Document:

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                                                                   Exhibit 10(z)

April 23, 2003

Mr. Gerald G. Nadig
24354 Grandview Drive
Barrington, IL 60010

Re: Change In Status/Separation Agreement and General Release

Dear Gerry:

The purpose of this letter agreement (the "Agreement") is to confirm our mutual
understanding and agreement regarding your change in status and subsequent
separation of employment from Material Sciences Corporation ("MSC"). Please read
this Agreement very carefully. It includes a general release of all possible
claims related to your employment by MSC, including the termination of your
employment.

Change in Status/Termination of Employment

Effective April 17, 2003 (your separation date), you have resigned from your
position as Chairman, President and Chief Executive Officer of MSC and all
subsidiary companies, as well as a board member of MSC.

Salary Continuation

For the period commencing on April 17, 2003 and ending on April 15, 2005
("Salary Continuation Period"), you shall receive your current salary of
$43,091.66 per month.

Health Insurance

Beginning May 1, 2003 and continuing until October 31, 2003, you and your
eligible family members will be maintained on the medical, dental and vision
benefits you have previously selected. The Company will pay for its portion of
the monthly premium. You will be responsible for the normal employee portion.
Also, under the Company's COBRA policy, you and your eligible family members can
elect continued health insurance (medical, dental and vision) for up to 18
months beginning November 1, 2003. (A COBRA letter will follow and provide you
with details.) The Company will pay its portion of the COBRA premium for
coverage for you for a period of eighteen (18) months ending April 30, 2005.

<PAGE>

Gerald G. Nadig
Page Two

If you decide not to continue your health insurance coverage during the COBRA
period, then this benefit will be canceled. Also, your acceptance of other
employment and coverage under your new employer's medical plans, during the
COBRA period, will result in your no longer being eligible for continued medical
coverage under COBRA.

Supplemental Pension Plan

You are fully vested under the Company's 1984 Supplemental Pension Plan. You are
eligible to retire under this plan as early as June 1, 2005. You are required to
apply to the Company to activate this benefit.

Other Employee Benefits

From and after April 17, 2003, except as otherwise expressly provided herein,
you shall cease to be eligible for and to participate in any employee benefit
plans, perquisites or other similar arrangements of MSC including, but not
limited to, any Life Insurance Plans, Short and Long Term Disability Plans,
Savings and Investment Plans and the MSC Retirement Plan.

For purposes of the MSC Retirement Plan, you shall not be eligible to receive a
contribution for calendar year 2003. Regarding the Savings and Investment Plan
(401k), you may withdraw your funds at any time within the provisions of the
Plan.

Long-Term Incentive (LTI), Stock and Stock Option Plans

MSC shall take the following actions, which have been approved by the
Compensation and Organization Committee and the MSC Board of Directors, with
respect to the specific awards of stock options, stock and cash made to you
under the 1992 Omnibus Stock Awards Plan for Key Employees (the "1992 Plan") and
listed below:

     1993 Restricted Stock/Stock Option Awards Agreement Dated September 22,
     1993. Under this Agreement (the "1993 Agreement"), you were granted an
     option (the "Option") to purchase up to 16,983 shares of common stock (the
     "Non-Qualified Option Shares") and up to 7,017 shares of common stock (the
     "Incentive Option Shares") at an exercise price of $14.25 per share. The
     Option is fully vested. MSC agrees to extend the date by which you must
     exercise the Option from July 16, 2003 (90 days after the Separation Date)
     to the Plan expiration date of September 22, 2003. Other than as
     specifically set forth herein, the Option shall be subject to the terms and
     conditions contained in the 1992 Plan and the 1993 Agreement.

     Non-Qualified Stock Option Agreement Dated March 1, 1995. Under this
     Agreement (the "1995 Agreement"), you were granted an option (the "Option")
     to purchase up to 27,600 shares of common stock (the "Option Shares") at an
     exercise price of $16.25 per share. The Option is fully vested. MSC agrees
     to extend the date by which you must exercise the Option from July 16, 2003
     (90 days after the Separation Date) to October 17, 2003. Other than as
     specifically set forth herein, the Option shall be subject to the terms and
     conditions contained in the 1992 Plan and the 1995 Agreement.

<PAGE>

Gerald G. Nadig
Page Three

     Non-Qualified Stock Option Agreement Dated March 1, 1996. Under this
     Agreement (the "1996 Agreement"), you were granted an option (the "Option")
     to purchase up to 27,600 shares of common stock (the "Option Shares") at an
     exercise price of $14.50 per share. The Option is fully vested. MSC agrees
     to extend the date by which you must exercise the Option from July 16, 2003
     (90 days after the Separation Date) to October 17, 2003. Other than as
     specifically set forth herein, the Option shall be subject to the terms and
     conditions contained in the 1992 Plan and the 1996 Agreement.

     Non-Qualified Stock Option Agreement Dated March 1, 1997. Under this
     Agreement (the "1997 Agreement"), you were granted an option (the "Option")
     to purchase up to 40,000 shares of common stock (the "Option Shares") at an
     exercise price of $16.375 per share. The Option is fully vested. MSC agrees
     to extend the date by which you must exercise the Option from July 16, 2003
     (90 days after the Separation Date) to October 17, 2003. Other than as
     specifically set forth herein, the Option shall be subject to the terms and
     conditions contained in the 1992 Plan and the 1997 Agreement.

