adverse Effect and (d) as of
     the date hereof, substantially all of the eligible employees of Borrower
     and each of its Subsidiaries are members of the collective bargaining units
     listed on Exhibit 7.1.25 hereto.

                                      -39-
<PAGE>

          7.1.26. Third Party Property. Exhibit 7.1.26, as updated by Borrower
     providing prompt written notice thereof to Agent, is a complete listing of
     all Persons that are not Affiliates of Borrower and that have Property from
     time to time located on Borrower's or any Subsidiary's premises for storage
     and/or processing (including pursuant to a lease or supply arrangement
     between such Person and Borrower or any Subsidiary), and includes a
     description of the nature of the relationship between Borrower or its
     Subsidiary and such Person with respect to such Property and a listing of
     any existing agreements relevant thereto. If requested by Agent, in its
     reasonable judgment, each such Person has delivered to Agent a letter
     confirming the nature of such relationship with Borrower. All such Property
     is readily identifiable as Property of such Person and not of Borrower or
     its Subsidiary, and is physically segregated from the Property of Borrower
     or its Subsidiary located on the Premises.

          7.1.27. Joint Venture Liabilities. Neither Borrower nor any of its
     Subsidiaries has any obligation or commitment to make any loans, advances
     or capital contributions in connection with any joint venture arrangement
     to which Borrower or such Subsidiary is a party.

          7.1.28. Project Assets. The Project Assets are and will remain located
     physically separate from the Tandem Mill Collateral, the Tin Mill
     Collateral and the Hot Mill Collateral, except for certain effluent
     collection and piping systems connected to the real Property improvements
     included in the Hot Mill Collateral. Borrower has an effective right
     pursuant to an existing easement to make use of such connected piping
     systems, as well as the balance of the Project Assets, for the disposal of
     effluents from all of its facilities.

          7.1.29. Fee Properties. As of the Effective Date, Exhibit 5.4 attached
     hereto contains a true, accurate and complete list of all fee interests of
     Borrower and its Subsidiaries in any real Property.

          7.1.30. Governmental Regulation. Neither Borrower nor any of its
     Subsidiaries is subject to regulation under the Public Utility Holding
     Company Act of 1935, the Federal Power Act, the Interstate Commerce Act or
     the Investment Company Act of 1940 or under any other federal or state
     statute or regulation which may limit its ability to incur Indebtedness or
     which may otherwise render all or any portion of the Obligations
     unenforceable.

          7.1.31. Securities Activities. Neither Borrower nor any of its
     Subsidiaries is engaged principally, or as one of its important activities,
     in the business of extending credit for the purpose of purchasing or
     carrying any Margin Stock. Following application of the proceeds of each
     Loan, not more than 25% of the value of the assets (either of Borrower only
     or of Borrower and its Subsidiaries on a consolidated basis) subject to the
     provisions of subsection 8.2.5 or 8.2.9 or subject to any restriction
     contained in any agreement or instrument, between Borrower and any Lender
     or any Affiliate of any Lender, relating to Indebtedness, will be Margin
     Stock.

                                      -40-
<PAGE>

          7.1.32. Certain Fees. No broker's or finder's fee or commission will
     be payable with respect to this Agreement or any of the financing
     transactions contemplated hereby, and Borrower hereby indemnifies Lenders
     against, and agrees that it will hold Lenders harmless from, any claim,
     demand or liability for any such broker's or finder's fees alleged to have
     been incurred in connection herewith or therewith and any expenses
     (including reasonable fees, expenses and disbursements of counsel) arising
     in connection with any such claim, demand or liability.

          7.1.33. Matters Relating to Collateral.

               (a) The entry of the applicable Financing Order is effective to
          create in favor of Agent, for the benefit of Lenders, as security for
          the Obligations, a valid first priority Lien on all of the Collateral,
          subject only to the Liens described in the applicable Financing Order
          as being senior to the Obligations.

               (b) Except for the Financing Orders, no authorization, approval
          or other action by, and no notice to or filing with, any government
          authority is required for either (i) the pledge or grant by the
          Borrower or any or its Subsidiaries of the Liens purported to be
          created in favor of Agent pursuant to this Agreement or any of the
          Security Documents or (ii) the exercise by Agent of any rights or
          remedies in respect of any Collateral (whether specifically granted or
          created pursuant to this Agreement, any of the Security Documents or
          created or provided for by applicable law), except for filings or
          recordings contemplated by Section 5.3 and except as may be required,
          in connection with the disposition of any pledged Collateral, by laws
          generally affecting the offering and sale of securities.

               (c) Except such as may have been filed in favor of Agent as
          contemplated by Section 5.3 and the Liens described in subsections
          8.2.5(v), (viii) and (xi), (i) no effective UCC financing statement,
          fixture filing or other instrument similar in effect covering all or
          any part of the Collateral is on file in any filing or recording
          office, including the items listed in the "Appraisal Document" section
          of the Appraisal and (ii) no effective filing covering all or any part
          of the Intellectual Property Collateral is on file in the United
          States Patent and Trademark Office. Each of the items of Collateral
          listed in the "Appraisal Document" section of the Appraisal is free
          and clear of any Lien, except for Permitted Liens.

               (d) Margin Regulations. The pledge of the pledged Collateral
          pursuant to this Agreement and the Security Documents does not violate
          Regulation T, U or X of the Board of Governors of the Federal Reserve
          System.

               (e) Information Regarding Collateral. All information supplied to
          Agent by or on behalf of the Borrower and any of its Subsidiaries with
          respect

                                      -41-
<PAGE>

          to any of the Collateral (in each case taken as a whole with
          respect to any particular Collateral) is accurate and complete in all
          material respects.

               7.1.34. Environmental Protection. No event or condition has
          occurred or is occurring with respect to the Borrower relating to any
          Environmental Law, any Hazardous Materials, or any investigation,
          notice, notice of violation, claim, action, suit, proceeding, demand,
          abatement order or other order or directive by any governmental
          authority or any other person relating to any Environmental Law or
          Hazardous Materials, which individually or in the aggregate has had or
          could reasonably be expected to have a Material Adverse Effect.
          Compliance with all requirements under current Environmental Laws or
          pending federal and/or state environmental laws and regulations, will
          not, individually or in the aggregate, have a reasonable possibility
          of giving rise to a Material Adverse Effect.

               7.1.35. Senior Indebtedness. The Obligations either (a)
          constitute senior indebtedness that is entitled to the benefits of the
          subordination provisions of the Exchange Intercreditor Agreement
          relating to the indebtedness under the Exchange Note Indenture and the
          Exchange Bond Indenture or (b) are senior in priority to all such
          Indebtedness pursuant to the terms of the applicable Financing Order.

               7.1.36. Prepetition Loan Documents. As of the Filing Date, the
          aggregate amount of the Prepetition Obligations is $161,015,375.52.
          For purposes of Sections 506(c) and 507(b) of the Bankruptcy Code, as
          of the Filing Date, the Prepetition Obligations are oversecured.

     7.2. Continuous Nature of Representations and Warranties.

     Each representation and warranty contained in this Agreement and the other
Loan Documents shall be continuous in nature and shall remain accurate, complete
and not misleading at all times during the term of this Agreement, except where
any such representation or warranty is given as of a specific date. Without
limiting the generality of the foregoing, each Loan request made or deemed made
pursuant to subsection 3.1.1 hereof shall constitute Borrower's reaffirmation,
as of the date of each such loan request, of each representation, warranty or
other statement made or furnished to Agent or any Lender by or on behalf of
Borrower, any Subsidiary of Borrower, or any Guarantor in this Agreement, any of
the other Loan Documents, or any instrument, certificate or financial statement
furnished in compliance with or in reference thereto.

     7.3. Survival of Representations and Warranties.

     All representations and warranties of Borrower contained in this Agreement
or any of the other Loan Documents shall survive the execution, delivery and
acceptance thereof by Agent and each Lender and the parties thereto and the
closing of the transactions described therein or related thereto.

                                      -42-
<PAGE>

                 SECTION 8. COVENANTS AND CONTINUING AGREEMENTS

     8.1. Affirmative Covenants.

     During the Term, and thereafter for so long as there are any Obligations
outstanding, Borrower covenants that, unless otherwise consented to by Majority
Lenders, in writing, it shall:

          8.1.1. Visits and Inspections; Lender Meeting. Permit (i)
     representatives of Agent and Term Loan Representative, and during the
     continuation of any Default or Event of Default any Lender, from time to
     time, as often as may be reasonably requested, but only during normal
     business hours, to visit and inspect the Properties of Borrower and each of
     its Subsidiaries, inspect, audit and make extracts from its books and
     records, and discuss with its officers, its employees and its independent
     accountants, Borrower's and each of its Subsidiaries' business, assets,
     liabilities, financial condition, business prospects and results of
     operations and (ii) appraisers engaged pursuant to Section 2.10 (whether or
     not personnel of Agent), from time to time, as often as may be reasonably
     requested, but only during normal business hours, to visit and inspect the
     Properties of Borrower and each of its Subsidiaries for the purpose of
     completing appraisals pursuant to Section 2.10. Agent, if no Default or
     Event of Default then exists, shall give Borrower reasonable prior notice
     of any such inspection, audit or appraisal visit. Agent will perform at
     least one such Collateral audit every two months unless otherwise agreed by
     all Revolving Lenders. Without limiting the foregoing, Borrower will
     participate and will cause its key management personnel to participate in
     periodic meetings with Agent and Lenders, which meetings shall be held at
     such times and such places as may be reasonably requested by Agent.

          8.1.2. Notices. Promptly notify Agent in writing of the occurrence of
     any Default or Event of Default or any event or the existence of any fact
     which renders any representation or warranty in this Agreement or any of
     the other Loan Documents inaccurate, incomplete or misleading in any
     material respect as of the date made or remade. In addition, Borrower
     agrees to provide Agent with prompt written notice of any change in the
     information disclosed in any Exhibit hereto, in each case after giving
     effect to the materiality limits and Material Adverse Effect qualifications
     contained therein.

          8.1.3. Financial Statements. Keep, and cause each of its Subsidiaries
     to keep, adequate records and books of account with respect to its business
     activities in which proper entries are made in accordance with customary
     accounting practices reflecting all its financial transactions; and cause
     to be prepared and furnished to Agent and each Lender, the following, all
     to be prepared in accordance with GAAP applied on a consistent basis,
     unless Borrower's certified public accountants concur in any change therein
     and such change is disclosed to Agent and is consistent with GAAP:

                                      -43-
<PAGE>

               (i) not later than 90 days after the close of each fiscal year of
          Borrower, unqualified (except for a qualification for a change in
          accounting principles with which the accountant concurs and except for
          a going concern qualification contained in such financial statements),
          audited financial statements of Borrower and its Subsidiaries as of
          the end of such year, on a Consolidated basis, certified by a firm of
          independent certified public accountants of recognized standing
          selected by Borrower but acceptable to Agent and, within a reasonable
          time thereafter a copy of any management letter issued in connection
          therewith;

               (ii) not later than 30 days after the end of each month
          hereafter, including the last month of Borrower's fiscal year,
          unaudited interim financial statements of Borrower and its
          Subsidiaries as of the end of such month and of the portion of the
          fiscal year then elapsed, on a Consolidated basis, certified by the
          principal financial officer of Borrower as prepared in accordance with
          GAAP and fairly presenting in all material respects the financial
          position and results of operations of Borrower and its Subsidiaries
          for such month and period subject only to changes from audit and
          year-end adjustments and except that such statements need not contain
          notes;

               (iii) on or before the second Business Day of each week
          hereafter, a report (each, a "Subsequent Budget") including an updated
          financial forecast in form and substance satisfactory to Agent,
          reflecting, on a line by line basis, anticipated cash receipts and
          disbursements for the succeeding months, determined on a weekly basis
          for the next succeeding 6 month period and on a monthly accrual basis
          for the then remaining portion of the Term;

               (iv) on or before the tenth Business Day of each month hereafter,
          a variance report reflecting, on a line by line basis consistent with
          the Final Budget, receipts and disbursements for the preceding month
          and the percentage variance of such actual results from those
          reflected in the Final Budget for such month. The information above
          shall be presented in reasonable detail and shall be certified by the
          chief financial officer of Borrower to the effect that such
          information fairly presents in all material respects the results of
          operation and financial condition of Borrower and its Subsidiaries as
          at the dates and for the periods indicated;

               (v) promptly after the sending or filing thereof, as the case may
          be, copies of any proxy statements, financial statements or reports
          which Borrower has made available to its Securities holders and copies
          of any regular, periodic and special reports or registration
          statements which, Borrower or any of its Subsidiaries files with the
          Securities and Exchange Commission or any governmental authority which
          may be substituted therefor, or any national securities exchange;

                                      -44-
<PAGE>

               (vi) promptly upon receipt or filing thereof, copies of all
          pleadings, applications, judicial information and other documents
          filed with the Bankruptcy Court or any trustee in respect of the
          Bankruptcy Case or distributed by Borrower to any official committee
          in the Bankruptcy Case; and

               (vii) such other data and information (financial and otherwise)
          as Agent or any Lender, from time to time, may reasonably request,
          bearing upon or related to the Collateral or Borrower's or any of its
          Subsidiaries' financial condition or results of operations.

          Concurrently with the delivery of the financial statements described
     in paragraph (i) of this subsection 8.1.3, Borrower shall forward to Agent
     a copy of the accountants' letter to Borrower's management that is prepared
     in connection with such financial statements. Concurrently with the
     delivery of the financial statements described in paragraphs (i), (ii) and
     (iii) of this subsection 8.1.3, Borrower shall cause to be prepared and
     furnished to Agent a Compliance Certificate in the form of Exhibit 8.1.3
     hereto executed by the Chief Financial Officer of Borrower (a "Compliance
     Certificate").

          8.1.4. Borrowing Base Certificates. On or before the third (3rd)
     Business Day of each week from and after the date hereof, or more
     frequently as reasonably requested by Agent, Borrower shall deliver to
     Agent, in form acceptable to Agent, a Borrowing Base Certificate as of the
     last day of the immediately preceding week, together with weekly sales and
     revenue reports and such other supporting materials as Agent shall
     reasonably request.

          8.1.5. Landlord, Processor and Storage Agreements. Provide Agent with
     copies of all agreements between Borrower or any of its Subsidiaries and
     (i) any landlord, processor, distributor, warehouseman or consignee which
     owns any premises at which any Collateral may, from time to time, be kept
     and (ii) any Person not an Affiliate of Borrower that has any Property
     located on the premises of Borrower or any Subsidiary, whether for storage,
     processing or otherwise.

          8.1.6. Deposit and Brokerage Accounts. For each deposit account or
     brokerage account that Borrower or any Subsidiary at any time opens or
     maintains, Borrower or such Subsidiary, as applicable, shall, pursuant to
     an agreement in form and substance reasonably satisfactory to Agent, cause
     the depository bank or securities intermediary, as applicable, to agree to
     comply at any time with instructions from Agent to such depository bank
     directing the disposition of funds from time to time credited to such
     deposit account or brokerage account, without further consent of Borrower.

          8.1.7. Subsidiaries. Cause each Subsidiary of Borrower (other than
     FW), whether now or hereafter in existence, to execute and deliver to Agent
     a (i) Guaranty Agreement and a security agreement pursuant to which such
     Subsidiary guaranties the payment of all Obligations and grants to Agent a
     first priority Lien (subject only to

                                      -45-
<PAGE>

     Permitted Liens) on all of its Properties of the types described in
     subsection 5.1, (ii) Mortgages on any such Subsidiary's real Property, and
     (iii) legal opinions and such other documents as the Agent may reasonably
     request to ensure that Agent, for the benefit of the Lenders, has a first
     priority Lien on all such Subsidiary's Property including such items
     described in Sections 5.3 and 5.4. Borrower agrees to provide all of the
     foregoing on or before May 31, 2003 with respect to each of WVH and Steel
     Strapping.

          8.1.8. Cooperation. Cooperate with Agent and its financial advisors in
     providing to Agent and such advisors such information as is necessary in
     order to permit Agent and such advisors to prepare periodic reconciliations
     of Borrower's actual performance to Borrower's performance projected in the
     Final Budget and Subsequent Budgets delivered pursuant to subsection
     8.1.3(iii).

          8.1.9. Environmental Matters.

               (i) Borrower agrees that Agent may, and shall at the direction of
          Majority Term Lenders, from time to time, retain, at Borrower's
          expense, an independent professional consultant to review any
          environmental audits, investigations, analyses and reports relating to
          Hazardous Materials prepared by or for Borrower and in the event Agent
          or Majority Term Lenders reasonably believe that Borrower has breached
          any representation, warranty or covenant contained in this Agreement
          or that there has been a material violation of Environmental Laws by
          Borrower, Agent or Term Loan Representative shall conduct its own
          investigation of any Property;

               (ii) Borrower will deliver to Agent and Term Loan Representative,
          as soon as practicable following receipt thereof: (i) copies of all
          notices, claims, actions, suits, proceedings, orders, audits,
          investigations, analyses, or written communications of any kind or
          character, whether prepared by Borrower or by independent consultants,
          governmental authorities or any other Persons, with respect to
          Environmental Laws or Hazardous Materials, which, individually or in
          the aggregate, could reasonably be expected to result in a Material
          Adverse Effect; and (ii) promptly upon the occurrence thereof, written
          notice describing in reasonable detail any detection of Hazardous
          Materials released at any Property or detected in soil or groundwater
          at any Property, the existence of which has a reasonable possibility,
          individually or in the aggregate, of resulting in a Material Adverse
          Effect; and

               (iii) Borrower shall promptly undertake any and all
          investigations, remediation or other response actions necessary to
          remove, remediate, clean up or abate any Hazardous Materials as
          required by any governmental agency or where failure to do so could
          reasonably be expected to have, individually or in the aggregate, a
          Material Adverse Effect. Borrower shall promptly take any and all
          actions necessary to (i) cure any material violation of applicable
          Environmental Laws by Borrower and (ii) make an appropriate response
          to

                                      -46-
<PAGE>

          any investigation, notice, notice of violation, claim, action,
          suit, proceeding, demand, abatement order or other order or directive
          by any governmental authority or any other person relating to any
          Environmental Law or Hazardous Materials, in each case where failure
          to do so could reasonably be expected to have, individually or in the
          aggregate, a Material Adverse Effect.

          8.1.10. Maintenance of Properties. Borrower will, and will cause each
     of its Subsidiaries to, maintain or cause to be maintained in good repair,
     working order and condition, ordinary wear and tear excepted, all material
     properties used or useful in the business of Borrower and its Subsidiaries
     (including all Intellectual Property) and from time to time will make or
     cause to be made all appropriate repairs, renewals and replacements
     thereof.

          8.1.11. Existence, etc.. Except as permitted under subsection 8.2.1,
     Borrower will, and will cause each of its Subsidiaries to, at all times
     preserve and keep in full force and effect its existence in the
     jurisdiction of organization specified on Exhibit 7.1.5 and all rights and
     franchises material to its business; provided, however that neither
     Borrower nor any of its Subsidiaries shall be required to preserve any such
     right or franchise if the governing body of Borrower or such Subsidiary
     shall determine that the preservation thereof is no longer desirable in the
     conduct of the business of Borrower or such Subsidiary, as the case may be,
     and that the loss thereof is not disadvantageous in any material respect to
     Borrower, such Subsidiary or Lenders.

          8.1.12. Payment of Taxes and Claims; Tax. Borrower will, and will
     cause each of its Subsidiaries to, pay all taxes, assessments and other
     governmental charges imposed upon it or any of its properties or assets or
     in respect of any of its income, businesses or franchises before any
     penalty accrues thereon, and all claims (including claims for labor,
     services, materials and supplies) for sums that have become due and payable
     and that by law have or may become a Lien upon any of its properties or
     assets, prior to the time when any penalty or fine shall be incurred with
     respect thereto; provided that no such tax, assessment, charge or claim
     need be paid if it is being contested in good faith by appropriate
     proceedings promptly instituted and diligently conducted, so long as (i)
     such reserve or other appropriate provision, if any, as shall be required
     in conformity with GAAP shall have been made therefor and (ii) in the case
     of a tax, assessment, charge or claim which has or may become a Lien
     against any of the Collateral, such proceedings conclusively operate to
     stay the sale of any portion of the Collateral to satisfy such charge or
     claim. Borrower will not, nor will it permit any of its Subsidiaries to,
     file or consent to the filing of any consolidated income tax return with
     any Person (other than Borrower or any of its Subsidiaries).

          8.1.13. Compliance with Laws, etc. Subject to applicable provisions of
     the Bankruptcy Code, Borrower shall comply, and shall cause each of its
     Subsidiaries to comply, with the requirements of all applicable laws,
     rules, regulations and orders of any government authority (including all
     Environmental Laws), noncompliance with

                                      -47-
<PAGE>

     which could reasonably be expected to result in, individually or in
     the aggregate, a Material Adverse Effect.

          8.1.14. ERISA Matters. Deliver to Agent and Term Loan Representative
     (i) promptly upon receipt, copies of all notices, claims, actions, suits,
     proceedings, orders, audits, examinations, investigations, or other written
     inquires or communications of any kind from the PBGC, the Internal Revenue
     Service, the Department of Labor or other governmental authority with
     respect to any Plan; (ii) promptly after the sending or filing thereof, as
     the case may be, copies of all notices or filings by Borrower, any of its
     Subsidiaries or the plan administrator of any plan with PBGC, the Internal
     Revenue Service, the Department of Labor or other governmental authority
     with respect to any Plan, whether in response to the items described in
     clause (i) above or otherwise; and (iii) upon request to the Agent, copies
     of (A) any annual or other reports filed in accordance with ERISA or the
     Code in connection with any Plan and (B) any actuarial valuation or
     financial report in connection with any Plan.

