Document:

<PAGE>
                                                                   EXHIBIT 10.26

                                                                  EXECUTION COPY

                 AMENDED AND RESTATED ASSET PURCHASE AGREEMENT

                                  BY AND AMONG

                               PAV REPUBLIC, INC.
                                 AS PURCHASER,

                                      AND

                       REPUBLIC ENGINEERED PRODUCTS LLC,
                            N&T RAILWAY COMPANY LLC,
                                      AND
                            BLUE STEEL CAPITAL CORP.
                                   AS SELLERS
                         DATED AS OF DECEMBER 16, 2003

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                             Page
                                                                                             ----
<S>                                                                                          <C>
ARTICLE I DEFINITIONS.......................................................................   2
        Section 1.1     Definitions.........................................................   2
        Section 1.2     Terms Generally.....................................................  15

ARTICLE II PURCHASE AND SALE OF ASSETS......................................................  15
        Section 2.1     Purchase and Sale of the Purchased Assets...........................  15
        Section 2.2     Excluded Assets.....................................................  18

ARTICLE III LIABILITIES ASSUMED.............................................................  18
        Section 3.1     Assumption of Liabilities...........................................  18

ARTICLE IV PURCHASE PRICE...................................................................  22
        Section 4.1     Purchase Price for Purchased Assets.................................  22
        Section 4.2     Payment of Purchase Price...........................................  24

ARTICLE V REPRESENTATIONS AND WARRANTIES AND RELATED UNDERTAKINGS...........................  24
        Section 5.1     Representations and Warranties of Sellers...........................  24
        Section 5.2     Representations and Warranties of Purchaser.........................  31
        Section 5.3     Amendments to Disclosure Schedules..................................  32

ARTICLE VI TAX MATTERS......................................................................  33
        Section 6.1     Transfer Taxes......................................................  33
        Section 6.2     Proration of Real Property Taxes....................................  33
        Section 6.3     Tax Returns; Cooperation on Tax Matters.............................  34
        Section 6.4     Allocation Purchase of Price and Purchase Price Allocation Forms....  35
        Section 6.5     Wage and Employment Tax Reporting...................................  35
        Section 6.6     Tax Sharing Agreements..............................................  35

ARTICLE VII COVENANTS AND ADDITIONAL AGREEMENTS.............................................  35
        Section 7.1     Approval Proceedings................................................  35
        Section 7.2     Employee Matters....................................................  36
        Section 7.3     Access to Information, Confidentiality..............................  36
        Section 7.4     Notification of Certain Matters.....................................  37
        Section 7.5     [Intentionally Omitted].............................................  37
        Section 7.6     Filings and Approvals Regarding the Railroad Subsidiary.............  38
        Section 7.7     Further Action......................................................  38
        Section 7.8     Conduct of the Business.............................................  39
        Section 7.9     Non-Assignable Contracts............................................  39
        Section 7.10    Acquisition Agreements..............................................  40
        Section 7.11    Indemnification Agreements..........................................  40
</TABLE>

                                        i

<PAGE>

<TABLE>
<S>                                                                                           <C>
       Section 7.12     Litigation..........................................................  41
       Section 7.13     Public Announcements................................................  41
       Section 7.14     Filings and Authorizations..........................................  41
       Section 7.15     Amendment to List of Purchased Contracts............................  42
       Section 7.16     Insurance...........................................................  42
       Section 7.17     Bulk Sale...........................................................  42
       Section 7.18     Employees and Employee Benefits Matters.............................  42
       Section 7.19     Closing Date Balance Sheet..........................................  43

ARTICLE VIII CONDITIONS TO THE CLOSING......................................................  43
       Section 8.1      Conditions to Obligations of Purchaser..............................  43
       Section 8.2      Conditions to Obligations of Seller.................................  46

ARTICLE IX CLOSING..........................................................................  47
       Section 9.1      Closing.............................................................  47
       Section 9.2      Closing Deliveries by Sellers.......................................  47
       Section 9.3      Closing; Deliveries by Purchaser....................................  48

ARTICLE X SURVIVAL..........................................................................  49

ARTICLE XI TERMINATION, AMENDMENT AND WAIVER................................................  49
       Section 11.1     Termination.........................................................  49
       Section 11.2     Effect of Termination...............................................  50
       Section 11.3     Break-Up Fee; Expense Reimbursement.................................  50
       Section 11.4     Earnest Money Deposit...............................................  50

ARTICLE XII MISCELLANEOUS...................................................................  51
       Section 12.1     Expenses............................................................  51
       Section 12.2     Governing Law; Forum................................................  51
       Section 12.3     Notices.............................................................  51
       Section 12.4     Headings............................................................  52
       Section 12.5     No Assignment; Benefit to Third Parties.............................  52
       Section 12.6     Entire Agreement....................................................  52
       Section 12.7     Counterparts........................................................  52
       Section 12.8     Waiver..............................................................  52
       Section 12.9     Amendment...........................................................  53
       Section 12.10    Severability........................................................  53
       Section 12.11    Further Assurances..................................................  53
</TABLE>

                                       ii

<PAGE>

                                    EXHIBITS

Sale Order                                                             Exhibit A

                                      iii

<PAGE>

                                    SCHEDULES

<TABLE>
<S>                                            <C>
Real Property                                  Schedule 2.1(a)
Owned Machinery and Equipment                  Schedule 2.1(b)
Railroad Subsidiary Assets                     Schedule 2.1(d)
Seller's Corporate Headquarters Assets         Schedule 2.1(e)(i)
Machine Shop Assets                            Schedule 2.1(e)(ii)
Purchased Plants - Fixed Assets                Schedule 2.1(f)
Permits                                        Schedule 2.1(g)
Purchased Contracts                            Schedule 2.1(k)
Intellectual Property Rights                   Schedule 2.1(i)
Claims of Credit                               Schedule 2.1(n)
Sellers Excluded Assets or Properties          Schedule 2.2(b)
[Intentionally Omitted]                        [Intentionally Omitted]
[Intentionally Omitted]                        [Intentionally Omitted]
Material Contracts                             Schedule 5.1(e)(i)
Cure Amounts                                   Schedule 5.1(e)(ii)
[Intentionally Omitted]                        [Intentionally Omitted]
[Intentionally Omitted]                        [Intentionally Omitted]
[Intentionally Omitted]                        [Intentionally Omitted]
[Intentionally Omitted]                        [Intentionally Omitted]
Reference Leases                               Schedule 5.1(j)
[Intentionally Omitted]                        [Intentionally Omitted]
Certain Actions                                Schedule 5.1(q)
[Intentionally Omitted]                        [Intentionally Omitted]
[Intentionally Omitted]                        [Intentionally Omitted]
[Intentionally Omitted]                        [Intentionally Omitted]
SEC Reports                                    Schedule 5.1(u)(i)
Unaudited Financial Statements                 Schedule 5.1(u)(iii)
[Intentionally Omitted]                        [Intentionally Omitted]
[Intentionally Omitted]                        [Intentionally Omitted]
[Intentionally Omitted]                        [Intentionally Omitted]
[Intentionally Omitted]                        [Intentionally Omitted]
[Intentionally Omitted]                        [Intentionally Omitted]
[Intentionally Omitted]                        [Intentionally Omitted]
Insurance                                      Schedule 5.1(aa)
Certain Changes or Events                      Schedule 5.1(bb)
[Intentionally Omitted]                        [Intentionally Omitted]
[Intentionally Omitted]                        [Intentionally Omitted]
[Intentionally Omitted]                        [Intentionally Omitted]
[Intentionally Omitted]                        [Intentionally Omitted]
[Intentionally Omitted]                        [Intentionally Omitted]
Indemnification Agreements                     Schedule 7.11
Assumed Employee Benefits Plans                Schedule 7.18
[Intentionally Omitted]                        [Intentionally Omitted]
[Intentionally Omitted]                        [Intentionally Omitted]
</TABLE>

                                       iv

<PAGE>

                 AMENDED AND RESTATED ASSET PURCHASE AGREEMENT

            This AMENDED AND RESTATED ASSET PURCHASE AGREEMENT (this
"Agreement"), is dated as of December 16, 2003, by and among REPUBLIC ENGINEERED
PRODUCTS LLC, a Delaware limited liability company ("Republic"), N&T RAIL WAY
COMPANY LLC, a Delaware limited liability company and BLUE STEEL CAPITAL CORP.,
a Delaware corporation (together with Republic, "Sellers" and each a "Seller")
which Sellers are debtors in possession under Chapter 11 of Title 11, United
States Code (as amended from time to time, the "Bankruptcy Code"), and PAV
REPUBLIC, INC., a Delaware corporation ("Purchaser").

            WHEREAS, Sellers have determined that it is in their best interest
to sell to Purchaser and Purchaser desires to purchase all of the assets used or
usable in connection with Sellers' business (the "Business"), and Purchaser
desires to assume certain specified liabilities of Sellers which are related to
the Business, all on the terms and subject to the conditions set forth in this
Agreement; and

            WHEREAS, Republic and certain of its subsidiaries commenced cases in
the United States Bankruptcy Court for the Northern District of Ohio, Eastern
Division under Chapter 11 of the Bankruptcy Code on October 6, 2003
(collectively, the "Chapter 11 Cases"); and

            WHEREAS, the Purchaser and the Sellers entered into an Asset
Purchase Agreement, dated as of November 7, 2003 (the "Old Agreement") and
desire to amend and restate the Old Agreement in its entirety and replace it
with this Agreement; and

            WHEREAS, Republic and certain of its subsidiaries continue in the
management arid possession of their properties as debtors in possession in the
Chapter 11 Cases pursuant to sections 1l07(a) and 1108 of the Bankruptcy Code
and, following approval of this Agreement, subject to the terms and conditions
of this Agreement; and

            WHEREAS, the transactions contemplated by this Agreement have been
implemented through the, filing of a motion seeking the entry of an order by the
Bankruptcy Court approving this Agreement and the terms of the sale of the
Purchased Assets (as defined herein) and the assumption of the Assumed
Liabilities (as defined herein) pursuant to Section 363 of the Bankruptcy Code
in accordance with the terms of this Agreement;

            WHEREAS, Purchaser intends to place One Million U.S. Dollars
($1,000,000) in an account to be used for the wind down and closure of the
Chapter 11 Cases; and

            WHEREAS, Purchaser, at the request of The Official Committee of
Unsecured Creditors in the Chapter 11 Cases, has committed to operate the
Business as a going concern; and

            WHEREAS, subject to the entry of the Sale Order (as defined herein)
and on the terms and conditions set forth herein, Purchaser shall purchase the
Purchased Assets and assume the Assumed Liabilities of Sellers.

<PAGE>
            NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements hereinafter set forth, the parties hereto agree to
amend and restate the Old Agreement in its entirety, as follows:

                                   ARTICLE I
                                   DEFINITIONS

      SECTION 1.1 DEFINITIONS. As used in this Agreement, the following terms
shall have the following meanings:

            "Acquisition Agreements" has the meaning set forth in Section 7.10.

            "Action" means any claim, charge, action, suit, arbitration,
mediation, inquiry, proceeding or investigation by any Person or Governmental
Authority before any Governmental Authority.

            "Active Employees" means employees of Seller actively employed in
the Business on the Closing Date; employees of Seller on disability or workers
compensation leave who are reasonably likely to return to work within a
reasonable time, employees of Seller on worker's compensation leave receiving
temporary total benefits, employees of Seller who have been laid off but possess
seniority rights under the Labor Agreements, and salaried employees on temporary
lay-off or approved personal leave per company policy.

            "Adjustment Date" has the meaning set forth in Section 6.2.

            "Administrative Agent" shall have the meaning set forth in the
Existing Credit Facility.

            "Affiliate" of a Person means any other Person that directly or
indirectly, through one or more intermediaries, Controls, is Controlled by, or
is under common Control with, the first mentioned Person.

            "Agreement" means this Agreement, including the Schedules and the
Exhibits, as amended from time to time in accordance with its terms.

            "Allocation" has the meaning set forth in Section 6.4.

            "Applicable Percentage" means a percentage (i) the numerator of
which is the aggregate principal amount of such Participant's Indebtedness under
the Existing Credit Facility with respect to which such Participant elects to
exercise a Purchase Option and (ii) the denominator of which is the aggregate
outstanding principal amount of all Indebtedness under the Existing Credit
Facility; provided, that if as a result of such elections, the Participants
would in the aggregate have Applicable Percentages totaling more than 33%, the
Applicable Percentages of the Participants shall be reduced pro rata based on
the respective amounts elected by each of the Participants, until Applicable
Percentages of the Participants do not exceed 33% in the aggregate.

                                       2

<PAGE>

            "Approvals" means all certificates, licenses, permits or other
approvals required to be obtained by Seller or its Subsidiaries in connection
with the use or ownership of its or their assets or properties or the operation
of its or their business.

            "Asbestos Liabilities" shall mean any loss, Liability, third-party
claim, cost, damage or expense (including without limitation any attorneys' fees
or expenses) arising from, relating to, or based on the presence or alleged
presence of asbestos or asbestos-containing materials in any product or item
manufactured, sold, marketed, installed, stored, transported, handled, used, or
distributed at any time by any Seller or any of its respective predecessor(s) or
Affiliates(s) or at any former or current properties or facilities of any Seller
or any of its respective predecessor(s) or Affiliate(s).

            "Assets" means the assets of every type and description, tangible or
intangible, real or personal that are owned, leased or licensed by any Seller,
including, without limitation, all Trust Moneys and other Collateral.

            "Assumed Employee Benefit Plans" has the meaning set forth in
Section 7.18.

            "Assumed Liabilities" has the meaning set forth in Section 3.1(a).

            "Assumption Agreement" means one or more assignment and assumption
agreements ill customary form and satisfactory to Purchaser.

            "Attendant Documents" has the meaning set forth in Section 5.1( a).

            "Auction" means, as more fully described in the Bidding Procedures
Order, the auction to be held prior to the Sale Hearing for consideration of
qualifying higher and better offers that may be presented to Sellers.

            "Audited Financial Statements" has the meaning set forth in Section
5.1(u)(ii).

            "Bankruptcy Code" has the meaning set forth in the Preamble.

            "Bankruptcy Court" means the United States Bankruptcy Court for the
Northern District of Ohio, Eastern Division, or such other court as may have
jurisdiction over the Chapter 11 Cases.

            "Bank Notes" has the meaning set forth in Section 4.1.

            "Bank Note Agreement" means the note agreement pursuant to which the
Bank Notes shall be issued to the holders thereof, in form and substance
reasonably acceptable to the Purchaser and the Administrative Agent.

            "Bank Note Consideration" has the meaning set forth in Section
4.1(a).

            "Bank Security Documents" means the mortgages and security
agreements pursuant to which the Purchaser grants to the Collateral Agent for
the benefit of the holders of the Bank Notes a first priority lien and security
interest in the Canton CAST-ROLL facility and

                                       3

<PAGE>

related assets of the Purchaser located in Canton, OH, at the premises described
in Exhibit A to the First Mortgage (as defined in the DIP Facility), including,
but not limited to, all equipment, fixtures, goods and other fixtures and
personal property located from time to time at such premises or related to the
operation thereof and related properties, and proceeds and products thereof and
the Insurance Collateral.

            "Bidding Procedures Order" means an order of the Bankruptcy Court
that is in form and substance satisfactory to the Purchaser and the Sellers.

            "Bill of Sale" means one or more bills of sale in form and substance
acceptable to Purchaser.

            "Bondholder Note Consideration" has the meaning set forth in Section
4.1(a).

            "Break-Up Fee" has the meaning set forth in Section 11.3.

            "Business" has the meaning set forth in the Recitals.

            "Business Combination" means with respect to any Person any (a)
merger, consolidation or combination to which such Person is a party, (b) any
sale, dividend, split or other disposition of any capital stock or other equity
interests of such Person, or any acquisition of capital stock or equity
interests or securities of such Person, representing in any such case at least
25% of such class of capital stock or equity interests, (c) any tender offer
(including, without limitation, a self-tender), exchange offer or
recapitalization for or affecting the outstanding equity or debt securities of
such Person, (d) any plan of reorganization under Chapter 11 of the Bankruptcy
Code, (e) any liquidation, dissolution or similar transaction involving such
Person, (f) any sale, dividend or other disposition of all or a material portion
of the assets of such Person or (g) the entering into of any agreement or
understanding, or the granting of any rights or options, with respect to any of
the foregoing.

            "Business Day" means any day that is not a Saturday, a Sunday or
other day on which banks are required or authorized by Law to be closed in the
City of New York.

            "Canadian Drawn Steel" means Canadian Drawn Steel Company, Inc.

            "Canadian Subsidiary" means 2011448 Ontario Limited; a company
formed under the laws of Canada.

            "Cash Consideration" has the meaning set forth in Section 4.1(a).

            "CAST-ROLL Collateral" means the Canton CAST-ROLL facility and
related assets of the Purchaser located in Canton, OH, at the premises described
in Exhibit A to the First Mortgage (as defined in the DIP Facility), including,
but not limited to, all equipment, fixtures, goods and other fixtures and
personal property located from time to time at such premises or related to the
operation thereof and related properties, and proceeds and products thereof.

                                       4

<PAGE>

            "CERCLA" means the Comprehensive Environmental Response Compensation
and Liability Act of 1980, as amended (U.S.C. Section 9601 et seq.), and all
regulations promulgated thereby.

            "Chapter 11 Cases" has the meaning set forth in the Recitals.

            "Chapter 11 Expenses" means the costs incurred and expenses paid or
payable by Sellers in connection with the administration of the Chapter 11
Cases, including, without limitation, (a) fees and expenses related to the DIP
Facility, (b) obligations to pay professionals' fees and expenses in connection
with the Chapter 11 Cases (including, without limitation, fees of attorneys,
accountants, investment bankers, financial advisors, and consultants retained by
Sellers, the Creditors' Committee or the pre-petition lenders, and any
compensation for making a substantial contribution in the Chapter 11 Cases) and
reimbursement of any expenses incurred by Sellers prior to the Closing Date in
connection therewith (including, without limitation, any obligations to pay any
holdback of any such fees and expenses), (c) fees and expenses payable to the
United States trustee under Section 1930 of title 28, United States Code and (d)
expenses of members of the Creditors' Committee.

            "Closing" has the meaning set forth in Section 9.1.

            "Closing Date" has the meaning set forth in Section 9.1.

            "Closing Date Balance Sheet" has the meaning set forth in Section
5.1(u)(iv).

            "Code" means the United States Internal Revenue Code of 1986, as
amended, together with the rules and regulations promulgated thereunder.

            "Collateral" has the meaning attributed to it in the Indenture.

            "Collateral Agent" shall have the meaning set forth in the Bank Note
Agreement.

            "Competing Bid" means a Qualified Bid that is determined to be the
highest or best offer at the Auction in accordance with the procedures set forth
in the Bidding Procedures Order.

            "Competing Bidder" means a Person other than the Purchaser that
submits a Qualified Bid.

            "Conducted" has the meaning set forth in Section 5.1(a).

            "Contract" means any written agreement, arrangement, understanding,
lease or instrument or other contractual or similar arrangement.

            "Control" (including the terms "Controlled by" and "under common
Control with") means the possession, directly or indirectly or as trustee or
executor, of the power to direct or cause the direction of the management
policies of a Person, whether through the ownership of capital stock, including
as trustee (other than a Chapter 11 trustee) or executor, by contract or credit
arrangement or otherwise.

                                       5
<PAGE>

            "Copyrights" has the meaning set forth in Section 2.1(i).

            "Creditors' Committee" means any statutory committee of unsecured
creditors appointed by the United States trustee in the Chapter 11 Cases.

            "Cure Costs" means all monetary Liabilities, including pre-petition
monetary Liabilities, of Sellers that must be paid or otherwise satisfied to
cure all of each Debtor Seller's monetary defaults under the Purchased Contracts
or Reference Leases at the time of the assumption thereof and assignment to
Purchaser as provided hereunder as such amounts are determined by the Bankruptcy
Court.

            "DIP Facility" means the debtor-in-possession financing entered into
by and between Republic as borrower, the other Sellers as guarantors, Fleet
Capital Corporation as administrative agent, certain other parties thereto as
co-agents, and the lending institutions listed on Schedule 1(c) thereto as
lenders, dated as of October 9, 2003.

            "DOJ" has the meaning set forth in Section 7.5(b).

            "Employee Benefit Plan" means each employee benefit plan within the
meaning of Section 3(3) of ERISA and each other personnel policy, stock option
plan, collective bargaining agreement, bonus plan or arrangement, incentive
award plan or arrangement, workers' compensation program, vacation policy,
voluntary employees' beneficiary association (VEBA), severance pay plan, policy
or agreement, deferred compensation agreement or arrangement, executive
compensation or supplemental income arrangement, consulting agreement,
employment agreement, and other employee benefit plan, agreement, arrangement,
program, practice, or understanding, that is sponsored, maintained, or
contributed to by any Seller or any ERISA Affiliate or with respect to which any
Seller or any ERISA Affiliate has any Liability or potential Liability.

            "Encumbrance" means any claim, Liability, charge, lease, covenant,
easement, encumbrance, security interest, lien, option, pledge, right of others,
mortgage, hypothecation, conditional sale, or restriction (whether on voting,
sale, transfer, defenses, set-off or recoupment rights, disposition, or
otherwise) against or with respect to tangible or intangible property or rights,
whether imposed by agreement, understanding, law, equity, or otherwise, except
for any restrictions on transfer generally arising under any applicable federal
or state securities law.

            "Environmental Law" means any and all applicable federal, state, and
local statutes, laws, regulations, ordinances, orders, common law, and similar
provisions currently in existence and applicable and having the force or effect
of law, concerning public health or safety, worker health or safety, pollution
or protection of Section 7401 et seq. (the "Clean Air Act"), the Clean Water
Act, 33 U.S.C. Section 1251 et seq., the Resource Conservation Recovery Act, 42
U.S.C. 6901 et seq. ("RCRA"), the Toxic Substances Control Act, 15 U.S.C.
Section 2601 et seq., the Comprehensive, Environmental Response, Compensation
and Liability Act, 42 U.S.C. Section 9601 et seq. ("CERCLA"), the Occupational
Safety and Health Act of 1970 (but only to the extent it regulates occupational
exposure to Hazardous Substances), all as amended, and any and all other
applicable laws, all as amended, which govern: (i) the existence, cleanup,
removal and/or remedy

                                        6
<PAGE>

of contamination or threat of contamination at, on or under owned or leased real
property; (ii) the release, threatened release, emission or discharge of
Hazardous Substances into the environment; (iii) the control of Hazardous
Substances; or (iv) the presence, use, manufacturing, refining production,
generation, transport, treatment, storage, disposal, distribution, importing,
labeling, testing, processing, removal, recycling, handling or recovery of
Hazardous Substances; and

            "Environmental Reports" means any and all environmental review and
assessment reports that Republic, its corporate predecessors, or any Subsidiary
of Republic has ever caused to be prepared or has ever received within the last
five (5) years with respect to the owned Real Property or leased Real Property.

            "Equipment" means (i) all Owned Machinery and Equipment and (ii) all
of Sellers' equipment, machinery, furniture, fixtures and improvements and
tooling located at or associated with the operation of the Purchased Plants that
are leased pursuant to Purchased Contracts;

            "ERISA" means the Employee Retirement Income Security Act of 1974,
as amended, together with the rules and regulations promulgated thereunder.

            "ERISA Affiliate" means any entity that" together with any Seller or
any Subsidiary of any Seller, is considered a single employer under Section 414
of the Code.

            "Excluded Assets" has the meaning set forth in Section 2.2 hereof.

            "Excluded Contracts" means any Contracts to which any Seller is a
party or its assets are bound that are not Purchased Contracts.

            "Excluded Environmental Liabilities" means any Liability or
investigatory, corrective or remedial obligation, whenever arising or occurring,
arising under Environmental Law, as amended or in effect prior to or as of the
Closing, with respect to the Sellers or any of their predecessor(s) or
Affiliate(s), their respective past or current properties or facilities, the
Business or the Assets (including without limitation any arising from the
on-site or off-site Release, threatened Release, treatment, storage, disposal,
or arrangement for disposal of Hazardous Substances) whether or not constituting
a breach of any representation or warranty herein and whether or not set forth
on any disclosure schedule attached hereto.

            "Excluded Liabilities" has the meaning set forth in Section 3.1(b).

            "Exercise Notice" has the meaning set forth in Section 4.1(c).

            "Existing Credit Facility" means the Revolving Credit Agreement
dated as of August 16, 2002 among Sellers, Fleet Capital Corporation, Bank of
America, N.A., G E Capital CFE, Inc., JP Morgan Chase Bank; Wells Fargo
Foothill, Inc., the other leading institutions named therein, and Fleet Capital
Corporation as Administrative Agent.

            "Existing Lenders" means the lending institutions listed as lenders
on Schedule 1 to the Existing Credit Facility or Schedule 1(c) to the DIP
Facility, as the context requires.

                                        7
<PAGE>

            "Expense Reimbursement Amount" has the meaning set forth in Section
11.3.

            "Expiration Date" has the meaning set forth in Section 4.l(b).

            "Final Order" means an order of the Bankruptcy Court as to which the
time to appeal shall have expired and as to which no appeal shall then be
pending.

            "FTC" has the meaning set forth in Section 7.5(b).

            "Governmental Authority" means any United States federal, state or
local, or any foreign, government, governmental, regulatory or administrative
authority, agency or commission or any court, tribunal or judicial or arbitral
body.

            "Governmental Order" means any order, writ, judgment, injunction,
decree, stipulation, determination or award entered by or with any Governmental
Authority.

            "Hazardous Substance" means any material, substance, or waste, or
combination thereof which is classified as hazardous, toxic, pollutant or
contaminant or words of similar meaning, whether solid, liquid or gaseous in
nature, under Environmental Laws, including without limitation petroleum
(including crude oil or any fraction thereof), polychlorinated biphenyls
(PCBs), asbestos and radioactive materials.

            "HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended.