     2001 Restricted Stock Award and Long Term Cash Award Agreement. Under this
     Agreement (the "2001 Agreement"), you were granted 86,800 shares of
     restricted common stock (the "Restricted Shares") and a cash award of
     $406,400 (the "Long Term Cash Award"). MSC agrees to accelerate the date on
     which you shall become fully vested in the Restricted Shares and the Long
     Term Cash Award from March 1, 2004 to April 17, 2003. Other than as
     specifically set forth herein, the Restricted Shares and Long Term Cash
     Award shall be subject to the terms and conditions contained in the 1992
     Plan and the 2001 Agreement.

     Non-Qualified Stock Option Agreement Dated March 1, 2002. Under this
     Agreement (the "2002 Agreement"), you were granted an option (the "Option")
     to purchase up to 330,030 shares of common stock (the "Option Shares") at
     an exercise price of $10.00 per share. The Option is vested on a pro-rata
     basis and 110,010 (12/36ths) fully vested on March 1, 2003. Under the 2002
     Agreement, 18,335 shares (2/36ths) will be vested effective April 17, 2003.
     MSC agrees to extend the date by which you must exercise the Option from
     July 16, 2003 (90 days after the Separation Date) to October 17, 2003.
     Other than as specifically set forth herein, the Option shall be subject to
     the terms and conditions contained in the 1992 Plan and the 2002 Agreement.

Long-Term Care

Your long-term care premium has been paid for the month of April. You will need
to take over that payment directly with the carrier, Trans America, if you wish
to continue this benefit. You may also want to continue the benefit for your
spouse, Nancy. Papers to make this conversion for direct payment will be
forwarded to you from the carrier.

<PAGE>

Gerald G. Nadig
Page Four

Vacation

You shall continue to accrue vacation under MSC's vacation policy until
April 17, 2003. You shall not earn or accrue any additional vacation after this
date. You will be paid for all earned but unused and accrued vacation on May 16,
2003.

Outplacement Assistance

Effective April 17, 2003, MSC will make outplacement assistance available to
you, at the full executive level, from the John Joseph Group for a period of up
to 24 months.

Automobile Allowance

During the Salary Continuation Period, you will continue to receive your monthly
automobile allowance of $1,000.

Executive Financial Planning Assistance

The Company will provide you with up to $2,500 for expenses incurred in
preparing taxes and estate financial planning for calendar year 2003.

Country Club Membership

The Company will reimburse you for your yearly Biltmore Country Club membership
dues for calendar year 2004. The benefit excludes all special assessments or
other charges.

Taxes

Please note that for any compensation, including but not limited to, salary
continuation, automobile allowance, distribution of shares, cash or cash
investment, applicable taxes and/or authorized deductions will be withheld by
the Company.

General Release

In consideration of the promises of MSC described in this Agreement, the receipt
and sufficiency of which are hereby acknowledged, you, of your own free will,
hereby voluntarily covenant not to sue and to release and forever discharge MSC
and where applicable, its predecessors, successors, assigns, parent
corporations, affiliates, officers, directors, shareholders, agents and
attorneys, past and present, of and from any and all actions or causes of
action, suits, claims, debts, charges, complaints, contracts, (whether oral or
written, express or implied from any source) and promises whatsoever, in law or
equity, which you, your heirs, executors, administrators, successors and assigns
(referred to collectively through this Agreement as "you") may now have against
MSC for, upon, or by reason of any matter, cause or thing whatsoever, including
but not limited to any and all matters arising out of your employment by MSC,
its affiliated companies, or both, and the cessation of said employment, and
including but not limited to any alleged violation of Title VII of the Civil
Rights Act of 1964, Sections 1981 through 1988 of Title 42 of the United States
Code, the Age Discrimination in Employment Act of 1967, the Americans With
Disabilities Act, the National Labor Relations Act, the Fair Labor Standards
Act, the Illinois Human Rights Act, the Illinois Wage Payment and Collection
Act, and any other federal, state or local civil, labor, wage-hour or human
rights law, or any other alleged violation of any federal, state or local law,

<PAGE>

Gerald G. Nadig
Page Five

regulation or ordinance, and/or public policy, contract or tort or common-law
having any bearing whatsoever on the terms and conditions and/or cessation of
your employment with MSC which you ever had, now have, or shall have as of the
date of this Agreement. This Agreement shall not be construed to waive any
rights or claims that you may have under the Age Discrimination and Employment
Act of 1967 which may arise after the date that you sign this Agreement. You
expressly acknowledge and agree that the release referred to in this paragraph
is an essential and material term of this Agreement and, without such
provisions, MSC would not have entered into this Agreement. The release as set
forth herein shall not be applicable to any claims you may have against the
Company for the Company's failure to perform in accordance with this Agreement.

Confidentiality

You agree that the terms and provisions of this Agreement have been and shall
continue to remain confidential and shall not be revealed by you to any other
person other than your attorney, accountant, members of your immediate family,
and federal and state taxing authorities.