     8.2. Negative Covenants.

     During the Term, and thereafter for so long as there are any Obligations
outstanding, Borrower covenants that, unless otherwise consented to by Majority
Lenders (or by a different number of Lenders as may be specified), in writing,
it shall not:

          8.2.1. Mergers; Consolidations; Acquisitions. Merge or consolidate, or
     permit any Subsidiary of Borrower to merge or consolidate, with any Person,
     other than mergers between Borrower and any of its wholly-owned
     Subsidiaries in which Borrower is the surviving entity; nor acquire, nor
     permit any of its Subsidiaries to acquire, all or any substantial part of
     the Properties of any Person, or any real Property, except for (i)
     acquisitions of assets consisting of fixed assets that constitute Capital
     Expenditures permitted under subsection 8.2.8 or (ii) any acquisition to
     which the Majority Revolving Lenders and the Majority Term Lenders have
     consented.

          8.2.2. Loans. Make, or permit any Subsidiary of Borrower to make, any
     loans or other advances of money to any Person, other than (i) for salary,
     travel advances, advances against commissions and other similar advances to
     employees in the ordinary course of business, not to exceed $250,000 in any
     fiscal year, (ii) extensions of trade credit in the ordinary course of
     business, (iii) deposits with financial institutions permitted under this
     Agreement, (iv) prepaid expenses and (v) loans by any Subsidiary of
     Borrower to Borrower or to another Subsidiary of Borrower.

                                      -48-
<PAGE>

          8.2.3. Total Indebtedness. Create, incur, assume, or suffer to exist,
     or permit any Subsidiary of Borrower to create, incur or suffer to exist,
     any Indebtedness for Money Borrowed, except:

               (i)    Obligations owing to Agent or any Lender under, or arising
          from, this Agreement or any of the other Loan Documents;

               (ii)   Indebtedness under the Indentures (and all related
          agreements, instruments and documents) and the City Loan Agreement
          (and all related agreements, instruments and documents), in each case
          to the extent outstanding on the date hereof;

               (iii)  (a) Indebtedness under the Exchange Instruments (and all
          related agreements, instruments and documents) and (b) Indebtedness in
          respect of the Series C Preferred, in each case to the extent
          outstanding on the date hereof;

               (iv)   Subordinated Debt listed on Exhibit 8.2.3 or otherwise
          approved by Majority Lenders;

               (v)    other Indebtedness listed on Exhibit 8.2.3;

               (vi)   Permitted Purchase Money Indebtedness;

               (vii)  contingent liabilities (including any relating reserves)
          arising from endorsements of checks and other negotiable instruments
          for deposit or collection in the ordinary course of business;

               (viii) Guaranties of any Indebtedness permitted hereunder;

               (ix)   the GO/RD Indebtedness;

               (x)    the Prepetition Obligations;

               (xi)   Indebtedness permitted pursuant to subsection 8.2.2(v);

               (xii)  Indebtedness in respect of financed insurance premiums;

               (xiii) Indebtedness in respect of the Series D Preferred; and

               (xiv) Indebtedness not included in paragraphs (i) through (xiii)
          above which does not exceed at any time, in the aggregate, the sum of
          $1,500,000.

          8.2.4. Affiliate Transactions. Enter into, or be a party to, or permit
     any Subsidiary of Borrower to enter into or be a party to, any transaction
     with any Affiliate of Borrower, including without limitation any
     management, consulting or similar fees, except (i) in the ordinary course
     of and pursuant to the reasonable requirements of Borrower's or such
     Subsidiary's business and upon fair and

                                      -49-
<PAGE>

     reasonable terms which are fully disclosed to Agent and are no less
     favorable to Borrower than would be obtained in a comparable arms-length
     transaction with a Person not an Affiliate, (ii) transactions involving
     Borrower, fiduciaries of and participants in, the Stock Plans made in
     compliance with applicable law and the terms of the Stock Plans, (iii) as
     set forth on Exhibit 8.2.4 hereto and (iv) as otherwise permitted under
     this Agreement; provided, that Borrower shall not, and shall not permit any
     Subsidiary, to, enter into any such transaction or series of related
     transactions involving aggregate consideration in excess of $1,000,000
     without the prior written consent of Majority Lenders, other than sales by
     Borrower to Webco of secondary and excess metals in the ordinary course of
     business in accordance with past business practices.

          8.2.5. Limitation on Liens. Create or suffer to exist, or permit any
     Subsidiary of Borrower to create or suffer to exist, any Lien upon any of
     its Property, whether now owned or hereafter acquired, except:

               (i) Liens at any time granted in favor of Agent for the benefit
          of Lenders;

               (ii) Liens for taxes, assessments or governmental charges (not
          including any Lien arising under ERISA or under Section 401(a)(29) or
          Section 412 of the Code), not yet due, or being contested in the
          manner described in subsection 7.1.14 hereto, but only if in Agent's
          judgment such Lien would not reasonably be expected to adversely
          effect Agent's rights or the priority of Agent's lien on any
          Collateral;

               (iii) Liens arising in the ordinary course of the business of
          Borrower or any of its Subsidiaries by operation of law or regulation,
          but only if payment in respect of any such Lien is not at the time
          required and such Liens do not, in the aggregate, materially detract
          from the value of the Property of Borrower and its Subsidiaries, taken
          as a whole, or materially impair the use or marketability thereof in
          the operation of the business of Borrower and its Subsidiaries or
          impair Agent's ability to exercise its remedies with respect thereto;

               (iv) Purchase Money Liens securing Permitted Purchase Money
          Indebtedness;

               (v) such other Liens as appear on Exhibit 8.2.5 hereto;

               (vi) Liens incurred or deposits made in the ordinary course of
          business of Borrower or any of its Subsidiaries in connection with (1)
          worker's compensation, social security, unemployment insurance and
          other similar laws and rules (not including ERISA) or (2) sales
          contracts, leases, statutory obligations, work in progress advances
          and other similar obligations not

                                      -50-
<PAGE>

          incurred in connection with the borrowing of money or the payment
          of the deferred purchase price of Property;

               (vii) reservations, covenants, zoning and other land use
          regulations, title exceptions or encumbrances granted in the ordinary
          course of business, affecting real Property owned or leased by
          Borrower or any of its Subsidiaries; provided that such Liens do not
          in the aggregate materially interfere with the use or marketability of
          such Property in the ordinary course of Borrower's or such
          Subsidiary's business, result in a material diminution in the value of
          any Collateral as security for the Obligations or impair Agent's
          ability to exercise its remedies with respect thereto;

               (viii) Liens securing the Prepetition Obligations;

               (ix) Liens on the GO Facility, the RD Facility and the
          Transportation Equipment granted to secure the GO/RD Indebtedness;

               (x) the Carveout;

               (xi) Liens on the Tandem Mill Collateral, the Tin Mill Collateral
          and the Hot Mill Collateral and any other "Collateral" (as defined in
          the Exchange Intercreditor Agreement) securing the Indebtedness under
          the Exchange Instruments, which Liens are junior to the Liens on such
          Collateral securing the Obligations; and

               (xii) such other Liens as all Lenders may hereafter approve in
          writing.

          8.2.6. Payments and Amendments of Certain Instruments.

               (i) Except as provided in clause (iv) below, make or permit any
          Subsidiary of Borrower to make any payment of any part or all of any
          Indebtedness outstanding as of the Filing Date (other than the
          Prepetition Obligations, Approved First Day Payments or as otherwise
          subsequently approved by the Bankruptcy Court), or take any other
          action or omit to take any other action in respect of any such
          Indebtedness, without, in each instance, the prior written consent of
          Majority Lenders;

               (ii) amend or modify any agreement, instrument or document
          evidencing or relating to any Subordinated Debt;

               (iii) (a) amend or modify any agreement, instrument or document
          evidencing or relating to the Indebtedness under the Indentures or the
          City Loan Agreement, including without limitation by means of a
          consent solicitation or an exchange offer; or (b) pay, repay or prepay
          all or any portion of the Indebtedness under the Indentures or the
          City Loan Agreement at any time, including principal and interest
          thereunder;

                                      -51-
<PAGE>

               (iv) (a) amend or modify any agreement, instrument or document
          evidencing, securing or relating to the Indebtedness under the
          Exchange Indentures, including without limitation the Junior
          Intercreditor Agreement and the Junior Security Documents; or (b)
          except as set forth in the proviso hereto, pay, repay or prepay all or
          any portion of the Indebtedness under the Exchange Instruments at any
          time, including (I) any interest or regularly scheduled principal
          payment, (II) any optional prepayment, purchase or redemption, (III)
          any prepayment, purchase or redemption upon an "Asset Disposition" (as
          defined in the Exchange Note Indenture) or other sale, transfer, lease
          or other disposition of Property, including without limitation a sale
          or leaseback transaction or an insured loss, (IV) any prepayment,
          purchase or redemption upon a change of control or similar event or
          (V) with respect to the Indebtedness under the Exchange Bonds, any
          prepayment, purchase or redemption upon any determination or event of
          taxability; provided, that Borrower may pay cash interest in respect
          of the Exchange Instruments on each October 1 and April 1 hereafter,
          so long as (A) the aggregate amount thereof paid in any calendar year
          does not exceed $750,000, and (B) the holders of the Indebtedness
          under the Exchange Instruments have consented to the entry of the
          Final Financing Order and have agreed that the Exchange Intercreditor
          Agreement remains in full force and effect for the benefit of Agent
          and Lenders and that the Liens of Agent on the Collateral are senior
          to the Liens of the trustees for, and the holders of, Indebtedness
          under the Exchange Instruments;

               (v) (a) amend or modify in any respect the terms of the Series C
          Preferred; or (b) exercise any conversion rights with respect to the
          Series C Preferred; provided, that the foregoing shall not prevent the
          conversion by Borrower of all or any of the Series C Preferred to
          common stock Securities of Borrower pursuant to the terms of the
          Series C Preferred as in existence on the date hereof, so long as such
          conversion does not result in a Change of Control;

               (vi) make or permit any Subsidiary of Borrower to (a) exercise
          any optional right of termination prior to the "Expiration Date" (as
          defined in the MABCO Lease, as in effect on the date hereof), or any
          optional right of prepayment of all or any of the liabilities under
          the MABCO Lease or (b) unless immediately after making such payment,
          no Event of Default is in existence and the outstanding principal
          balance of the Loans is zero, make any payment in respect of the
          exercise by the lessor under the MABCO Lease of its right to require
          the exercise of the "Termination Option" (as defined in the MABCO
          Lease, as in effect on the date hereof), upon the occurrence of a "Put
          Event" (as defined in the MABCO Lease, as in effect on the date
          hereof) or in respect of any guaranty of such payment obligations; or

               (vii) amend or modify in any respect the terms of the Series D
          Preferred or exercise any exchange or conversion rights with respect
          to the Series D Preferred; provided, that the foregoing shall not
          prevent the exchange

                                      -52-
<PAGE>

          by Borrower of all or any of the Series D Preferred for common
          stock Securities of Borrower as provided in the Series D Preferred.

          8.2.7. Distributions. Declare or make, or permit any Subsidiary of
     Borrower to declare or make, any Distributions, except for:

               (i) Distributions by any Subsidiary of Borrower to Borrower or to
          another Subsidiary of Borrower;

               (ii) Distributions paid solely in common stock of Borrower, so
          long as such Distribution does not result in a Change of Control;

               (iii) redemption of the Series C Preferred to the extent
          permitted in the proviso to subsection 8.2.6(v);

               (iv) the following Distributions in respect of the Series D
          Preferred, all on the terms provided in the Series D Preferred: (a)
          Distributions in the form of common stock of Borrower or additional
          Series D Preferred and constituting "Contingent Value Payments"; (b)
          optional redemption of the Series D Preferred in exchange for common
          stock Securities of Borrower; (c) mandatory redemption of the Series D
          Preferred upon maturity thereof on March 31, 2015 in exchange for
          common stock Securities of Borrower; (d) redemption of the Series D
          Preferred upon the occurrence of a "Significant Transaction" (as
          defined in the Series D Preferred) in exchange for common stock
          Securities of Borrower; and (e) Distributions permitted pursuant to
          subsection 8.2.6(vii).

          8.2.8. Capital Expenditures. Make Capital Expenditures (including,
     without limitation, by way of capitalized leases) which, in the aggregate,
     as to Borrower and all of its Subsidiaries, for any period set forth below,
     exceed the amount set forth below opposite such period:

                     Period                                           Amount
                     ------                                           ------

         2 months ending June 30, 2003                             $ 2,000,000
         5 months ending September 30, 2003                        $ 5,000,000
         8 months ending December 31, 2003                         $ 9,000,000
         3 months ending March 31, 2004                            $ 7,000,000
         6 months ending June 30, 2004                             $12,000,000
         9 months ending September 30, 2004                        $17,000,000
         12 months ending December 31, 2004                        $22,000,000

     If Borrower and its Subsidiaries do not use the entire amount of
     Capital Expenditures permitted in the period from May 1, 2003 to and
     including December 31, 2003, they

                                      -53-
<PAGE>

     may carry forward to the next succeeding fiscal year any such unused
     amount. Any Capital Expenditures made with the proceeds of insurance or
     condemnation proceedings shall be excluded from the calculation of Capital
     Expenditures for any applicable period.

          8.2.9. Disposition of Assets. Sell, lease or otherwise dispose of any
     of, or permit any Subsidiary of Borrower to sell, lease, transfer or
     otherwise dispose of any of, its Properties, including any disposition of
     Property as part of a sale and leaseback transaction, to or in favor of any
     Person, except for:

               (i) sales of Inventory in the ordinary course of business;

               (ii) transfers of Property to Borrower by a Subsidiary of
          Borrower or to a Subsidiary of Borrower which is a Guarantor by
          another Subsidiary of Borrower;

               (iii) so long as no Default or Event of Default exists and is
          continuing, dispositions of Property in the ordinary course of
          business that is substantially worn, damaged, uneconomic or obsolete,
          so long as the proceeds of such dispositions are used to purchase or
          acquire Property that constitutes a productive asset of the general
          types used in the business of Borrower and its Subsidiaries, provided,
          that (a) the replacement Property shall be acquired within 90 days
          after any disposition of Property that is to be replaced and the
          replacement Property shall be free and clear of Liens other than
          Purchase Money Liens that are permitted under this Agreement and (b)
          the aggregate fair market value of all such Property disposed of under
          this clause (iii) shall not exceed $2,000,000 in the aggregate during
          the period commencing on the Effective Date;

               (iv) dispositions of investments described in paragraphs (iv),
          (v), (vi), (vii) and (ix) of the definition of the term "Restricted
          Investments";

               (v) the disposition of up to 1300 nitrogen oxide emissions
          allowances at fair market value and in compliance with applicable
          laws, prior to August 31, 2003, so long as the cash proceeds thereof
          are promptly delivered to Agent for application against the
          Obligations as provided in subsection 3.3.1; and

               (vi) sales, leases or other dispositions of Term Loan Primary
          Collateral (in addition to such transfers otherwise permitted
          hereunder) (each, a "Term Collateral Sale") at fair market value, for
          not less than 90% cash consideration and that have been consented to
          by Majority Term Lenders;

               (vii) sales, leases or other dispositions of Revolving Loan
          Primary Collateral (in addition to such transfers otherwise permitted
          hereunder) (each, a "Revolver Collateral Sale") at fair market value,
          for not less than 90% cash

                                      -54-
<PAGE>

          consideration and that have been consented to by Supermajority
          Revolving Lenders; and

               (viii) sales, leases or other dispositions constituting Mixed
          Asset Transactions (in addition to such transfers otherwise permitted
          hereunder) that have been consented to by both Majority Term Lenders
          and Supermajority Revolving Lenders.

          8.2.10. Securities of Subsidiaries. Permit any of its Subsidiaries to
     issue any additional Securities except to Borrower.

          8.2.11. Bill-and-Hold Sales, Etc. Make, or permit any Subsidiary of
     Borrower to make, a sale to any customer on a bill-and-hold, guaranteed
     sale, sale and return, sale on approval, repurchase or return or
     consignment basis, unless otherwise agreed by Agent and Majority Lenders.

          8.2.12. Restricted Investment. Make or have, or permit any Subsidiary
     of Borrower to make or have, any Restricted Investment.

          8.2.13. Subsidiaries and Joint Ventures. Create, acquire or otherwise
     suffer to exist, or permit any Subsidiary of Borrower to create, acquire or
     otherwise suffer to exist, any Subsidiary or joint venture arrangement not
     in existence as of the date hereof, or commit, or permit any Subsidiary of
     Borrower to commit, to make a loan, advance or capital contribution to any
     joint venture arrangement or entity.

          8.2.14. Tax Consolidation. File or consent to the filing of any
     consolidated income tax return with any Person other than Borrower's
     Subsidiaries.

          8.2.15. Organizational Documents. Agree to, or suffer to occur, any
     amendment, supplement or addition to its or any of its Subsidiaries'
     charter, articles or certificate of incorporation, certificate of
     formation, limited partnership agreement, bylaws, limited liability
     agreement, operating agreement or other organizational documents (as the
     case may be), that would reasonably be expected to have a Material Adverse
     Effect.

          8.2.16. Fiscal Year End. Change, or permit any Subsidiary of Borrower
     to change, its fiscal year end.

          8.2.17. Negative Pledges. Enter into any agreement limiting the
     ability of Borrower or any of its Subsidiaries to voluntarily create Liens
     upon any of its Property, except pursuant to the Indentures, the City Loan
     Agreement and the Exchange Indentures.

          8.2.18. Structural Changes. Change its or any of its Subsidiaries'
     legal name, state of incorporation or organization, Type of Organization or
     Organizational I.D. Number, in each case without providing Agent with at
     least 30 days' prior written notice thereof.

                                      -55-
<PAGE>

          8.2.19. Payments to Unsecured Creditors. Without prior approval of the
     Bankruptcy Court and the prior written consent of Agent, at the direction
     of Majority Lenders, make any payment of any proceeds constituting part of
     the Collateral or other cash (including, without limitation, proceeds of
     Loans) to any unsecured creditor of Borrower on account of claims arising
     prior to the commencement of the Bankruptcy Case (including without
     limitation payments in respect of reclamation claims of unpaid suppliers of
     goods delivered to such Borrower prior to the commencement of the
     Bankruptcy Case (regardless of whether such claims have been granted
     administrative expense priority status pursuant to Section 546(c) of the
     Bankruptcy Code)) prior to confirmation of a Bankruptcy Plan, but excluding
     repayment of (i) the Prepetition Obligations, (ii) the Approved First Day
     Payments and (iii) up to $1,000,000 of any other payments necessary to cure
     defaults under any executory contracts or unexpired leases assumed by
     Borrower with the approval of the Bankruptcy Court.

          8.2.20. Change of Business. Change, or permit any Subsidiary to
     change, in any material respect, the nature of its business as conducted as
     of the date hereof.

          8.2.21. Prepetition Loan Documents. Dispute the validity or
     enforceability of (a) any of the Prepetition Loan Documents, (b) any of
     Borrower's obligations thereunder, (c) the validity, priority,
     enforceability, scope or extent of any Lien of in favor of Prepetition
     Agent or against any of the Prepetition Collateral or (d) the validity of
     any of the Prepetition Obligations, whether such dispute is brought in the
     Bankruptcy Case or in another judicial, administrative or other proceeding.

          8.2.22. FW Operations. On and after the Effective Date, FW shall have
     no assets, liabilities or obligations other than those assets acquired, and
     liabilities and obligations incurred by FW pursuant to the MABCO Lease and
     related agreements, instruments and documents, as in effect on the date
     hereof.

          8.2.23. Pension Plan Payments. On and after the Effective Date, make
     any cash pension plan payments, including payments of expenses.

     8.3. Specific Covenants.

     During the Term, and thereafter for so long as there are any Obligations
outstanding, Borrower covenants that, unless otherwise consented to by Majority
Lenders, in writing, it shall comply with the covenants set forth in Exhibit 8.3
hereto based on GAAP as in effect prior to such change. If GAAP changes from the
basis used in preparing the audited financial statements delivered to Agent by
Borrower on or before the date hereof, Borrower will continue to provide Agent
with certificates demonstrating compliance with such covenants.

                                      -56-
<PAGE>

                         SECTION 9. CONDITIONS PRECEDENT

     9.1. Conditions to Effectiveness of this Agreement.

     Notwithstanding any other provision of this Agreement or any of the other
Loan Documents, this Agreement shall not be effective, and no Lender shall be
required to make any Loan, nor shall Agent be required to or issue or procure
any Letter of Credit or LC Guaranty, unless and until each of the following
conditions has been and continues to be satisfied on or prior to May 23, 2003:

          9.1.1. Bankruptcy Case Matters. The Emergency Financing Order shall
     have been entered by the Bankruptcy Court in the Bankruptcy Case after
     notice and a hearing conducted in accordance with the Bankruptcy Code and
     rules thereunder, no later than 5 Business Days after the Filing Date, in
     form and substance satisfactory to Agent and Lenders, authorizing and
     approving the transactions contemplated in this Agreement and, among other
     things, (a) finding that Agent and Lenders are extending credit to Borrower
     in good faith within the meaning of Section 364(e) of the Bankruptcy Code,
     (b) approving payment by Borrower of all fees and expenses described
     hereunder, including without limitation the Revolving Loan Closing Fees,
     the Term Loan Closing Fee, the Letter of Credit fees, the Unused Line Fee,
     the prepayment fees, the audit fees, the Revolving Credit Administrative
     Fee, the Term Loan Monitoring Fee and the Deferred Fee, and all costs and
     expenses reimburseable by Borrower hereunder, (c) providing for the
     automatic perfection of Agent's Liens on the Collateral, (d) granting the
     Obligations superpriority status pursuant to Section 364(c)(1) of the
     Bankruptcy Code, subject to the Carve Out and providing that no costs of
     administration shall be imposed against Agent, Lenders or the Collateral
     pursuant to Section 506(c) of the Bankruptcy Code, (e) providing for the
     automatic vacation of the automatic stay upon the occurrence of an Event of
     Default, in order to permit enforcement of remedies under the Loan
     Documents, including without limitation the enforcement upon 5 Business
     Days' prior written notice to Borrower, of remedies against the Collateral,
     (f) providing that upon the occurrence of an Event of Default, Agent and
     Lenders shall be permitted to immediately cease making Revolving Credit
     Loans, and issuing Letters of Credit and LC Guaranties and that Borrower
     shall be prohibited from using cash Collateral in which Agent and Lenders
     have an interest without Agent's prior written consent, (g) providing that
     proceeds of the Loans shall be used as provided herein, (h) providing that
     Agent's Liens on the Collateral are first priority Liens, subject only to
     Liens acceptable to Agent and all Lenders, (i) providing for Borrower (and
     its successors and assigns, but without prejudice to the rights of an
     official committee or other party in interest in the Bankruptcy Case to
     assert claims on behalf of Borrower's estate within 60 days of the Filing
     Date), to forever release, discharge and acquit Prepetition Agent and each
     Prepetition Lender, and their respective officers, directors, agents,
     attorneys and predecessors in interest, of and from any claims, demands,
     liabilities, responsibilities, disputes, remedies, causes of action,
     indebtedness and obligations of every type, including without limitation
     any so-called "lender liability" claims or defenses, which occurred or
     arose on or prior to the Filing Date with respect to Borrower, the

                                      -57-
<PAGE>

     Prepetition Obligations, the Prepetition Loan Documents, this Agreement,
     the Obligations or the Loan Documents and (j) otherwise being in form and
     substance satisfactory to Agent and Lenders.