            "Ice Termination Act" means the ICC Termination Act of 1995, as
amended.

            "Indebtedness" means, at any time and with respect to any Person,
(a) all indebtedness of such Person for borrowed money, (b) all indebtedness of
such Person for the deferred purchase price of property or services (other than
property, including inventory, and services purchased, and trade payables, other
expense accruals and deferred compensation items arising, in the ordinary course
of business, consistent with past practice), (c) all obligations of such Person
evidenced by notes, bonds, debentures or other similar instruments (other than
performance; surety and appeal bonds arising in the ordinary course of business
in respect of which such Person's Liability remains contingent), (d) all
indebtedness of such Person created or arising under any conditional sale or
other title retention agreement with respect to property acquired by such Person
(even though the rights and remedies of Sellers or lender under such agreement
in the event of default are limited to repossession or sale of such property),
(e) all obligations of such Person under leases which have been or should be, in
accordance with U.S. GAAP, recorded as capital leases, to the extent required to
be so recorded, (f) all reimbursement, payment or similar obligations of such
Person, contingent or otherwise, under acceptance, letter of credit or similar
facilities, (g) all Indebtedness of others referred to in clauses (a) through
(f) above guaranteed directly or indirectly by such Person, or in effect
guaranteed directly or indirectly by such Person through an agreement (i) to
payor purchase such Indebtedness or to advance or supply funds for the payment
or purchase of such Indebtedness, (ii) to purchase, sell or lease (as lessee or
lessor) property, or to purchase or sell services, primarily for the purpose of
enabling the debtor to make payment of such Indebtedness, (iii) to supply funds
to or in any other manner invest in the debtor (including any agreement to pay
for property or services

                                       8
<PAGE>

irrespective of whether such property is received or such services are rendered)
or (iv) otherwise to assure a creditor against loss in respect of such
Indebtedness, and (h) all Indebtedness referred to in clauses (a) through (g)
above secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Encumbrance upon or in
property (including, without limitation, accounts and contract rights) owned by
such Person, even though such Person has not assumed or become liable for the
payment of such Indebtedness, and including in clauses (a) through (h) above any
accrued and unpaid interest thereon.

            "Indemnification Agreements" has the meaning set forth in Section
7.11.

            "Indemnification Claim" has the meaning set forth in Section 7.10.

            "Indenture" means the indenture governing the Senior Secured Notes
by and among Republic, La Salle Bank National Association and certain other
parties dated as of August 16, 2002, as amended.

            "Insurance Collateral" means fifty percent (50%) of the Insurance
Proceeds; such 500/0 shall be calculated so that with respect to each $1.00 of
Insurance Proceeds that is owing to or received by the Purchaser, $0.50 shall be
subject to the security interest of the Collateral Agent for the benefit of the
holders of the Bank Notes, and shall be applied immediately upon receipt to
repay the Bank Notes as provided therein.

            "Insurance Policies" has the meaning set forth in Section 5.1(aa).

            "Insurance Proceeds" means any proceeds greater than Five Million
U.S. Dollars ($5,000,000) but less than Twenty Five Million U.S. Dollars
($25,000,000) received by the Sellers after December 5, 2003 but prior to
Closing, or the Purchaser after December 5, 2003, for business interruption
insurance coverage relating to the loss events experienced by Sellers at the
Lorain plant in January, June and August of 2003.

            "Intellectual Property Rights" has the meaning set forth in Section
2.1(i).

            "Interest Payment" has the meaning set forth in Section 4.1.

            "Indenture Trustee" means the trustee appointed pursuant to the
Indenture.

            "Inventory" has the meaning set forth in Section 2.1(l).

            "IRS" means the U.S. Internal Revenue Service.

            "Knowledge" means the knowledge, after reasonable inquiry, of any of
the following executive officers and managers of the Sellers: Joseph Lapinsky,
John George, Joseph Kaczka, James Kuntz, Ted Macuzak, Cindy Oney, Leonard
Wisniewski and John Willoughby.

            "Law" means any federal, state, ,local or foreign statute, law,
ordinance, regulation, rule, code, order, other requirement or rule of law
(other than an Environmental Law).

                                        9
<PAGE>

            "Labor Agreements" means the collective bargaining agreements that
Sellers are party to, as described more fully on Schedule 2.1(k), and including
any arbitration decisions or memoranda of understanding executed by the parties
thereto interpreting such agreements.

            "Liability" means any liability or obligation of whatever kind or
nature (whether known or unknown, whether asserted or unasserted, whether
absolute or contingent, whether accrued or unaccrued, whether liquidated or
unliquidated, and whether due or to become due) including any liability for
taxes.

            "Liquidating Trust" means the REP Liquidating Trust formed for the
benefit of the holders of the Senior Secured Notes.

            "Lease Assignment and Assumption Agreement" has the meaning set
forth in Section 9.2(f).

            "Leased Real Property" means any land, buildings, structures,
improvements, fixtures or other interest in Real Property which is used or
intended to be used in, or otherwise related to, the Business in which any
Seller holds a leasehold or subleasehold estate or is granted the right to use
or occupy.

            "Leasehold Improvements" means all the buildings, structures,
improvements and fixtures located on any Leased Real Property which are owned by
Seller, regardless of whether title to such buildings, structures, improvements
or fixtures are subject to reversion to the landlord or other third party upon
the expiration or termination of the lease for such Leased Real Property.

            "Machine Shop Assets" has the meaning set forth on Schedule 2.1(e).

            "Material Adverse Effect" means, with respect to Sellers, any
change, circumstance or effect that, individually or in the aggregate with other
changes, circumstances and effects, is materially adverse to (i) the business,
operations, assets, Liabilities, financial condition, results of operations or
prospects of such entity and its subsidiaries taken as a whole or (ii) the
validity or enforceability of this Agreement or the ability of Sellers to
perform their respective obligations hereunder in a timely fashion; but
expressly excluding the effects of any repeal of or any other action by any
Governmental Authority with respect to the so-called Section 201 "steel
tariffs".

            "Material Contracts" has the meaning set forth in Section 5.1(e)(i).

            "New Lenders" means the lenders under the new senior secured credit
facility entered into by the Purchaser at Closing, if any.

            "New Securities" means each class of the equity securities and/or
debt securities (but excluding any working capital financing or other debt
financing that (i) issued at par and at a market rate of interest, and (ii) does
not include any equity conversion rights, equity-like features or
performance-linked returns), as the case may be, issued to or acquired by Perry
Affiliates in connection with its investment in the Purchaser, of which a pro
rata strip shall be acquired by Participants upon exercise of the Purchase
Option. New Securities will be subject to

                                       10
<PAGE>

the terms and conditions of a certificate of incorporation, bylaws and
securityholder agreement (which shall include, without limitation, tag along
rights, drag along rights, no discount for minority or nonvoting nature of
securities or premium for control, and other customary minority investor
protections on terms reasonably acceptable to the Participants), each in form
and substance reasonably satisfactory to the Purchaser; provided, however, that
any New Securities issued to Participants shall be nonvoting, but otherwise on
the same terms and conditions as are applicable to the Perry Affiliates.

            "New Senior Secured Notes" means the senior secured notes
representing the Note Consideration, to be governed by the New Senior Secured
Note Indenture and issued at Closing by Purchaser.

            "New Senior Secured Note Indenture" means the indenture governing
the New Senior Secured Notes in such form reasonably acceptable to each of
Purchaser and Republic which agreement shall include, among other things, such
non-economic terms as are necessary or desirable to reflect the transaction and
the Purchaser's proposed post-Closing capital structure.

            "Noteholders" means the holders of the Senior Secured Notes issued
pursuant to the Indenture.

            "Ohio Loan" means the loan agreement by and among Republic, the Ohio
Department of Development and certain other parties dated as of March 20, 2003
in the aggregate principal amount of Five Million U.S. Dollars ($5 million).

            "Owned Machinery and Equipment" has the meaning set forth in Section
2.1(b).

            "Participant" means any holder of Indebtedness under the Existing
Credit Agreement, including any bona fide assignee thereof after the date hereof

            "Patents" has the meaning set forth in Section 2.l(i).

            "PBGC" means the U.S. Pension Benefit Guaranty Corporation.

            "Permits" means licenses, franchises, permits, certificates of
authority, authorizations, approvals, registrations, franchises and similar
consents granted from any Governmental Authority.

            "Permitted Real Estate Liens" means (i) all presently existing and
future liens of real estate taxes or assessments and water rates, water meter
charges, water frontage charges and sewer taxes, rents and charges, if any,
provided that such items are not yet due and payable and are apportioned to the
extent provided in this Agreement; (ii) those Third Party Leases described on
Schedule 1.1 and the rights of other tenants in possession, if any, under leases
disclosed by Sellers to the Purchaser provided same does not materially and
adversely affect the use and operation of the applicable parcel of Real Property
as currently being used and operated by the applicable Seller; (iii) unpaid
state and local franchise, general corporation and/or income taxes, mechanics
liens, or other monetary liens (other than Personal Property Taxes); provided
that, based upon a deposit by any Seller with the Title Company, an indemnity by
any Seller to the Title Company, the order of a bankruptcy court having
jurisdiction, or other assurances by the

                                       11
<PAGE>

applicable Seller to the Title Company, such Seller is able to induce the Title
Company to omit such lien or encumbrance as an exception to title, or insure
against its collection out of or enforcement against the applicable Real
Property with respect to the applicable Title Policy issued by the Title
Company; (iv) such matters as the Title Company shall be willing to omit as
exceptions to coverage or, subject to Purchaser's reasonable approval, by
endorsement in form and substance acceptable to Purchaser in its reasonable
discretion, insure against collection out of or enforcement against such Real
Property with respect to the applicable Title Policy issued by the Title
Company; or (v) any other matter of record affecting title to any parcel of Real
Property that does not materially and adversely affect the operation of the
applicable parcel of Real Property as such parcel of Real Property is currently
used and operated.

            "Perry" shall mean Perry Partners LP and Perry Partners
International Inc.

            "Perry Affiliates" shall mean and include Perry and any of its or
their Affiliates other than the Purchaser.

            "Person" means an individual, corporation, partnership, association,
limited liability company, trust, joint venture, unincorporated organization,
other entity or group (as defined in Section 13(d)(3) of the Securities and
Exchange Act of 1934, as amended).

            "Pre-Closing Tax Period" means any taxable period or portion thereof
ending on or before the Closing Date or, as the context may require, all such
periods and portions. If a taxable period begins on or before the Closing Date
and ends after the Closing Date, then the portion of the taxable period through
the end of the Closing Date shall constitute a Pre-Closing Tax Period.

            "Purchase Price" has the meaning set forth in Section 4.l(a).

            "Purchased Assets" has the meaning set forth in Section 2.1.

            "Purchased Contracts" has the meaning set forth in Section 2.1(k).

            "Purchase Option" has the meaning set forth in Section 4.1(b).

            "Purchased Plants" has the meaning set forth in Section 2.1(a).

            "Purchaser" has the meaning set forth in the Preamble.

            "Purchaser Representatives" has the meaning set forth in Section
7.3(c).

            "Qualified Bid" means a bid submitted at the Auction to purchase
assets of Sellers pursuant to the Bidding Procedures Order.

            "Railroad Subsidiary" has the meaning set forth in Section 2.1(d).

            "Railroad Subsidiary Assets" means the assets of every type and
description, tangible or intangible, real or personal that are owned, leased or
licensed by the Railroad Subsidiary.

                                       12
<PAGE>

            "Real Property" has the meaning set forth in Section 2.1(a).

            "Reference Lease" means a lease, sublease, license, concession, use
or occupancy agreement or other arrangement with respect to any Leased Real
Property, including the right to all security deposits and other amounts and
instruments deposited by or on behalf of such Seller thereunder, to be assumed
by Sellers and assigned to Purchaser as set forth on Schedule 1.1(b).

            "Release" has the meaning set forth in CERCLA.

            "Republic" has the meaning set forth in the Preamble.

            "Required Creditor Notices" has the meaning set forth in Section
7.1(c).

            "Sale Hearing" means the hearing before the Bankruptcy Court to
approve this Agreement and the consummation of the transactions contemplated by
this Agreement as more fully described in the Bidding Procedures Order.

            "Sale Order" means an order of the Bankruptcy Court that is in form
and substance satisfactory to Purchaser and Sellers and includes and approves,
among other things, the sale provisions set forth on Exhibit A.

            "Securities Act" means the Securities Act of 1933, as amended.

            "Seller" has the meaning set forth in the Preamble.

            "Seller SEC Reports" has the meaning set forth in Section 5.1(u)(i).

            "Sellers" has the meaning set forth in the Preamble.

            "Senior Secured Notes" means the senior secured notes due 2009
governed by the Indenture and having an aggregate face value of Eighty Million
U.S. Dollars ($80 million).

            "Subsidiary" means any corporation, limited liability company,
partnership, joint venture or other legal entity of which any Seller or any
other Person, as the case may be (either alone or through or together with any
other Subsidiary), owns, directly or indirectly, 50% or more of the capital
stock or other equity interests the holders of which ,are generally entitled to
vote for the election of the board of directors or other governing body of such
corporation, limited liability company, partnership, joint venture or other
legal entity.

            "Surveys" means current surveys of each parcel of owned Real
Property, prepared in insurable form in accordance with ALTA standards
applicable to registered and licensed land surveyors making surveys in the state
in which such Real Property is located.

            "Tax" or "Taxes" means (i) any United States federal, state or local
or any non-United States net or gross income, gross receipts, net proceeds,
license, payroll, employment, excise, severance, stamp, occupation, premium,
windfall profits, environmental (including taxes under Section 59A of the Code),
customs, capital stock, franchise, profits, withholding, social security (or
similar), unemployment, disability, Real Property, personal property, sales,
use,

                                       13
<PAGE>

transfer, registration, value added, alternative or add-on minimum, estimated or
other taxes, assessments, duties, fees, levies or other governmental charges of
any kind whatever, whether disputed or not, including any interest, penalty or
addition thereto; (ii) any Liability for or in respect of the payment of any
amount of a type described in clause (i) of this definition as a result of being
a member of an affiliated, combined, consolidated, unitary or other group for
Tax purposes; and (ill) any Liability for or in respect of the payment of any
amount described in clauses (i) or (ii) of this definition as a transferee or
successor, by contract or otherwise.

            "Tax Return" means any return, declaration, report, and claim for
refund, or information return or statement relating to Taxes, including any
schedule or attachment thereto, and including any amendment thereof.

            "Third Party Lease" means each lease or other right of occupancy
affecting or relating to a property in which any Seller (or an entity in which
it directly or indirectly has an interest) is the landlord, either pursuant to
the terms of a lease agreement or as successor to any prior landlord.

            "Title Company" means any nationally recognized title insurance
company or companies engaged to deliver the Title Policies satisfactory to the
Purchaser.

            "Trademarks" has the meaning set forth in Section 2.1(i).

            "Transfer Taxes" has the meaning set forth in Section 6.1.

            "Trust Moneys" has the meaning attributed to it in the Indenture.

            "Unaudited Balance Sheet" has the meaning set forth in Section
5.l(u)(iii).

            "Unaudited Financial Statements" has the meaning set forth in
Section 5.l(u)(iii).

            "U.S. GAAP" means United States generally accepted accounting
principles in effect from time to time.

            "Wind Down Payment" has the meaning set forth in Section 4.1.

      SECTION 1.2 TERMS GENERALLY. As used in this Agreement (a) words in the
singular shall be held to include the plural and vice versa, (b) words of one
gender shall be held to include the other genders as the context requires, (c)
the terms "hereof', "herein" and "herewith" and words of similar import shall,
unless otherwise stated, be considered to refer to this Agreement and not to any
particular provision of this Agreement, (d) references to Article, Section,
paragraph, Exhibit and Schedule are references to the Articles, Sections,
paragraphs, Exhibits and Schedules to this Agreement, unless otherwise
specified, (e) the word "including" and words of similar import when used in
this Agreement, shall mean "including, without limitation", unless otherwise
specified, and (f) the word "or" shall not be exclusive.

                                       14
<PAGE>

                                   ARTICLE II
                           PURCHASE AND SALE OF ASSETS

      SECTION 2.1 PURCHASE AND SALE OF THE PURCHASED ASSETS. On the Closing
Date, Sellers shall transfer, sell, assign, and deliver to Purchaser, and
Purchaser shall purchase from Sellers, in each case on the terms and subject to
the conditions set forth in this Agreement and the Sale Order, all of Sellers'
right, title and interest in, to and under any and all assets, properties and
business of every kind and description, whether tangible or intangible, real,
personal or fixed, wherever situated, owned, held or used by Sellers or in which
Sellers have any right, title or interest, including, without limitation, all
Trust Moneys and other Collateral, but excluding the Excluded Assets (all such
assets, properties and business are referred to in this Agreement as the
"Purchased Assets"), free and clear of all Encumbrances, other than the Assumed
Liabilities and the Permitted Real Estate Liens. The Purchased Assets include,
without limitation, the following:

                  (a)   all real property and leases or subleases of, including,
      but not limited to, Reference Leases, Third Party Leases and any other
      interests in, real property used or owned or held for use by any Seller
      all of which is listed on the attached Schedule 2.1(a) (the "Real
      Property"), in each case together with all buildings and other structures,
      facilities or improvements currently or hereafter located thereon,
      including Leasehold Improvements, all fixtures of Sellers attached or
      appurtenant thereto and all easements, licenses, rights and appurtenances
      relating to the foregoing (the "Purchased Plants");

                  (b)   all Sellers' owned equipment, machinery and tooling
      located at or associated with the operation of the Purchased Plants and
      the equipment, machinery, furniture, fixtures and improvements and tooling
      listed on the attached Schedule 2.1(b) (the "Owned Machinery and
      Equipment");

                  (c)   all cars, trucks, fork lifts, other industrial vehicles
      and other motor vehicles owned by Sellers located at, or associated with,
      the operation of the Purchased Plants;

                  (d)   all Assets of N&T Railway Company, LLC (the "Railroad
      Subsidiary"), including all owned, leased or subleased Real Property of
      the Railroad Subsidiary, and any other interests in, Real Property used or
      owned by the Railroad Subsidiary, rights of way, locomotives, cars, track
      and switches, trackage rights, and track repair equipment, including, but
      not limited to, the Assets listed on the attached Schedule 2.l(d);

                  (e)   all Assets of or related to Republic's corporate
      headquarters located at 3770 Embassy Parkway, Akron, Ohio, including, but
      not limited to, the Assets listed on the attached Schedule 2.1(e)(i), and
      all Assets of or related to the machine shop located at 4135 Commerce
      Drive SW, Massillon, Ohio, including, but not limited to, the Assets set
      forth on the attached Schedule 2.1(e)(ii) (the "Machine Shop Assets");

                                       15
<PAGE>

              (f) all furniture, fixtures, improvements and other fixed assets
     that are located at or associated with the Purchased Plants, including the
     assets listed on the attached Schedule 2.1 (f);

              (g) to the extent transferable under applicable Law and applicable
     Environmental Law, all Permits used in the Business in conjunction with the
     Purchased Assets and all pending applications therefor, including, without
     limitation, those Permits described on the attached Schedule 2.1(g);

              (h) customer relationships, the goodwill and all other intangible
     assets relating to, symbolized by or associated with the Business;

              (i) all (i) patents, patent applications, provisional patent
     applications, patent disclosures, and all related continuation,
     continuation-in-part, divisional, reissue, re-examination, utility model,
     certificate of invention and design patents, patent application,
     registrations and applications for registrations ("Patents"), (ii)
     trademarks, service marks, trade-dress, logos, trade names, domain names
     and corporate names and registrations and applications for registration
     thereof ("Trademarks"), (iii) copyrights, copyright applications and
     registrations ("Copyrights"), (iv) commercial and technical trade secrets,
     know-how, confidential information, other proprietary property rights and
     interests, and (v) licenses, engineering, production and other designs,
     drawings, specifications, formulae, technology, computer and electronic
     data processing programs and software, software licenses, and proprietary
     property rights and interests and any licenses in respect thereof
     (collectively, "Intellectual Property Rights") which are used in connection
     with the operation of the Business, including those set forth on the
     attached Schedule 2.1(i);

              (j) copies or originals of all books, files and records used in
     the Business relating to the Purchased Assets described in this Section
     2.1, including plans, data, test results, drawings, diagrams, employment
     records, sales records, customer and supplier lists, advertising and
     promotional materials, engineering data, safety and environmental reports
     and documents, maintenance schedules and operating and production records,
     all other files, indices, market research studies, surveys, reports,
     analyses and similar information of every kind and nature, and in whatever
     format used in connection with the operation of the Business;

              (k) all contracts, agreements and purchase orders set forth on
     Schedule 2.1(k) (the "Purchased Contracts");

              (l) all items of inventory of the Business wherever located,
     including, without limitation, raw materials, work in process, finished
     goods, supplies used to operate and maintain the Equipment or process raw
     materials and work in process, spare parts and supply and packaging items
     including any of the aforementioned owned by Sellers but in the possession
     of manufacturers, customers, suppliers or dealers, or in transit or
     returned goods ("Inventory");

                                       16
<PAGE>

              (m) all notes (including notes from employees), accounts
     receivable and other receivables, cash, deposits, advances, prepaid
     expenses, prepaid Taxes, refunds and credits of Taxes of Sellers related to
     the Business, together with any unpaid interest or fees accrued thereon or
     other amounts due with respect thereto, and any security or collateral
     therefor, including recoverable advances and deposits;

              (n) all prepayments, prepaid expenses and deferred items, refunds,
     rights, claims, credits, causes of action, condemnation proceedings, rights
     of set-off or other rights against third parties, including without
     limitation any rights concerning any litigation in which, in connection
     with or with respect to the Business, any Seller is a claimant including,
     without limitation, and those identified on Schedule 2.1(n), except
     Bankruptcy Code avoiding power actions and claims;

              (o) all Sellers rights under or pursuant to all warranties,
     representations and guarantees made by suppliers, manufacturers and
     contractors in connection with the operation of the Business or affecting
     the Equipment;

              (p) all computer hardware, software programs, databases and other
     technology assets whether owned, licensed (subject to applicable
     restrictions), leased or internally developed and all documentation related
     to such computer software programs and databases used or held for use by
     Sellers and wherever located;

              (q) all right title and interest to all insurance policies now or
     at any time held by the Sellers or any of their predecessors and any and
     all entitlements thereunder and proceeds thereof, including, but not
     limited to, any refunds or refunded pre-payments related thereto;

              (r) any and all assets maintained pursuant to or in connection
     with the Assumed Employee Benefits Plans;

              (s) all air emissions credits and allowances Sellers have, are
     entitled to or have applied for, relating to the Purchased Assets or other
     emissions units now or previously located on the Real Property, including
     any such air emissions credits and allowances that Sellers have credit for
     or have banked, applied to bank or agreed to sell or trade;

              (t) Capital stock of the Canadian Subsidiary; provided that the
     Republic Labor Agreement has been adopted by the United Steelworkers of
     America; and

              (u) any and all assets held in the Republic Engineered Steels,
     Inc. VEBA used to fund disability benefits for active or retired employees
     but only if and to the extent such assets have not been used to pay
     benefits under any disability plan that is funded through the Republic
     Engineered Steels, Inc. VEBA (determined as of the signing date of this
     Agreement) as of the date Republic Technologies International, LLC no
     longer has any obligations to participants under such plan.

      SECTION 2.2 EXCLUDED ASSETS. Any provision of this Agreement to the
contrary notwithstanding, the following (collectively, the "Excluded Assets")
shall not be included in the

                                       17
<PAGE>

Purchased Assets and shall not be sold or assigned by Sellers to Purchaser
pursuant to this. Agreement:

              (a) the minute books, stock books, corporate seals and other
     corporate records of Sellers relating to their respective organization and
     existence; provided, however, that after execution of this Agreement,
     Sellers shall, on reasonable request by Purchaser, provide copies of such
     books, records and other materials not previously provided to Purchaser;

              (b) any assets or properties of the Sellers described on attached
     Schedule 2.2(b);

              (c) all Tax Returns of Sellers for Taxable periods ending on or
     prior to the Closing Date; provided, however, that after execution of this
     Agreement, Republic shall, pursuant to Section 6.3 or on reasonable request
     by Purchaser, provide copies to Purchaser of such Tax Returns not
     previously provided to Purchaser;

              (d) any capital stock owned beneficially or of record by any
     Seller, other than the stock of the Canadian Subsidiary;

              (e) causes of actions and recoveries, in each case under chapter 5
     of the Bankruptcy Code; and

              (f) any assets maintained pursuant to or in connection with any
     Employee Benefit Plan that is not an Assumed Employee Benefit Plan.

                                  ARTICLE III
                               LIABILITIES ASSUMED

     SECTION 3.1 ASSUMPTION OF LIABILITIES.