Non-disparagement

You agree not to disrupt, disparage, damage, impair, or otherwise interfere with
the business of MSC, or its relationships with its employees, customers, agents,
representatives or vendors. In return, MSC will not disrupt, disparage, impair,
or otherwise interfere with the reputation and integrity of yourself.

Change in Control Agreement

You acknowledge and agree that, effective April 17, 2003, that certain Change in
Control Agreement you entered into with MSC dated June 30, 2001 shall become
null and void and shall have no further force or effect. MSC also acknowledges
that the non-compete clause of the Change In Control Agreement is also null and
void effective today.

Technology Agreement

You expressly acknowledge and agree that, notwithstanding any provision or
statement to the contrary contained in this Agreement, that certain Technology
Agreement you entered into with MSC dated June 20, 1990, a copy of which is
attached, shall remain in full force and effect according to its terms and shall
continue to be binding upon you. Please pay special note to paragraph #3,
"Confidential Information" and paragraph #9, "Non-Compete".

Voluntary and Knowledgeable Act

You acknowledge that you have read this Change in Status/Separation Agreement
and General Release, that MSC has advised you to review it with an attorney, and
that you execute this Agreement of your own free will and with full knowledge of
its meaning and consequences. You acknowledge and agree that you have been given
twenty-one (21) days from today within which to consider and sign this
Agreement. You further understand that you have seven (7) days following your
signing of this Agreement to revoke this Agreement and that the Agreement shall
not become effective or enforceable until the expiration of said seven (7) day
period.

<PAGE>

Gerald G. Nadig
Page Six

Entire Agreement

This Agreement constitutes the entire Agreement between MSC and you with regard
to the matters described herein, and shall not be modified or amended in any
manner except by a supplemental written agreement jointly executed by the
parties. Notwithstanding the foregoing, you acknowledge and agree that, to the
extent you have entered into an Agreement to Arbitrate Employment Disputes
("Arbitration Agreement") with MSC, such Arbitration Agreement shall remain in
full force and effect and shall continue to be binding upon you with respect to
any matters arising under this Agreement.

Gerry, if you have any questions, or wish to discuss these terms any further,
please contact me. Again, you will have twenty-one (21) days from this date to
acknowledge your agreement with the terms of this letter by signing your name
and filling in the date where indicated below. If you do not revoke your
acceptance of this Agreement within seven (7) days after you sign it, it will
become effecting and binding.

Sincerely,

/s/ Michael J. Callahan
--------------------------------------
Michael J. Callahan
President and Chief Executive Officer

Acknowledged and Accepted:

/s/ Gerald G. Nadig
--------------------------------------
Gerald G. Nadig

4/28/03
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Date<PAGE>

                                                                  Exhibit 10(aa)

                               PURCHASE AGREEMENT

            PURCHASE AGREEMENT dated as of May 2, 2003 (this "Purchase
Agreement") among ISG VENTURE INC., a Delaware corporation ("ISG Sub"), ISG
ACQUISITION INC, a Delaware corporation ("ISG"); MSC WALBRIDGE COATINGS INC., a
Delaware corporation ("MSCWC") and MATERIAL SCIENCES CORPORATION, a Delaware
corporation ("MSC").

                              W I T N E S S E T H:

            WHEREAS, Walbridge Coatings, An Illinois Partnership (the
"Partnership") is a general partnership organized under the laws of the State of
Illinois for the purpose of owning and operating a facility designed primarily
to coat sheet steel with zinc or zinc alloys by an electroplating process and
also capable of coating sheet steel with Zincrometal (R) or other materials (the
"Walbridge Facility"); and

            WHEREAS, ISG and ISG Sub are soon to acquire with the consent of MSC
and MSCWC the "Partner's Interest" (as that term is defined in Appendix A) of
Bethlehem Steel Corporation, a Delaware corporation ("BSC"), and EGL Steel
Company, LLC, a Delaware limited liability company ("EGL"), in the Partnership
as part of BSC's bankruptcy court proceedings and to assume and agree in writing
to carry out all of BSC's and EGL's obligations under the Definitive Agreements
(as defined below) in accordance with Section 13.01 of the Amended Partnership
Agreement (as defined below) (the "ISG/BSC Transaction"); and

            WHEREAS, upon the closing of the ISG/BSC Transaction, MSCWC and ISG
Sub will be the only partners of the Partnership; and

            WHEREAS, ISG Sub desires to sell or cause ISG to sell to MSCWC all
of its interests in the Partnership, including without limitation the GP
Interest (as defined herein), and ISG desires to sell to MSCWC all of its
interests in the Partnership, including without limitation the Line Time Access,
and MSCWC desires to buy the same from ISG Sub and ISG, in each case on the
terms and conditions contained herein; and

            WHEREAS, MSC desires to enter into this Purchase Agreement in order
to induce ISG Sub and ISG Steel to enter into this Purchase Agreement;

            NOW, THEREFORE, the parties hereto agree as follows:

                                    ARTICLE I

                                   Definitions

                 (a) As used herein, the following terms shall have the
following meanings:

<PAGE>

            "Affiliate" means, with respect to any person, any other Person
directly or indirectly controlling, controlled by or under common control with
such Person.