          9.1.2. Final Budget. Agent and Lenders shall have received the Final
     Budget, in form and substance satisfactory to Agent and Lenders.

          9.1.3. First Day Orders. All first day orders entered by the
     Bankruptcy Court in the Bankruptcy Case or for which motion has been made
     on or prior to the Effective Date shall be satisfactory in form and
     substance to Agent and Lenders.

          9.1.4. Payment of Fees and Expenses. Borrower shall have paid all fees
     contemplated hereunder to be paid on the Effective Date, as well as all
     reasonably costs and expenses of Agent and Term Loan Representative through
     the Effective Date as provided herein.

          9.1.5. Documentation. On or before the Effective Date, Agent shall
     have received, in form and substance satisfactory to Agent and its counsel,
     duly executed copies of this Agreement and the other agreements,
     instruments, documents and other items listed on Exhibit 9.1.5 hereto.

          9.1.6. No Default. No Default or Event of Default shall exist.

          9.1.7. No Litigation. No action, proceeding, investigation, regulation
     or legislation shall have been instituted, threatened or proposed before
     any court, governmental agency or legislative body to enjoin, restrain or
     prohibit, or to obtain damages in respect of, or which is related to or
     arises out of this Agreement or the consummation of the transactions
     contemplated hereby.

     9.2. Conditions to Future Advances.

     Notwithstanding any other provision of this Agreement or any of the other
Loan Documents, and without affecting in any manner the rights of Agent or any
Lender under the other sections of this Agreement, no Lender shall be required
to make any Loan, nor shall Agent be required to or issue or procure any Letter
of Credit or LC Guaranty, unless and until each of the following conditions has
been and continues to be satisfied:

          9.2.1. Documentation. Agent shall have received, in form and substance
     satisfactory to Agent and its counsel, such additional documents,
     instruments, opinions and certificates as Agent and its counsel shall
     require from time to time pursuant to the terms of this Agreement and the
     Loan Documents.

          9.2.2. No Default. No Default or Event of Default shall exist.

          9.2.3. Representations and Warranties. All representations and
     warranties contained in this Agreement shall be true and correct in all
     material respects as of the date of such Loan, Letter of Credit or LC
     Guaranty.

                                      -58-
<PAGE>

          9.2.4. Material Adverse Effect. Since the Filing Date, other than as
     contemplated by the Final Budget, there has not been any material adverse
     change in the business, assets, financial condition, income or prospects of
     Borrower and its Subsidiaries taken as a whole, and no event or condition
     exists which would be reasonably likely to result in any Material Adverse
     Effect.

          9.2.5. Emergency Financing Order. Prior to entry of the Final
     Financing Order, the Emergency Financing Order shall remain in full force
     and effect and shall not have been stayed, revised, vacated or otherwise
     modified without the prior written consent of Agent and Lenders.

          SECTION 10. EVENTS OF DEFAULT; RIGHTS AND REMEDIES ON DEFAULT

     10.1. Events of Default.

     The occurrence of one or more of the following events shall constitute an
"Event of Default":

          10.1.1. Payment of Obligations. Borrower shall fail to pay (a) any of
     the Obligations hereunder or under any Note (other than principal) on the
     due date thereof (whether due at stated maturity, on demand, upon
     acceleration or otherwise) and such failure shall continue for 2 days
     thereafter or (b) any principal Obligations hereunder or under any Note on
     the due date thereof (whether due at stated maturity, on demand, upon
     acceleration or otherwise).

          10.1.2. Misrepresentations. Any representation, warranty or other
     statement made or furnished to Agent or any Lender by or on behalf of
     Borrower, any Subsidiary of Borrower or any Guarantor in this Agreement,
     any of the other Loan Documents or any instrument, certificate or financial
     statement furnished in compliance with or in reference thereto proves to
     have been false or misleading in any material respect when made, furnished
     or reaffirmed pursuant to Section 7.2 hereof.

          10.1.3. Breach of Specific Covenants. Borrower shall fail or neglect
     to perform, keep or observe any covenant contained in Section or subsection
     1.1.3, 1.3, 5.3, 5.4, 6.1.2, 6.2.4, 6.2.5, 8.1.1, 8.1.2, 8.1.4, 8.1.7,
     8.1.8, 8.2 or 8.3 hereof on the date that Borrower is required to perform,
     keep or observe such covenant or shall fail or neglect to perform, keep or
     observe any covenant contained in Section 8.1.3 hereof within 5 days
     following the date on which Borrower is required to perform, keep or
     observe such covenant.

          10.1.4. Breach of Other Covenants. Borrower shall fail or neglect to
     perform, keep or observe any covenant contained in this Agreement (other
     than a covenant which is dealt with specifically elsewhere in Section 10.1
     hereof) and the breach of such other covenant is not cured to Agent's
     satisfaction within 10 days after the sooner to occur of Borrower's receipt
     of notice of such breach from Agent or the date on which such failure or
     neglect first becomes known to any officer of Borrower.

                                      -59-
<PAGE>

          10.1.5. Default Under Financing Order, Security Documents or Other
     Agreements. Any event of default shall occur under, or Borrower, any of its
     Subsidiaries or any other Guarantor shall default in the performance or
     observance of any term, covenant, condition or agreement contained in, the
     applicable Financing Order, any of the Security Documents, or any of the
     Other Agreements and such default shall continue beyond any applicable
     grace period.

          10.1.6. Uninsured Losses. Any material loss, theft, damage or
     destruction of any material portion of the Collateral, if not fully covered
     (subject to such deductibles and self-insurance retentions as Agent shall
     have permitted) by insurance.

          10.1.7. Business Disruption; Condemnation. There shall occur a
     cessation of a substantial part of the business of Borrower or any
     Subsidiary of Borrower for a period which materially and adversely affects
     the ability of Borrower and its Subsidiaries capacity, taken as a whole, to
     continue their businesses on a basis as contemplated by the Final Budget;
     or Borrower or any Subsidiary of Borrower shall suffer the loss or
     revocation of any license or permit now held or hereafter acquired by
     Borrower or any Subsidiary of Borrower, the loss or revocation of which
     could reasonably be expected to have a Material Adverse Effect; or Borrower
     and its Subsidiaries shall be enjoined, restrained or in any way prevented
     by court, governmental or administrative order from conducting all or any
     material part of the business affairs of Borrower and its Subsidiaries,
     taken as a whole; or any material lease or agreement pursuant to which
     Borrower or any Subsidiary of Borrower leases, uses or occupies any
     Property shall be canceled or terminated prior to the expiration of its
     stated term, other than any such lease or agreement the cancellation or
     termination of which could not reasonably be expected to have a Material
     Adverse Effect; or any material portion of the Collateral shall be taken
     through condemnation or the value of such Property shall be impaired
     through condemnation.

          10.1.8. Change of Control. A Change of Control shall have occurred.

          10.1.9. ERISA. The filing of a notice of intent to terminate any Plan,
     the treatment of a Plan amendment as a plan termination under Section 4041
     of ERISA, or the commencement of proceedings by the PBGC to terminate or to
     appoint a trustee to administer any Plan, and in each case described above
     the Plan's termination or the appointment of a trustee could reasonably be
     expected to have a Material Adverse Effect.

          10.1.10. Challenge to Agreement. Borrower, any Subsidiary of Borrower
     or any Guarantor, or any Affiliate of any of them, shall challenge or
     contest in any action, suit or proceeding the validity or enforceability of
     this Agreement or any of the other Loan Documents, the legality or
     enforceability of any of the Obligations or the perfection or priority of
     any Lien granted to Agent; or Borrower or any other Person asserts any
     claims arising under Section 506(c) of the Bankruptcy Code against Agent,
     any Lender or the Collateral; or any Borrower, any Subsidiary of Borrower,
     or any Guarantor, or any Affiliate of any of them, commences any action

                                      -60-
<PAGE>

     in the Bankruptcy Case adverse to Agent or its rights and remedies
     under the Loan Documents.

          10.1.11. Repudiation of or Default Under Guaranty Agreement. Any
     Guarantor shall revoke or attempt to revoke the Guaranty Agreement signed
     by such Guarantor, or shall repudiate such Guarantor's liability thereunder
     or shall be in default under the terms thereof.

          10.1.12. Criminal Forfeiture. Borrower, any Subsidiary of Borrower or
     any Guarantor shall be criminally indicted or convicted under any law that
     could lead to a forfeiture of any Property of Borrower, any Subsidiary of
     Borrower or any Guarantor.

          10.1.13. Emergency Financing Order. Prior to the entering of a Final
     Financing Order, the Emergency Financing Order is stayed, reversed or
     vacated in any manner not acceptable to Agent and Lenders or the Emergency
     Financing Order is amended, modified or supplemented in a manner not
     permitted under this Agreement.

          10.1.14. Final Financing Order. A Final Financing Order is not entered
     on or before the 30th day after the Filing Date (unless a subsequent date
     for entering of a Final Financing Order is agreed to by Agent and all
     Lenders) or any such Final Financing Order is stayed, reversed or vacated
     in any manner not acceptable to Agent and Lenders or the Final Financing
     Order is amended, modified or supplemented in a manner not permitted under
     this Agreement.

          10.1.15. Dismissal or Conversion of Bankruptcy Case. An order is
     entered dismissing the Bankruptcy Case or converting it into a proceeding
     under Chapter 7 of the Bankruptcy Code.

          10.1.16. Appointment of Trustee or Examiner. A trustee is appointed or
     elected in the Bankruptcy Case, or an examiner is appointed in the
     Bankruptcy Case having enlarged powers beyond those set forth in Section
     1106 of the Bankruptcy Code.

          10.1.17. Filing of Bankruptcy Plan. (i) Borrower fails to file a
     Chapter 11 plan of reorganization within 270 days after the Filing Date or
     (ii) any Person files a Chapter 11 plan in the Bankruptcy Case in form and
     substance unacceptable to Agent or any Lender.

          10.1.18. Superpriority Claims; Use of Cash Collateral; Additional
     Debt. An order is entered in the Bankruptcy Case that (a) permits Borrower
     to incur Indebtedness secured by any claim under Bankruptcy Code Section
     364(c)(1) or by a Lien pari passu with or superior to the Lien granted to
     Agent hereunder, unless (i) there are no Obligations outstanding at the
     time of the entry of such an order and there is no requirement that Agent
     or any Lender extend any additional Obligations, (ii) such Indebtedness is
     used immediately to indefeasibly and finally pay the

                                      -61-
<PAGE>

     Obligations in cash in full, or (iii) such Indebtedness constitutes
     Permitted Purchase Money Indebtedness or (b) permits Borrower the right to
     use Collateral other than in accordance with the terms of the applicable
     Financing Order, unless (i) there are no Obligations outstanding at the
     time of the entry of such an order and there is no requirement that Agent
     or any Lender extend any additional Obligations or (ii) such Collateral is
     used immediately to indefeasibly and finally pay the Obligations in cash in
     full.

          10.1.19. Relief from Stay. An order is entered in the Bankruptcy Case
     granting any Person relief from the automatic stay so as to permit such
     Person to proceed against any material Property of Borrower.

          10.1.20. Filing of Certain Pleadings. A pleading is filed by any
     Person seeking relief of any of the sorts described in subsections 10.1.13,
     10.1.14, 10.1.15, 10.1.16, 10.1.17, 10.1.18 or 10.1.19, which is not
     dismissed within 15 days.

          10.1.21. Sale. Notice is given of a sale of all or any portion of the
     Collateral pursuant to Section 363 of the Bankruptcy Code, which sale is
     not permitted hereunder or to which the appropriate number of Lenders
     hereunder have not consented.

          10.1.22. Material Adverse Effect. Any change shall occur after the
     Filing Date (other than as contemplated by the Final Budget) in Borrower's
     and its Subsidiaries business, assets, financial conditions, income or
     prospects, taken as a whole, or any event or condition exists, which in any
     case would be reasonably likely to have a Material Adverse Effect.

          10.1.23. Changes in Senior Management. The failure of one of John
     Walker or Mark Kaplan to function as chief executive officer of Borrower,
     unless replaced within 10 days thereafter with a chief executive officer or
     chief restructuring officer acceptable to Agent and Majority Lenders.

          10.1.24. Defaults. A default or breach shall occur under any
     agreement, document or instrument to which any Borrower or any of its
     Subsidiaries is a party and entered into on or after the Filing Date or
     assumed by Borrower during the course of the Bankruptcy Case or otherwise
     required to be paid during the pendency of the Bankruptcy Case, that is not
     cured within any applicable grace period therefor, and such default or
     breach (i) involves the failure to make any payment when due in respect of
     any Indebtedness (other than the Obligations) of Borrower or any of its
     Subsidiaries in excess of $500,000 in the aggregate, or (ii) causes, or
     permits any holder of such Indebtedness or a trustee to cause, Indebtedness
     or a portion thereof in excess of $500,000 in the aggregate to become due
     prior to its stated maturity or prior to its regularly scheduled dates of
     payment, regardless of whether such default is waived, or such right is
     exercised, by such holder or trustee.

                                      -62-
<PAGE>

     10.2. Acceleration of the Obligations.

          (a) Upon or at any time after the occurrence and during the
     continuance of an Event of Default, (i) the Revolving Loan Commitments
     shall, at the option of Agent or Majority Revolving Lenders be terminated
     and/or (ii) Agent or Majority Lenders may and subject to Section 10.2(c) at
     the request of Majority Term Lenders shall, declare all or any portion of
     the Obligations at once due and payable without presentment, demand protest
     or further notice by Agent or any Lender, and Borrower shall forthwith pay
     to Agent, the full amount of such Obligations.

          (b) Agent shall take such action with respect to any Default or Event
     of Default as shall be directed by Majority Lenders or, subject to Section
     10.2(c), with respect to Term Loan Primary Collateral, as shall be directed
     by the Majority Term Lenders; provided that, unless and until Agent shall
     have received such directions, Agent may (but shall not be obligated to)
     take such action, or refrain from taking such action, with respect to such
     Default or Event of Default as it shall deem advisable and in the best
     interests of Agent and Lenders, including any action (or the failure to
     act) pursuant to the Loan Documents.

          (c) Notwithstanding anything herein contained to the contrary, the
     Majority Term Lenders shall not be entitled to direct Agent to exercise
     rights under Section 10.2(a) or (b) unless (A) the Revolving Credit
     Termination Date has occurred, (B) an Event of Default shall be in
     existence under subsection 10.1.1 because of Borrower's failure to make a
     payment of interest, principal, fees, expenses or other amounts due in
     respect of the Term Loan or (C) an Event of Default shall be in existence
     that reflects either a material impairment in the value of the Term Loan
     Primary Collateral, or a material interference with the ability of the Term
     Lenders to access, monitor or market a material portion of the Term Loan
     Primary Collateral.

          Agent and Lenders agree that if, pursuant to this Agreement, Agent is
     directed by Majority Term Lenders to take enforcement action against any of
     the Term Loan Primary Collateral, including without limitation, to pursue a
     sale, transfer, lease or other disposition of such Term Loan Primary
     Collateral, any such transaction shall be subject to Agent's right to use
     the Term Loan Primary Collateral (1) for a period of up to sixty (60) days
     after receipt by Agent of such direction (the "Completion Period"), for the
     purpose of finishing Inventory and selling or preparing for sale any of the
     Revolving Loan Primary Collateral and (2) for an additional period of up to
     sixty (60) days thereafter (the "Holding Period"), for the purpose of
     storing Inventory and selling or preparing for sale any of the Revolving
     Loan Primary Collateral. As between Revolving Lenders and Term Lenders,
     Revolving Lenders agree to bear the incremental costs and expenses of
     keeping the Term Loan Primary Collateral operational during the Completion
     Period and, throughout the Completion Period, in the same working

                                      -63-
<PAGE>

     order and repair as was the case immediately prior to the Completion
     Period (ordinary wear and tear excepted), in excess of the costs and
     expenses of maintaining the Term Loan Primary Collateral in a
     non-operational state ("Incremental Operational Costs"). Notwithstanding
     anything to the contrary contained herein, the Incremental Operational
     Costs shall be treated under this Agreement as Collateral Protection Loans
     relating to Revolving Loan Primary Collateral and not costs and expenses
     related to Term Loan Primary Collateral, and shall be repaid as provided
     herein for such Collateral Protection Loans. The existence of a Completion
     Period or Holding Period shall not prevent the preparation for sale,
     marketing, lease, transfer or other disposition of any of the Term Loan
     Primary Collateral, provided that any such activities and actions shall be
     completed, if applicable, subject to Agent's rights to access and use the
     Term Loan Primary Collateral for the purposes described herein during the
     Completion Period and the Holding Period.

     10.3. Other Remedies.

     Upon the occurrence and during the continuance of an Event of Default,
Agent shall have and may exercise from time to time the following other rights
and remedies:

          10.3.1. All of the rights and remedies of a secured party under the
     UCC or under other applicable law, and all other legal and equitable rights
     to which Agent or Lenders may be entitled, all of which rights and remedies
     shall be cumulative and shall be in addition to any other rights or
     remedies contained in this Agreement or any of the other Loan Documents,
     and none of which shall be exclusive.

          10.3.2. The right to take immediate possession of the Collateral, and
     to (i) require Borrower and each of its Subsidiaries to assemble the
     Collateral, at Borrower's expense, and make it available to Agent at a
     place designated by Agent which is reasonably convenient to both parties,
     and (ii) enter any premises where any of the Collateral shall be located
     and to keep and store the Collateral on said premises until sold (and if
     said premises be the Property of Borrower or any Subsidiary of Borrower,
     Borrower agrees not to charge, or permit any of its Subsidiaries to charge,
     Agent for storage thereof).

          10.3.3. The right to sell or otherwise dispose of all or any
     Collateral in its then condition, or after any further manufacturing or
     processing thereof, at public or private sale or sales, with such notice as
     may be required by law, in lots or in bulk, for cash or on credit, all as
     Agent, in its sole discretion, may deem advisable. Agent may, at Agent's
     option, disclaim any and all warranties regarding the Collateral in
     connection with any such sale. Borrower agrees that 10 days' written notice
     to Borrower or any of its Subsidiaries of any public or private sale or
     other disposition of Collateral shall be reasonable notice thereof, and
     such sale shall be at such locations as Agent may designate in said notice.
     Agent shall have the right to conduct such sales on Borrower's or any of
     its Subsidiaries' premises, without charge therefor, and such sales may be
     adjourned from time to time in accordance with applicable law.

                                      -64-
<PAGE>

     Agent shall have the right to sell, lease or otherwise dispose of the
     Collateral, or any part thereof, for cash, credit or any combination
     thereof, and Agent, on behalf of Lenders, may purchase all or any part of
     the Collateral at public or, if permitted by law, private sale and, in lieu
     of actual payment of such purchase price, may set off the amount of such
     price against the Obligations. The proceeds realized from the sale of any
     Collateral shall be applied, after allowing 2 Business Days for collection,
     as set forth in subsection 3.3.1, 3.3.2 or 3.4.2, as applicable. If any
     deficiency shall arise, Borrower and each Guarantor shall remain jointly
     and severally liable to Agent and Lenders therefor.

          10.3.4. Agent is hereby granted a license or other right to use,
     without charge, Borrower's and each of its Subsidiary's labels, patents,
     copyrights, licenses, rights of use of any name, trade secrets, tradenames,
     trademarks and advertising matter, or any Property of a similar nature, as
     it pertains to the Collateral, in completing, advertising for sale and
     selling any Collateral and Borrower's and each of its Subsidiary's rights
     under all licenses and all franchise agreements shall inure to Agent's
     benefit.

          10.3.5. Agent may, at its option, require Borrower to deposit with
     Agent funds equal to the LC Amount and, if Borrower fails to promptly make
     such deposit, Agent may advance such amount as a Revolving Credit Loan
     (whether or not an Overadvance is created thereby). Each such Revolving
     Credit Loan shall be secured by all of the Collateral and shall constitute
     a Base Rate Portion. Any such deposit or advance shall be held by Agent as
     a reserve to fund future payments on such LC Guaranties and future drawings
     against such Letters of Credit. At such time as all LC Guaranties have been
     paid or terminated and all Letters of Credit have been drawn upon or
     expired, any amounts remaining in such reserve shall be applied against any
     outstanding Obligations, or, if all Obligations have been indefeasibly paid
     in full, returned to Borrower.

     10.4. Set Off and Sharing of Payments.

     In addition to any rights now or hereafter granted under applicable law and
not by way of limitation of any such rights, during the continuance of any Event
of Default, each Lender is hereby authorized by Borrower at any time or from
time to time, with prior written consent of Agent and with reasonably prompt
subsequent notice to Borrower (any prior or contemporaneous notice to Borrower
being hereby expressly waived) to set off and to appropriate and to apply any
and all (i) balances held by such Lender at any of its offices for the account
of Borrower or any of its Subsidiaries (regardless of whether such balances are
then due to Borrower or its Subsidiaries), and (ii) other property at any time
held or owing by such Lender to or for the credit or for the account of Borrower
or any of its Subsidiaries, against and on account of any of the Obligations.
Borrower agrees, to the fullest extent permitted by law, that any Lender may
exercise its right to set off with respect to amounts in excess of its pro rata
share of the Obligations and upon doing so shall deliver such excess to Agent
for the benefit of all Lenders in accordance with the priorities set forth
herein.