              (a) Assumed Liabilities. Without duplication, on and as of the
     Closing Date, in connection with its acquisition of the Purchased Assets,
     Purchaser shall, except to the extent specifically excluded under Section
     3.1(b) as an Excluded Liability, assume and hold Sellers harmless with
     respect to, the following Liabilities and obligations of Sellers and no
     others (collectively, the "Assumed Liabilities"):

              (i) [Intentionally Omitted]

              (ii) [Intentionally Omitted]

              (iii) the Ohio Loan;

              (iv) executory obligations of any Seller arising or continuing
     after the Closing Date under the Purchased Contracts, including Cure Costs,
     if any, payable in connection with the assumption and assignment of the
     Purchased Contracts to Purchaser;

                                       18
<PAGE>

              (v) trade payables of any Seller incurred in the ordinary course
     of business after the filing of the Chapter 11 Cases;

              (vi) obligations of any Seller arising or continuing after the
     Closing Date under each Reference Lease relating to leased Real Property,
     including Cure Costs, if any, payable in connection with the assumption and
     assignment of the Reference Leases to Purchaser;

              (vii) accrued freight and utilities incurred by any Seller in the
     ordinary course of business after the filing of the Chapter 11 Cases;

              (viii) [Intentionally Omitted]; and

              (ix) all Liabilities (other than Liabilities for Taxes, which are
     governed by other provisions herein) arising from or under the Purchased
     Assets, but only to the extent that all of the events or states of facts
     giving rise to any such Liability occur wholly and entirely after the
     Closing Date and not as a result of or arising out of or related in any way
     to any Pre-Closing act or omission by Sellers or their respective
     predecessors;

              (x) all current liabilities for insurance premiums or financing
     payments in respect of insurance payments as reflected on the Closing Date
     Balance Sheets relating to all insurance policies assigned to the
     Purchaser, the coverage and proceeds of which the Purchaser will be
     entitled to pursuant to this Agreement, in an aggregate amount of up to Six
     Million U.S. Dollars ($6,000,000);

              (xi) all accrued liabilities to the extent they are set forth on,
     the Closing Date Balance Sheets related to employees of the Sellers who are
     Active Employees as of the Closing Date who accept employment by the
     Purchaser in furtherance of the offer to be made pursuant to Section 7.2
     hereof up to an aggregate amount of Twenty Five Million U.S. Dollars
     ($25,000,000);

              (xii) obligations under the RCM Section 3008(h) Corrective Action
     Order on Consent that will apply to the portion of the Canton, Ohio
     facility that is included in the Purchased Plants (U.S. EPA ID Number OHR
     000 110 197) and is expected to be entered into by U.S. EPA and Seller in
     October or November 2003; provided that the deadlines in the Order provide
     Purchaser with reasonably sufficient time to complete such obligations, in
     light of the Closing Date;

              (xiii) the Labor Agreements;

              (xiv) the Assumed Employee Benefit Plans; and

              (xv) the extent unpaid on the Closing Date, the critical vendor
     payments required pursuant to the critical vendor order to be entered in
     the bankruptcy court on or about October 28, 2003.

                                       19
<PAGE>

              (b) Excluded Liabilities. Purchaser shall not assume and shall not
     be liable for any of the following Liabilities or obligations of Sellers or
     relating to the Purchased Assets, regardless of the type or nature of such
     Liabilities or obligations (collectively, the "Excluded Liabilities").

              (i) Sellers' professional fees and expenses for advisors,
     including without limitation, advisors retained pursuant to an order of the
     Bankruptcy Court;

              (ii) Chapter 11 Expenses;

              (iii) all existing Contracts, whether written or oral, between
     Sellers and their respective advisors and consultants unless any such
     contract is a Purchased Contract;

              (iv) all change in control agreements (or similar agreements) to
     which any Seller is a party;

              (v) all Contracts, whether written or oral, between Sellers and
     their respective Affiliates, unless any such Contract is a Purchased
     Contract;

              (vi) Liabilities of Sellers to Sellers' current and former
     employees, officers and directors not expressly assumed under this
     Agreement;

              (vii) all obligations, Liabilities or amounts payable to any
     existing equity holders of Sellers pursuant to any Contract or otherwise;

              (viii) any Liabilities at obligations in respect of or relating to
     the Excluded Assets;

              (ix) any Liability for or on account of any Taxes (including, but
     not limited to, any personal property Taxes) of Sellers or, for pre-Closing
     Tax Periods, the Canadian Subsidiary and its Subsidiaries other than (i)
     Real Property Taxes to the extent set forth in Section 3.1(a)(viii) and
     (ii) Taxes allocated to Purchaser to the extent set forth in Section 6.2;

              (x) Liabilities or obligations in respect of Indebtedness, except
     for any that are Assumed Liabilities;

              (xi) Liabilities and obligations, whether known or unknown,
     relating to any environmental, health or safety matter (including, without
     limitation, any Liability or obligation arising under Laws or Environmental
     Laws) that are not expressly assumed under this Agreement, including
     without limitation:

                  (A) any Liabilities or obligations resulting from the
            transport, storage, disposal, treatment, or other management of any
            Hazardous Substance by Sellers, any predecessors of Sellers, or any
            other Person in connection with the Business prior to the Closing to
            or at any location or facility other than the Real Property;

                                       20
<PAGE>

                  (B) any Liabilities, obligations or claims for personal injury
            resulting from exposure to Hazardous Substances or otherwise, where
            such exposure or other event or occurrence occurred prior to the
            Closing;

                  (C) any Liabilities under application of any Laws or
            Environmental Laws imposing successor liability, creating
            obligations with respect to any Excluded Assets, former property,
            facility or operation, or imposing joint and several liability for
            any co-mingled contamination;

                  (D) any fines or penalties associated with violations or
            alleged violations arising out of or relating to events, conditions
            or circumstances occurring prior to the Closing;

                  (E) Asbestos Liabilities;

                  (F) Excluded Environmental Liabilities;

              (xii) trade payables or general unsecured claims not expressly
     assumed under this Agreement;

              (xiii) obligations, other than Cure Costs, arising under each
     Reference Lease relating to leased Real Property prior to the Closing Date;

              (xiv) obligations, other than Cure Costs, arising tinder each
     Purchased Contract prior to the Closing Date;

              (xv) the Excluded Contracts;

              (xvi) any Liabilities or obligations arising under or in
     connection with or related to any Employee Benefit Plan other than an
     Assumed Employee Benefit Plan, including, without limitation, any
     Liabilities or obligations Under Title IV of ERISA;

              (xvii) any Liability or obligation relating to Canadian Drawn
     Steel;

              (xviii) any other Liability or obligation not expressly assumed
     pursuant to Section 3.1(a).

                                   ARTICLE IV
                                 PURCHASE PRICE

     SECTION 4.1 PURCHASE PRICE FOR PURCHASED ASSETS.

              (a) The purchase price for the Purchased Assets shall be (i) a
     cash amount equal to the sum of (A) Eighty Seven Million Two Hundred
     Thousand U.S. Dollars ($87,200,000) (subject to adjustment in accordance
     with the terms and conditions set forth in Sections 6.1 and 6.2), plus (B)
     an amount equal to (x) the aggregate principal amount outstanding at
     Closing under the DIP Facility minus (y) the Refunding Amount (as defined
     in the DIP Facility); provided that the aggregate amount under this clause
     (B)

                                       21
<PAGE>

      shall in no event exceed an amount equal to Fourteen Million Three Hundred
      Thousand U.S. Dollars ($14,300,000)(the "Cash Consideration") which shall
      be allocated to the Existing Lenders, subject to the approval of the
      Bankruptcy Court as set forth in the Sale Order; plus (ii) notes (the "New
      Senior Secured Notes") in an aggregate principal amount of Eighty Million
      U.S. Dollars ($80,000,000), callable by the Purchaser in whole or in part
      at any time, in accordance with the terms of the New Senior Secured Note
      Indenture, (A) on or before June 30, 2004 at a price of $0.75 for every
      $1.00 of principal amount and accrued but unpaid interest thereon, (B)
      after June 30, 2004, but on or before September 30, 2004, at a price of
      $0.775 for every $1.00 of principal amount and accrued but unpaid interest
      thereon, and (C) thereafter, at par (plus all accrued but unpaid interest
      due thereon and in accordance with the terms of the New Senior Secured
      Note Indenture), and on economic terms in form and substance substantially
      similar to the terms set forth in the documents related to the Senior
      Secured Notes (including, without limitation, rights to insurance
      proceeds) and with such changes to non-economic terms as are necessary or
      desirable in the reasonable judgment of the Purchaser and the trustee
      under the New Senior Secured Note Indenture and its counsel in
      consultation with the holders of a majority in principal amount
      outstanding of the Senior Secured Notes, to reflect the transaction and
      the Purchaser's proposed post-Closing capital structure, secured by the
      Collateral, which notes shall be delivered at Closing by the Purchaser in
      consideration for the assets identified in the Indenture to the REP
      Liquidating Trust to be held by the trustee thereof for the benefit of the
      holders of the Senior Secured Notes (the "Bondholder Note Consideration"),
      and distributed in compliance with the Securities Act, to the holders of
      the Senior Secured Notes as agreed by the trustee to the New Senior
      Secured Note Indenture, the trustee to the Liquidating Trust, and the
      Purchaser, subject to the approval of the Bankruptcy Court as set forth in
      the Sale Order; plus (iii) notes (the "Bank Notes") in an aggregate
      principal amount of Twenty One Million U.S. Dollars ($21,000,000), on
      economic terms substantially similar to the Senior Secured Notes, but
      maturing on August 31, 2009, bearing interest at a rate of 10% per annum
      and amortizing, at a rate if 1% per annum quarterly in arrears (with any
      Insurance Proceeds being applied to the Bank Notes first to amortize the
      scheduled amounts due in inverse order of maturity and then to redeem such
      Bank Notes to the extent the same remain outstanding), secured by a first
      lien on (A) the CAST-ROLL Collateral, and (B) the Insurance Collateral
      (and no other assets), pursuant to the Bank Security Documents and with
      such other changes to non-economic terms as are necessary or desirable in
      the reasonable judgment of the Purchaser and the Administrative Agent to
      reflect the transaction and the Purchaser's proposed post-Closing capital
      structure, which notes shall be delivered at Closing by the Purchaser to
      the Existing Lenders (the "Bank Note Consideration"), subject to the
      approval of the Bankruptcy Court as set forth III the Sale Order; plus
      (iv) subject to the approval of the Bankruptcy Court, a cash amount of One
      Million U.S. Dollars ($1,000,000) to be paid to Sellers at Closing to be
      used for wind down and closure of the Chapter 11 Cases (the "Wind Down
      Payment"); and (v) the assumption by Purchaser of the Assumed Liabilities
      (clauses, (i), (ii),(iii), (iv), and (v) collectively, the "Purchase
      Price"). Purchaser agrees not to pledge or otherwise encumber the
      Insurance Collateral and to execute such documents and instruments
      evidencing such agreement as may be reasonably requested by the Sellers.
      The Purchaser will not be restricted from granting further junior liens on
      all or any of the assets subject

                                       22
<PAGE>

      to first liens in relation to the New Senior Secured Notes and-the Bank
      Notes, subject only, in the case of the Bank Notes, to the secured party
      entering into a lien subordination agreement on customary terms that is
      reasonably acceptable to the Collateral Agent.

              (b) In addition to the consideration set forth in Section 4.1(a),
      each Participant shall have the right in accordance with Section 4(c) to
      purchase New Securities (the "Purchase Option") in an amount that would
      result in the Participant acquiring an interest in Purchaser equal to its
      Applicable Percentage, in exchange for (i) a cash payment to Purchaser
      equal to its Applicable Percentage of the amount that would have been paid
      in cash by Perry Affiliates for all New Securities, had they purchased
      100% of the New Securities at the per unit price paid by them for New
      Securities they purchase at Closing, (ii) a cash payment to Perry equal to
      (A) its Applicable Percentage of $3,750,000 and (B) its Applicable
      Percentage of the reasonable and documented out of pocket costs and
      expenses (including legal, accounting, engineering and other consultant
      fees and expenses) incurred by Perry (and not reimbursed by the Purchaser
      or the Seller) in connection with this Agreement and the transactions
      contemplated hereby through the Closing Date.

              (c) The Purchase Option shall be exercisable, in whole or in part,
      at any time prior to December 15, 2003 or the entry of the Sale Order,
      whichever is later (the "Expiration Date"). In order to exercise the
      Purchase Option, in whole or in part, a Participant shall deliver to
      Purchaser, with a copy to the Administrative Agent, prior to the
      Expiration pate a written notice of its election to exercise a Purchase
      Option (an "'Exercise Notice"), which Exercise Notice shall indicate the
      aggregate principal amount of Indebtedness under the Existing Credit
      Agreement with respect to which a Participant elect to exercise a Purchase
      Option. In the event a Participant exercises, a Purchase Option, (i) Perry
      shall deliver to each such Participant by 5:00 p.m. (EST) one Business Day
      prior to the Closing Date a notice as to the amount to be forwarded by
      such Participant, and wire instructions for such funding, and (ii) such
      Participant shall deliver into escrow to an escrow account established on
      terms reasonably agreed by the parties, the consideration set forth in
      Section 4.1(b) in immediately available funds by 11:00 a.m. (EST) on the
      Closing Date. The closing of the transaction contemplated by any Exercise
      Notice shall not be deemed effective unless and until the Closing has
      occurred, on the terms set forth in this Agreement, without amendment
      affecting (i) the price, or (ii) other material terms in any material
      respect after the date hereof, unless the Participant has expressly agreed
      to any such change in terms. Each Participant that elects to exercise a
      Purchase Option shall execute and deliver such other documents, including
      without limitation the securityholder agreement referred to above, and
      take such other actions as Purchaser or Perry, as applicable, shall
      reasonably request to consummate the transaction contemplated by the
      Purchase Option.

              (d) At Closing, the Trustee shall retain Trust Moneys in an amount
      up to $750,000 (the "Retained Trust Moneys"), which will remain subject to
      the lien of the Trustee under the Indenture until applied, for its
      reasonable and documented fees and expenses, including the fees and
      expenses of its counsel (the "Trustee's Fees") and the automatic stay
      shall be deemed lifted for the purposes of the payment thereof. Any and

                                       23
<PAGE>

      all surplus funds remaining after the payment of the Trustee's Fees shall
      be paid to the trustee of the New Senior Secured Note Indenture as Trust
      Moneys (as defined therein).

      SECTION 4.2 PAYMENT OF PURCHASE PRICE.

              (a) On the Closing Date, Purchaser shall (i) deliver in cash, by
      wire transfer (pursuant to wire transfer instructions provided at least
      two (2) Business Days prior to the Closing Date, which wire instructions
      shall include instructions as to the further transfer on the Closing Date
      of the Cash Consideration to the Administrative Agent), in immediately
      available funds, to Republic, a sum equal to (A) the Cash Consideration,
      minus (B) the Earnest Money Deposit, plus (B) the Wind Down Payment, (ii)
      deliver the Bondholder Note Consideration to the REP Liquidating Trust,
      and (iii) deliver the Bank Note Consideration to the Existing Lenders.

              (b) On the Closing Date, Purchaser or its designees shall execute
      and deliver to Sellers the Assumption Agreement and Sellers shall execute
      and deliver to Purchaser or its designees the Bill of Sale and the
      Assumption Agreement and transfer the stock certificate representing 100%
      of the capital stock of the Canadian Subsidiary to the Purchaser.

              (c) [Intentionally Omitted]

                                   ARTICLE V
             REPRESENTATIONS AND WARRANTIES AND RELATED UNDERTAKINGS

      SECTION 5.1 REPRESENTATIONS AND WARRANTIES OF SELLERS. Sellers hereby
jointly and severally represent and warrant to Purchaser as follows:

              (a) Authority. Each Seller is organized and validly existing under
      the laws of the jurisdiction of its organization, and has all corporate or
      other power required to own, lease and operate the Purchased Assets and to
      carry on the Business as now conducted by such Sellers ("Conducted").
      Subject only to the approval of the Bankruptcy Court in the case of the
      Sellers, each Seller has the corporate or other power and authority to
      enter into this Agreement, to enter into any and all agreements
      contemplated in this Agreement (the "Attendant Documents") to which it is
      or is intended to be a party and to consummate the transactions
      contemplated hereby and thereby. Subject only to the approval of the
      Bankruptcy Court in the case of the Sellers, this Agreement and all of the
      Attendant Documents to which each Seller is a party, and the consummation
      of the transactions contemplated hereby and thereby, have been dilly
      authorized and approved by all necessary and proper corporate or other
      action on the part of each Seller. Subject to the approval of the
      Bankruptcy Court in the case of the Sellers, this Agreement, and all of
      the Attendant Documents to which each Seller is a party, have been (or to
      the extent to be entered into on or prior to the Closing, will be) duly
      authorized and duly and validly executed and delivered, and constitute
      legal, valid and binding obligations of each Seller enforceable against
      each Seller in accordance with their respective terms.

              (b) Assets. There are no Assets necessary to the operation of the
      Business as Conducted which are not included in the Purchased Assets. Upon

                                       24
<PAGE>

      consummation of the transactions contemplated hereby, Purchaser will have
      acquired good, valid and insurable title in and to, or a valid leasehold
      interest in or assignment of each of the Purchased Assets to be acquired
      by it, free and clear of all Encumbrances, except for the Assumed
      Liabilities and Permitted Real Estate Liens. The Purchased Assets
      constitute, in the aggregate, all of the Assets necessary for the conduct
      of the Business at the Purchased Plants substantially in the manner in
      which and to the extent to which such Business is Conducted at the
      Purchased Plants during the pendency of the Chapter 11 Cases. The
      Purchased Assets have been maintained in accordance with normal industry
      practices.

              (c) [Intentionally Omitted]

              (d) [Intentionally. Omitted]

              (e) Material Contracts.

              (i) The attached Schedule 5.1(e) identifies all contracts
      (collectively, the "Material Contracts") in effect as of the date of this
      Agreement to which any Seller is a party as set forth below:

                  (A) any lease of personal property involving any annual
            expense in excess of Two Hundred Thousand U.S. Dollars ($200,000.00)
            and not cancelable without Liability within 90 days;

                  (B) any Contract for the purchase of materials, supplies,
            goods, services, consulting, equipment or other assets that provides
            for either (x) annual payments from and after December 31, 2002 by
            Sellers of Two Hundred Thousand U.S. Dollars ($200,000.00) or more
            or (y) aggregate payments by Sellers of Two Hundred Thousand U.S.
            Dollars ($200,000.00) or more, in each case that is not cancelable
            without Liability within 90 days;

                  (C) any sales, distribution or similar Contract providing for
            the sale by any Seller of materials, supplies, goods, services,
            equipment or other assets that provide for either (x) annual
            payments to Sellers of Two Hundred Thousand U.S. Dollars
            ($200,000.00) or more or (y) aggregate payments to Sellers of Two
            Hundred Thousand U.S. Dollars ($200,000.00) or more, in each case
            that is not cancelable without Liability within 90 days;

                  (D) any Contract substantially related to the ownership of the
            Purchased Assets or operation of the Business containing warranty
            obligations on the part of Sellers;

                  (E) any Contract substantially related to the ownership of the
            Purchased Assets or operation of the Business containing provisions
            or covenants limiting the freedom of Sellers to engage in any line
            of business or compete with any Person or prohibiting or limiting
            the ability of any Person to compete with Sellers or prohibiting or
            limiting disclosure of confidential or proprietary information;

                                       25
<PAGE>

                  (F) any Contract substantially related to the ownership of the
            Purchased Assets or operation of the Business relating to
            Indebtedness for borrowed money, the issuance of any debt security
            or the assumption, guarantee or endorsement of the obligations of
            any Person;

                  (G) any Contract between or among any Seller and any Affiliate
            of any Seller;

                  (H) (x) all Contracts providing for a commitment of employment
            or consultation services for a specified or unspecified term, the
            name, position and rate of compensation of each Person to such
            Contract and the expiration date of each such Contract; and (y) any
            severance agreements or any Contracts or written or unwritten
            representations, commitments, promises, communications or courses of
            conduct involving an obligation of Sellers to make payments (with or
            without notice; passage of time, or both) to any Person in
            connection with, or as a consequence of, the transactions
            contemplated hereby;

                  (I) all partnership, joint venture, shareholders' or other
            Similar Contracts with any Person substantially related to the
            Purchased Assets;

                  (J) all Contracts with independent contractors, distributors,
            dealers, manufacturers' representatives, sales agencies or
            franchisees substantially related to the Purchased Assets;

                  (K) all Contracts substantially related. to the Purchased
            Assets and concerning (x) the future disposition or acquisition of
            any asset or property, other than dispositions or acquisitions in
            the ordinary course of business and the provisions of this
            Agreement, and (y) any Business Combination;

                  (L) all Contracts substantially related to the Purchased
            Assets and concerning the sharing, allocation or indemnification for
            Taxes;

                  (M) all Contracts that contain a right of first refusal with
            respect to any Purchased Assets or properties with a fair market
            value in excess of Two Hundred Thousand U.S. Dollars ($200,000.00);

                  (N) all Contracts substantially related to the Purchased
            Assets that provide for the payment or receipt of any licensing fee,
            royalty payment or the like;

                  (O) all Contracts substantially related to the Purchased
            Assets that provide for hedging or any similar financial
            arrangement;

                  (P) all Contracts substantially related to the Purchased
            Assets pursuant to which a third party has agreed to indemnify any
            Seller;

                  (Q) all Reference Leases relating to Real Property and all
            Third Party Leases; and

                                       26
<PAGE>

                  (R) all licenses substantially related to the Purchased Assets
            with respect to computer software that are necessary for the
            operation of the Business.

            (ii) Each Contract required to be disclosed in Schedule 5.1(e)(i)
      was entered into in the ordinary course of business, and except as set
      forth on Schedule 5.1(e)(ii), each such Contract that is material to the
      Purchased Assets or to the operation of the Business at the Purchased
      Plants is in full force and effect and constitutes a legal, valid and
      binding agreement, enforceable in accordance with its terms, of Sellers
      and, to Sellers' Knowledge, each other party thereto; and no Seller has
      received written notice that it is in violation or breach of or default
      under any such contract (or with notice or lapse of time or both, would be
      in violation or breach of or default under any such contract). Schedule
      5.l(e)(ii) sets forth all "cure" amounts that will be submitted in the
      Chapter 11 Cases and that will be payable on the Closing Date upon the
      assumption by the Purchaser or any of its Subsidiaries of any Contract, as
      determined by the Sellers in good faith.

            (iii) True and complete copies (or written summaries in the case of
      oral Contracts) of all of the Sellers' Material Contracts have been
      provided or made available to Purchaser.

            (f) [Intentionally Omitted]

            (g) [Intentionally Omitted]

            (h) [Intentionally Omitted]

            (i) [Intentionally Omitted]

            (j) [Intentionally Omitted]

            (k) [Intentionally Omitted]

            (l) [Intentionally Omitted]

            (m) [Intentionally Omitted]

            (n) [Intentionally Omitted]

            (o) [Intentionally Omitted]

            (p) [Intentionally Omitted]

            (q) Certain Actions. Except as disclosed in Schedule 5.1(q):

            (i) there are no Actions or proceedings pending or, to the Knowledge
      of any Seller, threatened against, relating to or affecting any of the
      Purchased Assets

                                       27
<PAGE>

      individually or in the aggregate, which, if adversely decided against
      Sellers, would reasonably be expected to result in the imposition of
      material Liability against Sellers;

            (ii) to Sellers' Knowledge, there are no facts or circumstances
      relating to the Purchased Assets that would give rise to any Action or
      proceeding against any Seller that would reasonably be expected to result
      in a Material Adverse Effect;

            (iii) none of the Sellers has received written notice, and no Seller
      otherwise has Knowledge, of any orders outstanding against any Seller; and

            (iv) prior to the execution of this Agreement, Republic has
      delivered or made available to Purchaser all responses of counsel for
      Sellers to auditors' requests for information regarding Actions or
      proceedings pending or threatened against, relating to or affecting
      Sellers during the three-year period prior to the date hereof.

            (r) [Intentionally Omitted]

            (s) [Intentionally Omitted]

            (t) [Intentionally Omitted]

            (u) Reports and Financial Statements.

            (i) Republic and Republic Engineered Products Holdings, LLC have
      filed, other than immaterial filings and as disclosed on Schedule
      5.1(u)(i), all required reports, schedules, forms and other documents
      required or agreed to be filed by either of them with the Securities and
      Exchange Commission since August 16, 2002 (collectively, including all
      exhibits thereto, the "Seller SEC Reports"). None of the Seller SEC
      Reports, as of their respective dates (and if amended or superseded by a
      filing prior to the date of this Agreement of the Closing Date, then the
      date of such filing), contained an untrue statement of material fact or
      omitted to state a material fact required to be stated therein or
      necessary to make the statements therein, in light of the circumstances
      under which they were made, not misleading.

            (ii) Each of the financial statements (including related notes)
      included in the Seller SEC Reports present fairly, in all material
      respects, the consolidated financial position and consolidated results of
      operation and cash flows of the filer thereof and its direct and indirect
      Subsidiaries as of the respective dates or for the respective periods set
      forth therein, all in conformity with U.S. GAAP consistently applied
      during the periods involved except as otherwise noted therein, and,
      subject, in the case of the unaudited interim financial statements, to the
      absence of complete notes and normal year-end adjustments. Such financial
      statements include the audited balance sheet of Republic Engineered
      Products Holdings, LLC and its direct and indirect Subsidiaries on a
      consolidated basis as of December 31, 2002 (the "Audited Balance Sheets"),
      and the related audited statements of income and cash flows for the fiscal
      year then ended filed as part of the Republic Engineered Products
      Holdings, LLC Annual Report on Form 10-K as filed with the Securities and
      Exchange Commission on April 1, 2003 (together with

                                       28
<PAGE>

      the Audited Balance Sheets, including the notes thereto, the "Audited
      Financial Statements").

            (iii) The unaudited combined consolidating balance sheets of Sellers
      as of June 30, 2003 (the "Unaudited Balance Sheets") and the related
      combined consolidating statements of income and cash flows for the Sellers
      for the three-month period then ended (together with the Unaudited Balance
      Sheet, including the notes thereto, the "Unaudited Financial Statements")
      are attached as Schedule 5.1(u)(iii) and were prepared from, and in
      accordance with, Sellers' books and records in accordance with U.S. GAAP
      consistently applied, and present fairly in all material respects the
      financial position, results of operations and cash flows of Sellers on a
      combined consolidating basis as of the dates and for the periods
      indicated, subject to the absence of complete notes and normal year-end
      adjustments.

            (iv) The unaudited combined consolidated balance sheets of Sellers
      as of the Closing Date (the "Closing Date Balance Sheets") shall be
      delivered at least two (2) Business Days prior to the Closing and will be
      prepared from, and in accordance with, Sellers' books and records in
      accordance with U.S. GAAP consistently applied, and present fairly in ail
      material respects the financial position, results of operations and cash
      flows of Sellers on a combined consolidating basis as of the dates
      indicated, subject to the absence of complete notes and normal year-end
      adjustments.