            "Amended ISG Coating Agreement" means the Amended and Restated
Coating Agreement dated a s of July 23, 1999 between ISG (as assignee of BSC)
and the Partnership.

            "Amended Operating Agreement" means the Amended and Restated
Operating Agreement dated as of July 23, 1999 between MSCWC and the Partnership.

            "Amended Parent Agreement" means the Amended and Restated Parent
Agreement dated as of July 23, 1999 between ISG (as assignee of BSC) MSCPFM and
MSC.

            "Amended Partnership Agreement" means the Amended and Restated
Partnership Agreement of the Partnership dated as of July 23, 1999 between ISG
Sub (as assignee of EGL) and MSCWC.

            "Appendix A" means Appendix A to the Definitive Agreements.

            "Definitive Agreements" means the Amended Parent Agreement, the
Amended Partnership Agreement, the Amended ISG Coating Agreement, the MSCWC
Coating Agreement, the Amended Operating Agreement, together in each case with
any and all changes therein or additions thereto evidenced by letter agreements
dated on or after July 23, 1999 or the minutes of the Management Committee of
the Partnership between July 23, 1999 and the date hereof.

            "Interest" means all of the interests of ISG and ISG Sub in the
Partnership including, without limitation, the GP Interest and the Line Time
Access.

            "ISG Transaction Documents" means this Purchase Agreement and each
of the Exhibits hereto to which ISG and/or ISG Sub is or is to be a party.

            "MSCWC Coating Agreement" means the Coating Agreement dated as of
July 23, 1999 between MSC and the Partnership.

            "MSC Transaction Documents" means this Purchase Agreement and each
of the Exhibits hereto to which MSC and/or MSCWC is or is to be a party.

            "Person" means any natural person, firm, trust, partnership, joint
venture, unincorporated association, corporation, limited liability company,
government or governmental agency.

            "Purchase Price" means the payment from MSCWC to ISG Sub and ISG
Steel pursuant to Section 2.02(b).

            "Scheduled Closing Date" means May 6, 2003.

            "Tolling Agreement" means the Tolling Agreement among ISG, MSCWC and
MSC in the form of Exhibit C attached hereto.

                                       2

<PAGE>

            "Transactions" means all transactions contemplated by this Purchase
Agreement.

            (b) Each of the following terms is defined in the Section set forth
opposite such term:

             Term                                     Section
             ----                                     -------

             Closing                                  2.01
             Closing Date                             2.01
             EGL                                      Recitals
             GP Interest                              2.02(a)
             ISG                                      Caption
             ISG/BSC Transaction                      Recitals
             ISG Sub                                  Caption
             Line Time Access                         2.02(a)
             MSC Undertaking                          2.02(b)
             MSC                                      Caption
             MSCWC                                    Caption
             Partnership                              Recitals
             Walbridge Facility                       Recitals

                                   ARTICLE II

                                  The Purchase

            SECTION 2.01. Closing Date. The Transactions shall, subject to the
satisfaction or waiver of the conditions set forth in Article V hereof, be
consummated (the "Closing") at the offices of Sidley Austin Brown & Wood, 10
South Dearborn Street, Bank One Plaza, Chicago, Illinois on the Scheduled
Closing Date or at such other place or time (but not later than May 30, 2003) as
shall be agreed to by the parties (the "Closing Date"), effective as of the
opening of business, Chicago time, on the Closing Date.

            SECTION 2.02. The Transactions. Simultaneously on the Closing Date:

                 (a) (i) MSCWC shall purchase from ISG Sub and ISG Sub shall
sell to MSCWC all of ISG Sub's interests in the Partnership, including without
limitation a 33.5% general partner interest in the Partnership (including all
rights with respect thereto except as expressly otherwise provided herein (the
"GP Interest")), which GP Interest shall include a 33.5% Voting Interest (as
defined in Appendix A) and a 33.5% Financial Interest (as defined in Appendix
A), and (ii) ISG Steel shall assign to MSCWC, and MSCWC shall acquire from ISG
all of ISG's interests in the Partnership, including without limitation all of
ISG's interest in the Amended ISG Coating Agreement (ISG's interest therein
being referred to herein as the "Line Time Access"), but excluding all inventory
or other assets owned by ISG or ISG that are not included in the term "Partner's
Interest" (as defined in Appendix A).

                 (b) In consideration therefor, MSCWC (or MSC) shall pay to
ISG, on behalf of ISG and ISG Sub, in the aggregate, $3,600,000.00 on the
Closing Date and MSC shall

                                       3

<PAGE>

assume and agree to pay or otherwise perform, or to cause one of its Affiliates
to pay or otherwise perform, and indemnify ISG and/or ISG Sub against any and
all liabilities, obligations, and commitments under the Definitive Agreements of
BSC (or ISG as successor to BSC under the Definitive Agreements) and/or EGL (or
ISG Sub as successor to EGL under the Definitive Agreements) that arise or
accrue with respect to any period beginning after the Closing Date or arise out
of events or circumstances occurring after the Closing Date, whether absolute,
contingent, known or unknown, disclosed or undisclosed in this Purchase
Agreement or otherwise (the "MSC Undertaking"). The form of the MSC Undertaking
is set forth in Exhibit A hereto.