                                      -65-
<PAGE>

     10.5. Remedies Cumulative; No Waiver.

     All covenants, conditions, provisions, warranties, guaranties, indemnities,
and other undertakings of Borrower contained in this Agreement and the other
Loan Documents, or in any document referred to herein or contained in any
agreement supplementary hereto or in any schedule or in any Guaranty Agreement
given to Agent or any Lender or contained in any other agreement between any
Lender and Borrower or between Agent and Borrower heretofore, concurrently, or
hereafter entered into, shall be deemed cumulative to and not in derogation or
substitution of any of the terms, covenants, conditions, or agreements of
Borrower herein contained. The failure or delay of Agent or any Lender to
require strict performance by Borrower of any provision of this Agreement or to
exercise or enforce any rights, Liens, powers, or remedies hereunder or under
any of the aforesaid agreements or other documents or security or Collateral
shall not operate as a waiver of such performance, Liens, rights, powers and
remedies, but all such requirements, Liens, rights, powers, and remedies shall
continue in full force and effect until all Loans and other Obligations owing or
to become owing from Borrower to Agent and each Lender have been fully
satisfied. None of the undertakings, agreements, warranties, covenants and
representations of Borrower contained in this Agreement or any of the other Loan
Documents and no Default or Event of Default by Borrower under this Agreement or
any other Loan Documents shall be deemed to have been suspended or waived by
Lenders, unless such suspension or waiver is by an instrument in writing
specifying such suspension or waiver and is signed by a duly authorized
representative of Agent (on behalf of itself, Majority Lenders, Majority
Revolving Lenders, Majority Term Lenders or all Lenders, as required pursuant to
subsection 11.10) and directed to Borrower.

                              SECTION 11. THE AGENT

     11.1. Authorization and Action.

     Each Lender hereby appoints and authorizes Agent to take such action on its
behalf and to exercise such powers under this Agreement and the other Loan
Documents as are delegated to Agent by the terms hereof and thereof, together
with such powers as are reasonably incidental thereto. Each Lender hereby
acknowledges that Agent shall not have by reason of this Agreement assumed a
fiduciary relationship in respect of any Lender. In performing its functions and
duties under this Agreement, Agent shall act solely as agent of Lenders and
shall not assume, or be deemed to have assumed, any obligation toward, or
relationship of agency or trust with or for, Borrower. As to any matters not
expressly provided for by this Agreement and the other Loan Documents (including
without limitation enforcement and collection of the Notes), Agent may, but
shall not be required to, exercise any discretion or take any action, but shall
be required to act or to refrain from acting (and shall be fully protected in so
acting or refraining from acting) upon the instructions of the Majority Lenders,
whenever such instruction shall be requested by Agent or required hereunder, or
a greater or lesser number of Lenders if so required hereunder, and such
instructions shall be binding upon all Lenders; provided, that Agent shall be
fully justified in failing or refusing to take any action which exposes Agent to
any liability or which is contrary to this Agreement, the other Loan Documents
or applicable law, unless Agent is indemnified to its satisfaction by the other
Lenders against any and all liability and expense

                                      -66-
<PAGE>

which it may incur by reason of taking or continuing to take any such
action. If Agent seeks the consent or approval of the Majority Lenders (or a
greater or lesser number of Lenders as required in this Agreement), with respect
to any action hereunder, Agent shall send notice thereof to each Lender and
shall notify each Lender at any time that the Majority Lenders (or such greater
or lesser number of Lenders) have instructed Agent to act or refrain from acting
pursuant hereto.

     11.2. Agent's Reliance, Etc.

     Neither Agent, any Affiliate of Agent, nor any of their respective
directors, officers, agents or employees shall be liable for any action taken or
omitted to be taken by it or them under or in connection with this Agreement or
the other Loan Documents, except for its or their own gross negligence or
willful misconduct. Without limitation of the generality of the foregoing,
Agent: (i) may treat each Lender party hereto as the holder of Obligations until
Agent receives written notice of the assignment or transfer or such lender's
portion of the Obligations signed by such Lender and in form reasonably
satisfactory to Agent; (ii) may consult with legal counsel, independent public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken in good faith by it in accordance with the
advice of such counsel, accountants or experts, (iii) makes no warranties or
representations to any Lender and shall not be responsible to any Lender for any
recitals, statements, warranties or representations made in or in connection
with this Agreement or any other Loan Documents; (iv) shall not have any duty
beyond Agent's customary practices in respect of loans in which Agent is the
only lender, to ascertain or to inquire as to the performance or observance of
any of the terms, covenants or conditions of this Agreement or the other Loan
Documents on the part of Borrower, to inspect the property (including the books
and records) of Borrower, to monitor the financial condition of Borrower or to
ascertain the existence or possible existence or continuation of any Default or
Event of Default; (v) shall not be responsible to any Lender for the due
execution, legality, validity, enforceability, genuineness, sufficiency or value
of this Agreement or the other Loan Documents or any other instrument or
document furnished pursuant hereto or thereto; (vi) shall not be liable to any
Lender for any action taken, or inaction, by Agent upon the instructions of
Majority Lenders (or a greater or lesser number of Lenders as required in this
Agreement) pursuant to Section 11.1 hereof or refraining to take any action
pending such instructions; (vii) shall not be liable for any apportionment or
distributions of payments made by it in good faith pursuant to Section 3 hereof;
(viii) shall incur no liability under or in respect of this Agreement or the
other Loan Documents by acting upon any notice, consent, certificate, message or
other instrument or writing (which may be by telephone, facsimile, telegram,
cable or telex) believed in good faith by it to be genuine and signed or sent by
the proper party or parties; and (ix) may assume that no Event of Default has
occurred and is continuing, unless Agent has actual knowledge of the Event of
Default, has received notice from Borrower or Borrower's independent certified
public accounts stating the nature of the Event of Default, or has received
notice from a Lender stating the nature of the Event of Default and that such
Lender considers the Event of Default to have occurred and to be continuing. In
the event any apportionment or distribution described in clause (vii) above is
determined to have been made in error, the sole recourse of any Person to whom
payment

                                      -67-
<PAGE>

was due but not made shall be to recover from the recipients of such
payments any payment in excess of the amount to which they are determined to
have been entitled.

     11.3. Fleet and Affiliates.

     With respect to its commitment hereunder to make Loans, Fleet shall have
the same rights and powers under this Agreement and the other Loan Documents as
any other Lender and may exercise the same as though it were not Agent; and the
terms "Lender," "Lenders", "Majority Lenders" and "Majority Revolving Lenders"
shall, unless otherwise expressly indicated, include Fleet in its individual
capacity as a Lender. Fleet and its Affiliates may lend money to, and generally
engage in any kind of business with, Borrower, and any Person who may do
business with or own Securities of Borrower all as if Fleet were not Agent and
without any duty to account therefor to any other Lender.

     11.4. Lender Credit Decision.

     Each Lender acknowledges that it has, independently and without reliance
upon Agent or any other Lender and based on the financial statements referred to
herein and such other documents and information as it has deemed appropriate,
made its own credit analysis and decision to enter into this Agreement. Each
Lender also acknowledges that it will, independently and without reliance upon
Agent or any other Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement. Agent shall not have any duty
or responsibility, either initially or on an ongoing basis, to provide any
Lender with any credit or other similar information regarding Borrower.

     11.5. Indemnification.

     Lenders agree to indemnify Agent (to the extent not reimbursed by
Borrower), in accordance with their respective Revolving Loan Percentages, from
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by, or asserted against
Agent in any way relating to or arising out of this Agreement or any other Loan
Document or any action taken or omitted by Agent under this Agreement; provided
that no Lender shall be liable for any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from Agent's gross negligence or willful misconduct.
Without limitation of the foregoing, each Lender agrees to reimburse Agent
promptly upon demand for its ratable share, as set forth above, of any
out-of-pocket expenses (including attorneys' fees) incurred by Agent in
connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiation, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement and each other Loan Document, to the
extent that Agent is not reimbursed for such expenses by Borrower. The
obligations of Lenders under this Section 11.5 shall survive the payment in full
of all Obligations and the termination of this Agreement. If after payment and
distribution of any amount by Agent to Lenders, any Lender or any other Person,
including Borrower, any

                                      -68-
<PAGE>

creditor of Borrower, a liquidator, administrator or trustee in bankruptcy,
recovers from Agent any amount found to have been wrongfully paid to Agent or
disbursed by Agent to Lenders, then Lenders, in accordance with their respective
Revolving Loan Percentages, shall reimburse Agent for all such amounts.

     11.6. Rights and Remedies to be Exercised by Agent Only.

     Each Lender agrees that, except as set forth in Section 10.4, no Lender
shall have any right individually (i) to realize upon the security created by
this Agreement or any other Loan Document, (ii) to enforce any provision of this
Agreement or any other Loan Document, or (iii) to make demand under this
Agreement or any other Loan Document.

     11.7. Agency Provisions Relating to Collateral.

     Each Lender authorizes and ratifies Agent's entry into this Agreement and
the Security Documents for the benefit of Lenders. Each Lender agrees that any
action taken by Agent with respect to the Collateral in accordance with the
provisions of this Agreement or the Security Documents, and the exercise by
Agent of the powers set forth herein or therein, together with such other powers
as are reasonably incidental thereto, shall be authorized and binding upon all
Lenders. Agent is hereby authorized on behalf of all Lenders, without the
necessity of any notice to or further consent from any Lender, to take any
action with respect to any Collateral or the Loan Documents which may be
necessary to perfect and maintain perfected Agent's Liens upon the Collateral,
for its benefit and the ratable benefit of Lenders. Lenders hereby irrevocably
authorize Agent, at its option and in its discretion, to release any Lien
granted to or held by Agent upon any Collateral (i) upon termination of the
Agreement and payment and satisfaction in full in cash of all Obligations; or
(ii) constituting property being sold or disposed of if Borrower certifies to
Agent that the sale or disposition is made in compliance with subsection 8.2.9
hereof, as it may be amended from time to time (and Agent may rely conclusively
on any such certificate, without further inquiry); or (iii) constituting
property in which Borrower owned no interest at the time the Lien was granted or
at any time thereafter; or (iv) in connection with any foreclosure sale or other
disposition of Collateral after the occurrence and during the continuation of an
Event of Default or (v) if approved, authorized or ratified in writing by Agent
at the direction of all Lenders. Upon request by Agent at any time, Lenders will
confirm in writing Agent's authority to release particular types or items of
Collateral pursuant hereto. Agent shall have no obligation whatsoever to any
Lender or to any other Person to assure that the Collateral exists or is owned
by Borrower or is cared for, protected or insured or has been encumbered or that
the Liens granted to Agent herein or pursuant to the Security Documents have
been properly or sufficiently or lawfully created, perfected, protected or
enforced or are entitled to any particular priority, or to exercise at all or in
any particular manner or under any duty of care, disclosure or fidelity, or to
continue exercising, any of its rights, authorities and powers granted or
available to Agent in this Section 11.7 or in any of the Loan Documents, it
being understood and agreed that in respect of the Collateral, or any act,
omission or event related thereto, Agent may act in any manner it may deem
appropriate, in its sole discretion, but consistent with the provisions of this
Agreement, including given Agent's own interest in the Collateral as a Lender
and that Agent shall have no duty or liability whatsoever to any

                                      -69-
<PAGE>

Lender, except as expressly set forth in this Agreement. Agent agrees not
to take any enforcement action with respect to a Mixed Asset Transaction,
without direction from Supermajority Revolving Lenders, or with respect to any
other Revolving Loan Primary Collateral, without direction from Majority
Revolving Lenders, in each case except to the extent that Agent reasonably
believes that delay in pursuing such enforcement action would have a material
adverse effect on Agent's ability to maximize the realization from such
Revolving Loan Primary Collateral.

     11.8. Agent's Right to Purchase Commitments.

     Agent shall have the right, but shall not be obligated, at any time upon
written notice to any Lender and with the consent of such Lender, which may be
granted or withheld in such Lender's sole discretion, to purchase for Agent's
own account all of such Lender's interests in this Agreement, the other Loan
Documents and the Obligations, for the face amount of the outstanding
Obligations owed to such Lender, including without limitation all accrued and
unpaid interest and fees.

     11.9. Right of Sale, Assignment, Participations.

     Borrower hereby consents to any Lender's participation, sale, assignment,
transfer or other disposition, at any time or times hereafter, of this Agreement
and any of the other Loan Documents, or of any portion hereof or thereof,
including, without limitation, such Lender's rights, title, interests, remedies,
powers, and duties hereunder or thereunder subject to the terms and conditions
set forth below:

          11.9.1. Sales, Assignments. Each Lender hereby agrees that, with
     respect to any sale or assignment (i) no such sale or assignment shall be
     for an amount of less than $5,000,000, (ii) each such sale or assignment
     shall be made on terms and conditions which are customary in the industry
     at the time of the transaction, (iii) except in connection with an
     Affiliate Sale, Agent must consent, such consent not to be unreasonably
     withheld, to each such assignment to a Person that is not an original
     signatory to this Agreement, (iv) except in connection with an Affiliate
     Sale, the assigning Lender shall pay to the Agent a processing and
     recordation fee of $3,500 and any out-of-pocket attorneys' fees and
     expenses incurred by the Agent in connection with any such sale or
     assignment and (v) each such sale or assignment by a Revolving Lender shall
     involve pro rata portions of the Revolving Credit Loans and Revolving Loan
     Commitment of the assigning Lender. Notwithstanding the foregoing, each
     Lender may sell or assign any portion of its rights, title, interests,
     remedies, powers and duties hereunder and under the other Loan Documents
     (each, an "Affiliate Sale") to (a) any Affiliate of such Lender or (b) any
     Person that is a bank, financial institution, insurance company or mutual
     fund in connection with the sale of all of such Lender's lending business
     or assets, in each case without complying with clauses (iii) and (iv)
     above. After such sale or assignment has been consummated (x) the assignee
     Lender thereupon shall become a "Lender" for all purposes of this Agreement
     and (y) the assigning Revolving Lender, if applicable, shall have no

                                      -70-
<PAGE>

     further liability for funding the portion of Revolving Loan Commitments
     assumed by such other Lender.

          11.9.2. Participations. Any Lender may grant participations in its
     extensions of credit hereunder to any other Lender or other lending
     institution (a "Participant"), provided that (i) no such participation
     shall be for an amount of less than $5,000,000, (ii) no Participant shall
     thereby acquire any direct rights under this Agreement, (iii) no
     Participant shall be granted any right to consent to any amendment, except
     to the extent any of the same pertain to (1) reducing the aggregate
     principal amount of, or interest rate on, or fees applicable to, any Loan
     or (2) extending the final stated maturity of any Loan or the stated
     maturity of any portion of any payment of principal of, or interest or fees
     applicable to, any of the Loans; provided, that the rights described in
     this subclause (2) shall not be deemed to include the right to consent to
     any amendment with respect to or which has the effect of requiring any
     mandatory prepayment of any portion of any Loan or any amendment or waiver
     of any Default or Event of Default, (iv) no sale of a participation in
     extensions of credit shall in any manner relieve the originating Lender of
     its obligations hereunder, (v) the originating Lender shall remain solely
     responsible for the performance of such obligations, (vi) Borrower and the
     Agent shall continue to deal solely and directly with the originating
     Lender in connection with the originating Lender's rights and obligations
     under this Agreement and the other Loan Documents, (vii) in no event shall
     any financial institution purchasing the participation grant a
     participation in its participation interest in the Loans without the prior
     written consent of Agent, and, in the absence of a Default or an Event of
     Default, Borrower, which consents shall not unreasonably be withheld,
     (viii) all amounts payable by Borrower hereunder shall be determined as if
     the originating Lender had not sold any such participation and (ix) no such
     participation shall be made by a Revolving Lender unless it involves a pro
     rata portion of each of the Revolving Credit Loans and Revolving Loan
     Commitment of the Revolving Lender granting the participation.

          11.9.3. Certain Agreements of Borrower. Borrower agrees that (i) it
     will use its best efforts to assist and cooperate with each Lender in any
     manner reasonably requested by such Lender to effect the sale of
     participation in or assignments of any of the Loan Documents or any portion
     thereof or interest therein, including, without limitation, assisting in
     the preparation of appropriate disclosure documents and making members of
     management available at reasonable times to meet with and answer questions
     of potential assignees and Participants; and (ii) subject to the provisions
     of Section 12.14 hereof, such Lender may disclose credit information
     regarding Borrower to any potential Participant or assignee.

          11.9.4. Non U.S. Resident Transferees. If, pursuant to this Section
     11.9, any interest in this Agreement or any Loans is transferred to any
     transferee which is organized under the laws of any jurisdiction other than
     the United States or any state thereof, the transferor Lender shall cause
     such transferee (other than any Participant), and may cause any
     Participant, concurrently with and as a condition precedent to the
     effectiveness of such transfer, to (i) represent to the transferor Lender
     (for the benefit

                                      -71-
<PAGE>

     of the transferor Lender, the Agent, and Borrower) that under
     applicable law and treaties no taxes will be required to be withheld by
     Agent, Borrower or the transferor Lender with respect to any payments to be
     made to such transferee in respect of the interest so transferred, (ii)
     furnish to the transferor Lender, Agent and Borrower either United States
     Internal Revenue Service Form W-8BEN or United States Internal Revenue
     Service Form W-8ECI (wherein such transferee claims entitlement to complete
     exemption from United States federal withholding tax on all interest
     payments hereunder), and (iii) agree (for the benefit of the transferor
     Lender, Agent and Borrower) to provide the transferor Lender, Agent and
     Borrower a new Form W-8BEN or Form W-8ECI upon the obsolescence of any
     previously delivered form and comparable statements in accordance with
     applicable United States laws and regulations and amendments duly executed
     and completed by such transferee, and to comply from time to time with all
     applicable United States laws and regulations with regard to such
     withholding tax exemption.

     11.10. Amendment.

     No amendment or waiver of any provision of this Agreement or any other Loan
Document (including without limitation any Note), nor consent to any departure
by Borrower therefrom, shall in any event be effective unless the same shall be
in writing and signed by the Majority Lenders and Borrower, and then such waiver
or consent shall be effective only in the specific instance and for the specific
purpose for which given; provided, that no amendment, waiver or consent shall be
effective, unless (i) in writing and signed by each Lender, to do any of the
following: (1) change clause (ii)(a) or clause (ii)(b) of the definition of the
term Borrowing Base to increase the advance percentage of 85% applicable to
Eligible Accounts or the advance percentage of 85% applicable to net orderly
liquidation percentages of categories or types of Eligible Inventory contained
therein, or to alter the appraisal procedures applicable to Eligible Inventory,
(2) increase the aggregate Revolving Loan Commitments or the Revolving Credit
Maximum Amount to an amount in excess of $210,000,000, it being understood that
no Revolving Lender's Revolving Loan Commitment may be increased without its
consent, (3) decrease the amount of the Availability Block to an amount below
$10,000,000, (4) amend the definition of either the term Eligible Inventory or
Eligible Account, if the effect of such amendment is to classify currently
ineligible Inventory as Eligible Inventory or currently ineligible Accounts as
Eligible Accounts, or to increase the amount of any monetary or percentage limit
or sublimit contained within such definition, (5) modify clause (i), clause
(ii)(a) or clause (ii)(b) of the definition of the term Borrowing Base, if the
effect of such amendment is to increase the amount of the Borrowing Base as
calculated thereunder, (6) amend subsection 3.3.1, 3.3.2, 3.4.2 or 10.2, (7)
reduce or increase the number of Lenders, Term Lenders or Revolving Lenders that
shall be required for Lenders or any class of Lenders or any of them to take any
action hereunder, (8) release or discharge any Person liable for the performance
of any obligations of Borrower hereunder or under any of the Loan Documents, (9)
amend any provision of this Agreement that requires the consent of all Lenders,
or consent to or waive any breach of such provision, (10) amend the definition
of the term "Majority Lenders", (11) amend this Section 11.10, (12) release any
substantial portion of the Collateral, unless otherwise permitted pursuant to
Section 11.7

                                      -72-
<PAGE>

hereof, (13) modify the priority of application of proceeds of any
Collateral or the provisions with respect to mandatory prepayments of the
various Obligations, (14) increase the maximum amount of Collateral Protection
Loans permitted to be made pursuant to Section 1.3, or (15) change the
definition of the terms "Availability", "Conditions to Release", "Term Loan
Primary Collateral" or "Revolving Loan Primary Collateral"; (ii) in writing and
signed by all Revolving Lenders, to do any of the following: (1) increase the
aggregate Revolving Loan Commitments, (2) reduce the principal of, or interest
on, any amount payable hereunder in respect of Revolving Credit Loans or under
any Revolving Note, or any fees or expenses related thereto, other than those
payable only to Fleet in its capacity as Agent, which may be reduced by Fleet
unilaterally, (3) decrease any interest rate payable hereunder in respect of the
Revolving Credit Loans, (4) postpone any date fixed for any payment of principal
of, or interest on, any amounts payable hereunder, each other than those payable
only to Fleet in its capacity as Agent, which may be postponed by Fleet
unilaterally, and other than in respect of the Term Loan and the Term Loan
Notes, (5) change the definition of the term Availability Block or (6) amend the
definition of the terms "Majority Revolving Lenders" and "Supermajority
Revolving Lenders"; (iii) in writing and signed by all Term Lenders affected
thereby, to do any of the following: (1) reduce the principal of, or interest
on, any amount payable in respect of the Term Loan or under any Term Note,
including any fees or expenses related thereto, (2) decrease any interest rate
payable hereunder in respect of the Term Loan, (3) postpone any date fixed for
any payment of principal of, or interest on, any amounts payable hereunder in
respect of the Term Loan or the Term Notes or any fees or expenses related
thereto, (4) amend the definition of the terms "Majority Term Lenders", "Term
Loan", "Term Lender" or "Term Loan Representative", (5) amend any provision
hereof that requires Agent to act at the direction of Majority Term Lenders or
the Term Loan Representative, (6) increase the number of Lenders or any class of
Lenders or any of them required to take any action in the case of any action
requiring the consent solely of Majority Term Lenders, (7) release any Lien on
any Collateral except in connection with a sale or other disposition pursuant to
subsection 8.2.9, (8) amend or waive any provision of Section 5.1, 5.2, 5.3,
5.4, 6.1, 8.1.10 or 8.2.5 as it relates to the Term Loan Primary Collateral, (9)
amend any provision of Section 1.3, 2.6 or 8.2.9 or (10) modify any rights
expressly granted to the Term Loan Representative or any Term Lender; (iv) in
writing and signed by Majority Term Lenders, to amend any Mortgage; (v) in
writing and signed by Agent in addition to the Lenders required above to affect
the rights or duties of Agent under this Agreement, any Note or any other Loan
Document; and (vi) in writing and signed by Term Loan Representative in addition
to the Lenders required above to affect the rights or duties of Term Loan
Representative under this Agreement, any Note or any other Loan Document.
Notwithstanding the foregoing, no amendment or waiver of any provision of this
Agreement, the Notes or any other Loan Document or any consent to any departure
by Borrower therefrom, which requires or includes a voting threshold other than
Majority Lenders shall be effective unless signed by Lenders constituting at
least the necessary number or percentage of Lenders required hereby for any such
amendment, waiver, departure or consent.