            (v) [Intentionally Omitted]

            (w) [Intentionally Omitted]

            (x) [Intentionally Omitted]

            (y) [Intentionally Omitted]

            (z) Disclosure. No representation or warranty by Sellers contained
      in this Agreement and no statement contained in any of the Attendant
      Documents or any other certificate or instrument furnished or to be
      furnished pursuant to this Agreement or in connection with the
      transactions contemplated in this Agreement contains or will contain any
      untrue statement of a material fact, or omits or will omit to state a
      material fact, necessary in order to make any of the statements, in light
      of the circumstances under which they were made, not misleading.

            (aa) Insurance. Sellers are covered by valid, outstanding and
      enforceable policies of insurance covering their respective properties,
      assets and business against risks of the nature normally insured against
      by companies in the same or similar lines of business and in coverage
      amounts typically and reasonably carried by such companies including,
      without limitation, policies with respect to workers compensation (the
      "Insurance Policies"). Such Insurance Policies are valid and binding and
      in full force and effect, and all premiums due thereon have been paid.
      Sellers have complied with all material provisions of such Insurance
      Policies. Schedule 5.1(aa) contains a complete and correct list of all
      Insurance Policies and all amendments and riders thereto, and identifies
      the name and address of the insurers, the expiration dates thereof,
      type(s) and amounts of

                                       29
<PAGE>

      insurance coverage, policy numbers, the annual premiums and payment terms
      thereof, the policy periods for each policy and a brief description of the
      interests insured thereby, copies of which have been provided or made
      available to Purchaser by Seller. During the three-year period prior to
      the date hereof, no Seller has made any claim under any of the Insurance
      Policies, or has suffered any losses that would give rise to any such
      claims, for any amount in excess of Two Hundred Fifty Thousand U.S.
      Dollars ($250,000.00), except as set forth on Schedule 5.l(aa). Schedule
      5.1(aa) contains a list of all outstanding claims made under any insurance
      policy covering Sellers for any amount in excess of Two Hundred Fifty
      Thousand U.S. Dollars ($250,000.00). No Seller (i) has permitted or
      suffered any act or omission that would cause nor (ii) knows of any reason
      or state of facts, that could lead to, the cancellation of or reduction of
      coverage provided by such policies. The Insurance Policies listed in
      Schedule 5.1(aa) are in amounts and have coverages as required by any
      Contract to which such Seller is a party or by which any of their
      Purchased Assets or properties is bound. No Seller has (i) received
      written notice, and Seller does not otherwise have Knowledge, that any
      insurer under any policy referred to in this Section 5.1(aa) is denying
      Liability with respect to a claim thereunder or defending under a
      reservation of rights clause nor (ii) assigned, pledged, mortgaged,
      hypothecated or otherwise transferred the rights under such insurance
      policies. Sellers have recorded a reserve for such Liabilities in and no
      Liability beyond such reserve would reasonably be expected to result in a
      Material Adverse Effect. Workers' compensation claims outside the State of
      Ohio for all employees of Sellers have been covered under fully insured
      programs since December 31, 2002 and there have been no gaps in such
      coverage.

            (bb) Absence of Certain Changes or Events. From and after September
      30, 2003, except (x) as contemplated or permitted by this Agreement, (y)
      as disclosed in any of the Sellers' public filings pursuant to the
      Securities Act, or (z) as set forth in Schedule 5.1(bb). Sellers have
      conducted their business only in the ordinary course and in a manner in
      all material respects consistent with past practice, and whether or not in
      the ordinary course during such period, there has hot been any event
      which, individually or together with any other events, has had or would
      reasonably be expected to result in, a Material Adverse Effect, excluding
      effects resulting from or arising out of general deterioration in the
      steel industry or the economy generally, or the filing of the Chapter 11
      Cases.

            (cc) [Intentionally Omitted]

            (dd) [Intentionally Omitted]

            (ee) [Intentionally Omitted]

            (ff) [Intentionally Omitted]

      SECTION 5.2 REPRESENTATIONS AND WARRANTIES OF PURCHASER. Purchaser hereby
represents and warrants to Sellers the following:

                                       30
<PAGE>

            (a) Good Standing and Authority. Purchaser is a limited liability
      company organized, validly existing and in good standing under the laws of
      the State of Delaware. Purchaser is duly qualified to do business as a
      foreign entity and is in good standing in each jurisdiction in which it is
      required to be qualified. Purchaser has full limited liability company
      power and authority to enter into this Agreement, to enter into the
      Attendant Documents to which it is a party and to consummate the
      transactions contemplated in this Agreement. This Agreement and all of the
      Attendant Documents to which Purchaser is a party, and the consummation of
      the transactions contemplated in this Agreement, have been or will be, on
      or prior to the Closing Date, duly authorized and approved by all
      necessary and proper limited liability company action on the part of
      Purchaser. This Agreement, and all of the Attendant Documents to which
      Purchaser is a party, when executed and delivered, will constitute legal,
      valid and binding obligations of Purchaser enforceable against such
      Purchaser in accordance with their respective terms.

            (b) Non-Violative Agreement. Neither the execution and delivery of
      this Agreement or the Attendant Documents to which Purchaser is a party
      nor the consummation of the transactions contemplated in this Agreement
      will conflict with, result in the breach or violation of or constitute a
      default under the terms, conditions or provisions of Purchaser's
      certificate of formation or limited liability company agreement or any
      other material agreement or instrument to which Purchaser is a party, or
      by which Purchaser is bound.

            (c) Consents, Approvals or Authorizations. Except for any approval
      required under the HSR Act or as otherwise contemplated by this Agreement,
      no consent, approval or authorization of, filing or registration with, or
      notification to, any Governmental Authority is required in connection with
      the execution and delivery of this Agreement by Purchaser or the
      consummation by Purchaser of the transactions contemplated hereby, other
      than any consent, approval or authorization, filing or registration with,
      or notification to, which if not obtained or made would not materially and
      adversely affect Purchaser's ability to consummate the transactions
      contemplated hereby. No consent, approval or authorization of any Person
      is required in connection with the execution and delivery of this
      Agreement by Purchaser or the consummation by Purchaser of the
      transactions contemplated hereby.

            (d) Operations of Purchaser. Purchaser was formed solely for the
      purpose of engaging in the transactions contemplated hereby, has engaged
      in no other business activities and has and on the Closing Date will have,
      conducted its operations only as contemplated hereby.

            (e) Financing. Purchaser shall have on the Closing Date sufficient
      unrestricted funds on hand or committed lines of credit or funds to pay
      the Cash Consideration and to perform its obligations hereunder, including
      assuming the Assumed Liabilities.

            (f) Purchase Price Financing. One hundred percent of the Cash
      Consideration has been raised by the Purchaser through the issuance to
      Perry and its

                                       31
<PAGE>

      Affiliates of equity securities or provision of working capital financing
      by Perry and its. Affiliates.

            (g) Capital Structure. As of the Closing Date, all of the
      outstanding capital stock of Purchaser will be owned by (i) Perry and (ii)
      the Participants who have exercised the Purchase Option, and no other
      Person will have any interest in the Purchaser of any nature.

            (h) Side Agreements. There are no side agreements of any nature
      whatsoever by and among Perry, any Perry Affiliate, and/or Purchaser and
      any third party in relation to the transactions contemplated by this
      Agreement.

      SECTION 5.3 AMENDMENTS TO DISCLOSURE SCHEDULES. From time to time prior to
the Closing, Sellers shall, by written notice to Purchaser or upon the written
request of Purchaser, amend the Schedules to this Agreement to reflect any
matters hereafter arising which, if existing, occurring or known to Sellers at
the date of this Agreement, would have been required to be set forth or
described in the Schedules to this Agreement; provided that (i) no such notice
or amendment to the Schedules pursuant to this Section 5.3 shall be deemed to
cure any breach of any representation or warranty which is made in this
Agreement as of the date hereof as of the date of such delivery, and (ii) no
such notice or amendment shall have any effect for purposes of determining
whether the condition in Section 8.1(c) has been satisfied.

                                   ARTICLE VI
                                   TAX MATTERS

      SECTION 6.1 TRANSFER TAXES. Subject to bankruptcy court approval, in
accordance with Section 1146(c) of the Bankruptcy Code, the making or delivery
of any instrument of transfer under a plan confirmed under Section 1129 of the
Bankruptcy Code shall riot be taxed under any law imposing a stamp tax or
similar tax. The instruments transferring the Purchased Assets to Purchaser
shall contain the following endorsement:

      "Because this [instrument] has been authorized pursuant to Order of the
      United States Bankruptcy Court for the Northern District of Ohio, Eastern
      Division, relating to a plan of reorganization of the Grantor, it is
      exempt from transfer taxes, stamp taxes or similar taxes pursuant to 11
      U.S.C. Section 1146(6), and any officer receiving this [instrument] is
      hereby authorized and directed to permit the transfer contemplated by this
      [instrument] without the payment of any stamp tax, transfer tax or similar
      tax."

            Purchaser and Sellers shall cooperate in providing each other with
any appropriate resale exemption certifications and other similar documentation.

            In the event real estate, stamp taxes, sales use or other or similar
taxes (including, without limitation, transfer taxes) ("Transfer Taxes") are or
will be assessed or required to be paid as a result of the transactions
contemplated hereby, or in order to record the deeds to be delivered to
Purchaser in accordance herewith, fifty percent (50%) of the Transfer Taxes
incurred as a result of the transactions contemplated hereby shall be deducted
from the Cash Consideration payable on the Closing Date and used by Purchaser to
pay such Transfer Taxes.

                                       32
<PAGE>

            Purchaser and Sellers agree to cooperate to determine the amount of
Taxes payable in connection with the transactions contemplated under this
Agreement ("Transaction Taxes"). Purchaser agrees to assist Sellers reasonably
in the preparation and filing of any and all required returns for or with
respect to such Transaction Taxes with any and all appropriate taxing
authorities. Nothing in this Section 6.1 shall require Purchaser to be liable
for any of the income tax Liability of any Seller, or any parties, members or
shareholders thereof.

      SECTION 6.2 PRORATION OF REAL PROPERTY TAXES. The Real Property Taxes on
the Purchased Assets for any taxable period commencing prior to the day
immediately preceding the Closing Date (the "Adjustment Date") and ending after
the Adjustment Date, whether or not such Taxes are due and payable at such time,
shall be prorated between Purchaser and Seller as of the close of business on
the Adjustment Date (all prorations attributed to the Sellers being, "Seller
Prorations"). All such prorations shall be allocated so that items relating to
time periods running between the filing date of the Chapter 11 Cases and the
Adjustment Date shall be allocated to Seller based upon the number of days in
the relevant period and items related to time periods beginning after the
Adjustment Date shall be allocated to Purchaser based on the number of days in
the period from and after the Closing Date. The amount of the Seller Prorations
shall be deducted from the Cash Consideration payable on the Closing Date and
used by Purchaser to pay any Real Property Taxes allocated to the Sellers;

      SECTION 6.3 TAX RETURNS; COOPERATION ON TAX MATTERS.

                  (a) Republic shall be responsible for the preparation and
      filing of all Tax Returns for Sellers for all periods as to which Tax
      Returns are due after the Closing Date (including the consolidated,
      unitary and combined Tax Returns for such Seller) which include the
      operations of the Business for any period ending on or before the Closing
      Date. Republic shall make all payments required with respect to any such
      Tax Returns, to the extent not prohibited, stayed or discharged by the
      Bankruptcy Court.

                  (b) Purchaser and Sellers agree to furnish or cause to be
      furnished to each other, as promptly as practicable, such information and
      assistance relating to the Purchased Assets and the Assumed Liabilities as
      is reasonably necessary for the preparation and filing of any Tax Return,
      claim for refund or other required or optional filings relating to Tax
      matters, for the preparation for and proof of facts during any Tax audit,
      for the preparation for any Tax protest, for the prosecution or defense of
      any suit or other proceeding relating to Tax matters and for the answer to
      any governmental or regulatory inquire relating to Tax matters.

                  (c) Purchaser agrees to retain possession, at its own expense,
      of all accounting, business, financial and Tax records and information (i)
      relating to the Purchased Assets or the Assumed Liabilities that are in
      existence on the Closing Date and transferred to Purchaser hereunder and
      (ii) coming into existence after the Closing Date that relate to the
      Purchased Assets or the Assumed Liabilities before the Closing Date, for a
      period of at least six years from the Closing Date. In addition, from and
      after the Closing Date, Purchaser agrees that it will provide access to
      Sellers and their attorneys, accountants and other representatives (after
      reasonable notice, during normal business hours and in a manner so as not
      to interfere with the normal business operations of

                                       33
<PAGE>
      Purchaser), to the books, records, documents and other information
      relating to the Purchased Assets or the Assumed Liabilities and to any
      officers of Purchaser as Sellers may reasonably deem necessary to (x)
      properly prepare for, file, prove, answer, prosecute and/or defend any
      such Tax Return, claim, filing, tax audit, tax protest, suit, proceeding
      or answer or (y) administer or complete any cases under Chapter 11 of the
      Bankruptcy Code of Sellers. Such access shall include, without limitation,
      access to any computerized information retrieval systems relating to the
      Purchased Assets or the Assumed Liabilities.

                  (d) For purposes of this Agreement other than Section 6.2, in
      the case of any Taxable period that includes (but does not end on) the
      Closing Date (a "Straddle Period"), the amount of any Taxes based on or
      measured by income or receipts of Sellers and the Canadian Subsidiary for
      the Pre-Closing Tax Period shall be determined based on an interim closing
      of the books as of the Close of business on the Closing Date and the
      amount of other Taxes of the Sellers and the Canadian Subsidiary for a
      Straddle Period which relate to the Pre-Closing Tax Period shall be deemed
      to be the amount of such Tax for the entire Taxable period multiplied by a
      fraction the numerator of which is the, number of days in the Taxable
      period ending on the Closing Date and the denominator of which is the
      number of days in such Straddle Period.

      SECTION 6.4 ALLOCATION PURCHASE OF PRICE AND PURCHASE PRICE ALLOCATION
FORMS. Purchaser and Sellers agree to allocate the Purchase Price and the
Assumed Liabilities among the Purchased Assets (and among Sellers) in accordance
with a schedule to be reasonably agreed to between them prior to the Closing
Date (the "Allocation"); provided that if Purchaser and Sellers are not able to
agree on the Allocation prior to the Closing Date, Purchaser's schedule of
allocation will be the Allocation with Republic's consent, which consent shall
not be unreasonably withheld. Sellers and Purchaser will cooperate in filing
with the IRS their respective Forms 8594 as provided for in Section 1060 of the
Code on a basis consistent with the Allocation, and the Allocation shall be
reflected on any Tax Returns required to be filed as a result or the
transactions contemplated hereby.

      SECTION 6.5 WAGE AND EMPLOYMENT TAX REPORTING. Sellers and Purchaser agree
that, in accordance with the "Alternative Procedure" provided in Section 5 of
Revenue Procedure 96-60, 1996-2 Cumulative Bulletin 399, with respect to filing
arid furnishing Internal Revenue Service Forms W-2, W-3 and 941, after the
Closing Date, (i) Sellers and Purchaser shall report on a
"predecessor-successor" basis with respect to any employee that is transferred
from any Seller to Purchaser (a "Transferred Employee"), (ii) Sellers shall not
be required to furnish Forms W-2 to such Transferred Employees to whom it
otherwise would have been obligated to furnish such forms for the calendar year
2003 and (iii) Purchaser shall assume the obligations of Sellers to furnish such
forms to the Transferred Employees for such calendar year.

      SECTION 6.6 TAX SHARING AGREEMENTS. All contracts described in Section 5.1
(e)(i)(L) (Tax Sharing Agreements) shall be terminated on or before Closing.

                                       34
<PAGE>

                                  ARTICLE VII
                       COVENANTS AND ADDITIONAL AGREEMENTS

      SECTION 7.1 APPROVAL PROCEEDINGS.

                  (a) Sellers shall (i) use their commercially reasonable
      efforts to cause the entry of the Bidding Procedures Order by the
      Bankruptcy Court on or before October 30, 2003, which date Purchaser may
      waive or extend at its sole discretion, and (ii) use their commercially
      reasonable efforts to obtain, and shall refrain from knowingly taking any
      action that would be likely to delay, prevent, impede or result in the
      revocation of the entry by the Bankruptcy Court of the Bidding Procedures
      Order.

                  (b) Sellers and Purchaser shall (i) use their best efforts to
      cause the entry of the Sale Order by the Bankruptcy Court on or before
      December 16, 2003, which date Purchaser may waive or extend at its sole
      discretion, and (ii) use their best efforts to obtain, and shall refrain
      from knowingly taking any action that would be likely to delay, prevent,
      impede or result in the revocation of the entry by the Bankruptcy Court of
      the Sale Order.

                  (c) Sellers shall provide notice of the proposed sale of the
      Purchased Assets, in form and substance reasonably acceptable to Purchaser
      and in such manner as may be required by Law, to Sellers' creditors, all
      Governmental Authorities that have filed a notice of appearance in the
      Chapter 11 Cases, all parties to the Purchased Contracts and Reference
      Leases and all parties entitled to notice of the Sale Motion by such date
      as shall allow sufficient time for the Sale Order to be entered by the
      Bankruptcy Court on or before December 16, 2003 (the "Required Creditor
      Notices").

      SECTION 7.2 EMPLOYEE MATTERS. The Purchaser will offer employment to all
employees of the Sellers who are Active Employees on terms that are no less
beneficial in the aggregate than the terms on which they are presently employed
by the Sellers. Purchaser will specifically assume the Labor Agreements upon the
Closing Date.

      SECTION 7.3 ACCESS TO INFORMATION, CONFIDENTIALITY.

                  (a) Sellers shall, and shall cause each of their respective
      officers, directors, employees, auditors and other agents of Sellers to
      afford the affiliates, officers, directors, employees, auditors and other
      agents of Purchaser and its Affiliates reasonable, access during normal
      business hours to the officers, directors, employees, agents, properties,
      offices, plants and other facilities of Sellers and to all books and
      records of Sellers, and shall furnish Purchaser and its Affiliates with
      all financial, operating and other data and information with respect to
      the business and properties of Sellers as Purchaser, through its
      Affiliates and their respective officers, employees or agents.

                  (b) Sellers shall promptly provide Purchaser with drafts of
      all documents, motions, orders, filing or pleadings that Seller or any of
      its Subsidiaries proposes to me With the Bankruptcy Court which relate to
      (i) this Agreement or the transactions contemplated hereunder, (ii) entry
      of the Sale Order and, (iii) the sale of the Purchased Assets by Sellers
      and assumption of Assumed Liabilities by Purchaser, and

                                       35
<PAGE>

      will provide Purchaser with a reasonable opportunity to review such
      documents in advance of their service and filing. Sellers shall consult
      and cooperate with Purchaser, and consider in good faith the views of
      Purchaser with respect to all such filings. Notwithstanding any provision
      to the contrary herein, Sellers shall not seek to amend or modify any
      provision of the Bidding Procedures Order or the Sale Order without the
      prior written consent of Purchaser.

                  (c) From the date hereof until the Closing Date, except as may
      be required by Law, neither Purchaser nor its affiliates, employees,
      agents, and representatives (collectively, "Purchaser Representatives")
      will disclose to any third party the information concerning Sellers that
      it may have acquired from Sellers in the course of Its due diligence
      investigation with respect to Sellers without the prior written consent of
      Seller; provided, however, Purchaser Representatives may disclose any such
      information as follows: (i) to the extent that the information is or
      becomes generally available to the public through no fault of any
      Purchaser Representative making such disclosure; (ii) to the extent that
      the same information is in the possession of the Purchaser Representative
      making such disclosure prior to receipt of such information; (iii) to the
      extent that the Purchaser Representative that received the information
      independently developed the same information prior to the date the
      Purchaser Representative received such information from Sellers without
      relying on any information; or (iv) to the extent that the same
      information becomes available to such Purchaser Representative making such
      disclosure on a non-confidential basis from a source other than a
      Purchaser Representative which is not known by Purchaser Representative to
      be confidential. If the transactions contemplated hereby are not
      consummated, the Purchaser Representatives will return or destroy the
      confidential information upon the written request of Seller. In the event
      that Purchaser or any Purchaser Representative is required by Law or legal
      process to disclose all or any part of any such confidential information,
      Purchaser shall promptly notify Republic of the existence, terms and
      circumstances surrounding such a request so that it may seek an
      appropriate protective order, at Republic's sole cost and expense, prior
      to Purchaser's disclosure of such information.

                  (d) Notwithstanding anything herein to the contrary; each
      party to the transaction (and each affiliate and person acting on behalf
      of any such party) agrees that each party (and each employee,
      representative, and other agent of such party) may disclose to any and all
      persons, without limitation of any kind, the tax treatment and tax
      structure of the transaction and all materials of any kind (including
      opinions or other tax analyses) that are provided to such party or such
      person relating to such tax treatment and tax structure, except to the
      extent necessary to comply with any applicable federal or state securities
      laws. This authorization is not intended to permit disclosure of any other
      information including (without limitation) (i) any portion of any
      materials to the extent not related to the tax treatment or tax structure
      of the transaction, (ii) the identities of participants or potential
      participants in the transaction, (iii) the existence or status of any
      negotiations, (iv) any pricing or financial information (except to the
      extent such pricing or financial information is related to the tax
      treatment or tax structure of the transaction), or (v) any other term or
      detail not relevant to the tax treatment or the tax structure of the
      transaction.

                                       36
<PAGE>

      SECTION 7.4 NOTIFICATION OF CERTAIN MATTERS. Sellers shall give prompt
notice to Purchaser of (i) the occurrence or non-occurrence of any event the
occurrence or non-occurrence of which would be likely to cause any
representation or warranty contained in this Agreement to be materially untrue
or inaccurate (without giving effect to any limitation as to "materiality" set
forth therein), (ii) any failure of Sellers to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it
hereunder and (iii) the occurrence or nonoccurrence of any event the occurrence
or non-occurrence of which would have a Material Adverse Effect; provided,
however, that the delivery of any notice pursuant to this Section 7.4 shall not
limit or otherwise affect the remedies available hereunder to the party
receiving such notice

      SECTION 7.5 [INTENTIONALLY OMITTED]

      SECTION 7.6 FILINGS AND APPROVALS REGARDING THE RAILROAD SUBSIDIARY.

                  (a) As soon as practicable following. the date of this
      Agreement, Purchaser shall make or cause to be made all filings with and
      submissions-to the Surface Transportation Board under the ICC Termination
      Act that are required in connection with the consummation of the
      transactions contemplated by this Agreement in respect of the Railroad
      Subsidiary; Sellers shall assist and support, and Republic shall cause the
      Railroad Subsidiary to assist and support, Purchaser in the preparation of
      such filings and submissions, and Purchaser shall provide, Republic an
      opportunity to review and comment on all such filings and submissions
      prior to their transmittal to the Surface Transportation Board.

                  (b) If the approvals or exemptions of the transactions from
      the Surface Transportation Board contemplated by this Agreement in respect
      of the assets of the Railroad Subsidiary have not been obtained or become
      effective by the Closing Date, Purchaser shall continue to use their
      commercially reasonable efforts to obtain all approvals or exemptions and,
      notwithstanding anything to the contrary herein, until such approvals or
      exemptions are obtained, this Agreement shall not constitute an agreement
      to assign the assets of the Railroad Subsidiary and to the extent
      permitted by Law and subject to any required exemptions or approvals, from
      and after the Closing Date (i) Republic shall hold the Railroad Subsidiary
      Assets in trust for the Purchaser until such time as such Railroad
      Subsidiary Assets may be transferred to Purchaser or its assignee, and
      shall execute a bill of sale and assignment and assumption agreement
      satisfactory to the Purchaser and in customary form at Closing to be held
      in escrow by Kirkland & Ellis LLP such that the Railroad Subsidiary Assets
      may be transferred to Purchaser effective immediately upon receipt of the
      required exemptions or approvals, (ii) Republic shall use commercially
      reasonable efforts to cause the Railroad Subsidiary to continue to operate
      in the ordinary course of business or as otherwise reasonably directed by
      Purchaser, (iii) Republic shall, and Republic shall cause the Railroad
      Subsidiary to, enter into any reasonable arrangement designed to provide
      Purchaser with the benefits of, and cause Purchaser to bear the costs and
      obligations of, Republic's ownership of the Railroad Subsidiary and (iv)
      Purchaser shall indemnify Sellers for any losses arising out of the
      operation of the Railroad Subsidiary from and after the Closing Date.

                                       37
<PAGE>

      SECTION 7.7 FURTHER ACTION.

                  (a) Upon the terms and subject to the conditions hereof, each
      of the parties hereto shall use its commercially reasonable efforts to
      take or cause to be taken all appropriate action and to do or cause to be
      done all things necessary, proper or advisable under applicable Laws to
      consummate the transactions contemplated by this Agreement as promptly as
      practicable, including using its commercially reasonable efforts to obtain
      all Permits and orders from Governmental Authorities and consents,
      approvals and authorizations from parties to contracts with any Seller as
      are necessary for the consummation of the transactions contemplated by
      this Agreement and to fulfill the conditions to the Closing. Sellers shall
      use their commercially reasonable efforts, in cooperation with Purchaser
      to secure, transfer, assign or otherwise convey to Purchaser all Permits
      necessary for the continued post-Closing operation of the Purchased Assets
      or discharge the Assumed Liabilities in compliance with all applicable
      Laws and Environmental Laws.

                  (b) Each party hereto agrees to cooperate in obtaining any
      other consents and approvals that may be required in connection with the
      transactions contemplated by this Agreement; provided, however, that no
      party hereto shall be required to compensate any third party to obtain any
      such consent or approval.

                  (c) Prior to the execution and delivery of this Agreement,
      Purchaser instructed a Title Company to obtain title insurance commitments
      and corresponding Surveys. Promptly after Purchaser receives such title
      commitments and corresponding Surveys, Purchaser shall deliver copies
      thereof, as well as further continuations, supplements or revisions
      thereto, directly to Sellers and to the trustee of the New Senior Secured
      Notes. Purchaser shall use commercially reasonably efforts for the market
      in which the respective properties are located to cause the Title Company
      to deliver title insurance commitments and to cause the corresponding
      Surveys to be completed as soon as possible and in any event delivered
      prior to Closing.