                 (c) Effective as of the completion of the closing of the
ISG/BSC Transaction and the Closing hereunder, ISG and ISG Sub shall be jointly
and severally responsible for payment to MSCWC of (i) all "Allocated Fixed
Costs" (as defined in Section 5.02 of the Amended ISG Coating Agreement) owed by
BSC (or ISG as successor to BSC under the Definitive Agreements) for the period
from the last day for which such costs have been paid by BSC (currently February
28, 2003) to and including the Closing Date hereunder, and (ii) all unpaid
"Coating Fees" (as defined in Appendix A) owed by BSC (or ISG as successor to
BSC under the Definitive Agreements) under Section 5.01 of the Amended ISG
Coating Agreement for coating services rendered by the Partnership to BSC, ISG
or any of their respective Affiliates. Not later than five business days after
the Closing, MSCWC shall invoice ISG and ISG Sub for (i) such Allocated Fixed
Costs (currently estimated by MSC to be $514,051.92 for the period March 1, 2003
through May 6, 2003) and (ii) such Coating Fees (estimated by MSC as of 12:01
a.m. on April 25, 2003, after giving effect to funds received from BSC on April
25, 2003, to be $1,375,283.26), and ISG and/or ISG Sub shall pay the amount of
such invoice (in the absence of manifest error) to MSCWC within 30 days
thereafter.

                 (d) (i) ISG and ISG Sub and (ii) MSC, MSCWC and the
Partnership shall exchange mutual releases with respect to their respective
obligations under the Definitive Agreements in the form of Exhibit B hereto.

            SECTION 2.03. Payment Mechanics. The $3,600,000.00 payment on the
Closing Date referred to in Section 2.02(b) shall be paid in cash (in United
States dollars) by MSCWC by wire transfer of immediately available funds to an
account specified by ISG in a written notice to MSCWC delivered not less than
two business days prior to the Closing.

            SECTION 2.04. Excluded Liabilities. Except as otherwise provided in
this Purchase Agreement or the Amended Partnership Agreement, neither MSC nor
MSCWC shall assume or undertake to pay, perform, satisfy or discharge any
liabilities, obligations, agreements or commitments (i) of BSC, EGL, ISG, ISG
Sub, the Partnership or any of their respective Affiliates or (ii) relating to
the operation of the Partnership, the use of the Line Time Access or to the
ownership of the GP Interest and arising or accrued with respect to any period
ending on or before the Closing Date or arising out of events or circumstances
occurring or existing on or prior to the Closing Date, whether due or to become
due or whether accrued, absolute, contingent, known or unknown, disclosed or
undisclosed in this Purchase Agreement or otherwise.

                                       4

<PAGE>

                                   ARTICLE III

                         Representations and Warranties

            SECTION 3.01. Representations and Warranties of ISG and ISG Sub. ISG
and ISG Sub each represents and warrants to MSC and MSCWC that:

                 (a) Corporate Existence and Power. Each of ISG and ISG Sub
is a corporation duly incorporated, validly existing and in good standing under
the laws of the jurisdiction of its incorporation and has all corporate powers
and all material governmental licenses, authorizations, consents and approvals,
if any, required to execute and deliver each of the ISG Transaction Documents to
which it is or will be a party and to perform its obligations thereunder.

                 (b) Corporate and Governmental Authorization; No
Contravention. The execution, delivery and performance by each of ISG and ISG
Sub of this Purchase Agreement are within the corporate powers of ISG and/or ISG
Sub, as the case may be, have been duly authorized by all necessary corporate
action by ISG and ISG Sub, require no action by or in respect of, or filing
with, any governmental body, agency or official (except for such actions or
filings which, at the time of execution of this Purchase Agreement, have already
been taken or made or such actions or filings the failure of which to take or
make would not in the aggregate have a material adverse effect on the
transactions contemplated hereby and thereby) and do not or will not, as the
case may be, contravene, or constitute a default under, any provision of
applicable law or regulation or of the certificate of incorporation or by-laws
of ISG or ISG Sub, as applicable, or of any material agreement, judgment,
injunction, order, decree or other instrument binding upon ISG or ISG Sub, as
applicable.

                 (c) Title to Interest. On the Closing Date, ISG Sub will
have valid title to the GP Interest being sold to MSCWC pursuant to this
Purchase Agreement, and ISG will have valid title to the Amended ISG Coating
Agreement being assigned to MSCWC pursuant to this Purchase Agreement. Upon the
completion of the Closing, MSCWC will have acquired from ISG and ISG Sub all of
their respective interests in the Partnership, including without limitation (i)
the GP Interest and Line Time Access and (ii) all of the Partner's Interest
formerly owned by EGL or BSC, in each case free and clear of all liens, charges
and encumbrances.

                 (d) Binding Effect. Each of the ISG Transaction Documents,
when duly and validly executed by each of the other parties thereto, shall
constitute a valid and binding agreement of ISG and/or ISG Sub, as applicable.

                 (e) Limitation. ISG and ISG Sub acknowledge that MSC makes
no representation or warranty with respect to the assets, liabilities, business,
operations, condition (financial or otherwise) or prospects of the Partnership.