                                      -73-
<PAGE>

     11.11. Resignation of Agent; Appointment of Successor.

     The Agent may resign as Agent by giving not less than thirty (30) days'
prior written notice to the Lenders and Borrower. If the Agent shall resign
under this Agreement, then, (i) subject to the consent of the Borrower (which
consent shall not be unreasonably withheld and which consent shall not be
required during any period in which a Default or an Event of Default exists),
the Majority Lenders shall appoint from among the Lenders a successor agent for
the Lenders or (ii) if a successor agent shall not be so appointed and approved
within the thirty (30) day period following the Agent's notice to the Lenders
and the Borrower of its resignation, then the Agent shall appoint a successor
agent who shall serve as Agent until such time as the Majority Lenders appoint a
successor agent, subject to the Borrower's consent as set forth above. Upon its
appointment, such successor agent shall succeed to the rights, powers and duties
of the Agent and the term "Agent" shall mean such successor effective upon its
appointment, and the former Agent's rights, powers and duties as Agent shall be
terminated without any other or further act or deed on the part of such former
Agent or any of the parties to this Agreement. After the resignation of any
Agent hereunder, the provisions of this Section 11 shall inure to the benefit of
such former Agent and such former Agent shall not by reason of such resignation
be deemed to be released from liability for any actions taken or not taken by it
while it was an Agent under this Agreement.

     11.12. Term Loan Representative.

     Each Term Lender hereby agrees that for the limited purposes described in
this Agreement, and no other purposes, Manchester shall act as Term Loan
Representative for all Term Lenders. A replacement Term Loan Representative may
be appointed from time to time by vote of Majority Term Lenders. If no Person is
acting as Term Loan Representative at any time, the rights of Term Loan
Representative hereunder may not be exercised by any Term Lender. Term Loan
Representative shall have no rights, obligations or duties under this Agreement,
except as specifically set forth herein.

                           SECTION 12. MISCELLANEOUS

     12.1. Power of Attorney.

     Borrower hereby irrevocably designates, makes, constitutes and appoints
Agent (and all Persons designated by Agent) as Borrower's true and lawful
attorney (and agent-in-fact), solely with respect to the matters set forth in
this Section 12.1, and Agent, or Agent's agent, may, without notice to Borrower
and in Borrower's or Agent's name, but at the cost and expense of Borrower:

          12.1.1. At such time or times as Agent or said agent, in its sole
     discretion, may determine, endorse Borrower's name on any checks, notes,
     acceptances, drafts, money orders or any other evidence of payment or
     proceeds of the Collateral which come into the possession of Agent or under
     Agent's control.

                                      -74-
<PAGE>

          12.1.2. At such time or times upon or after the occurrence and during
     the continuance of an Event of Default (provided that the occurrence of an
     Event of Default shall not be required with respect to clauses (v), (vii),
     (ix), (x) and (xiv) below), as Agent or its agent in its sole discretion
     may determine: (i) demand payment of the Accounts from the Account Debtors,
     enforce payment of the Accounts by legal proceedings or otherwise, and
     generally exercise all of Borrower's rights and remedies with respect to
     the collection of the Accounts; (ii) ask for, demand, collect, sue for,
     recover, compound, receive and give acquittance and receipts for moneys due
     and to become due under or in respect of any of the Collateral; (iii)
     settle, adjust, compromise, discharge or release any of the Accounts or
     other Collateral or any legal proceedings brought to collect any of the
     Accounts or other Collateral; (iv) sell or assign any of the Accounts and
     other Collateral upon such terms, for such amounts and at such time or
     times as Agent deems advisable, and at Agent's option, with all warranties
     regarding the Collateral disclaimed; (v) take control, in any manner, of
     any item of payment or proceeds relating to any Collateral; (vi) prepare,
     file and sign Borrower's name to a proof of claim in bankruptcy or similar
     document against any Account Debtor or to any notice of lien, assignment or
     satisfaction of lien or similar document in connection with any of the
     Collateral; (vii) receive, open and dispose of all mail addressed to
     Borrower and notify postal authorities to change the address for delivery
     thereof to such address as Agent may designate; (viii) endorse the name of
     Borrower upon any of the items of payment or proceeds relating to any
     Collateral and deposit the same to the account of Agent on account of the
     Obligations; (ix) endorse the name of Borrower upon any chattel paper,
     document, instrument, invoice, freight or express bill, bill of lading,
     storage or warehouse receipt, draft against debtor, assignment, notice or
     similar document or agreement relating to the Accounts, Inventory and any
     other Collateral; (x) use Borrower's stationery and sign the name of
     Borrower to verifications of the Accounts and notices thereof to Account
     Debtors; (xi) use the information recorded on or contained in any data
     processing equipment and computer hardware and software relating to the
     Accounts, Inventory, Equipment and any other Collateral; (xii) make and
     adjust claims under policies of insurance; (xiii) file any claims or take
     any action or institute any proceedings that Agent may deem necessary or
     desirable for the collection of any of the Collateral or otherwise to
     enforce or protect the rights of Agent with respect to any of the
     Collateral; (xiv) pay or discharge taxes or Liens (other than Liens
     permitted under this Agreement) levied or placed upon or threatened against
     the Collateral, the legality or validity thereof and the amounts necessary
     to discharge the same to be determined by Agent in its sole discretion, any
     such payments made by Agent to become obligations of Borrower to Agent, due
     and payable immediately without demand; and (xv) subject to the terms of
     the applicable Financing Order, do all other acts and things necessary, in
     Agent's determination, to fulfill Borrower's obligations under this
     Agreement, including without limitation sell, transfer, pledge, make any
     agreement with respect to or otherwise deal with any of the Collateral as
     fully and completely as though Agent were the absolute owner thereof for
     all purposes, and, at Agent's option and Borrower's expense, at any time or
     from time to time, all acts and things that Agent deems necessary to
     protect, preserve or realize upon the Collateral and Agent's

                                      -75-
<PAGE>

     security interest therein in order to effect the intent of this
     Agreement, all as fully and effectively as Borrower might do.

     The power of attorney granted hereby shall constitute a power coupled with
an interest and shall be irrevocable.

     12.2. Indemnity.

     Borrower hereby agrees to indemnify Agent and each Lender (and each of
their Affiliates) and hold Agent and each Lender and the officers, directors,
employees and Affiliates of Agent and each Lender (collectively, the
"Indemnitees") harmless from and against any liability, loss, damage, suit,
action or proceeding ever suffered or incurred by any such Person (including
reasonable attorneys fees and legal expenses) as the result of Borrower's
failure to observe, perform or discharge Borrower's duties hereunder. In
addition, Borrower shall defend each Indemnitee against and save it harmless
from all claims of any Person with respect to Indemnified Liabilities (except
those resulting from the gross negligence or intentional misconduct of any such
Person). Without limiting the generality of the foregoing, these indemnities
shall extend to any loss, damage, cost, expense or liability incurred by any
Indemnitee or any claim asserted against any Indemnitee by any Person, directly
or indirectly arising out of or attributable to (i) the use, generation,
storage, release, threatened release, discharge, disposal or presence of any
solid or Hazardous Materials on, under or about the Collateral or (ii)
Borrower's or any other Person's failure to comply with laws applicable to solid
or Hazardous Materials or other toxic substances. Notwithstanding any contrary
provision in this Agreement, the obligation of Borrower under this Section 12.2
shall survive the payment in full of the Obligations and the termination of this
Agreement.

     12.3. Sale of Interest.

     Borrower may not sell, assign or transfer any interest in this Agreement,
any of the other Loan Documents, or any of the Obligations, or any portion
thereof, including, without limitation, Borrower's rights, title, interests,
remedies, powers, and duties hereunder or thereunder.

     12.4. Severability.

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

     12.5. Successors and Assigns.

     This Agreement and the other Loan Documents shall be binding upon and inure
to the benefit of the successors and assigns of Borrower, Agent and each Lender
permitted under Section 11.9 hereof.

                                      -76-
<PAGE>

     12.6. Cumulative Effect; Conflict of Terms.

     The provisions of the Loan Documents are hereby made cumulative with the
provisions of this Agreement. Except as otherwise provided in any of the other
Loan Documents by specific reference to the applicable provision of this
Agreement, and except as provided in Section 3.2, if any provision contained in
this Agreement is in direct conflict with, or inconsistent with, any provision
in any of the other Loan Documents, the provision contained in this Agreement
shall govern and control.

     12.7. Execution in Counterparts.

     This Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed to be an original and all of which
counterparts taken together shall constitute but one and the same instrument.

     12.8. Notice.

     Except as otherwise provided herein, all notices, requests and demands to
or upon a party hereto, to be effective, shall be in writing and shall be sent
by personal delivery against receipt, by overnight courier or by facsimile and,
unless otherwise expressly provided herein, shall be deemed to have been validly
served, given, delivered or received immediately when delivered against receipt,
one Business Day after deposit with an overnight courier or, in the case of
facsimile notice, when sent, addressed as follows:

     If to Agent:                     Fleet Capital Corporation
                                      One South Wacker Drive
                                      Suite 1400
                                      Chicago, Illinois  60606
                                      Attention:  Loan Administration Manager
                                      Facsimile No.:  (312) 827-6537

     With a copy to:                  Goldberg, Kohn, Bell, Black,
                                        Rosenbloom & Moritz, Ltd.
                                      55 East Monroe Street
                                      Suite 3700
                                      Chicago, Illinois  60603
                                      Attention:  David L. Dranoff, Esq.
                                      Facsimile No.:  (312) 332-2196

     If to Borrower:                  Weirton Steel Corporation
                                      400 Three Springs Drive
                                      Weirton, West Virginia  26062
                                      Attention:  Mark E. Kaplan
                                      Facsimile No.:  (304) 797-2991

                                      -77-
<PAGE>

     With a copy to:                  Weirton Steel Corporation
                                      400 Three Springs Drive
                                      Weirton, West Virginia  26062
                                      Attention:  William R. Kiefer, Esq.,
                                                  General Counsel and Secretary
                                      Facsimile No.:  (304) 797-3484

                                      and

                                      McGuire Woods LLP
                                      23rd Floor, Dominion Tower
                                      625 Liberty Avenue
                                      Pittsburgh, Pennsylvania  15222
                                      Attention:  Mark Freedlander, Esq.
                                      Facsimile No.:  (412) 667-6050

     If to Term Loan Representative:  Manchester Securities Corp.
                                      712 Fifth Avenue
                                      New York, NY 10019
                                      Attention.  Brett Cohen
                                      Facsimile No.:  (212) 974-2092

     With a copy to:                  O'Melveny & Myers LLP
                                      30 Rockefeller Plaza
                                      New York, NY 10112
                                      Attention:  Adam Harris, Esq.
                                      Facsimile No.:  (212) 408-2420

or to such other address as each party may designate for itself by notice given
in accordance with this Section 12.8; provided, however, that any notice,
request or demand to or upon Agent or a Lender pursuant to subsection 3.1.1 or
4.2.2 hereof shall not be effective until received by Agent or such Lender.

     12.9. Consent.

     Whenever Agent's, Majority Lenders', Majority Term Lenders, Majority
Revolving Lenders or all Lenders' consent is required to be obtained under this
Agreement or any of the other Loan Documents as a condition to any action,
inaction, condition or event, except as otherwise specifically provided herein,
Agent, Majority Lenders, Majority Term Lenders, Majority Revolving Lenders or
all Lenders, as applicable, shall be authorized to give or withhold such consent
in their sole and absolute discretion and to condition its consent upon the
giving of additional Collateral security for the Obligations, the payment of
money or any other matter.

                                      -78-
<PAGE>

     12.10. Credit Inquiries.

     Borrower hereby authorizes and permits Agent and each Lender to respond to
usual and customary credit inquiries from third parties concerning Borrower or
any of its Subsidiaries.

     12.11. Time of Essence.

     Time is of the essence of this Agreement and the other Loan Documents.

     12.12. Entire Agreement.

     This Agreement and the other Loan Documents, together with all other
instruments, agreements and certificates executed by the parties in connection
therewith or with reference thereto, embody the entire understanding and
agreement between the parties hereto and thereto with respect to the subject
matter hereof and thereof and supersede all prior agreements, understandings and
inducements, whether express or implied, oral or written.

     12.13. Interpretation.

     No provision of this Agreement or any of the other Loan Documents shall be
construed against or interpreted to the disadvantage of any party hereto by any
court or other governmental or judicial authority by reason of such party having
or being deemed to have structured or dictated such provision.

     12.14. Confidentiality.

     Agent and each Lender shall hold all nonpublic information obtained
pursuant to the requirements of this Agreement in accordance with Agent's and
such Lender's customary procedures for handling confidential information of this
nature and in accordance with safe and sound banking practices and in any event
may make disclosure reasonably required by a prospective participant or assignee
in connection with the contemplated participation or assignment or as required
or requested by the Bankruptcy Court, any governmental authority or
representative thereof or pursuant to legal process and shall require any such
participant or assignee to agree to comply with this Section 12.14.

     12.15. GOVERNING LAW; CONSENT TO FORUM.

     THIS AGREEMENT HAS BEEN NEGOTIATED, EXECUTED AND DELIVERED IN AND SHALL BE
DEEMED TO HAVE BEEN MADE IN CHICAGO, ILLINOIS. TO THE EXTENT APPLICABLE, AND
SUBJECT TO THE BANKRUPTCY CODE, THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF ILLINOIS; PROVIDED,
HOWEVER, THAT IF ANY OF THE COLLATERAL SHALL BE LOCATED IN ANY JURISDICTION
OTHER THAN ILLINOIS, THE LAWS OF SUCH JURISDICTION SHALL GOVERN THE METHOD,
MANNER AND PROCEDURE FOR FORECLOSURE OF AGENT'S LIEN UPON SUCH

                                      -79-
<PAGE>

COLLATERAL AND THE ENFORCEMENT OF AGENT'S OTHER REMEDIES IN RESPECT OF SUCH
COLLATERAL TO THE EXTENT THAT THE LAWS OF SUCH JURISDICTION ARE DIFFERENT FROM
OR INCONSISTENT WITH THE LAWS OF ILLINOIS.

     AS PART OF THE CONSIDERATION FOR NEW VALUE RECEIVED, AND REGARDLESS OF ANY
PRESENT OR FUTURE DOMICILE OR PRINCIPAL PLACE OF BUSINESS OF BORROWER, AGENT OR
ANY LENDER, IF (I) THE BANKRUPTCY CASE IS DISMISSED OR (II) THE BANKRUPTCY COURT
ABSTAINS FROM HEARING, OR REFUSES TO EXERCISE JURISDICTION OVER, ANY ACTIONS OR
PROCEEDINGS ARISING IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENTS IN ANY WAY CONNECTED WITH, OR RELATED OR INCIDENTAL TO THE DEALINGS OF
THE PARTIES HERETO IN RESPECT OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENTS OR
THE TRANSACTIONS RELATED HERETO OR THERETO, THEN BORROWER HEREBY CONSENTS AND
AGREES THAT THE CIRCUIT COURT OF COOK COUNTY, ILLINOIS, AND THE UNITED STATES
DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS, EASTERN DIVISION, SHALL
HAVE EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN
BORROWER ON THE ONE HAND AND AGENT OR ANY LENDER ON THE OTHER HAND PERTAINING TO
THIS AGREEMENT OR TO ANY MATTER ARISING OUT OF OR RELATED TO THIS AGREEMENT.
BORROWER EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY
ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND BORROWER HEREBY WAIVES ANY
OBJECTION WHICH BORROWER MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION,
IMPROPER VENUE OR FORUM NON CONVENIENS AND HEREBY CONSENTS TO THE GRANTING OF
SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT.

     BORROWER HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER
PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH
SUMMONS, COMPLAINT AND OTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL
ADDRESSED TO BORROWER AT THE ADDRESS SET FORTH IN THIS AGREEMENT AND THAT
SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON THE EARLIER OF BORROWER'S ACTUAL
RECEIPT THEREOF OR 5 DAYS AFTER DEPOSIT IN THE U.S. MAILS, PROPER POSTAGE
PREPAID. NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO AFFECT THE
RIGHT OF AGENT OR ANY LENDER TO SERVE LEGAL PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW, OR TO PRECLUDE THE ENFORCEMENT BY AGENT OR ANY LENDER OF ANY
JUDGMENT OR ORDER OBTAINED IN SUCH FORUM OR THE TAKING OF ANY ACTION UNDER THIS
AGREEMENT TO ENFORCE SAME IN ANY OTHER APPROPRIATE FORUM OR JURISDICTION.

                                      -80-
<PAGE>

     12.16. WAIVERS BY BORROWER.

     BORROWER WAIVES (I) THE RIGHT TO TRIAL BY JURY (WHICH AGENT AND EACH LENDER
HEREBY ALSO WAIVES) IN ANY ACTION, SUIT, PROCEEDING OR COUNTERCLAIM OF ANY KIND
ARISING OUT OF OR RELATED TO ANY OF THE LOAN DOCUMENTS, THE OBLIGATIONS OR THE
COLLATERAL; (II) PRESENTMENT, DEMAND AND PROTEST AND NOTICE OF PRESENTMENT,
PROTEST, DEFAULT, NON PAYMENT, MATURITY, RELEASE, COMPROMISE, SETTLEMENT,
EXTENSION OR RENEWAL OF ANY OR ALL COMMERCIAL PAPER, ACCOUNTS, CONTRACT RIGHTS,
DOCUMENTS, INSTRUMENTS , CHATTEL PAPER AND GUARANTIES AT ANY TIME HELD BY AGENT
OR ANY LENDER ON WHICH BORROWER MAY IN ANY WAY BE LIABLE AND HEREBY RATIFIES AND
CONFIRMS WHATEVER AGENT OR ANY LENDER MAY DO IN THIS REGARD; (III) NOTICE PRIOR
TO AGENT'S TAKING POSSESSION OR CONTROL OF THE COLLATERAL OR ANY BOND OR
SECURITY WHICH MIGHT BE REQUIRED BY ANY COURT PRIOR TO ALLOWING AGENT TO
EXERCISE ANY OF AGENT'S REMEDIES; (IV) THE BENEFIT OF ALL VALUATION,
APPRAISEMENT AND EXEMPTION LAWS; (V) NOTICE OF ACCEPTANCE HEREOF AND (VI) EXCEPT
AS PROHIBITED BY LAW, ANY RIGHT TO CLAIM OR RECOVER ANY SPECIAL, EXEMPLARY,
PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN, OR IN ADDITION TO,
ACTUAL DAMAGES. BORROWER ACKNOWLEDGES THAT THE FOREGOING WAIVERS ARE A MATERIAL
INDUCEMENT TO AGENT'S AND EACH LENDER'S ENTERING INTO THIS AGREEMENT AND THAT
AGENT AND EACH LENDER IS RELYING UPON THE FOREGOING WAIVERS IN ITS FUTURE
DEALINGS WITH BORROWER. BORROWER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED
THE FOREGOING WAIVERS WITH ITS LEGAL COUNSEL AND HAS KNOWINGLY AND VOLUNTARILY
WAIVED ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE
EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL
BY THE COURT.

     12.17. Advertisement.

     Borrower hereby authorizes Agent to publish the name of Borrower and the
amount of the credit facility provided hereunder in any "tombstone" or
comparable advertisement which Agent elects to publish.

     12.18. Marshalling of Payments.

     Neither any Agent nor any Lender shall be under any obligation to marshal
any assets in favor of Borrower or any other party or against or in payment of
any or all of the Obligations. To the extent that Borrower makes a payment or
payments to Agent or any Lenders (or to Agent for the benefit of any Lenders),
or Agent or any Lenders enforce any security interests or exercise their rights
of setoff, and such payment or payments or the

                                      -81-
<PAGE>

proceeds of such enforcement or setoff or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside and/or
required to be repaid to a trustee, receiver or any other party under any
bankruptcy law, any other state or federal law, common law or any equitable
cause, then, to the extent of such recovery, the obligation or part thereof
originally intended to be satisfied, and all Liens, rights and remedies therefor
or related thereto, shall be revived and continued in full force and effect as
if such payment or payments had not been made or such enforcement or setoff had
not occurred.

     12.19. Independence of Covenants.

     All covenants hereunder shall be given independent effect so that if a
particular action or condition is not permitted by any of such covenants, the
fact that it would be permitted by an exception to or would otherwise be within
the limitations of another covenant shall not avoid the occurrence of an Event
of Default or Default if such action is taken or condition exists.

     12.20. Obligations Several; Independence of Lenders' Obligations; Damages
            Waiver.

     The obligations of Lenders hereunder are several and no Lender shall be
responsible for the obligations or Commitments of any other Lender hereunder.
The amounts payable at any time hereunder to each Lender shall be a separate and
independent debt; however, each Lender acknowledges that pursuant to the terms
of this Agreement, it has agreed to act hereunder through the Agent and/or the
Term Loan Representative as described herein.