                  (d) The Sellers shall use their commercially reasonable
      efforts to assist the Purchaser with respect to any financing which the
      Purchaser is raising in connection with the Closing, including in
      connection with refinancing the DIP Facility or the Senior Secured Notes,
      which efforts will include the production of financial statements required
      by regulation S-X or any similar requirement.

      SECTION 7.8 CONDUCT OF THE BUSINESS. Except as contemplated by this
Agreement or with the prior written consent of Purchaser, Sellers covenant and
agree that, during the period between the date of this Agreement and the
Closing, Sellers shall (i) conduct the Business in a manner consistent with past
practice, and (ii) confer on a regular and frequent basis with one or more
Purchaser Representatives to report operational matters and the general status
of ongoing operations including sales levels, profit margins, cost increases,
changes or modifications to the operations of Sellers or their Subsidiaries and
adverse trends.

                                       38
<PAGE>

      SECTION 7.9 NON-ASSIGNABLE CONTRACTS.

                  (a) Notwithstanding anything contained in this Agreement to
      the contrary, this Agreement shall not constitute an agreement to assign
      any Purchased Contractor any claim, right or benefit arising thereunder or
      resulting therefrom if an attempted assignment thereof without the consent
      of a third party thereto would constitute a breach or other contravention
      thereof, would be ineffective with respect to any such third party, or
      would in any way adversely affect the rights of Purchaser or Sellers
      thereunder.

                  (b) With respect to any such Purchased Contract for which the
      consent of a party thereto shall not have been obtained at Closing and any
      claim, right or benefit arising thereunder or resulting therefrom, Sellers
      and Purchaser shall each use their reasonable good faith efforts to obtain
      as expeditiously as possible the written consent of the other parties to
      such Purchased Contract for the assignment thereof to Purchaser.

                  (c) Unless and until any consent, waiver, confirmation,
      novation or approval is obtained with respect to any such Purchased
      Contract, Sellers and Purchaser shall cooperate to establish an
      arrangement satisfactory to Purchaser under which Purchaser would obtain
      the claims, rights and benefits and assume the corresponding Liabilities
      and obligations thereunder (including by means of any subcontracting,
      sublicensing or subleasing arrangement) or under which Sellers would
      enforce for the benefit of Purchaser, with Purchaser assuming and agreeing
      to pay Sellers' obligations, any and all claims, rights and benefits of
      Sellers against a third party thereto. In such event, (i) Sellers will
      promptly pay to Purchaser, when received, all moneys received by it under
      any such Purchased Contract or any claim, right or benefit arising
      thereunder, and (ii) Purchaser will promptly pay, perform or discharge,
      when due, any and all obligations and Liabilities arising thereunder,
      other than those being contested in good faith.

      SECTION 7.10 ACQUISITION AGREEMENTS. To the extent that any of the
acquisition agreements set forth on the attached Schedule 2.1(k) (the
"Acquisition Agreements") are not assignable without the consent of another
party, such consent is not obtained and there is hereafter discovered any event
or occurrence. for which Purchaser would have been entitled to indemnification
if such Acquisition Agreement had been assigned to Purchaser (an
"Indemnification Claim"), Sellers shall, upon receipt of written notice from
Purchaser, pursue such Indemnification Claim on Purchaser's behalf at
Purchaser's sole reasonable expense. Purchaser shall control the investigation,
defense and settlement (including choice of counsel in its sole discretion) of
any Indemnification Claim and shall reimburse Sellers for all reasonable costs
and expenses relating thereto promptly upon presentation by Sellers of invoices
or other documentation evidencing such amounts to be reimbursed. Sellers shall
make available to Purchaser, at Purchaser's reasonable expense, its counsel and
other representatives, all information and documents available to them that
relate to such Indemnification Claim. Sellers shall also render to Purchaser, at
Purchaser's reasonable expense, such assistance and cooperation as may
reasonably be required to ensure the proper and adequate pursuit of such
Indemnification Claim. Sellers shall promptly remit and turn over to Purchaser
any recovery (including pursuant

                                       39
<PAGE>

to any settlement, arbitration, judicial proceeding or otherwise) relating to
any such Indemnification Claim and such recovery shall be deemed to be a
Purchased Asset.

      SECTION 7.11 INDEMNIFICATION AGREEMENTS. Sellers and Purchaser shall
cooperate to establish arrangements reasonably acceptable to each of Purchaser
and Republic under which Purchaser would obtain certain claims, rights and
benefits and assume certain corresponding Liabilities. and obligations under the
indemnification agreements set forth on the attached Schedule 7.11 (the
"Indemnification Agreements") with respect to the Purchased Assets. Without
limiting the generality of the foregoing, if there is discovered any event or
occurrence for which indemnification would have been provided under such
Indemnification Agreements, Sellers shall, upon receipt of written notice from
Purchaser, pursue such indemnification claim on Purchaser's behalf at
Purchaser's sole reasonable expense. Purchaser shall control the investigation,
defense and settlement (including choice of counsel in its sole discretion) of
any such indemnification claim asserted under any Indemnification Agreement and
shall reimburse Sellers for all reasonable costs and expenses relating thereto
promptly upon presentation by Sellers of invoices or other documentation
evidencing such amounts to be reimbursed. Sellers, at Purchaser's reasonable
expense, shall make available to Purchaser, its counsel and other
representatives, all information and documents available to them that relate to
any such indemnification claim. Sellers also shall, at Purchaser's reasonable
expense, render to Purchaser such assistance and cooperation as may reasonably
be required to ensure the proper and adequate pursuit of any such
indemnification claim. Sellers shall promptly remit and turn over to Purchaser
any recovery (including pursuant to any settlement, arbitration, judicial
proceeding or otherwise) relating to any such indemnification claim and such
recovery shall be deemed to be a Purchased Asset. Purchaser shall be entitled to
satisfy any payment obligation, threshold amount or other condition to the
receipt of indemnification under any Indemnification Agreement. To the extent
that Purchaser and Republic may benefit from an indemnification claim asserted
under any Indemnification Agreement, .and Purchaser contributes to the
satisfaction of any payment obligation, threshold or other condition, then
Purchaser and Republic shall share in the benefit of any recovery therefrom pro
rata based upon their respective contributions to the satisfaction of any such
condition.

      SECTION 7.12 LITIGATION. Sellers will promptly supply to Purchaser copies
of all litigation or legal proceedings pertaining to the Purchased Assets which
may arise subsequent to the execution of this Agreement but prior to the Closing
Date, and will also advise Purchaser promptly in writing of any written threat
of litigation or other legal proceeding (including actions or motions in the
Bankruptcy Court) which is made between the date of this Agreement and the
Closing Date pertaining to the Purchased Assets or the Seller' ability to
perform its obligations under this Agreement.

      SECTION 7.13 PUBLIC ANNOUNCEMENTS. Prior to the Closing Date, the parties
shall consult with each other before issuing any press release or otherwise
making any public statement or holding any discussion with the Creditors
Committee, and, any ad hoc meeting of trade creditors with respect to this
Agreement and the transactions contemplated hereby, and shall not issue any such
press release or make any such public statement without the prior approval
thereof by the other party, which approval shall not be unreasonably withheld.
Nothing in this Section 7.13 shall prevent disclosure by Sellers or Purchaser,
or any of their Affiliates, with respect to this Agreement and the transactions
contemplated hereby as Sellers or Purchaser,

                                       40
<PAGE>

or such Affiliate, may be required to make by applicable Law, provided, however,
that the party required to make such disclosure shall give prior notice to the
other party of the nature of the requirement, the identity of the Person or
Persons to whom disclosure is required to be made and the information to be
disclosed; and further provided, that Purchaser and Sellers may make reasonable
efforts to promote and encourage union, public arid/or governmental support for
the transactions and/or conditions related directly or indirectly thereto.

      SECTION 7.14 FILINGS AND AUTHORIZATIONS. Each of Sellers and Purchaser, as
promptly as practicable, shall (i) make, or cause to be made, all such filings
or submissions under Laws applicable to it as may be required for it to
consummate the transaction contemplated herein; (ii) use its and their
commercially reasonable efforts to obtain, or cause to be obtained, all
authorizations, approvals, consents and waivers from all Persons and
Governmental Authorities necessary to be obtained by it in order for it so to
consummate such transactions; and (iii) use its and their commercially
reasonable efforts to take, or cause to be taken, all other actions necessary,
proper or advisable in order for it to fulfill its obligations hereunder.

      SECTION 7.15 AMENDMENT TO LIST OF PURCHASED CONTRACTS. Notwithstanding
anything herein to the contrary, at any time prior to the Sale Hearing Purchaser
shall be entitled in its sole discretion to remove any executory Contracts or
Unexpired leases from the list of Purchased Contracts by providing written
notice thereof to Republic and any Contracts so removed shall not constitute
Purchased Assets at Closing. At any time before or after the Closing Purchaser
shall be entitled in its sole discretion to request the Sellers to add to the
list of Purchased Contracts any executory Contracts or unexpired leases of
Sellers by providing written notice thereof to Republic, and any Contracts so
added shall constitute Purchased Assets; provided that Purchaser shall not be
entitled to add to the list of Purchased Contracts any executory Contracts or
unexpired leases of Sellers that any Seller has rejected by order of the
Bankruptcy Court. Sellers shall give written notice to Purchaser prior to the
submission of any motion in the Chapter 11 Cases to reject any executory
Contracts or unexpired leases. Sellers shall use commercially reasonable efforts
to have such Contracts and leases assigned to the Purchaser as soon as
practicable after receipt of such notice (but no earlier than the Closing).

      SECTION 7.16 INSURANCE. Following the Closing Date, Sellers shall maintain
insurance policies that provide the same level of coverage as the Insurance
Policies and that cover claims made and events occurring prior to the Closing
Date; provided, however that such insurance policies may only cover the Excluded
Assets and Liabilities not assumed by Purchaser hereunder.

      SECTION 7.17 BULK SALE. Each of the parties to this Agreement hereby
waives compliance with the bulk sales or bulk transfer laws that are applicable
to the sale of the Purchased Assets with respect to the Excluded Liabilities.

      SECTION 7.18 EMPLOYEES AND EMPLOYEE BENEFITS MATTERS. Effective as of the
Closing Date, Purchaser shall assume the Employee Benefit Plans listed on
Schedule 7.18 (the "Assumed Employee Benefit Plans"). Republic has an obligation
to contribute to the Steelworkers Pension Plan (the "Union Pension Plan").
Purchaser agrees that, from and after the Closing Date, in order to avoid the
assessment of any withdrawal Liability under Section 4201 of ERISA, Purchaser
shall have an obligation to contribute to the Union Pension Plan for
substantially the

                                       41
<PAGE>

same number of contribution base units for which Republic had an obligation
to contribute prior to the Closing Date. Purchaser may apply for an exemption
from or variance or waiver of the requirements of Section 4204(a)(1) of ERISA,
and Sellers shall cooperate in the prosecution of any such application and
implementation of any such exemption, variance or waiver. To the extent that
before the Closing Date such an exemption, variance or waiver is not granted
with respect to the Union Pension Plan, then the following provisions shall
apply with respect to the Union Pension Plan (unless such an exemption.,
variance or waiver is applied for or granted prior to the first day of the first
plan year of the Union Pension Plan beginning after the Closing Date):

                  (a) Purchaser shall provide to the Union Pension Plan annually
      for a period of five plan years of the Union Pension Plan (commencing with
      the first plan year of the Union Pension Plan beginning after the Closing
      Date) a bond issued by a corporate surety company that is an acceptable
      surety for purposes of Section 412 of ERISA, or an amount held in escrow
      by a bank or a similar financial institution satisfactory' to the Union
      Pension Plan, or such other equivalent form of security permitted for this
      purpose in an amount equal to 100% (or 200% in the event that the Union
      Pension Plan is in reorganization in the plan year during which the
      Closing Date occurs) of the greater of (I) the average annual contribution
      required to have been made by Republic with respect to the operations
      under the Union Pension Plan for the three plan years of the Union Pension
      Plan preceding the plan year in which the Closing Date occurs, or (II) the
      annual contribution that Republic was required to have made with respect
      to the operations under the Union Pension Plan for the last plan year of
      the Union Pension Plan preceding the plan year in, which the Closing Date
      occurs; which bond, escrow or security shall be paid to the Union Pension
      Plan if Purchaser withdraws from the Union Pension Plan in a complete or
      partial withdrawal with respect to its operations, or fails to make a
      contribution to the Union Pension Plan when due, at any time during the
      first five plan years of the Union Pension Plan beginning after the
      Closing Date.

                  (b) Republic and Purchaser hereby agree that if Purchaser
      withdraws from the Union Pension Plan in a complete withdrawal or a
      partial withdrawal with respect to operations during the first five plan
      years of such Union Pension Plan beginning after the Closing Date,
      Purchaser will be primarily liable and Republic will be secondarily liable
      to such Union Pension Plan for any withdrawal Liability that Republic
      would have incurred to the Union Pension Plan (but for Section 4204 of
      ERISA) in the event the Liability of Purchaser with respect to the Union
      Pension Plan is not paid.

                  (c) In the event Republic liquidates before the end of the
      five plan year period described in subparagraph (a) above, Purchaser
      agrees to provide a bond or an amount m escrow equal to the amount
      described in Section 4204(a)(3) of ERISA on behalf of Republic, which
      amount shall revert to Purchaser if not paid to the Union Pension Plan
      during such five plan year period.

      SECTION 7.19 CLOSING DATE BALANCE SHEET. Sellers will provide to Purchaser
a Closing Date Balance Sheet at least two (2) Business Days prior to the Closing
Date.

                                       42
<PAGE>

                                  ARTICLE VIII
                            CONDITIONS TO THE CLOSING

      SECTION 8.1 CONDITIONS TO OBLIGATIONS OF PURCHASER. The obligations of
Purchaser to effect the Closing shall be subject to the prior and/or
simultaneous satisfaction or written waiver by Purchaser of each of the
following conditions:

                  (a) Bidding Procedures Order. The Bidding Procedures Order (i)
      shall have been entered on or before November 7, 2003, which date may be
      waived or extended by Purchaser in its sale discretion, (ii) shall not
      have been stayed, modified, amended, dissolved, revoked or rescinded
      without Purchaser's consent and (iii) shall be in full force and effect on
      the Closing Date.

                  (b) Sale Order. The Sale Order (i) shall have been entered on
      or before December 16, 2003, which date may be waived or extended by
      Purchaser in its sale discretion, (ii) shall not have been stayed,
      modified, amended, dissolved, revoked or rescinded without Purchaser's
      consent and (iii) shall be in full force and effect on the Closing Date.

                  (c) Representations and Warranties. (i) The representations
      and warranties of Sellers set forth in this Agreement qualified by
      materiality shall be true and correct in all respects. as of the date of
      this Agreement and as of the Closing Date as though made on and as of the
      Closing Date (except that to the extent such representations and
      warranties expressly speak as of an earlier date, such representations,
      and warranties shall be true and correct in all respects as of such
      specified date); (ii) the representations and warranties of Sellers set
      forth in this Agreement that contain no qualification with respect to
      materiality shall be true and correct in all material respects as of the
      date of this Agreement and as of the Closing Date as though made on and as
      of the Closing Date (except to the extent such representations and
      warranties expressly speak as of an earlier date, such representations and
      warranties shall be true and correct in all material respects as of such
      specified date); and (iii) Purchaser shall have received a certificate
      dated the Closing Date signed by the Chief Executive Officer of each
      Seller to such effect.

                  (d) Covenants. Sellers shall have performed in all material
      respects all of the obligations, covenants and agreements required to be
      performed by them under this Agreement at or prior to the Closing Date and
      Purchaser shall have received a certificate dated the Closing Date and
      signed by the Chief Executive Officer of each Seller to that effect.

                  (e) [Intentionally Omitted]

                  (f) [Intentionally Omitted]

                  (g) No-Material Adverse Effect. There shall not have occurred
      since the date hereof any event, change, occurrence, development or state
      of facts or circumstances which has had or would reasonably be expected to
      have a Material Adverse Effect, but excluding effects resulting from or
      arising in connection with (i) the filing of the Chapter 11 Cases, this
      Agreement, the transactions contemplated hereby or

                                       43
<PAGE>

      the announcement hereof, or (ii) general deterioration in the steel
      industry or the economy generally.

                  (h) Closing Deliveries.. Sellers shall have delivered or
      caused to be delivered to Purchaser each of the items listed in Section
      9.2 hereof.

                  (i) [Intentionally Omitted]

                  (j) Labor Agreements. All of the Labor Agreements shall be in
      full force and effect unmodified from their current terms and the
      Purchaser shall be entitled to the benefit thereof.

                  (k) [Intentionally Omitted]

                  (l) [Intentionally Omitted]

                  (m) [Intentionally Omitted]

                  (n) Waiver of Avoidance Actions. Sellers and their chapter 11
      estates shall have executed a waiver satisfactory to Purchaser waiving any
      present or future avoidance actions under Sections 547, 548 or 549 of the
      Bankruptcy Code against any vendors, suppliers or trade creditors.

                  (o) No Termination. This Agreement shall not have been
      terminated pursuant to Section 11.1.

                  (p) [Intentionally Omitted]

                  (q) [Intentionally Omitted]

                  (r) [Intentionally Omitted]

                  (s) Release of Indenture Liens. All Encumbrances on the
      Purchased Assets which constitute. Collateral securing the Senior Secured
      Notes (including, but not limited to the Trust Moneys other than the
      Retained Trust Moneys) shall have been released at the time of the Closing
      and transferred to the Purchaser in consideration for the issuance of the
      New Senior Secured Notes.

                  (t) Release. Purchaser, Perry and their professional advisors
      shall have been released from any and all Liability which may' arise in
      relation to the transactions contemplated hereby, other than Liability
      arising under the terms of this Agreement or any securities issued
      pursuant to the terms hereof, pursuant to a mutual release of the parties
      contained in the Sale Order.

                  (u) Change of Corporate Names. Prior to or contemporaneously
      with the Closing, the Sellers and each of their Affiliates shall have
      provided satisfactory documentation to Purchaser for the Purchaser to file
      amendments to each of their corporate charters and other relevant filings
      and documents, as necessary, to change (i)

                                       44
<PAGE>

      their names and any other trade names, including d/b/a's, and (ii) the
      names of any other companies, partnerships or ventures that include
      "Republic", "Engineered", any permutations thereof or other trade names.
      The new names will not have the words "Republic", "Engineered", any other
      trade name of or being used by Sellers or any of their respective
      Affiliates of Sellers, any permutation of any thereof, or any other words
      indicating that Sellers or their respective Affiliates may be involved in
      the Business.

      SECTION 8.2 CONDITIONS TO OBLIGATIONS OF SELLER. The obligations of
Sellers to effect the Closing shall be subject to the prior and/or simultaneous
satisfaction or written waiver by Seller of each of the following conditions:

                  (a) Representations and Warranties. (i) The representations
      and warranties of Purchaser set forth in this Agreement qualified by
      materiality shall be true and correct in all respects as of the date of
      this Agreement and as of the Closing Date as though made on and as of the
      Closing date (except that to the extent such representations and
      warranties expressly speak as of an earlier date, such representations and
      warranties shall be true and correct in all respects as of such specified
      date); (ii) the representations and warranties of Purchaser set forth in
      this Agreement that contain no qualification with respect to materiality
      shall be true and correct in all material respects as of the date of this
      Agreement and as of the Closing Date as though made on and as of the
      Closing Date (except to the extent such representations and warranties
      expressly speak as of an earlier date, such representations and
      warranties shall be true and correct in all material respects as of such
      specified date); and (iii) Republic shall have received a certificate
      dated the Closing Date and signed on behalf of Purchaser by the chief
      executive officer of Purchaser to such effect.

                  (b) Covenants. Purchaser shall have performed in all material
      respects all obligations, covenants and agreements required to be
      performed by it under this Agreement at or prior to the Closing Date and
      Republic shall have received a certificate, dated the Closing Date and
      signed by the chief executive officer of Purchaser, to that effect.

                  (c) Consents and Approvals. Sellers and Purchaser shall have
      received all consents or approvals and made all applications, requests,
      notices and filings with any Person or Governmental Authority-required to
      be obtained or made in. connection with the consummation of the
      transactions contemplated by this Agreement which required consents and
      approvals are set forth in the attached Schedule 8.2(c).

                  (d) No Order. No Governmental Authority shall have enacted,
      issued, promulgated, enforced or entered any statute, rule, regulation,
      injunction or other Governmental Order (whether temporary, preliminary or
      permanent) which is in effect and has the effect of making the
      transactions contemplated by this agreement illegal or otherwise
      restraining or prohibiting consummation of such transactions.

                  (e) Closing Deliveries. Purchaser shall have delivered or
      caused to be delivered to Seller each of the items listed in Section 9.3
      hereof.

                                       45
<PAGE>

                  (f) [Intentionally Omitted]

                  (g) Labor Agreements. All Labor Agreements shall have been
      assigned to. Purchaser pursuant to this Agreement.

                  (h) No Termination. This Agreement shall not have been
      terminated pursuant to Section 11.1.

                  (i) The Sale Order shall have been approved and shall be in
      full force and effect on the Closing Date.

                                   ARTICLE IX
                                     CLOSING

      SECTION 9.1 CLOSING. The closing (the "Closing") of the transactions
contemplated in this Agreement shall take place as soon as practicable after the
satisfaction or waiver of each of the conditions set forth in Article XIII (the
"Closing Date") at the offices of Kirkland & Ellis LLP located at 153 East 53rd
Street, New York, NY 10022, but in no event later than December 22, 2003.

      SECTION 9.2 CLOSING DELIVERIES BY SELLERS. At the Closing, Sellers shall
properly execute (if necessary) and deliver (or cause to be delivered) to
Purchaser:

                  (a) [Intentionally Omitted]

                  (b) The Bill of Sale, duly executed by Sellers.

                  (c) The Assumption Agreement, duly executed by Sellers.

                  (d) Such other deeds, bills of sale, assignments, releases,
      consents to assignments and other instruments of sale, conveyance,
      assignment, assumption and transfer as. Purchaser or its counsel may
      reasonably request, satisfactory in form and in substance to Purchaser and
      its counsel, in order to convey to Purchaser all of Sellers' rights, title
      and interests in and to the Purchased Assets and to assign to Purchaser
      all of the Assumed Liabilities in the manner provided for in this
      Agreement.

                  (e) Limited warranty deeds for each parcel of the owned Real
      Property in form and substance acceptable to Purchaser.

                  (f) Lease Assignment and Assumption Agreements with respect to
      each parcel of leased Real Property in customary form and acceptable to
      the Purchaser in its reasonable discretion (the "Lease Assignment and
      Assumption Agreement"), duly executed by Sellers.

                  (g) [Intentionally Omitted]

                  (h) Certified copies of the Sale Order and the Bidding
      Procedures Order and a copy of the docket sheet for the Chapter 11 Cases
      showing their entry and

                                       46
<PAGE>

      that no order has been entered that modifies, amends, stays, dissolves,
      revokes or rescinds either of such orders.

                  (i) A certificate of the Secretary of each Seller in customary
      form and acceptable to the Purchaser in its reasonable discretion.

                  (j) A certificate of an officer of each Seller referred to in
      Sections 8.1(c) and 8.l(d) in customary form and acceptable to the
      Purchaser in its reasonable discretion.

                  (k) A certificate from each Seller certifying that. such
      Seller is not a foreign person for the purposes of section 1445 of the
      Code, which certificate shall comply with the requirements of Treasury
      Regulation 1.1445-2 and shall be in customary form and acceptable to the
      Purchaser in its reasonable discretion.

                  (l) A cross-receipt for the Cash Consideration paid by
      Purchaser to Sellers at the Closing.

                  (m) Stock certificates for the Canadian Subsidiary
      representing 100% of the capital stock of the Canadian Subsidiary together
      with stock powers executed in blank and a Stock Transfer Agreement in
      customary form and acceptable to the Purchaser in its reasonable
      discretion.

                  (n) Such other documents and instruments as are contemplated
      in this Agreement or as Purchaser or Purchaser's counsel may reasonably
      request in order to evidence or consummate the transactions contemplated
      by this Agreement or to effectuate the purpose or intent of this
      Agreement.

      SECTION 9.3 CLOSING; DELIVERIES BY PURCHASER. At the Closing, Purchaser
shall properly execute (if necessary) and deliver (or caused to be delivered) to
Sellers and in accordance with Section 4.1:

                  (a) The Cash Consideration and the Wind Down Payment.

                  (b) The Bondholder Note Consideration and the Bank Note

                  (c) The Assumption Agreement, duly executed, by Purchaser or
      any designee of Purchaser.

                  (d) The Lease Assignment and Assumption Agreement, duly
      executed.

                  (e) [Intentionally Omitted]

                  (f) A certificate of an officer of Purchaser referred to in
      Sections 8.2(a) and 8.2(b) in customary form and acceptable to the Sellers
      in their reasonable discretion.

                                       47
<PAGE>

                  (g) A certificate of the Secretary of Purchaser in customary
      form and acceptable to the Sellers in their reasonable discretion.

                  (h) [Intentionally Omitted]

                  (i) Such other documents and instruments as are contemplated
      in this Agreement or as Sellers or Sellers' counsel may reasonably request
      in order to evidence or consummate the transactions contemplated in this
      Agreement or to effectuate the purpose or intent of this Agreement.

                                    ARTICLE X
                                    SURVIVAL

            All representations and warranties made in this Agreement shall not
survive the Closing Date and shall be extinguished by the Closing.