            SECTION 3.02. Representations and Warranties of MSC and MSCWC. MSC
and MSCWC each represents and warrants to ISG and ISG Sub that:

                 (a) Corporate Existence and Power. Each of MSCWC and MSC is
a corporation duly incorporated, validly existing and in good standing under the
laws of the

                                        5

<PAGE>

jurisdiction of its incorporation and has all corporate powers and all material
governmental licenses, authorizations, consents and approvals required to
execute and deliver each of the MSC Transaction Documents to which it is or is
to be a party and to perform its obligations thereunder.

                 (b) Corporate and Governmental Authorization; No
Contravention. The execution, delivery and performance by each of MSCWC and MSC
of each of the MSC Transaction Documents to which it is or is to be a party are
within the corporate powers of MSCWC and/or MSC, as the case may be, have been
duly authorized by all necessary corporate action of MSC and/or MSCWC, require
no action by or in respect of, or filing with, any governmental body, agency or
official (except for such actions or filings which, at the time of execution of
this Purchase Agreement, have already been taken or made or such actions or
filings the failure of which to take or make would not in the aggregate have a
material adverse effect on the transactions contemplated hereby and thereby) and
do not or will not, as the case may be, contravene, or constitute a default
under, any provision of applicable law or regulation or of the certificate of
incorporation or by-laws (or other similar documents) of MSCWC or MSC, as
applicable, or of any material agreement, judgment, injunction, order, decree or
other instrument binding upon MSCWC or MSC, as applicable.

                 (c) Binding Effect. Each of the MSC Transaction Documents,
when duly and validly executed by each of the other parties thereto, shall
constitute a valid and binding agreement of MSCWC and/or MSC, as applicable.

                 (d) Limitation. MSC and MSCWC acknowledge that neither ISG nor
ISG Sub makes any representation or warranty with respect to the GP Interest
(except as provided in Section 3.01 hereof), their compliance or non-compliance
with any of the Definitive Agreements or the assets, liabilities, business,
operations, condition (financial or otherwise) or prospects of the Partnership.

                                   ARTICLE IV

                                    Covenants

            SECTION 4.01. Cooperation and Commercially Reasonable Efforts.
Subject to the terms and conditions of this Purchase Agreement, each of MSC,
MSCWC, ISG and ISG Sub shall cooperate with one another in timely giving all
notices, making all filings, seeking all regulatory clearances and obtaining all
consents of third parties, if any, necessary to consummate the Transactions, and
agrees to execute and deliver such other documents, certificates, agreements and
other writings and shall use commercially reasonable efforts to take, or cause
to be taken, such other actions and to do, or cause to be done, all things
necessary or desirable in order to satisfy the conditions set forth in Article V
(including, in the case of ISG and ISG Sub, the closing of the ISG/BSC
Transaction) hereof and to consummate the Transactions as soon as reasonably
practicable, and in any event not later than May 30, 2003. Notwithstanding
anything herein to the contrary, nothing contained herein shall require any
party to waive any of the conditions set forth in Article V hereof.

                                        6

<PAGE>

            SECTION 4.02. Notice of Certain Events. Each of the parties hereto
shall promptly notify the other parties hereto of:

                 (a) any notice or other communication from any Person
alleging that the consent of such Person is or may be required in connection
with the consummation of any of the Transactions or otherwise asserting any
objection to any of the Transactions;

                 (b) to the extent permitted by applicable law, any notice or
other communication from any governmental or regulatory agency or authority in
connection with the consummation of the Transactions;

                 (c) any notice of any breach or inaccuracy of any of the
representations and warranties made in this Purchase Agreement by any of the
parties hereto; or

                 (d) any actions, suits, claims, investigations or
proceedings commenced or, to its knowledge, threatened against, relating to or
otherwise affecting any party hereto that relate to the consummation of the
Transactions.

            SECTION 4.03. Confidentiality. From and after the date hereof, each
of ISG and ISG Sub and its Affiliates will hold, and will cause their respective
officers, directors, employees, accountants, counsel, consultants, advisors and
agents to hold, in confidence, unless compelled to disclose by judicial or
administrative process or by other requirements of law, all confidential
documents and information concerning the Partnership except to the extent that
such information can be shown to have been (i) in the public domain through no
fault of ISG or ISG Sub, as the case may be, or their respective Affiliates or
(ii) later lawfully acquired on a nonconfidential basis by ISG or ISG Sub, as
the case may be, or their respective Affiliates. The obligation of ISG and ISG
Sub and their respective Affiliates to hold any such information in confidence
shall be satisfied if they exercise the same care with respect to such
information as they would take to preserve the confidentiality of their own
similar information.

            SECTION 4.04. Survival of Representations and Warranties. All of the
respective representations and warranties of MSC and MSCWC and of ISG and ISG
Sub set forth in Article III hereof shall survive the completion of the Closing.