     To the extent permitted by law, Company shall not assert, and hereby
waives, any claim against any Indemnitee, on any theory of liability, for
special, indirect, consequential or punitive damages (as opposed to direct or
actual damages) arising out of, in connection with or as a result of this
Agreement, any other Loan Document, any transaction contemplated by the Loan
Documents, any Loan or the use of proceeds thereof.

                                      -82-
<PAGE>

     IN WITNESS WHEREOF, this Agreement has been duly executed on the day and
year specified at the beginning of this Agreement.

                          WEIRTON STEEL CORPORATION,
                            Chapter 11 Debtor-In-Possession, as Borrower

                          By______________________________________________
                          Title___________________________________________

                          FLEET CAPITAL CORPORATION,
                            as Agent and as a Revolving Lender

                          By______________________________________________
                          Title___________________________________________

                          Revolving Loan Commitment:  $50,000,000

                          FOOTHILL CAPITAL CORPORATION,
                            as a Revolving Lender

                          By______________________________________________
                          Title___________________________________________

                          Revolving Loan Commitment:  $50,000,000

                          THE CIT GROUP/BUSINESS CREDIT, INC.,
                            as a Revolving Lender

                          By______________________________________________
                          Title___________________________________________

                          Revolving Loan Commitment:  $50,000,000

                                      -83-
<PAGE>

                          GMAC COMMERCIAL FINANCE LLC,
                            as a Revolving Lender

                          By______________________________________________
                          Title___________________________________________

                          Revolving Loan Commitment:  $35,000,000

                          TRANSAMERICA BUSINESS CAPITAL
                            CORPORATION, as a Revolving Lender

                          By______________________________________________
                          Title___________________________________________

                          Revolving Loan Commitment:  $15,000,000

                          MANCHESTER SECURITIES CORP.,
                          as a Term Lender

                          By______________________________________________
                          Title___________________________________________

                          Term Loan Commitment:  $25,000,000

                                      -84-
<PAGE>

                                   APPENDIX A

                               GENERAL DEFINITIONS

     When used in the Debtor-In-Possession Loan and Security Agreement dated as
of May 20, 2003, by and among Fleet Capital Corporation, individually and as
Agent, the other financial institutions which are or become parties thereto and
Weirton Steel Corporation, as Chapter 11 Debtor and Debtor-In-Possession, as
Borrower (a) the terms Account, Certificated Security, Chattel Paper, Commercial
Tort Claim, Deposit Account, Document, Electronic Chattel Paper, Equipment,
Financial Asset, Fixture, General Intangible, Goods, Instrument, Inventory,
Investment Property, Letter-of-Credit Rights, Payment Intangibles, Proceeds,
Security Entitlement, Software, Supporting Obligations, Tangible Chattel Paper
and Uncertificated Security have the respective meanings assigned thereto under
the UCC; (b) all other terms indicating Collateral having the meanings assigned
thereto under the UCC and such terms, including those identified in clause (a),
shall be deemed to mean such Property, whether now owned or hereafter created or
acquired by Borrower or in which Borrower now has or hereafter acquires any
interest; (c) capitalized terms which are not otherwise defined have the
respective meanings assigned thereto in said Debtor-In-Possession Loan and
Security Agreement; and (d) the following terms shall have the following
meanings (terms defined in the singular to have the same meaning when used in
the plural and vice versa):

          2004 Indenture - that certain Indenture dated as of July 3, 1996
     between Bankers Trust Company and Borrower, pursuant to which Borrower
     issued $125,000,000 of 11-3/8% Senior Notes due 2004, as amended from time
     to time.

          2004 Senior Notes - any promissory notes, debentures or other
     instruments previously issued by Borrower pursuant to the 2004 Indenture,
     and any replacement promissory notes, debentures or other instruments
     issued pursuant thereto.

          2005 Indenture - that certain Indenture dated as of June 12, 1995
     between Bankers Trust Company and Borrower, pursuant to which Borrower
     issued $125,000,000 of 10-3/4% Senior Notes due 2005, as amended from time
     to time.

          2005 Senior Notes - any promissory notes, debentures or other
     instruments previously issued by Borrower pursuant to the 2005 Indenture,
     and any replacement promissory notes, debentures or other instruments
     issued pursuant thereto.

          Account Debtor - any Person who is or may become obligated under or on
     account of any Account, Contract Right, Chattel Paper or General
     Intangible.

          Additional Real Property - the real Property legally described on
     Exhibit A-7.

          Affiliate - a Person (other than a Subsidiary): (i) which directly or
     indirectly through one or more intermediaries controls, or is controlled
     by, or is under common control with, a Person; (ii) which beneficially owns
     or holds 5% of the Voting Stock of a Person; or (iii) 5% or more of the
     Voting Stock (or in the case of a Person which is not a corporation, 5% or
     more of the voting equity interest) of which is beneficially owned or held
     by a Person or a Subsidiary of a Person.

<PAGE>

          Agent - Fleet Capital Corporation in its capacity as agent for the
     Lenders under the Agreement and any successor in that capacity appointed
     pursuant to subsection 11.11 of the Agreement.

          Agreement - the Debtor-In-Possession Loan and Security Agreement
     referred to in the first sentence of this Appendix A, all Exhibits and
     Schedules thereto and this Appendix A, as each of the same may be amended
     from time to time.

          Applicable Margin - the percentages set forth below with respect to
     the Base Rate Portion and the LIBOR Portion:

          Base Rate Portion                                          2.25%
          LIBOR Portion                                              3.75%

          Appraisal - that certain Appraisal of Weirton Steel Corporation dated
     as of April 14, 2003, provided by Hilco Appraisal Service, LLC, providing a
     statement of value of the subject machinery and equipment on the basis of a
     24-month orderly liquidation value and net 24-month orderly liquidation
     value.

          Approved First Day Payments - any payments to vendors, customers,
     employees, contractors, professionals or other Persons approved in a first
     day order in the Bankruptcy Case and acceptable to Agent.

          Availability - the amount of additional money which Borrower is
     entitled to borrow from time to time as Revolving Credit Loans, such amount
     being the difference derived when the sum of the principal amount of
     Revolving Credit Loans then outstanding (including any amounts which Agent
     or any Lender may have paid for the account of Borrower pursuant to any of
     the Loan Documents and which have not been reimbursed by Borrower), the LC
     Amount and any reserves is subtracted from the Borrowing Base. If the
     amount under clause (a) is equal to or greater than the Borrowing Base,
     Availability is 0.

          Availability Block - the amount indicated below for each period
     indicated below:

                         Period                                     Amount
                         ------                                     ------

     Effective Date to and including December 30, 2003           $10,000,000
     December 31, 2003 to and including January 30, 2004         $11,000,000
     January 31, 2004 to and including February 28, 2004         $12,000,000
     February 29, 2004 to and including March 30, 2004           $13,000,000
     March 31, 2004 to and including April 29, 2004              $14,000,000
     April 30, 2004 to and including May 30, 2004                $15,000,000
     May 31, 2004 to and including June 29, 2004                 $16,000,000
     June 30, 2004 to and including July 30, 2004                $18,000,000
     July 31, 2004 and thereafter                                $20,000,000

                                      A-2
<PAGE>

     The Availability Block is subject to reduction pursuant to the
provisions of subsection 3.3.1.

          Avoidance Action Recoveries - means any and all recoveries of cash,
     Property or proceeds thereof in the Bankruptcy Case in respect of any
     Avoidance Actions.

          Avoidance Actions - means any and all actions in the Bankruptcy Case
     under any and all of Sections 544, 547, 548, 549, 550 and 553 of the
     Bankruptcy Code.

          Bank - Fleet National Bank.

          Bankruptcy Case - the case under Chapter 11 of the Bankruptcy Code in
     which Borrower is the debtor and the debtor-in-possession, pending before
     the Bankruptcy Court.

          Bankruptcy Code - means the United States Bankruptcy Code, 11 U.S.C.
     Section 101 et seq., as in effect on the Filing Date and as amended from
     time to time.

          Bankruptcy Court - means the United States Bankruptcy Court for the
     Northern District of West Virginia having jurisdiction over the Bankruptcy
     Case.

          Bankruptcy Plan - a final plan for Borrower confirmed by final order
     of the Bankruptcy Court in the Bankruptcy Case, in form and substance
     satisfactory to Agent and Lenders.

          Base Rate - the rate of interest announced or quoted by Bank from time
     to time as its prime rate for commercial loans, whether or not such rate is
     the lowest rate charged by Bank to its most preferred borrowers; and, if
     such prime rate for commercial loans is discontinued by Bank as a standard,
     a comparable reference rate designated by Bank as a substitute therefor
     shall be the Base Rate.

          Base Rate Portion - that portion of the Revolving Credit Loans that is
     not subject to a LIBOR Option.

          Bonds - the Pollution Control Revenue Refunding Bonds (Weirton Steel
     Corporation Project) Series 1989 issued by the City of Weirton, West
     Virginia.

          Borrowing Base - as at any date of determination thereof, an amount
     equal to the lesser of:

               (i) the Revolving Credit Maximum Amount; or

               (ii) an amount equal to:

                                      A-3
<PAGE>

                    (a)  85% of the net amount of Eligible Accounts outstanding
                         at such date; plus

                    (b)  the least of (1) up to 85% (or such lesser percentage
                         as Agent may determine from time to time in its
                         reasonable credit judgment), of the net orderly
                         liquidation percentage of each category or type of
                         Eligible Inventory, as determined by Hilco Appraisal
                         Services, LLC or another appraiser acceptable to
                         Majority Revolving Lenders, and reflected in the most
                         recent Inventory appraisal delivered to Agent under the
                         Agreement, (2) 65% of the aggregate book value of
                         Eligible Inventory, or (3) $100,000,000; minus

                    (c)  the Availability Block.

     The limitations set forth in the immediately preceding sentence and
     each of the advance rates set forth above may be adjusted downward by
     Agent, as Agent shall deem necessary or appropriate in its reasonable
     credit judgment.

          For purposes hereof, (1) the sum of clauses (a) plus (b) minus (c)
     shall be limited to (i) 85% of Accounts as reflected from time to time on
     the Consolidated financial statements of Borrower, as such calculation is
     determined pursuant to the Exchange Indentures as in effect on the Filing
     Date and (ii) 65% of Inventory as reflected from time to time on the
     Consolidated financial statements of Borrower, as such calculation is
     determined pursuant to the Exchange Indentures as in effect on the Filing
     Date, the net amount of Eligible Accounts at any time shall be the face
     amount of such Eligible Accounts less any and all returns, rebates,
     discounts (which may, at Agent's option, be calculated on shortest terms),
     credits, allowances or excise taxes of any nature at any time issued,
     owing, claimed by Account Debtors, granted, outstanding or payable in
     connection with such Accounts at such time (provided, that such amounts
     shall not be subtracted from the net amount of Eligible Accounts to the
     extent already taken into account in determining the gross amount of
     Eligible Accounts or in the form of a reserve pursuant to subsection 1.1.1
     of the Agreement) and (2) the amount of Eligible Inventory shall be
     determined on a first-in, first-out, lower of cost or market basis in
     accordance with GAAP.

          Borrowing Base Certificate - a certificate by a responsible officer of
     Borrower, substantially in the form of Exhibit 8.1.4 (or another form
     acceptable to Agent) setting forth the calculation of the Borrowing Base,
     including a calculation of each component thereof, all in such detail as
     shall be satisfactory to Agent. All calculations of the Borrowing Base in
     connection with the preparation of any Borrowing Base Certificate shall
     originally be made by Borrower and certified to Agent; provided, that Agent
     shall have the right to review and adjust, in the exercise of its
     reasonable credit judgment based on the terms of the Agreement, any such
     calculation after giving notice thereof to the Borrower, (1) to reflect its
     reasonable estimate of declines in value of any of the Collateral described
     therein, and (2) to the

                                      A-4
<PAGE>

     extent that Agent determines that such calculation is not in
     accordance with this Agreement.

          Business Day - any day excluding Saturday, Sunday and any day which is
     a legal holiday under the laws of the State of Wisconsin or the State of
     Illinois or is a day on which banking institutions located in either of
     such states are closed.

          Capital Expenditures - expenditures made or liabilities incurred for
     the acquisition of any fixed assets or improvements, replacements,
     substitutions or additions thereto which have a useful life of more than
     one year, including the total principal portion of Capitalized Lease
     Obligations.

          Capitalized Lease Obligation - any Indebtedness represented by
     obligations under a lease that is required to be capitalized for financial
     reporting purposes in accordance with GAAP.

          Carve Out - as defined in the then applicable Financing Order.

          Change of Control - any Person shall own or control either (i) more
     than 50% of the aggregate issued and outstanding Voting Stock of Borrower
     or (ii) a sufficient percentage of the issued and outstanding Voting Stock
     of Borrower to elect or control the majority of the board of directors of
     Borrower; or Borrower shall fail to own and control 100% of the Securities
     of its Subsidiaries; or a "Change of Control" (as is defined in the
     Exchange Note Indenture, as it exists on the date hereof) shall have
     occurred; or a "Significant Transaction" (as defined in the Series D
     Preferred) shall have occurred.

          City Loan Agreement - the Loan Agreement dated as of November 1, 1989
     between Borrower and the City of Weirton, West Virginia and executed in
     connection with certain Pollution Control Revenue Refunding Bonds (Weirton
     Steel Corporation Project) Series 1989, issued on November 1, 1989.

          Code - the Internal Revenue Code of 1986, as amended, and any
     successor statute, and all rules and regulations promulgated thereunder.

          Collateral - all of the Property and interests in Property described
     in Section 5 of the Agreement, and all other Property and interests in
     Property that now or hereafter secure the payment and performance of any of
     the Obligations.

          Collateral Protection Loans - as defined in subsection 1.1.4 of the
     Agreement.

          Completion Period - as defined in Section 10.2 of the Agreement.

          Compliance Certificate - as defined in subsection 8.1.3 of the
     Agreement.

          Computer Hardware and Software - all of Borrower's rights (including
     rights as licensee and lessee) with respect to (i) computer and other
     electronic data

                                      A-5
<PAGE>

     processing hardware, including all integrated computer systems,
     central processing units, memory units, display terminals, printers,
     computer elements, card readers, tape drives, hard and soft disk drives,
     cables, electrical supply hardware, generators, power equalizers,
     accessories, peripheral devices and other related computer hardware; (ii)
     all Software and all software programs designed for use on the computers
     and electronic data processing hardware described in clause (i) above,
     including all operating system software, utilities and application programs
     in any form (source code and object code in magnetic tape, disk or hard
     copy format or any other listings whatsoever); (iii) any firmware
     associated with any of the foregoing; and (iv) any documentation for
     hardware, Software and firmware described in clauses (i), (ii) and (iii)
     above, including flow charts, logic diagrams, manuals, specifications,
     training materials, charts and pseudo codes.

          Conditions to Release - each of the following: (a) entry by the
     Bankruptcy Court of the Final Financing Order and (b) delivery to Agent and
     Term Loan Representative of a final mortgagee title insurance policy, in
     the form of the applicable Title Commitment and issued by the same title
     insurance company, with respect to each parcel of real Property so
     identified in Section 5.4 of the Agreement.

          Consolidated - the consolidation in accordance with GAAP of the
     accounts or other items as to which such term applies.

          Contract Right - as to any Person, any right of such Person to payment
     under a contract for the sale or lease of goods or the rendering of
     services, which right is at the time not yet earned by performance.

          Contractual Obligation - as applied to any Person, means any provision
     of any Security issued by that Person or of any material indenture,
     mortgage, deed of trust, contract, undertaking, agreement or other
     instrument to which that Person is a party or by which it or any of its
     properties is bound or to which it or any of its properties is subject.

          Current Assets - at any date means the amount of assets of a Person
     that would be properly classified as current assets on a balance sheet at
     such date in accordance with GAAP.

          Default - an event or condition the occurrence of which would, with
     the lapse of time or the giving of notice, or both, become an Event of
     Default.

          Deferred Fee - as defined in Section 2.14 of the Agreement.

          Derivative Obligations - every obligation of a Person under any
     forward contract, futures contract, exchange contract, swap, option or
     other financing agreement or arrangement (including, without limitation,
     caps, floors, collars and similar agreement), the value of which is
     dependent upon interest rates, currency exchange rates, commodities or
     other indices.

                                      A-6
<PAGE>

          Distribution - in respect of any Person means and includes: (i) the
     payment of any dividends or other distributions on Securities (except
     distributions in such Securities) whether direct or indirect and (ii) the
     redemption, retirement, sinking fund, purchase or acquisition of Securities
     of such Person, as the case may be.

          Dominion Account - a special bank account or accounts of Agent
     established by Borrower pursuant to subsection 6.2.4 of the Agreement at
     banks selected by Borrower, but acceptable to Agent in its discretion, and
     over which Agent shall have sole and exclusive access and control for
     withdrawal purposes.

          Effective Date - the date upon which all conditions contained in
     Section 9.1 of the Agreement have first been satisfied.

          Eligible Account - an Account arising in the ordinary course of the
     business of Borrower from the sale of goods or rendition of services which
     Agent, in its reasonable credit judgment based on the terms of the
     Agreement, deems to be an Eligible Account. Without limiting the generality
     of the foregoing, and without duplication with any reserves against
     Eligible Accounts established under subsection 1.1.1 of the Agreement, no
     Account shall be an Eligible Account if:

               (i) it arises out of a sale made or services rendered by Borrower
          to a Subsidiary of Borrower or an Affiliate of Borrower or to a Person
          controlled by an Affiliate of Borrower; or

               (ii) it remains unpaid more than 60 days after the original due
          date; or

               (iii) it remains unpaid more than 90 days after the original
          invoice date, except with respect to up to $20,000,000 in the
          aggregate of Accounts outstanding at any time which remaining unpaid
          more than 91 days, but less than 121 days after the original invoice
          date; or

               (iv) the total unpaid Eligible Accounts of the Account Debtor
          exceed 15% of the net amount of all Eligible Accounts, but only to the
          extent of such excess; or

               (v) any covenant, representation or warranty contained in the
          Agreement with respect to such Account has been breached; or

               (vi) the Account Debtor is also a creditor or supplier of
          Borrower or any Subsidiary of Borrower, or the Account Debtor has
          disputed liability with respect to such Account, or the Account Debtor
          has made any claim with respect to any other Account due from such
          Account Debtor to Borrower or any Subsidiary of Borrower, or the
          Account otherwise is or may become subject to right of setoff by the
          Account Debtor, provided, that any such Account shall be eligible to
          the extent such amount thereof exceeds such contract, dispute, claim,
          setoff or similar right; or

                                      A-7
<PAGE>

               (vii) the Account Debtor has commenced a voluntary case under the
          federal bankruptcy laws or any similar law, as now constituted or
          hereafter amended, or made an assignment for the benefit of creditors,
          or an involuntary case has been filed against such Account Debtor
          under the federal bankruptcy laws or any similar law, or any other
          petition or other application for relief under the federal bankruptcy
          laws or any similar law, as now constituted or hereafter amended, has
          been filed against the Account Debtor, or if the Account Debtor has
          failed, suspended business, ceased to be Solvent, or consented to or
          suffered a receiver, trustee, liquidator or custodian to be appointed
          for it or for all or a significant portion of its assets or affairs;
          or

               (viii) it arises from a sale made or services rendered to an
          Account Debtor outside the United States, Puerto Rico or Canada; or

               (ix) (1) it arises from a sale to the Account Debtor on a
          bill-and-hold, guaranteed sale, sale-or-return, sale-on-approval, or
          any other repurchase or return basis; or (2) it is subject to a
          reserve established by Borrower for potential returns or refunds, to
          the extent of such reserve; or

               (x) the Account Debtor is the United States of America or any
          department, agency or instrumentality thereof, unless Borrower assigns
          its right to payment of such Account to Agent, in a manner
          satisfactory to Agent, in its judgment, so as to comply with the
          Assignment of Claims Act of 1940 (31 U.S.C. Section 203 et seq., as
          amended); or

               (xi) it is not at all times subject to Agent's duly perfected,
          first priority security interest (subject only to the Carveout) or is
          subject to a Lien that is not a Permitted Lien; or

               (xii) the goods giving rise to such Account have not been
          delivered to and accepted by the Account Debtor or the services giving
          rise to such Account have not been performed by Borrower and accepted
          by the Account Debtor or the Account otherwise does not represent a
          final sale; or

               (xiii) the Account is evidenced by chattel paper or an instrument
          of any kind, or has been reduced to judgment; or

               (xiv) Borrower or a Subsidiary of Borrower has made any agreement
          with the Account Debtor for any extension, compromise, settlement or
          modification of any Account or any deduction therefrom, except for
          discounts or allowances which are made in the ordinary course of
          business for prompt payment and which discounts or allowances are
          reflected in the calculation of the face value of each invoice related
          to such Account; or

               (xv) 25% or more of the Accounts owing from the Account Debtor
          (other than Crown Cork & Seal, Inc. and its Affiliates) are not
          Eligible

                                      A-8
<PAGE>

          Accounts hereunder; or, in the case of Crown Cork & Seal, Inc.
          and its Affiliates, taken as a whole, 10% or more than the Accounts
          owing from such Account Debtor are not Eligible Accounts hereunder, in
          each case, solely because of the application of clauses (ii) and (iii)
          of this definition; or

               (xvi) Borrower has made an agreement with the Account Debtor to
          extend the time of payment thereof beyond the limit provided in clause
          (ii) of this definition; or

               (xvii) it represents service charges, late fees or similar
          charges; or

               (xviii) the Account Debtor is Crown Cork & Seal, Inc. or one of
          its Affiliates and the aggregate Accounts owing by Crown Cork & Seal,
          Inc. and its Affiliates, taken as a whole, exceed $15,000,000;
          provided, that Agent may further reduce such amount from time to time
          in its discretion), but solely to the extent of such excess; or

               (xix) it arises under a lease by Borrower to the Account Debtor;
          or

               (xx) it is not otherwise acceptable to Agent in its reasonable
          credit judgment.