                                   ARTICLE XI
                        TERMINATION, AMENDMENT AND WAIVER

      SECTION 11.1 TERMINATION. Notwithstanding anything herein to the contrary,
this Agreement may be terminated and the transactions contemplated hereby
abandoned at any time prior to the Closing:

                  (a) by mutual written consent of Purchaser and Republic; or

                  (b) by Purchaser, if any or all of Sellers agree to transfer a
      material portion of the Purchased Assets to a third party; or

                  (c) by Purchaser or Republic, if the Bankruptcy Court or any
      other court of competent jurisdiction in the United States or other
      Governmental Authority shall have issued an order, decree, ruling or taken
      any other action restraining, enjoining or otherwise prohibiting the
      purchase of the Purchased Assets on the terms and conditions contained
      herein and such order, decree, ruling or other action shall have become a
      Final Order; or

                  (d) by Purchaser if there is a material breach by any Seller
      of any representation, warranty or covenant of the Sellers under this
      Agreement and Sellers are unable or shall fail or refuse to cure such
      breach within ten (10) days after written notice from Purchaser specifying
      such breach; or

                  (e) by Republic if there is a material breach by Purchaser of
      any representation, warranty or covenant of Purchaser under this Agreement
      and Purchaser is unable or shall fail or refuse to cure such breach within
      ten (10) days after written notice from Republic specifying such breach;
      or

                  (f) [Intentionally Omitted]

                                       48
<PAGE>

                  (g) by Purchaser, if (i) the Bidding Procedures Order shall
      not have been entered by the Bankruptcy Court on or prior to November 7,
      2003 or (ii) the Bidding Procedures Order shall not have become a Final
      Order on or prior to the date that is 10 days after its entry or (ii) the
      Sale Order shall not have been entered by the Bankruptcy Court on or prior
      to December 16, 2003 or (iii) the Sale Order shall not have become a Final
      Order on or prior to the date that is ten (10) days after the entry of the
      Sale Order unless Purchaser has waived the requirement for a Final Order;
      or

                  (h) by Purchaser or Republic if the Closing shall not have
      occurred on or prior to December 22, 2003; provided, however, that the
      right to terminate this Agreement under this Section 11.1(h) shall not be
      available to any party whose failure to fulfill any obligation under this
      Agreement shall have been the cause of, or shall have resulted in, the
      failure of the Closing; or

                  (i) by Purchaser, upon the conversion of the Chapter 11 Cases
      to cases under chapter 7 of the Bankruptcy Code, appointment of a Chapter
      11 trustee or an examiner with expanded powers, or entry of an order
      pursuant to Section 362 of the Bankruptcy Code lifting the automatic stay
      with respect to any material portion of the Purchased Assets; provided,
      however that Purchaser shall not be entitled to exercise its right to
      terminate this Agreement pursuant to this Section 11.1(i) until Purchaser
      has given Republic five days' prior written notice, and Republic shall be
      permitted to cure any such event during such five-day period.

      SECTION 11.2 EFFECT OF TERMINATION. In the event of the termination of
this Agreement pursuant to Section 11.1, this Agreement shall forthwith become
void and have no effect and there shall be no Liability on the part of any party
hereto or its Affiliates, directors, officers, shareholders, or agents except
under Section 11.3 and Section 11.4.

      SECTION 11.3 BREAK-UP FEE; EXPENSE REIMBURSEMENT. From and after the
entry' of the Bidding Procedures Order, if this Agreement is terminated for any
reason other than pursuant to Section 11.1(e), then Sellers shall reimburse
Purchaser (and the direct and indirect owners of the equity of Purchaser) for
documented reasonable out-of-pocket costs and expenses (including legal,
accounting, engineering and other consultant fees and expenses) incurred in
connection with this Agreement and the transactions contemplated hereby in an
amount up to One Million U.S. Dollars ($1,000,000) (the "Expense Reimbursement
Amount"). From and after the entry of the Bidding Procedures Order, in the event
this Agreement is terminated pursuant to Section 11.1(b) or as a result of
Seller accepting a Competing Bid this should conform to the order, then Seller
shall pay Purchaser (i) the Expense Reimbursement Amount and (ii) Three Million
U.S. Dollars ($3,000,000) (the "Break-Up Fee"). The payment of the Expense
Reimbursement Amount and the Break-Up Fee shall be made in accordance with the
terms and conditions set forth in the Bidding Procedures Order.

      SECTION 11.4 EARNEST MONEY DEPOSIT. Within two (2) Business Days of entry
of the Bidding Procedures Order, the Purchaser shall deposit as earnest money,
$10,000,000 into an escrow account (the "Earnest Money Deposit") pursuant to an
escrow agreement in form and substance reasonably satisfactory to the parties,
containing the following terms. In the event that this Agreement is terminated
under any of the provisions of Section 11.1 other than 11.1(e), then

                                       49
<PAGE>

the Earnest Money Deposit shall be released to the Purchaser within two (2)
Business Days after such termination. In the event that this Agreement is
terminated under Section 11.1(e), then the Earnest Money Deposit shall be paid
to the Seller as liquidated damages (and not as a penalty). In the event that
the transaction contemplated by this Agreement is consummated, the Earnest.
Money Deposit shall be applied to the Cash Consideration portion of the Purchase
Price.

                                   ARTICLE XII
                                  MISCELLANEOUS

      SECTION 12.1 EXPENSES. Except as otherwise set forth in this Agreement
(including without limitation Section 11.3), Sellers and Purchaser shall each
bear the expenses incurred by them in connection with the preparation and
negotiation of this Agreement and the Attendant Documents and the consummation
of the transactions contemplated in this Agreement.

      SECTION 12.2 GOVERNING LAW; FORUM. This Agreement shall be governed by,
and construed in accordance with, the Laws of the State of New York and, to the
extent applicable, the Bankruptcy Code. If the Bankruptcy Court does not have
subject matter jurisdiction over any action or proceeding arising out of or
relating to this Agreement, then each party (a) agrees that all such actions or
proceedings shall be heard and determined in federal court of the United States
for the Southern District of New York, (b) irrevocably submits to the
jurisdiction of such court in any such action or proceeding, (c) consents that
any such action or proceeding may be brought in such court and waives any
objection that such party may now or hereafter have to the venue jurisdiction or
that such action or proceeding was brought in an inconvenient court, and (d)
agrees that service of process in any such action or proceeding may be effected
by mailing a copy thereof by registered or certified mail (or any substantially
similar form of mail), postage prepaid, to such party at its address as provided
in Section 12.3 (provided that nothing herein shall affect the right to effect
service of process in any other manner permitted by New York law).

      SECTION 12.3 NOTICES. Any and all notices, requests, demands and other
communications permitted under or required pursuant to this Agreement shall be
in writing. and shall be deemed given if personally delivered or if mailed,
postage prepaid, certified or registered mail, return receipt requested, to the
parties at the addresses set forth below, or at such other addresses as they may
indicate by written notice given as provided in this Section 12.3:

If to Purchaser:                       With required copies to (which shall not
                                       constitute notice):
Perry Strategic Capital Inc.           Kirkland & Ellis LLP
599 Lexington Avenue                   153 East 53rd Street
New York, NY  10022                    New York, NY  10022
Attention:  Peter F. Schweinfurth      Attention:  Adrian van Schie

                                       --and--

If to Seller:                          With required copies to (which shall not
                                       constitute notice):

                                       50
<PAGE>

Republic Engineered Products, LLC      McDonald Hopkins Co., LPA
3770 Embassy Parkway                   2100 Bank One Center
Akron, Ohio  44333                     600 Superior Avenue, E.
Attention:  Joseph Lapinsky            Cleveland, Ohio  44114-2653
                                       Attention:  Shawn M. Riley

      SECTION 12.4 HEADINGS. The headings contained in this Agreement are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.

      SECTION 12.5 NO ASSIGNMENT; BENEFIT TO THIRD PARTIES.

                  (a) No party may assign its rights and obligations under this
      Agreement without the prior written consent of the other parties, except
      that Purchaser may assign all or any of its rights and obligations
      hereunder to any Affiliate of Purchaser upon the execution of a Written
      instrument whereby any such assignee agrees to assume all of the
      assignor's obligations and be bound by all the terms and conditions of
      this Agreement in relation to the rights and obligations assigned, and
      after the Closing, Sellers may assign all of their rights and obligations
      hereunder pursuant to an order of the Bankruptcy Court to a single entity
      whose' primary purpose is the liquidation of Sellers' assets; provided,
      however, that no such assignment shall relieve the assigning party of its
      obligations hereunder. This Agreement shall be binding on and inure to the
      benefit of the parties and their respective successors and assigns.

                  (b) The terms and provisions of this Agreement are intended
      solely for the benefit of the parties hereto and their respective
      successors and permitted assigns and are not intended to, and shall not,
      confer third-party beneficiary rights upon any other Person.

      SECTION 12.6 ENTIRE AGREEMENT. This Agreement, including the Exhibits and
the Schedules attached or to be attached to it, together with the Attendant
Documents is and shall be deemed to be the complete and final expression of the
agreement between the parties as to the matters contained in and related to this
Agreement and supersedes any previous agreements between the parties pertaining
to such matters.

      SECTION 12.7 COUNTERPARTS. This Agreement may be' executed in
counterparts, each of which shall be deemed an original and all of which, taken
together, shall be considered one and the same agreement.

      SECTION 12.8 WAIVER. At any time prior to the Closing Date, any party
hereto may (a) extend the time for the performance of any of the obligations or
other acts of the other parties hereto, (b) waive any inaccuracies in the
representations and warranties contained herein or in any document delivered
pursuant hereto and (c) waive compliance with any of the agreements or
conditions contained herein. Any such extension or waiver shall only be valid if
set forth in an instrument in writing signed by the party or parties to be bound
thereby. The failure of any Party to assert any of its rights hereunder shall
not constitute a waiver of any such rights. The waiver

                                       51
<PAGE>

by any party of any breach of any provision of this Agreement shall not operate
or be construed as a waiver of any subsequent or similar breach.

      SECTION 12.9 AMENDMENT. This Agreement may only be amended by written
agreement executed by each of the parties hereto.

      SECTION 12.10 SEVERABILITY. The provisions of this Agreement shall be
deemed severable and the invalidity or unenforceability of any provision will,
not affect the validity or enforceability of the other provisions hereof, and
this Agreement shall be interpreted so as to most fully give effect to its terms
and still be valid and enforceable; provided, however, that any provision
altered pursuant to this Section 12.10 shall not result in a material adverse
impairment of the rights or obligations of any party hereto.

      SECTION 12.11 FURTHER ASSURANCES. From time to time after the Closing
Date, at Purchaser's request and without further consideration, Sellers shall
execute and deliver or cause to be executed and delivered such further
instruments of conveyance, assignment and transfer and shall take such other
action as Purchaser may reasonably request in order more effectively to convey,
transfer, reduce to possession or record title to any of the Purchased Assets
purchased pursuant to this Agreement. On Purchaser's request, Sellers shall
cooperate and use their commercially reasonable efforts to have their officers,
directors, employees and agents cooperate with Purchaser on or after the Closing
Date by furnishing information, evidence, testimony and other assistance in
connection with any actions, proceedings, arrangements or disputes involving
Purchaser and which are based on contracts, leases, arrangements or acts of
Sellers which were in effect or occurred on or prior to the Closing Date.

                     (Rest of Page Intentionally Left Blank)

                                       52
<PAGE>

            IN WITNESS WHEREOF, the parties hereto have caused this Asset
Purchase Agreement to be executed by its dilly authorized officers as of the day
and year first written above.

                                           PAV REPUBLIC, INC.

                                           By: /s/ Peter F. Schweinfurth
                                               ---------------------------------
                                               Name: Peter F. Schweinfurth
                                               Title: Authorized Person

                                           REPUBLIC ENGINEERED PRODUCTS LLC

                                           By: /s/ Joseph F. Lapinsky
                                               ---------------------------------
                                               Name: Joseph F. Lapinsky
                                               Title: President

                                           N&T RAILWAY COMPANY LLC

                                           By: /s/ Joseph F. Lapinsky
                                               ---------------------------------
                                               Name: Joseph F. Lapinsky
                                               Title: President

                                           BLUE STEEL CAPITAL CORP.

                                           By: /s/ Joseph F. Lapinsky
                                               ---------------------------------
                                               Name: Joseph F. Lapinsky
                                               Title: President
<PAGE>

                                    EXHIBIT A

                              (SALE PROVISIONS)(1)

            (i) a specific provision authorizing and requiring the execution and
delivery by Sellers of the Agreement and the other agreements contemplated
thereby;

            (ii) a specific provision authorizing and requiring Sellers to
perform their obligations under the Agreement and the other agreements
contemplated thereby;

            (iii) a specific provision authorizing and requiring Sellers to sell
the Purchased Assets to Purchaser pursuant to the terms of the Agreement and the
other agreements contemplated thereby;

            (iv) a specific finding that the Purchase Price shall be allocated
in accordance with the Agreement and the other agreements contemplated thereby;

            (v) a specific finding that, pursuant to Section 363(f) of the
Bankruptcy Code, the sale of the Purchased Assets to Purchaser is free and clear
of all liens, claims and encumbrances other than the Assumed Liabilities;

            (vi) a specific finding that Purchaser is a good faith purchaser
within the meaning of Section 363(m) of the Bankruptcy Code;

            (vii) a specific finding that (i) Purchaser does not constitute a
successor to Sellers or their estates; (ii) the sale does not amount to a
consolidation, merger or de facto merger of Purchaser and Sellers or their
estates; and (iii) Purchaser is not merely a continuation of Sellers or their
estates, there is not substantial continuity between Purchaser and Sellers or
their estates, and there is no continuity of enterprise between Purchaser and
Sellers and their estates;

            (viii) a specific finding that (i) Purchaser is not purchasing all
of Sellers' assets, (ii) Purchaser is only purchasing the Purchased Assets and
(iii) Purchaser is not purchasing the Excluded Assets;

            (ix) a specific finding that (i) Purchaser is not assuming all of
Sellers' liabilities, (ii) Purchaser is only assuming the Assumed Liabilities
and (iii) Purchaser is not assuming the Excluded Liabilities;

            (x) a specific finding that (i) Sellers are not assuming and
assigning all of their contracts and leases to Purchaser, (ii) Sellers are only
assuming and assigning the

----------------
(1)   Any capitalized term not defined herein shall have the meaning ascribed to
      such term in the Asset Purchase Agreement by and among PAV Republic, Inc.,
      as Purchaser, and Republic Engineered Products LLC, N&T Railway Company
      LLC, and Blue Steel Capital Corp., as Sellers.

                                      A-1
<PAGE>

Purchased Contracts and Reference Leases to Purchaser and (iii) Sellers are not
assuming and assigning the Excluded Contracts to Purchaser;

            (xi) a specific provision authorizing and requiring Sellers to
assume and assign the Purchased Contracts and Reference Leases to Purchaser
pursuant to Section 365 of the Bankruptcy Code;

            (xii) a specific finding that Purchaser need not provide any
adequate assurance of future performance with respect to the Purchased Contracts
or Reference Leases pursuant to Section 365(f)(2) of the Bankruptcy Code other
than purchaser's promise to perform under the Purchased Contracts and Reference
Leases following the Closing;

            (xiii) a specific finding that the cure amounts set forth on
Schedule 5.1(e) constitute all of the cure amounts that Sellers are required to
pay in order to assume and assign the Purchased Contracts and Reference Leases;

            (xiv) a specific finding that the Purchased Contracts and Reference
Leases will be in full force and effect from and after the Closing,
notwithstanding any provision in the Purchased Contracts and Reference Leases
(including those of the type described in Sections 365(b)(2) and (f) of the
Bankruptcy Code) that prohibits, restricts, or conditions assignment or
transfer;

            (xv) a specific finding that non-debtor parties to the Purchased
Contracts and Reference Leases are barred and enjoined from asserting against
Purchaser, among other things, assignment fees, rent accelerations, defaults,
breaches, claims, pecuniary losses or conditions to assignment existing as of
the Closing or by reason of the Closing;

            (xvi) a specific finding that any objections timely filed with
respect to the sale, which have not been withdrawn, are without merit or the
interests of such objections have been otherwise satisfied or adequately
provided for by the Bankruptcy Court;

            (xvii) a specific finding that Purchaser's offer is the highest and
best offer;

            (xviii) a specific finding that the amount of the Purchase Price
represents the fair value of the assets being sold;

            (xix) a specific finding that the sale is in the best interests of
Sellers and their estates and creditors;

            (xx) a specific finding that the Bankruptcy Court shall retain
jurisdiction for the purpose of enforcing the provisions of the Sale Order and
the Agreement and the other agreements contemplated thereby and resolve any
disputes related thereto;

                                      A-2
<PAGE>

            (xxi) a specific finding that there are no brokers involved in
consummating this sale and no brokers' commissions are due;

            (xxii) a specific finding that no bulk sales law or any similar law
of any state or other jurisdiction apply in any way to this sale;

            (xxiii) a specific finding that Sellers and Purchaser are authorized
to close the sale immediately upon entry of the Sale Order; and

            (xxiv) a specific, finding providing that the Sale Order shall be
effective immediately upon entry pursuant to Rule 7062 and 9014 of the Federal
Rules of Bankruptcy Procedure, and no automatic stay of execution, pursuant to
Rule 62(a) of the Federal Rules of Civil Procedure, or Rule 6004(g) or 6006(d)
of the Federal Rules of Bankruptcy Procedures applies with respect to the Sale
Order.

                                  This document consisting of 91 pages
                                  is a true copy of the original filed on
                                  12/16/03.
                                  Attest:  Kenneth J. Hirz, Clerk
                                  By: /s/ illegible                12/17/03
                                      ----------------             --------
                                           Deputy Clerk              Date

                                      A-3<PAGE>
                                                                   EXHIBIT 10.27

                              COLLECTIVE BARGAINING
                                    AGREEMENT

                                     Between

                       REPUBLIC ENGINEERED PRODUCTS, INC.

                                       And

                         UNITED STEELWORKERS OF AMERICA,

                                  AFL-CIO, CLC

                            Effective August 16, 2002

                                       (R)

<PAGE>

                              COLLECTIVE BARGAINING
                                    AGREEMENT
                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
ARTICLE                                                                                               PAGE NO
<S>                                                                                                   <C>
1  Purpose, Scope and Recognition..................................................................      1

2  Union Security and Check Off....................................................................      2

3  Management Rights...............................................................................      3

4  Responsibilities of the Parties.................................................................      6

5  Successorship and Right to Bid..................................................................      7

6  Contracting Out.................................................................................     10

7  New Employee Orientation........................................................................     10

8  Neutrality......................................................................................     11

9  Union Role in Negotiation of Benefits...........................................................     20

10 Printing of Agreement...........................................................................     22

11 Leave of Absence Policy for  Union Employees....................................................     22

12 Grievance and Arbitration Procedure.............................................................     24

13 Suspension and Discharge........................................................................     29

14 Safety and Health...............................................................................     29

15 Substance Abuse.................................................................................     31

16 Allowance for Funeral Leave.....................................................................     33

17 Hours of Work...................................................................................     33

18 Overtime and Premium Pay........................................................................     34
</TABLE>

                                        i
<PAGE>

<TABLE>
<S>                                                                                                     <C>
19 Holidays........................................................................................     35

20 Vacation........................................................................................     36

21 Jury Duty.......................................................................................     38

22 Employees in Military Service...................................................................     38

23 Savings Clause..................................................................................     40

24 Seniority.......................................................................................     41

25 Severance Allowance.............................................................................     45

26 Wages...........................................................................................     48

27 Incentive Plan..................................................................................     50

28 Profit Sharing..................................................................................     50

29 Institute for Career Development................................................................     54

30 Stand Up For Steel..............................................................................     58

31 Board of Directors..............................................................................     59

32 Coordinators....................................................................................     60

33 Benefits........................................................................................     61

   * Health Care...................................................................................     65

   * Pension and Retiree Healthcare................................................................     70

   * Benefit Trust.................................................................................     70

   * Life Insurance................................................................................     73

   * Sickness & Accident Benefits..................................................................     73

34 Miscellaneous Matters...........................................................................     75

35 Termination Date................................................................................     81

   Appendix A - Wage Rates.........................................................................     83
</TABLE>

                                       ii
<PAGE>

                                    AGREEMENT

      THIS AGREEMENT is made and entered into by and between Republic Engineered
Products, Inc. (hereinafter referred to as the "Company"), and the United
Steelworkers of America, AFL-CIO, CLC (hereinafter referred to as the "Union").

                                    ARTICLE 1

                         PURPOSE, SCOPE AND RECOGNITION

SECTION 1 - PURPOSE

      It is the intent and purpose of the parties hereto to set forth herein the
agreement covering rates of pay, hours of work, and conditions of employment to
be observed between the parties hereto for the Employees of the Company in the
bargaining units of the Company set forth in this Article.

SECTION 2 - RECOGNITION

      The Union having been designated the exclusive collective bargaining
representative of the Employees of the Company as defined in this Article, the
Company recognizes the Union as such exclusive representative. Accordingly, the
Union makes this Agreement in its capacity as the exclusive collective
bargaining representatives of such Employees. The provisions of this Agreement
constitute the sole procedure for the processing and settlement of any claim by
an Employee or the Union of a violation by the Company of this Agreement. As the
representative of the Employees, the Union may process complaints, and
grievances through the complaint and grievance procedure, including arbitration,
in accordance with this Agreement or adjust or settle the same.

SECTION 3 - COVERAGE

      In accordance with and subject to the provisions of the Labor Management
Relations Act 1947, as amended, the Company recognizes the Union as the
exclusive bargaining agency of the

                                       1
<PAGE>

production and maintenance Employees (including all employees performing office,
clerical and technical work that are included in existing RTI/USWA bargaining
units) of the Company's steel manufacturing and finishing facilities for which
units the Union is certified by the National Labor Relations Board or may be,
during the life of this Agreement, recognized by the Company as the exclusive
collective bargaining representative of the Company for the purpose of
collective bargaining in respect to rates of pay, hours of work, and conditions
of employment.

SECTION 4 - EMPLOYEE DEFINED

The term "Employee," as used in this Agreement, shall mean the production,
maintenance, and office and clerical Employees, but shall not include
executives, foremen, assistant foremen, supervisors who do not work with tools,
draftsmen, timekeepers, first-aid men and nurses and plant protection. In the
plants in Stark County, Ohio, bricklayers are similarly not included.

                                    ARTICLE 2

                          UNION SECURITY AND CHECK OFF

      Each employee, who fails voluntarily to acquire or maintain membership in
the Union, shall be required as a condition of employment, on and after the
thirtieth (30th) day following the beginning of employment or the effective date
of this provision, whichever is later, to pay to the Union each month an agency
fee as a contribution towards the Union's expenses as a collective bargaining
representative. The agency fee for the first month shall be in an amount equal
to the Union's regular and usual monthly dues, including an initiation fee if
applicable, and for each month thereafter in an amount equal to the regular and
usual monthly dues.

      During the life of this contract, the Company agrees to deduct from an
employee's pay monthly dues, assessments, and initiation fees as designated by
the International Secretary/Treasurer of the Union and as authorized by a signed
voluntary check-off request.

                                       2
<PAGE>

Such proceeds will be mailed to the International Secretary/Treasurer of the
Union Steelworkers of America, or its successor, Five Gateway Center,
Pittsburgh, PA, 15222.

      The Union agrees to save the Company harmless from any action growing out
of these deductions commenced by or on behalf of any employee or by any agency
of the Federal or State or Local government against the Company, the Union
assumes full responsibility for the disposition of the funds so deducted once
they have been turned over to the International Secretary/ Treasurer of the
Union.

                                    ARTICLE 3

                                MANAGEMENT RIGHTS

SECTION 1

      All of the rights, functions and prerogatives of management except as
modified by the provisions of this Agreement and applicable law are reserved and
retained exclusively to the Company. Specifically, this Agreement does not
impair or limit the Company's right (other than those rights management has
relinquished in this Agreement) to:

      a.    Determine either the products to be processed, manufactured, and
            marketed, or the means and methods by which such products will be
            processed, manufactured, and marketed;

      b.    Determine what work required in its business shall be performed at
            any plant covered by this Agreement and by employees covered by this
            Agreement;

      c.    Transfer, either temporarily or permanently, manufacturing,
            processing and production work from one plant to any other plant or
            location;

      d.    Determine the size and composition of the work force covered by this
            Agreement;

                                       3
<PAGE>

      e.    Establish and enforce production, quality, service and safety
            standards;

      f.    Improve, change, or introduce new manufacturing, processing,
            production, maintenance, warehousing, marketing and service methods,
            equipment, machinery and facilities;

      g.    Establish and change departmental production and work standards;

      h.    Determine when and if vacancies in the working force shall be
            filled;

      i.    Discontinue temporarily or permanently, in whole or in part, the
            operations of any plant and business covered or affected by this
            Agreement;

      j.    Establish and enforce reasonable rules applicable to employees
            covered by this Agreement;

      k.    Determine the hours of work, work schedules, the starting and
            quitting times, when overtime shall be worked and to require
            overtime;

      l.    Direct and instruct employees;

      m.    Determine the assignment of work or overtime;

      n.    Select, hire, layoff, upgrade, downgrade, promote, transfer,
            discipline, suspend, and separate employees for cause;

      o.    Determine job content and right to subcontract bargaining unit work,
            except as provided in Article 6 Contracting Out.

                                       4
<PAGE>

SECTION 2

      The above rights of the Company are not all-inclusive but indicate the
type of matters or rights, which belong to and are inherent to the management.
Any of the rights, power and authority the Company had prior to entering into
collective bargaining resulting in this Agreement are retained by the Company
except as expressly and specifically abridged, delegated, granted or modified by
the specific terms of the Agreement.

      Nothing in this Agreement will be considered as limiting the Company's
ability to change job duties or assign employees to duties. The Company may
assign employees to any duty for which they are qualified and for any length of
time consistent with the other terms and conditions of the Agreement. The
ability of the Company to maintain a stable work force and an efficient and
profitable operation is dependent upon workforce flexibility. An employee may
not refuse to perform work or to take an assignment (consistent with the safety
relief provisions) that the employee is qualified to perform. The Company will
not assign an employee in violation of this Agreement or in a discriminatory or
arbitrary manner.