                                    ARTICLE V

                               Closing Conditions

            SECTION 5.01. ISG's and ISG Sub's Conditions. Each of ISG's and ISG
Sub's obligations to take the actions contemplated by this Purchase Agreement to
be taken on the Closing Date are subject to the fulfillment, on or prior to the
Closing Date, of each of the following conditions, any or all of which may be
waived in whole or in part on or prior to the Closing Date by ISG or ISG Sub:

                 (a) Representations and Warranties. The representations and
warranties of MSC and MSCWC contained in this Purchase Agreement shall be true
in all material respects on and as of the Closing Date as though such
representations and warranties were made on and as of such date.

                                        7

<PAGE>

                 (b) Covenants. Each of MSC and MSCWC shall have performed in
all material respects all of its obligations hereunder required to be performed
by it prior to or on the Closing Date.

                 (c) Receipt of Purchase Price. ISG shall have received the
full amount of the Purchase Price in accordance with Sections 2.02(b) and 2.03.

                 (d) MSC Undertaking. MSC shall have executed and delivered
to ISG the MSC Undertaking. The form of the MSC Undertaking is set forth in
Exhibit A hereto.

                 (e) Release. The Partnership shall have executed and
delivered to ISG and to ISG Sub a Mutual Release in the form of Exhibit B
hereto.

                 (f) Tolling Agreement. MSCWC shall have executed and
delivered to ISG the Tolling Agreement.

                 (g) Governmental Clearances. To the extent required by
applicable law or government regulations, all material regulatory clearances
shall have been obtained.

                 (h) Injunctions. No provision of any applicable law or
regulation and no judgment, injunction, order or decree shall prohibit or
restrain the consummation of the Transactions.

                 (i) ISG/BSC Transaction. The ISG/BSC Transaction shall have
been closed.

            SECTION 5.02. MSC's and MSCWC's Conditions. Each of MSC's and
MSCWC's obligations to take the actions contemplated by this Purchase Agreement
to be taken on the Closing Date are subject to the fulfillment, on or prior to
the Closing Date, of each of the following conditions, any or all of which may
be waived in whole or in part on or prior to the Closing Date by MSC or MSCWC:

                 (a) Representations and Warranties. The representations and
warranties of ISG and ISG Sub in this Purchase Agreement shall be true in all
material respects on and as of the Closing Date as though such representations
and warranties were made on and as of such date.

                 (b) Covenants. Each of ISG and ISG Sub shall have performed
in all material respects all of its obligations hereunder required to be
performed by it prior to or on the Closing Date.

                 (c) Release. ISG and ISG Sub shall have executed and
delivered to the Partnership a Mutual Release in the form of Exhibit B hereto.

                 (d) Assignment by ISG Sub. ISG Sub shall have assigned to
MSCWC all of its Interest, including without limitation the GP Interest, in
accordance with Section 2.02(a)(i). The form of such assignment is set forth in
Exhibit D hereto.

                                       8

<PAGE>

                 (e) Assignment by ISG. ISG shall have assigned to MSCWC all
of its Interest, including without limitation the Line Time Access, in
accordance with Section 2.02(a)(ii). The form of such assignment is set forth in
Exhibit E hereto.

                 (f) Tolling Agreement. ISG shall have executed and delivered
to MSCWC the Tolling Agreement.

                 (g) Governmental Clearances. To the extent required by
applicable law or government regulations, all material regulatory clearances
shall have been obtained.

                 (h) Injunctions. No provision of any applicable law or
regulation and no judgment, injunction, order or decree shall prohibit or
restrain the consummation of the Transactions.

                 (i) ISG/BSC Transaction. The ISG/BSC Transaction shall have
been closed.

                                   ARTICLE VI

                                   Termination

            SECTION 6.01. Termination. This Purchase Agreement may be terminated
prior to the Closing Date:

                 (a) by the written agreement of all of the parties hereto;

                 (b) by any party if the Transactions shall not have been
consummated on or before May 30, 2003; provided that no party may terminate this
Purchase Agreement pursuant to this Section 6.01(b) if the Transactions shall
have been delayed due in whole or in material part to the intentional, willful
or grossly negligent breach in a material respect by such party of any of its
representations or warranties or the intentional, willful or grossly negligent
failure of such party to fulfill a condition to the performance of the
obligations of any other party or to perform a covenant of this Purchase
Agreement; or

                 (c) by any party if there shall be any law or regulation
that makes the consummation of the Transactions illegal or otherwise prohibited,
or materially alters the Transactions, or if consummation of the Transactions
would violate any nonappealable final judgment, injunction, order or decree of
any court or governmental body having competent jurisdiction.

The party or parties desiring to terminate this Purchase Agreement pursuant to
clauses (b) or (c) of this Section 6.01 shall give notice of such desire to
terminate to the other parties hereto.

            SECTION 6.02. Effect of Termination. If this Purchase Agreement is
terminated as permitted by Section 6.01, such termination shall be without
liability of any party (or any shareholder, director, officer, employee, agent,
consultant or representative of such party) to any other party to this Purchase
Agreement. The provisions of Section 4.03 and Section 7.01 shall survive any
termination of this Purchase Agreement pursuant to Section 6.01 hereof.

                                        9

<PAGE>

                                   ARTICLE VII

                                  Miscellaneous

            SECTION 7.01. Expenses. Each of the parties hereto shall pay its own
expenses (including legal and accounting fees) incurred in connection with the
negotiation and execution of this Purchase Agreement and the documents to be
executed on the Closing Date and the consummation of the Transactions.