          Eligible Inventory - Inventory of Borrower (other than packaging
     materials and supplies, tooling, samples and literature) which Agent, in
     its reasonable credit judgment based upon the terms of the Agreement, deems
     to be Eligible Inventory. Without limiting the generality of the foregoing,
     and without duplication with any reserves against Eligible Inventory
     established under subsection 1.1.1 of the Agreement, no Inventory shall be
     Eligible Inventory if:

               (i) it is not raw materials, work in process that is, in Agent's
          opinion, readily marketable in its current form or finished goods
          which meet the specifications of the purchase order or contract for
          such Inventory, if any;

               (ii) it is fuel oil, coke breeze, sump breeze, store supplies,
          melting slag or dross; or

               (iii) it is not in good, new and saleable condition or is
          otherwise unmerchantable; or

               (iv) it is slow-moving or obsolete; or

               (v) it does not meet all standards imposed by any governmental
          agency or authority; or

               (vi) it does not conform in all respects to any covenants,
          warranties and representations set forth in the Agreement applicable
          to it; or

                                      A-9
<PAGE>

               (vii) it is not at all times subject to Agent's duly perfected,
          first priority security interest pursuant to the applicable Financing
          Order (subject only to the Carveout) or is subject to a Lien that is
          not a Permitted Lien; or

               (viii) it is not situated at a location in compliance with the
          Agreement, provided that Inventory situated at a location not owned by
          Borrower will be Eligible Inventory only (a) if it is consignment
          Inventory, Borrower has complied with the requirements of Agent and
          Majority Revolving Lenders with respect thereto or (b) if it is
          otherwise situated at a location not owned by Borrower, (I) at least
          $100,000 in Inventory is situated at such location and (II) Agent has
          received a satisfactory landlord's agreement, processor letter or
          bailee letter, as applicable, with respect to such location, and in
          the case of Inventory located with a processor or bailee, Agent has
          filed an appropriate UCC financing statement covering such Inventory
          showing the processor as debtor, Borrower as secured party and Agent
          as assignee of secured party; or

               (ix) it is in transit; or

               (x) it is not otherwise acceptable to Agent in its reasonable
          credit judgment.

          Emergency Financing Order - a financing order entered in the
     Bankruptcy Case within 5 days following the Filing Date, but prior to the
     satisfaction of the fifteen (15) day notice period contained in Rule
     4001(c) of the Federal Rules of Bankruptcy Procedure, authorizing Borrower
     to obtain the financing and to grant the Liens contemplated by and
     described in this Agreement, in form and substance satisfactory to Agent
     and Lenders, as amended, modified or supplemented from time to time with
     the prior written consent of all Lenders; provided, however, that if the
     purpose of such amendment, modification or supplement is solely to reflect
     an amendment, modification or supplement to the Agreement, then such
     amendment, modification or supplement of the Emergency Financing Order
     shall only require the approval of such number of Lenders as would be
     required to approve such amendment, modification or supplement under
     subsection 11.10 of the Agreement.

          Environmental Laws - all federal, state and local laws, rules,
     regulations, ordinances, orders and consent decrees relating to health,
     safety and environmental matters.

          ERISA - the Employee Retirement Income Security Act of 1974, as
     amended, and any successor statute, and all rules and regulations from time
     to time promulgated thereunder.

          Event of Default - as defined in Section 10.1 of the Agreement.

          Exchange Act - the Securities Act of 1934, as amended, and any
     successor statute, and all rules and regulations promulgated thereunder.

                                      A-10
<PAGE>

          Exchange Bond Indenture - the Indenture of Trust pursuant to which
     Exchange Bonds were issued in connection with the Permitted Note Exchange
     Offer.

          Exchange Bonds - the bonds issued in exchange for the bonds originally
     issued pursuant to the City Loan Agreement.

          Exchange Indentures - collectively (i) the Exchange Note Indenture and
     (ii) the Exchange Bond Indenture, each in form and substance reasonably
     acceptable to Agent, as each such Indenture is amended from time to time.

          Exchange Instruments - any promissory notes, bonds, debentures or
     other instruments issued by Borrower pursuant to either Exchange Indenture
     in connection with the Permitted Note Exchange Offer, including without
     limitation the Exchange Bonds and the Exchange Notes, and any replacement
     bonds, promissory notes, debentures or other instruments issued pursuant
     thereto.

          Exchange Intercreditor Agreement - the Intercreditor Agreement
     executed by the collateral agent under the Junior Intercreditor Agreement,
     the indenture trustee under the Exchange Note Indenture, the indenture
     trustee under the Exchange Bond Indenture and the Prepetition Agent.

          Exchange Loan Agreement - the Agreement between the City of Weirton,
     West Virginia and Borrower executed in connection with the Exchange Bonds.

          Exchange Note Indenture - the Indenture pursuant to which Exchange
     Notes were issued in connection with the Permitted Note Exchange Offer.

          Exchange Notes - the notes issued in exchange for the notes originally
     issued pursuant to the Indentures.

          Filing Date - May 19, 2003.

          Final Budget - a budget of Borrower, including balance sheets, income
     statements, and cash flow statements, on a monthly line-item basis, for the
     period from May 1, 2003 through and including December 31, 2004, in form
     and substance acceptable to Agent and Lenders, as shown on Exhibit 7.1.12,
     together with supporting schedules previously delivered  to lenders.

          Final Financing Order - a final order entered in the Bankruptcy Case
     after the satisfaction of the fifteen (15) day notice period contained in
     Rule 4001(c) of the Federal Rules of Bankruptcy Procedure, authorizing
     Borrower to obtain the financing and to grant the Liens contemplated by and
     described in this Agreement, in form and substance substantially similar to
     the Emergency Financing Order and otherwise in form and substance
     satisfactory to Agent and Lenders, as amended, modified or supplemented
     from time to time with the prior written consent of all Lenders; provided,
     however, that if the purpose of such amendment, modification or supplement
     is solely to reflect an amendment, modification or supplement to the

                                      A-11
<PAGE>

     Agreement, then such amendment, modification or supplement of the Final
     Financing Order shall only require the approval of such number of Lenders
     as would be required to approve such amendment, modification or supplement
     under subsection 11.10 of the Agreement.

          Financing Order - the Emergency Financing Order or the Final Financing
     Order, as applicable.

          FW - FW Holdings, Inc.

          GAAP - generally accepted accounting principles in the United States
     of America in effect from time to time.

          GO Facility - Borrower's general office facility located at 400 Three
     Springs Drive, Weirton, West Virginia.

          GO/RD Indebtedness - Indebtedness for Money Borrowed of Borrower in an
     aggregate principal amount not in excess of $3,100,000, owing to Steelworks
     Community Federal Credit Union.

          Guarantors - each Person who hereafter guarantees payment or
     performance of the whole or any part of the Obligations.

          Guaranty Agreements - each guaranty hereafter executed by any
     Guarantor.

          Hazardous Materials - any chemical, material or substance, exposure to
     which is prohibited, limited or regulated by any governmental authority or
     which may or could pose a hazard to the health and safety of the owners,
     occupants or any persons in the vicinity of any Property or to the indoor
     or outdoor environment.

          Holding Period - as defined in Section 10.2 of the Agreement.

          Hot Mill Collateral - the real Property constituting Borrower's Hot
     Strip Mill located at Borrower's Weirton, West Virginia steel-making
     facility, which converts slabs into flat rolled coils and which is legally
     described on Exhibit A-1 attached to the Agreement, together with
     Intellectual Property and Computer Hardware and Software used in connection
     with the operation and maintenance of the Hot Strip Mill and all Equipment
     and Fixtures now or hereafter located thereon (whether or not later moved),
     including without limitation the Equipment listed on Exhibit A-2 attached
     to the Agreement.

          Incremental Operational Costs - as defined in Section 10.2 of the
     Agreement.

          Indebtedness - as applied to a Person means, without duplication:

               (i) all items which in accordance with GAAP would be included in
          determining total liabilities as shown on the liability side of a
          balance sheet of

                                      A-12
<PAGE>

          such Person as at the date as of which Indebtedness is to be
          determined, including, without limitation, Capitalized Lease
          Obligations;

               (ii) all obligations of other Persons which such Person has
          guaranteed;

               (iii) all reimbursement obligations in connection with letters of
          credit or letter of credit guaranties issued for the account of such
          Person;

               (iv) Derivative Obligations;

               (v) all obligations in respect of preferred stock Securities, to
          the extent subject to mandatory redemption; and

               (vi) in the case of Borrower (without duplication), the
          Obligations.

          Indemnified Liabilities - collectively, any and all liabilities,
     obligations, losses, damages (including natural resource damages),
     penalties, actions, judgments, suits, claims (including Environmental
     Claims), costs (including the costs of any investigation, study, sampling,
     testing, abatement, cleanup, removal, remediation or other response action
     necessary to remove, remediate, clean up or abate any Hazardous Materials
     Activity), expenses and disbursements of any kind or nature whatsoever
     (including the reasonable fees and disbursements of counsel for Indemnitees
     in connection with any investigative, administrative or judicial proceeding
     commenced or threatened by any Person, whether or not any Indemnitee shall
     be designated as a party or a potential party thereto, and any fees or
     expenses incurred by Indemnitees in enforcing Section 12.2 of the
     Agreement), whether direct, indirect or consequential and whether based on
     any federal, state or foreign laws, statutes, rules or regulations
     (including securities and commercial laws, statutes, rules or regulations
     and Environmental Laws), on common law or equitable cause or on contract or
     otherwise, that may be imposed on, incurred by, or asserted against any
     Indemnitee, in any manner relating to or arising out of (i) this Agreement
     or the other Loan Documents or the transactions contemplated hereby or
     thereby (including Lenders' agreement to make the Loans hereunder or the
     use or intended use of the proceeds thereof or the issuance of Letters of
     Credit hereunder or the use or intended use of any thereof, the failure of
     a Lender to honor a drawing under a Letter of Credit as a result of any act
     or omission, whether rightful or wrongful, of any present or future de jure
     or de facto government authority, or any enforcement of any of the Loan
     Documents (including any sale of, collection from, or other realization
     upon any of the Collateral), (ii) the statements contained in the
     commitment letter delivered by any Lender to Borrower with respect thereto,
     or (iii) any Environmental Claim or any Hazardous Materials Activity
     relating to or arising from, directly or indirectly, any past or present
     activity, operation, land ownership, or practice of Borrower or any of its
     Subsidiaries.

          Indemnitees - as defined in Section 12.2 of the Agreement.

                                      A-13
<PAGE>

          Indentures - collectively, the 2004 Indenture and the 2005 Indenture.

          Intellectual Property - all past, present and future: trade secrets,
     know-how and other proprietary information; trademarks, internet domain
     names, service marks, trade dress, trade names, business names, designs,
     logos, slogans (and all translations, adaptations, derivations and
     combinations of the foregoing) indicia and other source and/or business
     identifiers, and the goodwill of the business relating thereto and all
     registrations or applications for registrations which have heretofore been
     or may hereafter be issued thereon throughout the world; copyrights
     (including copyrights for computer programs) and copyright registrations or
     applications for registrations which have heretofore been or may hereafter
     be issued throughout the world and all tangible property embodying the
     copyrights, unpatented inventions (whether or not patentable); patent
     applications and patents; industrial design applications and registered
     industrial designs; license agreements related to any of the foregoing and
     income therefrom; books, records, writings, computer tapes or disks, flow
     diagrams, specification sheets, computer software, source codes, object
     codes, executable code, data, databases and other physical manifestations,
     embodiments or incorporations of any of the foregoing; the right to sue for
     all past, present and future infringements of any of the foregoing; all
     other intellectual property; and all common law and other rights throughout
     the world in and to all of the foregoing.

          Interest Period - as applicable to any LIBOR Portion, a period
     commencing on the date such LIBOR Portion is advanced, continued or
     converted, and ending on the date which is one (1) month, two (2) months or
     three (3) months later, as may then be requested by Borrower; provided that
     (i) any Interest Period which would otherwise end on a day which is not a
     Business Day shall end in the next preceding or succeeding Business Day as
     is Agent's custom in the market to which such LIBOR Portion relates; (ii)
     there remains a minimum of one (1) month, two (2) months or three (3)
     months (depending upon which Interest Period Borrower selects) in the Term,
     unless Borrower and Lenders have agreed to an extension of the Term beyond
     the expiration of the Interest Period in question; and (iii) all Interest
     Periods of the same duration which commence on the same date shall end on
     the same date.

          Interim Amount - the Prepetition Obligations, plus $7,500,000.

          Interim Period - the period commencing with the entry of the Emergency
     Financing Order and ending on the earlier to occur of (a) the entry of the
     Final Financing Order and (b) the date that is 30 days after the Filing
     Date.

          Junior Intercreditor Agreement - the Collateral Agency and Second Lien
     Intercreditor Agreement dated as of June 18, 2002 among the collateral
     agent thereunder, the indenture trustee under the Exchange Note Indenture
     and the indenture trustee under the Exchange Bond Indenture.

                                      A-14
<PAGE>

          Junior Security Documents - the deeds of trust, security agreements
     and other agreements, instruments and documents now or hereafter securing
     all or any portion of the Indebtedness under the Exchange Indentures.

          LC Amount - at any time, the aggregate undrawn face amount of all
     Letters of Credit and LC Guaranties then outstanding.

          LC Guaranty - any guaranty pursuant to which Agent or any Affiliate of
     Agent shall guaranty the payment or performance by Borrower of its
     reimbursement obligation under any standby letter of credit.

          LC Obligations - any Obligations that arise from any draw against any
     Letter of Credit or against any Letter of Credit supported by an LC
     Guaranty.

          Letter of Credit - any standby letter of credit issued by Agent, Bank
     or any other Affiliate of Agent for the account of Borrower.

          LIBOR - as applicable to any LIBOR Portion, for the applicable
     Interest Period, the rate per annum (rounded upward, if necessary, to the
     nearest 1/32 of one percent) as determined on the basis of the offered
     rates for deposits in U.S. dollars, for a period of time comparable to such
     Interest Period which appears on the Telerate page 3750 as of 11:00 a.m.
     (London time) on the day that is two (2) London Banking Days preceding the
     first day of such Interest Period; provided, however, if the rate described
     above does not appear on the Telerate System on any applicable interest
     determination date, the LIBOR shall be the rate (rounded upwards as
     described above, if necessary) for deposits in U.S. dollars for a period
     substantially equal to the Interest Period on the Reuters Page "LIBO" (or
     such other page as may replace the LIBO Page on that service for the
     purpose of displaying such rates), as of 11:00 a.m. (London Time), on the
     day that is two (2) London Banking Days prior to the first day of such
     Interest Period. If both the Telerate and Reuters systems are unavailable,
     then the rate for that date will be determined on the basis of the offered
     rates for deposits in U.S. dollars for a period of time comparable to such
     Interest Period which are offered by four (4) major banks in the London
     interbank market at approximately 11:00 a.m. (London time), on the day that
     is two (2) London Banking Days preceding the first day of such Interest
     Period as selected by Agent. The principal London office of each of the
     major London banks so selected will be requested to provide a quotation of
     its U.S. dollar deposit offered rate. If at least two (2) such quotations
     are provided, the rate for that date will be the arithmetic mean of the
     quotations. If fewer than two quotations are provided as requested, the
     rate for that date will be determined on the basis of the rates quoted for
     loans in U.S. dollars to leading European banks for a period of time
     comparable to such Interest Period offered by major banks in New York City
     at approximately 11:00 a.m. (New York City time), on the day that is two
     (2) London Banking Days preceding the first day of such Interest Period. In
     the event that Agent is unable to obtain any such quotation as provided
     above, it will be determined that LIBOR pursuant to a Interest Period
     cannot be determined. In the event that the Board of Governors of the
     Federal Reserve System

                                      A-15
<PAGE>

     shall impose a Reserve Percentage with respect to LIBOR deposits of
     Bank then for any period during which such Reserve Percentage shall apply,
     LIBOR shall be equal to the amount determined above divided by an amount
     equal to 1 minus the Reserve Percentage.

          LIBOR Interest Payment Date - the first day of each calendar month
     during and immediately following the applicable Interest Period.

          LIBOR Option - the option granted pursuant to Section 3.1 of the
     Agreement to have the interest on all or any portion of the principal
     amount of the Revolving Credit Loans based on the LIBOR.

          LIBOR Portion - that portion of the Revolving Credit Loans specified
     in a LIBOR Request (including any portion of Revolving Credit Loans which
     is being borrowed by Borrower concurrently with such LIBOR Request) which,
     as of the date of the LIBOR Request specifying such LIBOR Portion, has met
     the conditions for basing interest on the LIBOR in Section 3.1 of the
     Agreement and the Interest Period of which was commenced and not
     terminated.

          LIBOR Request - a notice in writing (or by telephone confirmed
     electronically or by telecopy or other facsimile transmission on the same
     day as the telephone request) from Borrower to Agent requesting that
     interest on a Revolving Credit Loan be based on the LIBOR, specifying: (i)
     the first day of the Interest Period (which shall be a Business Day); (ii)
     the length of the Interest Period; (iii) whether the LIBOR Portion is a new
     Loan, a conversion of a Base Rate Portion, or a continuation of a LIBOR
     Portion, and (iv) the dollar amount of the LIBOR Portion, which shall be in
     an amount not less than $1,000,000 or an integral multiple of $100,000 in
     excess thereof.

          Lien - any interest in Property securing an obligation owed to, or a
     claim by, a Person other than the owner of the Property, whether such
     interest is based on common law, statute or contract. The term "Lien" shall
     also include rights of seller under conditional sales contracts or title
     retention agreements, reservations, exceptions, encroachments, easements,
     rights-of-way, covenants, conditions, restrictions, leases and other title
     exceptions and encumbrances affecting Property. For the purpose of the
     Agreement, Borrower or its applicable Subsidiary shall be deemed to be the
     owner of any Property which it has acquired or holds subject to a
     conditional sale agreement or other arrangement pursuant to which title to
     the Property has been retained by or vested in some other Person for
     security purposes and, therefor, such Property shall be deemed Property of
     Borrower or such Subsidiary subject to a Lien.

          Loan Account - the loan account established on the books of Agent
     pursuant to Section 3.6 of the Agreement.

                                      A-16
<PAGE>

          Loan Documents - the Agreement, the applicable Financing Order, the
     Other Agreements and the Security Documents.

          Loans - all loans and advances of any kind made by Agent, any Lender,
     or any Affiliate of Agent or any Lender, pursuant to the Agreement,
     including without limitation the Revolving Credit Loans, the Swingline
     Loans, the Term Loan and the Collateral Protection Loans.

          London Banking Day - any date on which commercial banks are open for
     business in London, England.

          MABCO Lease - the Lease Agreement dated as of October 26, 2001 between
     MABCO Steam Company, LLC and FW Holdings, Inc., with respect to the Foster
     Wheeler Steam Generating Facility and certain related assets, as it may be
     amended from time to time.

          Majority Lenders - as of any date prior to the termination of the
     Revolving Loan Commitments, Revolving Lenders and Term Lenders holding 51%
     or more of the outstanding Revolving Loan Commitments and the aggregate
     principal balance of the Term Loan determined on a combined basis; and
     following the termination of the Revolving Loan Commitments, Lenders
     holding 51% or more of the outstanding Loans, LC Amounts and LC Obligations
     not yet reimbursed by Borrower or funded with a Revolving Credit Loan;
     provided, that (i) in each case, if there are 3 or more Lenders with
     outstanding Loans, LC Amounts, unfunded and unreimbursed LC Obligations or
     Revolving Loan Commitments, at least 3 Lenders shall be required to
     constitute Majority Lenders; and (ii) prior to termination of the Revolving
     Loan Commitments, if any Revolving Lender breaches its obligation to fund
     any requested Revolving Credit Loan, for so long as such breach exists, its
     voting rights hereunder as a Revolving Lender shall be calculated with
     reference to its outstanding Revolving Loans, LC Amounts and unfunded and
     unreimbursed LC Obligations, rather than its Revolving Loan Commitment.

          Majority Revolving Lenders - as of any date prior to termination of
     the Revolving Loan Commitments, Revolving Lenders holding 51% or more of
     the outstanding Revolving Loan Commitments determined on a combined basis;
     and following the termination of the Revolving Loan Commitments, Revolving
     Lenders holding 51% or more of the outstanding Revolving Loans, LC Amount
     and LC Obligations not yet reimbursed by Borrower or funded with
     outstanding Revolving Credit Loans; provided, that (i) in each case, if
     there are 3 or more Lenders with outstanding Loans, LC Amounts, unfunded
     and unreimbursed LC Obligations or Revolving Loan Commitments, at least 3
     Lenders shall be required to constitute Majority Revolving Lenders; and
     (ii) prior to termination of the Revolving Loan Commitments, if any
     Revolving Lender breaches its obligation to fund any requested Revolving
     Credit Loan, for so long as such breach exists, its voting rights hereunder
     as a Revolving Lender shall be calculated with reference to its outstanding
     Revolving

                                      A-17
<PAGE>

     Loans, LC Amounts and unfunded and unreimbursed LC Obligations, rather
     than its Revolving Loan Commitment.

          Majority Term Lenders- as of any date, Term Lenders holding 51% or
     more of the outstanding Term Loan.

          Manchester - Manchester Securities Corp.

          Margin Stock - as defined in Regulation U of the Board of Governors of
     the Federal Reserve System as in effect from time to time.

          Material Adverse Effect - (i) a material adverse effect on the
     business, condition (financial or otherwise), operation, performance or
     properties of Borrower and its Subsidiaries, taken as a whole, (ii) a
     material adverse effect on the rights and remedies of Agent or Lenders
     under the Loan Documents, or (iii) the material impairment of the ability
     of Borrower and its Subsidiaries to perform their obligations hereunder or
     under any Loan Document.

          Mixed Asset Transaction - as defined in subsection 3.3.2 of the
     Agreement.