SECTION 3

      Insofar as a grievance relates solely to the exercise by the Company of
one of the exclusive rights of management recognized in this Article, a
grievance shall not be arbitrated or otherwise litigated, except insofar as such
grievance alleges a direct violation of the express provisions of this
Agreement.

SECTION 4

      Supervisors and other non-bargaining unit personnel may not perform duties
normally performed by bargaining unit employees except in emergency situations.

                                       5
<PAGE>

                                    ARTICLE 4

                         RESPONSIBILITIES OF THE PARTIES

SECTION 1 - RESPONSIBILITIES AND NONDISCRIMINATION

      Each of the parties hereto acknowledged the rights and responsibilities of
the other party and agrees to discharge its responsibilities under this
Agreement.

      There shall be no discrimination, restraint or coercion against any
employee because of membership in the Union.

      It is the continuing policy of the Company and the Union that the
provisions of this Agreement and the actions of these parties shall be
consistent with all local, state, and federal employment laws. Neither party
shall retaliate against any employee who exercises his rights thereunder. To
that end, when the masculine noun or pronoun is used in this Agreement, it shall
include the feminine, and the singular may include the plural, or vice versa as
the context may require.

SECTION 2 - CIVIL RIGHTS COMMITTEE

      A joint Committee on Civil Rights shall be established at each plant. The
Union representation on the committee shall be no more than three (3) members of
the Union, in addition to the Local Union President/Unit Chairperson and
Chairman of the Grievance Committee. The Union shall certify the Union members
to the plant manager and the Company members shall be certified to the Union.

SECTION 3 - NO STRIKE - NO LOCKOUT

      During the term of this Agreement, the Union, its agents, members,
representatives and employees of the Company shall not instigate, promote,
sponsor, encourage, condone or engage in any strike, sympathy strike, picketing,
slowdown, stoppage of work, withholding of services, honoring the picket line of
this or any other Union at the Company's facility, or other interruption

                                       6
<PAGE>

or interference of any sort with the business of the Company for any reason
under any circumstance. The Company shall have the right to discharge or
otherwise discipline any employee who does engage in any form of the foregoing
described conduct during the term of this Agreement, and any employee so
disciplined will have recourse to the grievance procedure solely to determine
whether such employee engaged in the conduct herein prohibited. The Arbitrator
will have no authority to modify the discipline. The Company shall not lockout
during the term of this Agreement.

                                    ARTICLE 5

                         SUCCESSORSHIP AND RIGHT TO BID

A.    SUCCESSORSHIP

      The Company agrees that it will not sell, convey, assign or otherwise
transfer any plant or significant part thereof covered by the then existing
Basic Labor Agreement between the Company and the Union (an "Operation") to any
other party (hereinafter referred to as "Buyer") who intends to continue to
operate the Operation as the Company had, unless the following conditions have
been satisfied prior to the closing date of the sale:

      a.    the Buyer shall have entered into an agreement with the Union
            recognizing it as the bargaining representative for the employees
            within the then existing bargaining units,

      b.    the Buyer shall have either (i) entered into an agreement with the
            Union establishing the terms and conditions of employment or (ii)
            agreed to assume and be bound by the Collective Bargaining Agreement
            as it applies to the Operation, in either case to be effective as of
            the closing date, and

      c.    if requested by the Company, the Union will enter into negotiations
            with the Company on the subject of releasing and discharging the
            Company from any

                                       7
<PAGE>

      obligations, responsibilities and liabilities to the Union and the
      Employees and/or applicable individuals in connection with the sale of the
      Operation, except as the parties otherwise mutually agree.

      This Article is not intended to apply to (i) any transactions solely
between the Company and any of its subsidiaries or affiliates, or its parent
company including any of its subsidiaries or affiliates; (ii) transactions
involving the sale of stock of the Company or its Parent or a merger of the
Company or its Parent or (iii) a public offering of registered securities.

B.    RIGHT TO BID

SECTION 1

      Should (a) the Company decide (a "Company Decision") or (b) be presented
with an offer (an "Unsolicited Offer") to sell or otherwise transfer (other than
a sale lease-back transaction conducted purely as a financing transaction and
involving an unrelated third party): (i) a controlling interest in the corporate
entity which owns its assets (a "Controlling Interest"); or (ii) all or a
portion of its facilities ("Facilities"), (either or both, the "Assets") it will
so advise the USWA in writing and grant to the USWA the right to organize a
transaction to purchase the assets (a "Transaction").

SECTION 2

      The Company will provide the USWA with any information needed to determine
whether it wishes to pursue a Transaction. All such information shall be subject
to an executed Confidentiality Agreement.

SECTION 3

      The Company shall notify the USWA of the schedule and/ or timetable for
consideration by the Company of any possible

                                       8
<PAGE>

transaction. The Company will provide the USWA with thirty days in which to
organize an alternative transaction and the same information provided to any
other interested party.

SECTION 4

      During the period described in Section 3 above, the Company will not enter
into any binding agreement or contract regarding the Assets with another party
(including a letter of intent that commits the Company to a topping or break up
fee) other than procedural agreements such as a confidentiality agreement.

SECTION 5

      In the event that the USWA submits an offer within the thirty-day period
described above, the Company shall not be under any obligation to accept such
offer. However, the Company shall be entitled to enter into an agreement with
regard to the Assets with an entity other than the USWA only if, in the
reasonable judgment of its Board of Directors, the non-USWA proposal is more
favorable on balance to the Company and/or its shareholders, taking into
consideration price, certainty of payment (or risk of nonpayment),
contingencies, financial strength of the proposed purchaser, conditions
precedent to closing and other factors affecting the value of the transaction to
the Company and its shareholders.

SECTION 6

      This agreement shall not be deemed to cover any public offering of equity
or any transactions solely between the Company and any of its subsidiaries or
affiliates, or its parent company including any of its subsidiaries or
affiliates.

SECTION 7

      The rights granted to the USWA herein may be transferred or assigned by
the USWA to a third party (but the transferee may not thereafter transfer such
right to bid).

                                        9
<PAGE>

                                    ARTICLE 6

                                 CONTRACTING OUT

SECTION 1

      The Company recognizes the Union's concern about contracting out work and
with regards thereto the Company, except in emergencies, will not contract out
work that bargaining unit employees normally perform while there are bargaining
unit employees available who are capable to perform the subject work. It is
further agreed that no work will be regularly contracted out which results in
diminishing the size and scope of the bargaining unit (with the exception of
temporary surge work due to major construction or major repairs, or when
specialized skills or trades are not available).

SECTION 2

      The Company will provide notice to the Local Union President (Unit
Chairperson) or his/her designee of all such contracting out. The parties will
meet to discuss particular work or general issues at a meeting to be scheduled
for that purpose.

                                    ARTICLE 7

                            NEW EMPLOYEE ORIENTATION

      The United Steelworkers of America and the Company will develop a joint
New Bargaining Unit Employee Orientation Program, which shall entail the
following:

      1.    An introduction of Plant Management officials, International Union
            officials, and Local Union Representatives.

      2.    Distribution and discussion of the USWA Labor Agreement including
            any relevant local agreements, the probationary period, and the
            grievance procedure.

      3.    Discussion of Safety and Health programs and Safe Working
            procedures.

                                       10
<PAGE>

      4.    Presentation on and discussion of the history and achievements of
            the United Steelworkers of America and the Local Union.

      5.    Presentation on and discussion of the structure of the United
            Steelworkers of America and the Local Union, and the services that
            are provided by the various offices and committees.

      6.    Presentation on the history of the Company and plant.

      7.    Review of the markets in which the Company participates; the
            products produced and the customers serviced.

      8.    Discussion of the structure of the Company, the plant organization,
            and the functions and services that are provided by the various
            departments.

      Each new employee, either individually or as part of a small group shall,
within ten days of their being hired, be given a presentation of the above
Program by Company and Union officials.

      At the conclusion of the presentation, Union officials shall be given an
opportunity to meet with the new employee(s) for up to two (2) hours without the
presence of management representatives.

      All costs associated with developing this Program, including lost time for
Union officials who participate in its development, and the costs, including
lost time for individuals participating in the presentation, shall be borne by
the Company.

                                    ARTICLE 8

                                   NEUTRALITY

A.    INTRODUCTION

      The Company and the United Steelworkers of America ("USWA" or "the Union")
have developed a constructive and

                                       11
<PAGE>

harmonious relationship built on trust, integrity and mutual respect. The
parties place a high value in the continuation and improvement of that
relationship.

B.    NEUTRALITY

      To underscore the Company's commitment in this matter, it agrees to adopt
a position of neutrality in the event that the Union seeks to represent any
non-represented employees of the Company.

      Neutrality means that, except as explicitly provided herein, the Company
will not in any way, directly or indirectly, involve itself in efforts by the
Union to represent the Company's employees, or efforts by its employees to
investigate or pursue unionization.

      The Company's commitments to remain neutral as outlined above shall cease
if the Company demonstrates to the Arbitrator under Section G herein that during
the course of an Organizing Campaign (as defined in C below), the Union is
intentionally or repeatedly (after having the matter called to the Union's
attention) materially misrepresenting to the employees the facts surrounding
their employment or is conducting a campaign demeaning the integrity or
character of the Company or its representatives.

C.    ORGANIZING PROCEDURES

      Prior to the Union distributing authorization cards to non-represented
employees at a Covered Workplace (meaning any workplace which is: (i) controlled
by the Company, as the Company is defined in Section E herein; and (ii) employs
or intends to employ employees who are eligible to be represented by a labor
organization in any unit(s) appropriate for bargaining), the Union shall provide
the Company with written notification (the "Written Notification") that an
organizing campaign (the "Organizing Campaign") will begin. The Written
Notification will include a description of the proposed bargaining unit.

      The Organizing Campaign shall begin immediately upon provision of Written
Notification and continue until the earliest

                                       12
<PAGE>

of:   (i)   the Union gaining recognition under C-5 and C-6 below;

      (ii)  written notification by the Union that it wishes to discontinue the
            Organizing Campaign; or (iii) 90 days from provision of Written
            Notification to the Company.

      There shall be no more than one Organizing Campaign in any 12-month
period.

      Upon Written Notification the following shall occur:

1.    NOTICE POSTING

      The Company shall post a notice on all bulletin boards at all Covered
Workplaces where employees eligible to be represented within the proposed
bargaining unit work and where notices are customarily posted. This notice shall
read as follows:

                              "NOTICE TO EMPLOYEES"

      We have been formally advised that the United Steelworkers of America are
conducting an organizing campaign among certain of our employees. This is to
advise you that:

      1.    The Company does not oppose collective bargaining or the
            unionization of our employees.

      2.    The choice of whether or not to be represented by a union is yours
            alone to make.

      3.    We will not interfere in any way with your exercise of that choice.

      4.    The Union will conduct its organizing effort over the next 90 days.

      5.    In their conduct of the organizing effort, the Union and its
            representatives are prohibited from misrepresenting the facts
            surrounding your employment. Nor may they demean the integrity or
            character of the Company or its representatives.

                                       13
<PAGE>

      6.    If the Union secures a simple majority of authorization cards,
            subject to verification, of the employees in [insert description of
            bargaining unit provided by the Union] the Company shall recognize
            the Union as the exclusive representative of such employees without
            a secret ballot election conducted by the National Labor Relations
            Board.

      7.    The authorization cards must unambiguously state that the signing
            employees desire to designate the Union as their exclusive
            representative.

      8.    Employee signatures on the authorization cards will be verified by a
            third party neutral chosen by the Company and the Union.

      The amended version of this notice as described above will be posted as
soon as the Unit Determination procedure in C-3 below is completed.

      In addition, following receipt of Written Notification, the Company may
issue one written communication to its employees concerning the Campaign. Such
communication shall be restricted to the issues covered in the Notice referred
to in C-1 above or raised by other terms of this Neutrality Article.

      The communication shall be fair and factual, shall not demean the Union as
an organization nor its representatives as individuals and no reference shall be
made to any occurrence, fact or event relating to the Union or its
representatives that reflects adversely upon the Union, its representatives or
unionization.

      The communication shall be provided to the Union at least two business
days prior to its intended distribution. If the Union believes that the
communication violates the strictures of this provision it shall so notify the
Company. Thereupon the parties shall immediately bring the matter to the
Arbitrator who shall issue a bench decision resolving any dispute. In no event
shall the communication be released until after the Union has been given the two
days referred to above to object, and if the Union does object, until after the
Arbitrator has ruled.

                                       14
<PAGE>

2.    EMPLOYEE LISTS

      Within five days following Written Notification, the Company shall provide
the Union with a complete list of all of its employees in the proposed
bargaining unit who are eligible for union representation. Such list shall
include each employee's full name, home address, job title and work location.
Upon the completion of the Unit Determination procedure as described in C-3
below, an amended list will be provided if the proposed unit is changed as a
result of such Unit Determination procedure. Thereafter during the Organizing
Campaign, the Company will provide the Union with updated lists monthly.

3.    DETERMINATION OF APPROPRIATE UNIT

      As soon as practicable following Written Notification, the parties will
meet to attempt to reach an agreement on the unit appropriate for bargaining. In
the event that the parties are unable to agree on an appropriate unit, either
party may refer the matter to the Dispute Resolution Procedure contained in
Section G below. In resolving any dispute over the scope of the unit, the
Arbitrator shall apply the principles used by the NLRB.

4.    ACCESS TO COMPANY FACILITIES

      During the Organizing Campaign, the Company, upon written request, shall
grant reasonable access to its facilities to the Union for the purpose of
distributing literature and meeting with unrepresented Company employees.
Distribution of Union literature shall not compromise safety or production,
disrupt ingress or egress, or disrupt the normal business of the facility.
Distribution of Union literature inside Company facilities and meetings with
unrepresented Company employees inside Company facilities shall be limited to
non-work areas during non-work time.

5.    CARD CHECK

      If, at any time during an Organizing Campaign which follows the existence
at a Covered Workplace of a substantial and representative complement of
employees in any unit appropriate

                                       15
<PAGE>

for collective bargaining, the Union demands recognition, the parties will
request that a mutually acceptable neutral (or the American Arbitration
Association if no agreement on a mutually acceptable neutral can be reached)
conduct a card check within five days of the making of the request. The neutral
shall compare the authorization cards submitted by the Union against original
handwriting examples of the entire bargaining unit furnished by the Company and
shall determine if a simple majority of eligible employees has signed cards. The
Union and the Company shall jointly prepare the list of eligible employees.

6.    UNION RECOGNITION

      If at any time during an Organizing Campaign, the Union secures a simple
majority of authorization cards of the employees in an appropriate bargaining
unit, the Company shall recognize the Union as the exclusive representative of
such employees without a secret ballot election conducted by the National Labor
Relations Board. The authorization cards must unambiguously state that the
signing employees desire to designate the Union as their exclusive
representative for collective bargaining purposes. Each card must be signed and
dated during the Organizing Campaign.

D.    HIRING

      1.    The Company shall, at any Covered Workplace that it builds or
            acquires after the effective date of this Neutrality Article, give
            preference in hiring to qualified employees of the Company then
            accruing continuous service in bargaining units covered by this
            Collective Bargaining Agreement. In choosing between qualified
            applicants from such bargaining units, the Company shall apply
            standards established in Article 34(A)(1) Preferential Hiring
            (specifically the Plant Transfer provisions) of this Collective
            Bargaining Agreement.

      This Section D-l shall only apply where the employer for the purposes of
collective bargaining is or will be the Company,

                                       16
<PAGE>

a Parent or an Affiliate (and not a Venture) provided, however, that in a case
where a Venture will likely have an adverse impact on employment opportunities
for then current bargaining unit employees covered by this Collective Bargaining
Agreement, then this Section D-l shall apply to such Venture as well.

      2.    Before implementing this provision the Company and the Union will
            decide how this preference will be applied.

      3.    In determining whether to hire any applicant at a Covered Workplace
            (whether or not such applicant is an employee covered by the
            Collective Bargaining Agreement), the Company shall refrain from
            using any selection procedure, which, directly or indirectly,
            evaluates applicants based on their attitudes or behavior toward
            unions or collective bargaining.

E.    DEFINITIONS AND SCOPE OF THIS AGREEMENT

      1.    Rules with Respect to Affiliates, Parents and Ventures

      For purposes of this Article only, the Company includes (in addition to
the Company) any entity, which is:

      (i)   engaged in (a) the mining, refining, production, processing,
            transportation, distribution or warehousing of raw materials used in
            the making of steel; or (b) the making, finishing, processing,
            fabricating, transportation, distribution or warehousing of steel;
            and

      (ii)  a Parent, Affiliate or a Venture of the Company.

      For purposes of this Article, a Parent is any entity which directly or
indirectly owns or controls more than 50% of the voting power of the Company; an
Affiliate is any entity in which the Company directly or indirectly: (a) owns
more than 50% of the voting power or (b) has the power based on contracts or
constituent documents to direct the management and policies of the entity; and a
Venture is an entity in which

                                       17
<PAGE>

the Company owns a material interest; provided that none of Perry Strategic
Capital, their limited partners, their portfolio companies or affiliates outside
the Company's corporate family will deemed to be a Parent, Affiliate or Venture.

      2.    Rules with Respect to Existing Parents, Affiliates and Ventures

      The Company agrees to cause all of its existing Parents, Affiliates and/or
Ventures that are covered by the provisions of Section E-1 above, to become a
party/parties to this appendix and to achieve compliance with its provisions.

      3.    Rules with Respect to New Parents, Affiliates and Ventures

      The Company agrees that it will not consummate a transaction, the result
of which would result in the Company having or creating: (i) a Parent, (ii) an
Affiliate or (iii) a Venture; without ensuring that the New Parent, New
Affiliate and/or New Venture, if covered by the provisions of Section E-1 above,
agrees to and becomes bound by this article.

      4.    In the event that a Parent, Affiliate or Venture is not itself
            engaged in the operations described in Section E (l)(i) above, but
            has a Parent, Affiliate or Venture that is engaged in such
            operations, then such Parent, Affiliate or Venture shall be covered
            by all provisions of this Agreement.

F.    BARGAINING IN NEWLY-ORGANIZED UNITS

      Where the Union is recognized pursuant to the above procedures, the first
collective bargaining agreement applicable to the new bargaining unit will be
determined as follows:

      1.    The employer and the Union shall meet within 14 days following
            recognition to begin negotiations for a first collective bargaining
            agreement covering the new unit bearing in mind the wages, benefits,
            and working

                                       18
<PAGE>

            conditions in the most comparable operations of the Company (if any
            comparable operations exist), and those of unionized competitors to
            the facility in which the newly recognized unit is located.

      2.    If after 90 days following the commencement of negotiations the
            parties are unable to reach agreement for such a collective
            bargaining agreement, they shall submit those matters that remain in
            dispute to the Chairman of the Union Negotiating Committee and the
            Company's Vice President Human Resources who shall use their best
            effort to assist the parties in reaching a collective bargaining
            agreement.

      3.    If after 90 days following such submission of outstanding matters,
            the parties remain unable to reach a collective bargaining
            agreement, the matter may be submitted to final offer interest
            arbitration in accordance with procedures to be developed by the
            parties.

      4.    If interest arbitration is invoked, it shall be a final offer
            package interest arbitration proceeding. The interest arbitrator
            shall have no authority to add to, detract from, or modify the final
            offers submitted by the parties, and the arbitrator shall not be
            authorized to engage in mediation of the dispute. The arbitrator's
            decision shall select one or the other of the final offer packages
            submitted by the parties on the unresolved issues presented in
            arbitration. The interest arbitrator shall select the final offer
            package found to be the more reasonable when considering (a) the
            negotiating guideline described in F-1 above, (b) any other matters
            agreed to by the parties and therefore not submitted to interest
            arbitration, and (c) the fact that the collective bargaining
            agreement will be a first contract between the parties. The decision
            shall be in writing and shall be rendered within thirty (30) days
            after the close of the interest arbitration hearing record.

                                       19
<PAGE>

      5.    Throughout the proceedings described above concerning the
            negotiation of a first collective bargaining agreement and any
            interest arbitration that may be engaged in relative thereto, the
            Union agrees that there shall be no strikes, slowdowns, sympathy
            strikes, work stoppages or concerted refusals to work in support of
            any of its bargaining demands. The Company, for its part, likewise
            agrees not to resort to the lockout of employees to support its
            bargaining position.

G.    DISPUTE RESOLUTION

      Any alleged violation or dispute involving the terms of this article may
be brought to a joint committee of one representative of each of the Company and
the Union. If the parties cannot satisfactorily resolve the alleged violation or
dispute, either party may submit such dispute to the Arbitrator. A hearing shall
be held within ten (10) days following such submission and the Arbitrator shall
issue a decision within five (5) days thereafter. Such decision shall be in
writing but need only succinctly explain the basis for the findings. All
decisions by the Arbitrator pursuant to this Article shall be based on the terms
of this Article and the applicable provisions of the law. The Arbitrator's
remedial authority shall include the power to issue an order requiring the
Company to recognize the Union where, in all the circumstances, such an order
would be appropriate.

      The Arbitrator's award shall be final and binding on the parties and all
employees covered by this Article. Each party expressly waives the right to seek
judicial review of said award; however, each party retains the right to seek
judicial enforcement of said award.

                                    ARTICLE 9

                      UNION ROLE IN NEGOTIATION OF BENEFITS

      Most wage and benefits programs provided lack any established
administrative practice by which bargaining unit

                                       20
<PAGE>

members are informed, at the time of payment, that such benefits were the result
of negotiation between the Company and Union. In recognition of the Union's role
in achieving the goals of the enterprise, the Company agrees to adopt such a
practice in the manner detailed in this Article.

      This understanding shall apply to payments of the following: retroactivity
payments made pursuant to wage increases; lump sum payments; severance pay;
Pension Plan payments; Sickness and Accident benefits (in this case, only to the
first check in any stream of payments); and wage increases (provided that, in
the case of wage increases, this understanding shall apply only to the first
payroll period following the effective date of such increase ).

      In the administration of the wage and benefit programs identified above,
the Company agrees that it shall give recognition to the role of the Union in
negotiating such items as follows:

      The form of such recognition will vary depending on whether the Company
makes a communication of its own with or in conjunction with such benefit
payment:

      (i)   If the Company does not make its own communication, the Union shall
            be given a reasonable opportunity to include its own communication
            with the payment being provided by the Company;

      (ii)  If the Company does make such a communication, then the Union shall
            be given a reasonable opportunity to insert, within the first three
            paragraphs of such Company communication, a paragraph briefly
            reporting the role played by the Union in bargaining such payment or
            benefit. If the communication is in other than written form, the
            parties shall devise a system consistent with the spirit and intent
            of this Article.

      In all events, the following legend shall be included on the check stub or
other similar document for all payments or benefits

                                       21
<PAGE>

made by the Company to its employees or retirees: "This payment is being made
pursuant to an agreement negotiated on your behalf by your Union - the United
Steelworkers of America, AFL-CIO-CLC." This obligation shall not extend to
payments issued by third party vendors such as Workers' Compensation carriers,
health plan administrators, etc.

                                   ARTICLE 10

                              PRINTING OF AGREEMENT

      Immediately upon ratification of the new Collective Bargaining Agreement,
the parties will create a mutually acceptable new Agreement.

      Said Agreement shall, at the expense of the Company, be printed (by a
union printer) in a form (size, paper stock, etc.) and distributed in a manner
designated by the Union and approved by the Company (such approval not to be
unreasonably withheld).

      Said distribution of the Collective Bargaining Agreement booklet shall
occur within three (3) months of the closing. The distribution of Benefits
booklets shall occur within six (6) months of the closing.

      The Company shall provide the Union with electronic versions of the
Agreement.

                                   ARTICLE 11

                           LEAVE OF ABSENCE POLICY FOR
                                 UNION EMPLOYEES

SECTION 1 - LOCAL UNION LEAVE

      Leaves of absence for the purpose of accepting positions with Local Unions
shall be available to a reasonable number of

                                       22
<PAGE>

Employees. Adequate notice of intent to apply for leave shall be afforded local
Plant Management to enable proper provision to be made to fill the job to be
vacated.

      Leaves of absence for the purpose of accepting an elective office with the
Local Union shall be for a period not in excess of three (3) years and may be
renewed for further periods of three (3) years each.

SECTION 2 - INTERNATIONAL UNION LEAVE

      The parties have reached the following agreement with respect to any
person who leaves their employment with the Company to become an employee or
elected official of the International Union:

      (a)   First becomes an Officer or Director of the International Union
            after July 1, 1998, or

      (b)   Becomes an employee of the International Union and whose
            probationary period expires on or after July 1, 1998; or

      (c)   Was an Officer or Director or employee of the International Union
            prior to August 1, 1996 but was not as of that date accruing service
            for Company pension purposes (for time spent as an Officer, Director
            or employee of the International Union) pursuant to a valid
            agreement providing for such accrual.

      An individual described in this Section shall be granted a leave of
absence from the Company concurrent with the period of his permanent employment
with the International Union.

      Once an individual described in this Section is made a permanent employee
of the International Union (by completing his probationary period) that person
shall, from that point forward and while he retains his leave of absence status
with the Company, not receive any service credit for Company pension purposes.

                                       23
<PAGE>

      Such person shall accumulate continuous service for purposes of recall to
employment and for all other purposes under the Labor Agreement, except
pensions, provided that he shall not be entitled to receive any contractual
benefits during the period of his leave of absence or receive retiree health
care benefits from the Company if he is eligible for coverage in the
International Union health care plan for retirees.

                                   ARTICLE 12

                       GRIEVANCE AND ARBITRATION PROCEDURE

SECTION 1 - DEFINITION AND PROCEDURE

      A grievance is a claim by any employee or group of employees, or by the
Union against the Company with respect to the meaning or application of the
terms of this Agreement. Grievances shall be processed in the following manner:

STEP 1

      The aggrieved employee and/or the committeeman shall discuss the matter
with his supervisor within fifteen (15) days after the date of the occurrence
giving rise to the grievance or within fifteen (15) days of the date he should
have reasonably known of the incident. Appropriate management people will be
available for the purpose of handling grievances at this Step. Any grievance
settled by the parties at this first Step shall not be a binding precedent on
either party and shall not be admissible as evidence at any arbitration. The
supervisor's oral answer in this Step 1 shall be final unless the grievance is
reduced to writing and presented in the second Step.