            SECTION 7.02. Notices. All notices hereunder shall be in writing and
shall be personally delivered or sent via reputable overnight courier or
facsimile. Such notices shall be addressed respectively:

            if to MSC or MSCWC, to:

                     Material Sciences Corporation
                     2200 Pratt Boulevard
                     Elk Grove Village, IL  60007

                     Attention of Chief Financial Officer
                     Telecopier:  847-718-8643

            with a copy to:

                     Sidley Austin Brown & Wood
                     10 South Dearborn Street
                     Bank One Plaza
                     Chicago, IL  60603

                     Attention of Jon M. Gregg
                     Telecopier:  312-853-7036

            if to ISG or ISG Sub, to each of them:

                     C/O International Steel Group Inc.
                     3250 Interstate Drive, 2nd Floor
                     Richmond, Ohio 44286-9000

                     Attention of Mr. Gordon Spelich
                     Telecopier:  330-659-9132

            with a copy to:

                     Jones, Day, Reavis & Pogue
                     North Point, 901 Lakeside Avenue
                     Cleveland, Ohio  44114-1190

                     Attention of David Watson

                                       10

<PAGE>

                     Telecopier:  216-579-0212

or to such other address or telecopier number as such party may hereafter
specify for the purpose of providing notice to the other parties. Each such
notice, request or other communication shall be effective (i) if given by
facsimile, when such facsimile is transmitted to the telecopier number specified
in this Section 7.02 and the transmission of the appropriate number of pages is
confirmed or (ii) if given by any other means, when delivered at the address
specified in this Section.

            SECTION 7.03. Third Parties. Nothing in this Purchase Agreement,
whether express or implied, is intended to confer any rights or remedies under
or by reason of this Purchase Agreement on any persons other than the parties
hereto and their respective successors and permitted assigns.

            SECTION 7.04. Successors and Assigns. This Purchase Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
successors and permitted assigns; provided that in no event shall any party
hereto be permitted to assign any of its obligations under this Purchase
Agreement to any other Person without the written consent of each other party
hereto.

            SECTION 7.05. Headings. Headings are for ease of reference only and
shall not form a part of this Purchase Agreement.

            SECTION 7.06. Governing Law; Entire Agreement.

                 (a) This Purchase Agreement shall be construed in accordance
with and governed by the law of the State of Illinois without giving effect to
the principles of conflicts of laws thereof which might cause the laws of any
other jurisdiction to govern this Purchase Agreement.

                 (b) This Purchase Agreement, the Exhibits hereto and the
documents referred to herein to be executed contemporaneously herewith on or
before the Closing embody the entire agreement of the parties hereto with
respect to the subject matter hereof and supersede all prior agreements with
respect thereto.

            SECTION 7.07. Incorporation of Exhibits. The Exhibits identified in
this Purchase Agreement are incorporated herein by reference and made a part
hereof.

            SECTION 7.08. Amendments and Waivers.

                 (a) Any provision of this Purchase Agreement may be amended
or waived if, but only if, such amendment or waiver is in writing and is signed,
in the case of an amendment, by each party to this Purchase Agreement, or in the
case of a waiver, by the party against whom the waiver is to be effective.

                 (b) No failure or delay by any party in exercising any
right, power or privilege hereunder shall operate as a waiver thereof nor shall
any single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or

                                       11

<PAGE>

privilege. The rights and remedies herein provided shall be cumulative and not
exclusive of any rights or remedies provided by law.

            SECTION 7.09. Counterparts. This Purchase Agreement may be executed
in one or more counterparts, each of which shall be deemed an original and all
of which taken together shall constitute a single agreement. This Purchase
Agreement shall become a binding agreement when each party hereto shall have
received a counterpart hereof signed by each of the other parties hereto.

            IN WITNESS WHEREOF, the parties hereto have caused this Purchase
Agreement to be duly executed as of the day and year first above written.

                           ISG VENTURE INC.

                           By:      /s/ Gordon Spelich
                                    --------------------------------------------
                                    Name:    Gordon Spelich
                                    Title:   Vice President

                           ISG ACQUISITION INC.

                           By:      /s/ Gordon Speclich
                                    --------------------------------------------
                                    Name:    Gordon Spelich
                                    Title:   Vice President

                           MSC WALBRIDGE COATINGS INC.

                           By:      /s/ James J. Waclawik, Sr.
                                    --------------------------------------------
                                    Name:    James J. Waclawik, Sr.
                                    Title:   Vice President, Chief
                                             Financial Officer and Secretary

                           MATERIAL SCIENCES CORPORATION

                           By:      /s/ James J. Waclawick, Sr.
                                    --------------------------------------------
                                    Name:    James J. Waclawik, Sr.
                                    Title:   Vice President, Chief
                                             Financial Officer and Secretary

                                       12

<PAGE>

                                 Exhibit Index

Exhibit A            MSC Undertaking

Exhibit B            Mutual Release

Exhibit C            Tolling Agreement

Exhibit D            Assignment of GP Interest

Exhibit E            Assignment of ISG Coating Agreement

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