          Money Borrowed - means, (i) Indebtedness arising from the lending of
     money by any Person to Borrower or any of its Subsidiaries; (ii)
     Indebtedness, whether or not in any such case arising from the lending by
     any Person of money to Borrower or any of its Subsidiaries, (1) which is
     represented by notes payable or drafts accepted that evidence extensions of
     credit, (2) which constitutes obligations evidenced by bonds, debentures,
     notes or similar instruments, or (3) upon which interest charges are
     customarily paid (other than accounts payable) or that was issued or
     assumed as full or partial payment for Property; (iii) Indebtedness that
     constitutes a Capitalized Lease Obligation; (iv) reimbursement obligations
     with respect to letters of credit or guaranties of letters of credit and
     (v) Indebtedness of Borrower or any of its Subsidiaries under any guaranty
     of obligations that would constitute Indebtedness for Money Borrowed under
     clauses (i) through (iii) hereof, if owed directly by Borrower or any of
     its Subsidiaries. Money Borrowed shall not include trade payables unless
     past due more than 6 months from the date of incurrence of the obligation
     in respect thereof, or any other accrued expenses.

          Mortgages - the Deeds of Trust or mortgages, as the case may be, now
     or hereafter executed by Borrower in favor of Agent, for the benefit of
     itself and Lenders, by which Borrower has granted to Agent, as security for
     the Obligations, a Lien upon the real Property of Borrower described on
     Exhibit 5.4, and all other mortgages, deeds of trust and comparable
     documents now or at any time hereafter securing the whole or any part of
     the Obligations.

          Multiemployer Plan - any multiemployer plan (as defined in Section
     4001(a)(3) of ERISA) in respect of which Borrower or any of its
     Subsidiaries is or was (or with the application of Section 4212(c) of ERISA
     would be) (i) an

                                      A-18
<PAGE>

     "employer" as defined in Section 3(5) of ERISA or (ii) a "seller" as
     defined in Section 4204 of ERISA.

          No. 9 Tandem Mill - the Property, inclusive of fence, buildings, other
     improvements, fixtures and Equipment located in Borrower's Strip Steel
     Department at its mill in Weirton, West Virginia.

          Notes - collectively, the Revolving Notes and the Term Notes.

          Obligations - all Loans, all LC Obligations, indemnities and all other
     advances, debts, liabilities, obligations, covenants and duties, together
     with all interest, fees and other charges thereon, owing, arising, due or
     payable from Borrower to Agent, for its own benefit, from Borrower to Agent
     for the benefit of any Lender, from Borrower to any Lender or from Borrower
     to Bank or, solely with respect to Product Obligations, any other Affiliate
     of Agent, of any kind or nature, present or future, whether or not
     evidenced by any note, guaranty or other instrument, whether arising under
     the Agreement or any of the other Loan Documents, whether direct or
     indirect (including those acquired by assignment), absolute or contingent,
     primary or secondary, due or to become due, now existing or hereafter
     arising and however acquired, including without limitation any Product
     Obligations owing to Agent, any Lender, Bank or any other Affiliate of
     Agent.

          Organizational I.D. Number - with respect to any Person, the
     organizational identification number assigned to such Person by the
     applicable governmental unit or agency of the jurisdiction of organization
     of such Person.

          Other Agreements - any and all agreements, instruments and documents
     (other than the Agreement and the Security Documents), heretofore, now or
     hereafter executed by Borrower, any Subsidiary of Borrower or any other
     third party and delivered to Agent or any Lender in respect of the
     transactions contemplated by the Agreement.

          Overadvance - the amount, if any, by which the unpaid balance of
     Revolving Credit Loans plus the sum of the LC Amount plus the amount of LC
     Obligations that have not been reimbursed by Borrower or funded with a
     Revolving Credit Loan, plus reserves, exceeds the Borrowing Base.

          PBGC - the Pension Benefit Guaranty Corporation referred to and
     defined in ERISA and any successor agency.

          Permitted Liens - any Lien of a kind specified in subsection 8.2.5 of
     the Agreement.

          Permitted Note Exchange Offer - collectively, exchange offers made by
     Borrower and the City of Weirton, West Virginia to the holders of (i) both
     issues of the Senior Notes and (ii) the Bonds, as the case may be, wherein
     such Person offered

                                      A-19
<PAGE>

     to exchange and accepted for exchange, up to the entire outstanding
     principal amount of such securities.

          Permitted Purchase Money Indebtedness - Purchase Money Indebtedness of
     Borrower incurred after the date hereof which is secured by a Purchase
     Money Lien and the principal amount of which, when aggregated with the
     principal amount of all other such Indebtedness and Capitalized Lease
     Obligations of Borrower and its Subsidiaries at the time outstanding after
     the Effective Date, does not exceed $5,000,000. For the purposes of this
     definition, the principal amount of any Purchase Money Indebtedness
     consisting of capitalized leases (as opposed to operating leases) shall be
     computed as a Capitalized Lease Obligation.

          Person - an individual, partnership, corporation, limited liability
     company, joint stock company, land trust, business trust, or unincorporated
     organization, or a government or agency or political subdivision thereof.

          Plan - any employee pension benefit plan (as defined in Section 3(2)
     of ERISA) that is subject to the provisions of Title IV of ERISA, and in
     respect of which Borrower or any of its Subsidiaries is to was (or, if such
     plan were terminated, would under Section 4069 of ERISA be deemed to be) an
     "employer" as defined in Section 3(5) of ERISA.

          Prepetition Agent - Fleet Capital Corporation.

          Prepetition Collateral - all collateral securing the Prepetition
     Obligations.

          Prepetition Lenders - the lenders under the Prepetition Agreement.

          Prepetition Loan Agreement - the Amended and Restated Loan and
     Security Agreement dated as of May 3, 2002, by and among Prepetition Agent,
     individually and as Agent, Foothill Capital Corporation, individually and
     as Syndication Agent, The CIT Group/Business Credit, Inc., individually and
     as a Documentation Agent, GMAC Business Credit, LLC, individually and as a
     Documentation Agent, the other financial institutions which are or become
     parties thereto and Weirton Steel Corporation, as amended through the
     Filing Date.

          Prepetition Loan Documents - the Prepetition Loan Agreement and all
     other agreements, instruments and documents evidencing or securing the
     Prepetition Obligations.

          Prepetition Obligations - all of the Indebtedness and obligations
     outstanding as of the Filing Date under the Prepetition Loan Documents.

          Proceeds Receipts - as defined in subsection 3.3.1 of the Agreement.

          Product Obligations - every obligation of Borrower under and in
     respect of any one or more of the following types of services or facilities
     extended to Borrower

                                      A-20
<PAGE>

     by Bank, Agent or any Affiliate of Bank or Agent: (i) cash management
     or related services including the automatic clearing house transfer of
     funds for the account of Borrower pursuant to agreement or overdraft and
     (ii) cash management, including controlled disbursement services.

          Project Assets - all of the pollution control Equipment and Fixtures
     located at Borrower's Weirton, West Virginia steel-making facility, the
     purchase and/or installation of which were financed or refinanced with the
     proceeds of the Bonds.

          Property - any interest in any kind of property or asset, whether
     real, personal or mixed, or tangible or intangible.

          Purchase Money Indebtedness - means and includes (i) Indebtedness
     (other than the Obligations) for the payment of all or any part of the
     purchase price of any fixed assets, (ii) any Indebtedness (other than the
     Obligations) incurred at the time of or within 10 days prior to or after
     the acquisition of any fixed assets for the purpose of financing all or any
     part of the purchase price thereof, and (iii) any renewals, extensions or
     refinancings thereof, but not any increases in the principal amounts
     thereof outstanding at the time.

          Purchase Money Lien - a Lien upon fixed assets which secures Purchase
     Money Indebtedness, but only if such Lien shall at all times be confined
     solely to the fixed assets the purchase price of which was financed through
     the incurrence of the Purchase Money Indebtedness secured by such Lien.

          RD Facility - Borrower's Research and Development Facility located on
     Three Springs Drive, Weirton, West Virginia.

          Reserve Percentage - the maximum aggregate reserve requirement
     (including all basic, supplemental, marginal and other reserves) which is
     imposed on member banks of the Federal Reserve System against
     "Euro-currency Liabilities" as defined in Regulation D.

          Restricted Investment - any investment made in cash or by delivery of
     Property to any Person, whether by acquisition of stock, Indebtedness or
     other obligation or Security, or by loan, advance or capital contribution,
     (including without limitation a loan, advance or capital contribution in
     connection with any joint venture investment) or otherwise, or in any
     Property except the following:

               (i) investments by Borrower, to the extent existing on the date
          hereof, in one or more Subsidiaries of Borrower;

               (ii) investments by Borrower or its Subsidiaries in Property to
          be used in the ordinary course of business;

               (iii) Current Assets arising from the sale of goods and services
          in the ordinary course of business of Borrower or any of its
          Subsidiaries;

                                      A-21
<PAGE>

               (iv) investments made and maintained only at such time as there
          are no Loans outstanding, in direct obligations of the United States
          of America, or any agency thereof or obligations guaranteed by the
          United States of America, provided that such obligations mature within
          one year from the date of acquisition thereof;

               (v) investments made and maintained only at such time as there
          are no Loans outstanding, in certificates of deposit maturing within
          one year from the date of acquisition and fully insured by the Federal
          Deposit Insurance Corporation;

               (vi) investments made and maintained only at such time as there
          are no Loans outstanding, in commercial paper given a rating of not
          lower than A-2/P-2 by a national credit rating agency and maturing not
          more than 270 days from the date of creation thereof;

               (vii) investments made and maintained only at such time as there
          are no Loans outstanding, in money market, mutual or similar funds
          having assets in excess of $100,000,000 and the investments of which
          are limited to investment grade securities;

               (viii) investments existing on the date hereof and listed on
          Exhibit 8.2.12 hereto;

               (ix) investments consisting of shares of common stock of Metals
          USA Inc. received by Borrower under Metals USA Inc.'s plan of
          reorganization; and

               (x) investments otherwise expressly permitted pursuant to the
          Agreement.

          Revolver Collateral Sale - as defined in subsection 8.2.9 of the
     Agreement.

          Revolving Credit Loan - a Loan made by any Revolving Lender pursuant
     to Section 1.1 of the Agreement.

          Revolving Credit Maximum Amount - an amount equal to (a) the Interim
     Amount, during the Interim Period and (b) from and after the entry of the
     Final Financing Order, $200,000,000, as either such amount may be reduced
     or increased from time to time pursuant to the terms of the Agreement.

          Revolving Credit Termination Date - the earlier to occur of (a) the
     repayment in full of the Revolving Credit Loans and the termination of all
     Revolving Loan Commitments or (b) the termination of the Revolving Loan
     Commitments pursuant to Section 4.

                                      A-22
<PAGE>

          Revolving Lender - any Lender with a Revolving Loan Commitment or that
     holds any portion of the Revolving Credit Loans.

          Revolving Loan Administrative Fee - as defined in Section 2.13 of the
     Agreement.

          Revolving Loan Closing Fees - as defined in Section 2.5 of the
     Agreement.

          Revolving Loan Commitment - with respect to any Revolving Lender, the
     amount of such Revolving Lender's Revolving Loan Commitment pursuant to
     subsection 1.1.1 of the Agreement, as set forth below such Revolving
     Lender's name on the signature page hereof.

          Revolving Loan Percentage - with respect to each Revolving Lender, the
     percentage equal to the quotient of such Revolving Lender's Revolving Loan
     Commitment divided by the aggregate of all Revolving Loan Commitments.

          Revolving Loan Primary Collateral - all Property of Borrower and each
     Subsidiary of Borrower, other than the Term Loan Primary Collateral.

          Revolving Notes - the Secured Promissory Notes executed by Borrower on
     or before the Effective Date in favor of each Revolving Lender to evidence
     the Revolving Credit Loans, which shall be in the form of Exhibit 1.1 to
     the Agreement, together with any replacement or successor notes therefor.

          Security - all shares of stock, partnership interests, membership
     interests, membership units or other ownership interests in any other
     Person and all warrants, options or other rights to acquire the same.

          Security Documents - the Guaranty Agreements, the Mortgages and all
     other instruments and agreements now or at any time hereafter securing the
     whole or any part of the Obligations.

          Senior Notes - collectively, the 2004 Senior Notes and the 2005 Senior
     Notes.

          Series C Preferred - Borrower's Series C Junior Redeemable Convertible
     Preferred Stock.

          Series D Preferred - Borrower's Series D Exchangeable Redeemable
     Preferred Stock.

          Solvent - as to any Person, that such Person (i) owns Property whose
     fair saleable value is greater than the amount required to pay all of such
     Person's Indebtedness (including contingent debts), (ii) is able to pay all
     of its Indebtedness as such Indebtedness matures and (iii) has capital
     sufficient to carry on its business and transactions and all business and
     transactions in which it is about to engage.

                                      A-23
<PAGE>

          Steel Strapping - The Steel Strapping Company LLC.

          Stock Plans - collectively, Borrower's 1984 Employee Stock Ownership
     Plan and Borrower's 1989 Employee Stock Ownership Plan, as each existed on
     the November 1, 2001.

          Subordinated Debt - Indebtedness of Borrower or any Subsidiary of
     Borrower that is subordinated to the Obligations in a manner satisfactory
     to Agent, and contains terms, including without limitation, payment terms,
     satisfactory to Majority Lenders.

          Subsequent Budget - as defined in subsection 8.1.3(iii) of the
     Agreement.

          Subsidiary - any Person of which another Person owns, directly or
     indirectly through one or more intermediaries, more than 50% of the Voting
     Stock at the time of determination.

          Supermajority Revolving Lenders - as of any date prior to termination
     of the Revolving Loan Commitments, Revolving Lenders holding 77% or more of
     the outstanding Revolving Loan Commitments determined on a combined basis;
     and following the termination of the Revolving Loan Commitments, Revolving
     Lenders holding 77% or more of the outstanding Revolving Loans, LC Amount
     and LC Obligations not yet reimbursed by Borrower or funded with
     outstanding Revolving Credit Loans; provided, that (i) in each case, if
     there are 3 or more Lenders with outstanding Loans, LC Amounts, unfunded
     and unreimbursed LC Obligations or Revolving Loan Commitments, at least 3
     Lenders shall be required to constitute Majority Revolving Lenders; and
     (ii) prior to termination of the Revolving Loan Commitments, if any
     Revolving Lender breaches its obligation to fund any requested Revolving
     Credit Loan, for so long as such breach exists, its voting rights hereunder
     as a Revolving Lender shall be calculated with reference to its outstanding
     Revolving Loans, LC Amounts and unfunded and unreimbursed LC Obligations,
     rather than its Revolving Loan Commitment.

          Swingline Loans - as defined in subsection 1.1.5 of the Agreement.

          Tandem Mill Collateral - the real Property constituting Borrower's No.
     9 Tandem Mill located at Borrower's Weirton, West Virginia steel-making
     facility and which is legally described on Exhibit A-3 attached to the
     Agreement, together with all Intellectual Property and Computer Hardware
     and Software used in connection with the operation and maintenance of
     Borrower's No. 9 Tandem Mill and all Equipment and Fixtures now or
     hereafter located thereon (whether or not later moved), including without
     limitation the Equipment listed on Exhibit A-4 attached to the Agreement.

          Term - as defined in Section 4.1 of the Agreement.

          Term Collateral Sale - as defined in subsection 8.2.9 of the
     Agreement.

                                      A-24
<PAGE>

          Term Lender - any Lender with a Term Loan Commitment or that holds any
     part of the Term Loan.

          Term Loan - as defined in Section 1.3 of the Agreement.

          Term Loan Cash Collateral - as defined in Section 1.3 of the
     Agreement.

          Term Loan Closing Fee - as defined in Section 2.3 of the Agreement.

          Term Loan Commitment - with respect to any Term Lender, the amount of
     such Term Lender's Term Loan Commitment pursuant to Section 1.3 of the
     Agreement, as set forth below such Term Lender's name on the signature
     pages hereof.

          Term Loan Commitment Letter - that certain commitment letter dated as
     of May 3, 2003 between Borrower and Manchester.

          Term Loan Primary Collateral - all right, title and interest of
     Borrower or any of its Subsidiaries in and to the Term Loan Cash
     Collateral, the Tin Mill Collateral, the Tandem Mill Collateral, the RD
     Facility, the Hot Mill Collateral, the Project Assets, and all other Goods,
     Fixtures, Equipment (including all machinery, computers, data processing,
     computer or office equipment (except to the extent relating to Accounts or
     other Revolving Loan Primary Collateral), all furniture and all trucks and
     other vehicles), and real Property of Borrower and any Subsidiary of
     Borrower, including all Equipment and Fixtures identified in the Appraisal,
     in each case whether now owned or hereafter existing, including any
     leasehold interests with respect to the foregoing.

          Term Loan Representative - Manchester or such other Person that
     succeeds Manchester as Term Loan Representative under the Agreement.

          Term Notes - the Secured Promissory Notes to be executed by Borrower
     on or before the Effective Date in favor of each Term Lender to evidence
     its Term Loan, which shall be in the form of Exhibit 1.3 to the Agreement,
     together with any replacement or successor notes therefor.

          Tin Mill Collateral - the real Property constituting Borrower's Tin
     Mill located at Borrower's Weirton, West Virginia steel-making facility and
     which is legally described on Exhibit A-5 attached to the Agreement,
     together with all Intellectual Property and Computer Hardware and Software
     used in connection with the operation and maintenance of the Tin Mill and
     all Equipment and Fixtures now or hereafter located thereon (whether or not
     later moved), including without limitation the Equipment listed on Exhibit
     A-6 attached to the Agreement.

          Title Commitments - as defined in Section 5.4 of the Agreement.

                                      A-25
<PAGE>

          Total Credit Facility - $225,000,000, as reduced from time to time
     pursuant to the terms of the Agreement.

          Transportation Equipment - the railroad locomotives and railcars owned
     by Borrower and listed on Exhibit A-8 to the Prepetition Loan Agreement.

          Type of Organization - with respect to any Person, the kind or type of
     entity by which such Person is organized, such as a corporation or limited
     liability company.

          UCC - the Uniform Commercial Code as in effect in the State of
     Illinois on the date of this Agreement, as it may be amended or otherwise
     modified.

          Unused Line Fee - as defined in Section 2.5 of the Agreement.

          Voting Stock - Securities of any class or classes of a corporation,
     limited partnership or limited liability company or any other entity the
     holders of which are ordinarily, in the absence of contingencies, entitled
     to vote with respect to the election of corporate directors (or Persons
     performing similar functions).

          Webco - WeBCo International LLC.

          WVH - Weirton Venture Holdings Corp.

     OTHER TERMS. All other terms contained in the Agreement shall have, when
the context so indicates, the meanings provided for by the UCC to the extent the
same are used or defined therein.

     CERTAIN MATTERS OF CONSTRUCTION. The terms "herein", "hereof" and
"hereunder" and other words of similar import refer to the Agreement as a whole
and not to any particular section, paragraph or subdivision. The use of the word
"include" or "including", when following any general statement, term or matter,
shall not be construed to limit such statement, term or matter to the specific
items or matters set forth immediately following such word or to similar items
or matters, whether or not non-limiting language (such as "without limitation"
or "but not limited to" or words of similar import) is used with reference
thereto, but rather shall be deemed to refer to all other items or matters that
fall within the broadest possible scope of such general statement, term or
matter. Any pronoun used shall be deemed to cover all genders. The section
titles, table of contents and list of exhibits appear as a matter of convenience
only and shall not affect the interpretation of the Agreement. All references to
statutes and related regulations shall include any amendments of same and any
successor statutes and regulations. All references to any of the Loan Documents
shall include any and all modifications thereto and any and all extensions or
renewals thereof.

                                      A-26
<PAGE>

                                LIST OF EXHIBITS

Exhibit 1.1                Form of Revolving Note
Exhibit 1.2                Existing Letters of Credit
Exhibit 1.3                Form of Term Note
Exhibit 3.1.1              Form of Loan Borrowing Request
Exhibit 5.4                Real Property
Exhibit 6.1.1              Business Locations
Exhibit 7.1.1              Jurisdictions in which Borrower and each Subsidiary
                           is Authorized to do Business
Exhibit 7.1.4              Capital Structure of Borrower and each Subsidiary
Exhibit 7.1.5              Names; Organization
Exhibit 7.1.12             Final Budget
Exhibit 7.1.13             Surety Obligations
Exhibit 7.1.14             Tax Identification Numbers of Subsidiaries
Exhibit 7.1.16             Intellectual Property
Exhibit 7.1.19             Contracts Restricting Right to Incur Debts
Exhibit 7.1.20             Litigation
Exhibit 7.1.22             Capitalized and Operating Leases
Exhibit 7.1.23             Pension Plans
Exhibit 7.1.25             Labor Relations
Exhibit 7.1.26             Third Party Property
Exhibit 8.1.3              Form of Compliance Certificate
Exhibit 8.1.4              Form of Borrowing Base Certificate
Exhibit 8.2.3              Existing Indebtedness
Exhibit 8.2.4              Affiliate Transactions
Exhibit 8.2.5              Permitted Liens
Exhibit 8.2.12             Permitted Investments
Exhibit 8.3                Covenants

Exhibit A-1                Hot Mill Real Property
Exhibit A-2                Hot Mill Equipment
Exhibit A-3                Tandem Mill Real Property
Exhibit A-4                Tandem Mill Equipment
Exhibit A-5                Tin Mill Real Property
Exhibit A-6                Tin Mill Equipment
Exhibit A-7                Additional Real Property

                                List of Exhibits-----------------------------------
EXHIBIT 10.1
-----------------------------------

Douglas O. McKinnon President and CEO USURF America, Inc.

      Re:  Consulting and Legal Services

Dear Doug:

This  will  confirm  our  oral  agreement  relating  to  our  firm's  performing
consulting  and legal  services on behalf of USURF in the future.  Specifically,
our firm has  agreed to perform  consulting  and legal  services,  in the manner
heretofore  performed by us on behalf of USURF,  for the calendar  year 2003, in
consideration  of USURF's issuing a total of 3,500,000 shares of common stock to
us. We also agreed that USURF would register such shares upon our request.

Should the foregoing  accurately reflect our agreement,  you need not respond to
this communication.

We look forward to continuing our relationship with USURF.

Thank you for your attention.

Sincerely,

NEWLAN & NEWLAN

    By: /s/ ERIC NEWLAN
       --------------------------------
       Eric Newlan

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