STEP 2

      If the grievance is not settled in Step 1, it may be reduced to writing on
forms furnished by the Company and submitted to the Operating Unit Manager or
his designee within ten (10) working days of the supervisor's oral response in
Step 1. The

                                       24
<PAGE>

grievance shall set forth the nature of the dispute, the provision of the
contract violated and relief sought. It shall be signed by the employee and/or
in the case of a grievance brought by the Union, it shall be signed by a member
of the Grievance Committee. A second step meeting shall be held between the
grievant, the grievance committee and an appropriate management representative
within five (5) working days following the day on which the written grievance is
presented to the Operating Unit Manager. Within fifteen (15) working days after
the meeting, the Operating Unit Manager or his designee shall give a written
answer.

STEP 3

      The Step 2 answer shall be final unless the grievance is submitted to Step
3 by the Grievance chairman (or his designee) to the Plant General Manager
within five (5) working days after receiving the Operating Unit Manager's Step 2
answer. A meeting will be scheduled between the International Staff
Representative and appropriate management representative at a mutually agreed
time. Within five (5) working days of said meeting, the Company will provide the
International Staff Representative with a written answer, a copy of this answer
will be given to the Grievance Committee Chairman of the Local Union.

STEP 4

      The Step 3 answer shall be final unless the International Staff
Representative, within thirty (30) days of the delivery of the Company's answer
in Step 3, appeals the grievance by a notice in writing delivered to the General
Manager of Human Resources. The parties may mutually agree to the selection of
an arbitrator. If the parties cannot agree on the selection of permanent
arbitrators, either party may request the Federal Mediation and Conciliation
Service to send a panel of seven (7) arbitrators for each case (all of which
must be members of the National Academy of Arbitrators). If the parties cannot
agree on a selection, a "strike" method of selection shall be implemented with
the last remaining name to be the arbitrator. The decision of the arbitrator
shall be final

                                       25
<PAGE>

and binding on both parties and any costs and expenses of the arbitrator shall
be borne equally by both parties. The arbitrator may consider and decide only
the particular issue presented to him by the grievance and his decision must be
based upon an interpretation of the express language of this Agreement. The
arbitrator shall not have the right to amend, take away, add to or change any of
the provisions of this Agreement.

SECTION 2 - UNION REPRESENTATION

      The number of grievance committeemen at each plant shall be mutually
agreed upon between Management and the Union. The grievance committeemen shall
be selected by the Union from the plant areas they are to represent; however,
there shall be no more than one (1) grievance committeeman selected from any one
(1) plant area. Plant areas, or grievance representation units, for the purposes
of this Section shall be determined by mutual agreement between Management and
the Union, and existing plant areas, or grievance representation units, shall
continue in effect unless Management and the Union otherwise agree.

      A grievance committeeman will be permitted to visit departments at
reasonable times for the purpose of transacting legitimate business as a
grievance committeeman, including the presentation, investigation, hearing or
settling of alleged complaints or grievances. If then at work, the grievance
committeeman will be granted time off, without pay, for such purpose after
obtaining permission (which shall not be unreasonably withheld) from his own
department head or his designated representative and reasonable notice to the
head of the department to be visited or his designated representative.

      If not at work, the grievance committeeman will be permitted to visit
departments for the purpose as described above after reasonable notice to the
head of the department to be visited or his designated representative.

      Departmental Representatives may be designated by the Union at any plant
to aid the Grievance Committee.

                                       26
<PAGE>

SECTION 3 - PLANT ACCESS

      The District Director and the International representative of the Union
who customarily handles grievances at a plant shall have access to the plant,
subject to established rules of the plant, at reasonable times to investigate
grievances with which they are concerned.

      The Local Union President/Unit Chairperson will be permitted access to the
plant at reasonable times when necessary to transact legitimate union business
pertaining to the administration of the applicable agreements between the
parties after notice to the Company.

SECTION 4 - MINI-ARBITRATION PROCEDURE

      Notwithstanding any other provision of this Agreement, the following
mini-arbitration procedure is designed to provide prompt and efficient handling
of routine grievances, including certain grievances concerning discipline of
less than four (4) days, supervisor's working and vacation scheduling.

      (A)   The mini-arbitration procedure shall be implemented in light of the
            circumstances existing in each plant, with due regard to the
            following:

            1.    In accordance with the understanding made by the staff
                  representative of the Union designated pursuant to this
                  Agreement and his Company counterpart, the local union and the
                  local management shall appeal the grievance to an arbitrator
                  under this mini-arbitration procedure by mutual agreement of
                  the parties.

            2.    The appeal shall be made within ten (10) calendar days of
                  receipt of the Step 2 minutes.

            3.    As soon as it is determined that a grievance is to be
                  processed under this procedure, the local parties shall notify
                  the Administrative Secretary of the area

                                       27
<PAGE>

            panel. The appeal shall include the date, time and place for the
            hearing. Thereafter, the rules of Procedure for Mini-Arbitration
            shall apply.

      (B)   The hearing shall be conducted in accordance with the following:

            1.    The hearing shall be informal.

            2.    No briefs shall be filed or transcripts made.

            3.    There shall be no formal evidence rules.

            4.    A previously designated local representative shall present
                  each party's case.

            5.    The arbitrator shall have the obligation of assuring that all
                  necessary facts and considerations are brought before him by
                  the representatives of the parties. In all respects, he shall
                  assure that the hearing is a fair one.

            6.    If the arbitrator or the parties conclude at the hearing that
                  the issues involved are of such complexity or significance as
                  to require further consideration by the parties, the case
                  shall be referred to Step 3 and it shall be processed as
                  though appealed on such date.

      (C)   The arbitrator shall issue a decision no later than forty-eight'
            (48) hours after conclusion of the hearing (excluding Saturdays,
            Sundays and holidays). The arbitrator's decision shall be based on
            the records developed by the parties before and at the hearing and
            shall include a brief written explanation of the basis for his
            conclusion. These decisions shall not be cited as a precedent in any
            discussion at any step of the complaint and grievance or arbitration
            procedure. The authority of the arbitrator shall be the same as that
            provided in Section 1 of this Article.

                                   ARTICLE 13

                                       28
<PAGE>

                            SUSPENSION AND DISCHARGE

      No permanent, full-time employee shall be pre-emptorily discharged. Where
the Company concludes that an employee's conduct may justify suspension or
discharge, he shall be first suspended. Such initial suspension shall be in
writing and for not more than five (5) calendar days. A copy of such notice
shall be given to the Grievance Committeeman. During this period of initial
suspension the employee may, if he believes that he has been unjustly dealt
with, request a hearing and a statement of the offense before the General
Manager of the plant with or without his Union Representative present as he may
choose. The Union Representative shall be notified of the hearing in any event.
At such hearing the facts concerning the case shall be made available to both
parties. After such hearing, or if no such hearing is requested, the Company may
conclude whether the suspension shall be converted into a discharge, or,
dependent upon the facts in the case, that such suspension should be extended or
revoked. The suspension may be revoked or modified with or without pay. The
Company's answer shall be made within five (5) calendar days from the date of
this Hearing. The employee, within five (5) calendar days after such
disposition, other than by mutual agreement, may allege a grievance which shall
be handled in accordance with the procedure of the Grievance and Arbitration
Procedure Section.

      If a grievance is filed, it shall be heard by the Grievance Committeeman
and General Manager of the plant within five (5) calendar days after the
grievance is filed. The Arbitration Hearing on discharge cases must be held
within ninety (90) days of the notice of discharge.

                                   ARTICLE 14

                                SAFETY AND HEALTH

SECTION 1

      The Company shall make reasonable provisions for the safety, and health of
its employees during the hours of their

                                       29
<PAGE>

employment. The Company and the employees shall comply with all rules of the
Company for safety and health, and with the regulations of State and Federal
government. The Company recognizes its obligation to prevent, correct and
eliminate unhealthy and unsafe working conditions and practices.

SECTION 2

      A joint safety and health committee shall be established at each plant,
consisting of up to two (2) Company representatives and up to two (2) designated
Union representatives. The joint committee shall be co-chaired by one
representative of the Company and one representative of the Union. The safety
committee will meet as necessary, but at least once a month, for the purpose of
conferring with the safety supervisor to provide information relating to safety
issues in the plant, to audit, monitor and recommend improvements to plant
safety and to provide another line of communication to management regarding
safety matters. Minutes of each meeting shall be kept and distributed to each
committee member. Time on safety committee business shall be considered as time
worked and shall be paid as such by the Company. The co-chairs or their
designees shall make monthly tours of the plant and report their findings along
with recommendations to the full safety and health committee for their actions.

SECTION 3

      The Company shall provide transportation from the plant for any
occupationally injured employee on the day of injury to and from the place of
medical treatment. The Company will not require injured employees on the day of
injury to transport themselves to and from the place of medical treatment.

SECTION 4

      Employees attending such safety meetings while not on their regular
scheduled shift will be paid at straight time their base hourly rate for the
time spent at these meetings.

                                       30
<PAGE>

SECTION 5

      If an employee sustains an injury arising out of, or in the course of,
their employment, and if the employee is unable to return to his work on the day
of injury, he shall be paid for all lost time on the day of injury.

SECTION 6

      The Company acknowledges its obligation to comply with all safety laws,
rules and regulations, federal and state. The Union and the employees agree to
assist the Company in the implementation of such laws, rules and regulations. A
Union and a management member of the health and safety committee may accompany
any state inspector or Federal OSHA compliance officer on their inspection of
the plant subject to the inspector's or officer's consent.

SECTION 7

      If an employee shall believe that there exists an unsafe condition, risk,
or danger of injury greater than the normal hazards inherent to the operation,
he shall notify his supervisor of such danger and of the facts relating thereof.
If the issue remains unresolved, the co-chairs of the safety and health
committee or their designees shall immediately investigate the alleged unsafe
condition and determine if it exists. If it is agreed that an unsafe condition
does exist, it shall be corrected immediately. If it is not agreed that an
unsafe condition exists, operations will continue but the issue will be brought
up to the full safety and health committee as soon as practicably possible. The
employee will be entitled to be relieved from the job for the remainder of the
turn, without pay, without discipline, pending any such resolution. If it is
determined that an unsafe condition existed, the employee will be made whole for
all lost wages.

                                   ARTICLE 15

                                 SUBSTANCE ABUSE

      The parties recognize the serious problems that can result

                                       31
<PAGE>

from substance abuse in the workplace. The purpose of this Article is to help
assure a safe work environment for all employees, maintain the orderly operation
of the business, and encourage any employee needing help because of substance
abuse to seek assistance. The standards for substance abuse are as follows:

SECTION 1

      While on Company property, or on Company business, it is a violation of
this Article to be under the influence of, to be in control of, to ingest, to
use, or to traffic in, any substance which affects the senses, or any illegal
controlled substance or be in the possession of any drug paraphernalia.
Substances affecting the senses include, but are not limited to, intoxicating
beverages, narcotics, drugs, or consumer products used improperly to produce a
euphoric or "high" effect. For purposes of this Article, being under the
influence of alcohol shall mean that the employee has an alcohol concentration
of 0.08 or greater.

SECTION 2

      In order to further insure the safety of the workplace, all employees will
be required to permit an inspection, when requested to do so by designated
Company personnel, of all employee work areas including desks, lockers, lunch
pails, tool boxes, and employee vehicles brought on Company property.

SECTION 3

      Testing for substance abuse will be required on applicants who receive a
conditional offer of employment, and any employee returning from an extended
leave of absence or layoff. Just cause testing for substance abuse may be
required for employees identified by their supervisor or any other management
representative as unfit or impaired to work, or employees involved in a
workplace accident or equipment damage incident.

SECTION 4

      Any employee who requests help for a substance abuse problem before
testing positive on a drug or alcohol test or any

                                       32
<PAGE>

employee who for the first time tests positive (under Section 3) will be
provided such assistance on an extremely confidential basis. A refusal to be
tested shall be subject to disciplinary action up to and including discharge.
After referral to a substance abuse assistance program, the employee must
complete the program satisfactorily prior to returning to work, and comply with
such after care treatment as is prescribed by the Company, in conjunction with
such program.

                                   ARTICLE 16

                           ALLOWANCE FOR FUNERAL LEAVE

      When death occurs to an Employee's legal spouse, mother, father,
mother-in-law, father-in-law, son, daughter, brother, sister, grandparents or
grandchildren (including stepfather, stepmother, stepchildren, stepbrother or
stepsister when they have lived with the Employee in an immediate family
relationship), brother-in-law, or sister-in-law, an Employee, upon request, will
be excused and paid for up to a maximum of three (3) scheduled shifts (or for
such fewer shifts as the Employee may be absent) which fall within a seven (7)
consecutive calendar day period beginning with the date of the death; and it is
established that the Employee attended the funeral. Payment shall be eight (8)
times his average straight-time hourly earnings (as computed for jury pay - see
Article 21). An Employee will not receive funeral pay when it duplicates pay
received for time not worked for any other reason. Time thus paid will be
counted as hours worked for purposes of determining overtime and premium pay
liability.

                                   ARTICLE 17

                                  HOURS OF WORK

SECTION 1 - NORMAL WORK WEEK

      Normally forty (40) hours of work per week shall constitute a week's work.

                                       33
<PAGE>

SECTION 2 - SCHEDULES

      Schedules showing Employees' workdays will be posted no later than the
last scheduled operating turn, but in any event, no later than Friday, 2:00 P.M.
of the week preceding the calendar week in which the schedule becomes effective.
Should the Company have to change the schedule, the Union Grievance Committeeman
will be notified.

SECTION 3 - SHOW UP TIME

      If an Employee has been regularly scheduled or notified to report for work
and is not thereafter given notice by the Company that work is not available,
and reports for the work, the Company will guarantee four (4) hours of work, or
four (4) hours of pay at the Employee's base hourly rate for his scheduled work.
It is the responsibility of each Employee to keep the Company advised of his
telephone number.

      The foregoing shall not apply in the event of strikes, work stoppages in
connection with labor disputes, failure of utilities beyond the control of
Management, or Acts of God interfering with the work being provided.

                                   ARTICLE 18

                            OVERTIME AND PREMIUM PAY

SECTION 1

      Overtime shall not be pyramided by using the same hours more than once for
the purpose of payment of overtime premium.

SECTION 2

      Hours worked in excess of eight (8) hours per day by an employee on a
scheduled eight (8) hour shift, ten (10) hours per day on a scheduled ten (10)
hour shift, or twelve (12) hours per day on a scheduled twelve (12) hour shift
will be paid at one and

                                       34
<PAGE>

one-half (1-1/2) the employee's straight time hourly rate plus any applicable
shift premium.

SECTION 3

      Hours worked in excess of forty (40) hours per week will be paid at one
and one-half (1-1/2) the employee's straight time rate plus any applicable shift
premium.

SECTION 4

      For all time worked by an employee on Sunday, a premium of one and
one-half (1-1/2) times the employee's base rate for that turn shall be paid. For
the purpose of this provision, Sunday shall be deemed to be the twenty-four (24)
hours beginning with the turn change starting closest to 12:00 A.M. Sunday.

                                   ARTICLE 19

                                    HOLIDAYS

      The Company will pay eight (8) hours pay at the individual Employee's base
hourly rate of pay, adjusted to include his average hourly incentive for the
previous quarter, for those Employees who have completed their probationary
period and who are on the regular active payroll at the time of the following
Holidays:

<TABLE>
<S>                   <C>
New Year's Day        Thanksgiving Day
Good Friday           Day after Thanksgiving
Memorial Day          Christmas Eve
Independence Day      Christmas Day
Labor Day
</TABLE>

      If one (1) of the above listed Holidays falls on Saturday or Sunday, the
Company, at its option, may celebrate the Holiday on the day on which it falls
or on the preceding Friday or subsequent Monday. In order to be paid for such
Holiday, Employees who are otherwise eligible, must have worked on the last
scheduled

                                       35
<PAGE>

workday before and the first scheduled workday following the Holiday unless
their failure to do so is a result of:

      (a)   absence for which the Employee is paid in accordance with the
            express provisions of this Agreement;

      (b)   a layoff or job-related injury within five (5) work days preceding
            the Holiday, or;

      (c)   sickness or other similar good cause.

      An eligible Employee who would otherwise be entitled to pay for an
unworked Holiday and who is on a vacation schedule in accordance with the
provisions of this Article when a Holiday occurs shall be paid for the unworked
Holiday in addition to this vacation pay.

      Employees scheduled to work on any of the above-named Holidays shall be
paid at one and one-half times their regular rate of pay including applicable
incentive earnings for all work performed on such Holiday in addition to their
Holiday pay. Any Employee scheduled to work on one of the foregoing Holidays who
fails to report for work shall not be eligible to receive Holiday pay unless
failure to do so is a result of (A), (B), or (C) above. There shall be no
pyramiding of overtime pay under this or any other Article of the Agreement.

                                   ARTICLE 20

                                    VACATION

SECTION 1

      An Employee who, on the anniversary date of his most recent employment by
the Company, has attained the years of continuous service with the Company as
indicated in the following table and who otherwise qualifies, shall receive
vacation with pay as follows:

<TABLE>
<CAPTION>
Years of Continuous Service     Amount of Paid Vacation
<S>                             <C>
One (1) Year                    One (1) Week
</TABLE>

                                       36
<PAGE>

<TABLE>
<S>                          <C>
Three (3) Years              Two (2) Weeks
Ten (10) Years               Three (3) Weeks
Seventeen (17) Years         Four (4) Weeks
Twenty-Five (25) Years       Five (5) Weeks
</TABLE>

SECTION 2 - ELIGIBILITY

      To be eligible for a vacation in any calendar year during the term of this
Agreement, the Employee must have one (1) year of continuous service credit with
the Company and have been actively employed at the Company for twenty-six (26)
regular work weeks of the preceding fifty-two (52) work weeks.

SECTION 3 - COMPUTATION OF VACATION PAY

      Pay for the vacation week shall amount to forty (40) times the Employee's
base hourly rate of pay, adjusted to include his average hourly incentive for
the previous quarter, for each full week of vacation or two percent (2%) of the
Employee's previous year's W-2 form earnings, whichever is highest. Vacation
will be taken in weekly (seven (7) consecutive calendar days) increments only.
Provided vacation is scheduled and approved at least thirty (30) days in
advance, vacation pay will be paid no later than the last workday prior to the
Employee's vacation.

SECTION 4 - SCHEDULING

      The date allotted to an Employee for a vacation shall be established by
the Company so as to cause a minimum of interference with the Company's
operations. The Company reserves the right to schedule either a one (1) or two
(2) week(s) vacation shutdown, or schedule staggered vacations.

      In the event the Company decides on a vacation shutdown, it shall notify
the Union in writing, at least sixty (60) days prior to such shutdown. Vacation
period requests by Employees will be indicated by written application of each
Employee during the month of December. (Applications will be provided by the
Company.) Either a vacation schedule or a vacation shutdown notice will be
posted after the end of December. To the extent

                                       37
<PAGE>

practicable, Employees shall be given preference for the desired vacation
periods in accordance with their seniority subject to the right of the Company
to determine the number of Employees from any Operating Unit or Wage Group, to
be on vacation at any one time and to schedule vacations so as to minimize
interference with the Company's operations.

SECTION 5 - ACCUMULATION OF VACATION

      Vacations may not be accumulated.

                                   ARTICLE 21

                                    JURY DUTY

      An Employee who is on active payroll of the Company, who is summoned for
jury service or subpoenaed as a witness shall be excused from work on the days
on which he is called for service, and shall receive for each such day on which
he was regularly scheduled to work the difference between eight (8) times his
base hourly rate of pay including applicable incentive earnings, not to exceed
forty (40) hours per week, and the payment received for such jury or witness
service. The Employee will present proof of service and of the amount of pay
received therefore.

                                   ARTICLE 22

                          EMPLOYEES IN MILITARY SERVICE

SECTION 1 - REEMPLOYMENT

      The Company shall accord to each Employee who applies for reemployment
after conclusion of military service with the United States such reemployment
rights as he shall be entitled to under then existing statutes.

SECTION 2 - TRAINING PROGRAMS

      Reasonable programs of training shall be employed in the

                                       38
<PAGE>

event Employees do not qualify to perform the work on the job which they might
have attained except for absence in the military service.

SECTION 3 - LEAVE OF ABSENCE

      Any Employee entitled to reinstatement under this Article shall be
granted, upon request, a leave of absence without pay not to exceed sixty (60)
days before he shall be required to return to work.

SECTION 4 - DISABLED VETERANS

      Any Employee entitled to reinstatement under this Article who returns with
service-connected disability incurred during the course of service shall be
assigned to any vacancy which shall be suitable to such impaired condition
during the continuance of such disability irrespective of seniority; provided,
however, that such impairment is of such a nature as to render the veteran's
returning to his own job or department onerous or impossible; and provided,
further, that the veteran meets the minimum physical requirements for the job
available or for the job as Management may be able to adjust it to meet the
veteran's impairment.

SECTION 5 - VACATION

      (a)   An Employee who at the time of leaving active employment to enter
            military service of the United State has qualified for a vacation in
            the year of such entrance and who has not received a vacation or
            vacation allowance shall be granted such allowance.

      (b)   Any Employee re-employed under the terms of this Article and who,
            under the terms of the Vacation Article 20 of this Agreement, except
            for his absence due to such military service, would have been
            entitled to receive a vacation or vacation allowance, shall receive
            such vacation or vacation allowance for the calendar year in which
            he is re-employed, without regard to any requirement other than an
            adequate record of continuous service.

                                       39
<PAGE>

SECTION 6 - MILITARY ENCAMPMENT ALLOWANCE

      An Employee with one (1) or more years of continuous service who is
required to attend an encampment of the Reserve of the Armed Forces or the
National Guard shall be paid, for a period not to exceed two (2) weeks in any
calendar year, the difference between the amount paid by the Government (not
including travel, subsistence and quarters allowance) and the amount calculated
by the Company in accordance with the following formula. Such pay shall be based
on the number of days such Employee would have worked had he not been attending
such encampment during such two (2) weeks (plus any holiday in such two (2)
weeks which he would not have worked) and the pay for each such day shall be
eight (8) times his average straight-time hourly rate of earnings (including
applicable incentive earnings but excluding shift differentials and Sunday and
overtime premiums) during the last pay period worked prior to the encampment. If
the period of such encampment exceeds two (2) weeks in any calendar year, the
period on which such pay shall be based shall be the first two weeks he would
have worked during such period.

                                   ARTICLE 23

                                 SAVINGS CLAUSE

      If any provision of this Agreement is in conflict with applicable law or
regulation, such provision shall become null and void and no longer be
effective; however, the remainder of this Agreement shall not be affected
thereby and will continue in full force and effect. In the event any provision
of this Agreement is rendered ineffective, due to a conflict with applicable
law, either party, upon the request of the other, shall meet and negotiate on
the limited subject of the provision rendered ineffective by applicable law.
However, the No Strike - No Lockout provisions of this Agreement shall continue
in full force and effect regardless of whether the parties are able to reach
Agreement.

                                       40
<PAGE>

                                   ARTICLE 24

                                    SENIORITY

SECTION 1 - FACTORS AFFECTING

      Plant continuous service shall be used for all purposes in which a measure
of continuous service is utilized.

      In the promotion of Employees to non-supervisory positions and for the
purpose of demotions, or layoffs in connection with the decreasing of the
working force and of the recalling to work of Employees so laid off, the
following factors shall be considered, and if factors (b and (c) are relatively
equal, length of continuous service shall govern:

      (a)   Length of continuous service;

      (b)   Ability to perform the work, and;

      (c)   Physical fitness.

SECTION 2 - CONTINUOUS SERVICE RECORD

      The continuous service record of any Employee shall be determined as
follows:

      (a)   Each Employee shall have such continuous service record as is shown
            on the employment records of the Company for such Employee
            commencing with the date of initial employment with the Company, and
            he shall accumulate additional continuous service in accordance with
            Subparagraph (C) below, until his continuous service record shall be
            broken in which event his continuous service record shall end and be
            canceled. For Employees who had previously been employed by the
            preceding owner of any plant, continuous service will include credit
            for all service shown on the Employee's continuous service record
            with such preceding owner as of the date of initial employment with
            the Company.

      (b)   Each new Employee and each person rehired after the

                                       41
<PAGE>

            cancellation of his continuous service record shall accumulate
            continuous service from the date of such hiring or rehiring, until
            his continuous service record is broken, in which event his
            continuous service record shall end and be canceled.

            (c)   The continuous service record of an Employee shall be
                  considered to be broken so that no prior period or periods of
                  employment shall be counted and his seniority shall cease in
                  the following instances:

                  1.    Employee voluntarily quits employment;

                  2.    Employee is discharged;

                  3.    Employee fails to return to work upon expiration of an
                        approved leave of absence where forty-eight (48) hour
                        notice to return has been given by the Company to the
                        Employee and to the Union;

                  4.    Employee is absent due to either layoff or disability or
                        both which continues for more than two (2) years
                        (however, (i) for three (3) years thereafter, upon
                        written medical certification to the Company of his
                        fitness to return to duty, the Employee will be eligible
                        for recall to any position for which he is qualified
                        which is not filled pursuant to Section 4, Paragraph (A)
                        based on his previously accumulated service; and (ii)
                        Employees unable to work due to an on-duty injury shall
                        accumulate credit for continuous service until the end
                        of the period for which statutory Workers' Compensation
                        is payable, plus thirty (30) days;

                  5.    Unauthorized absence from scheduled work for three (3)
                        consecutive working days;

                  6.    Employee fails to report for and begin work within seven
                        (7) calendar days after receipt by Employee of notice of
                        recall from layoff. Employees who are employed elsewhere
                        will, upon a request made to the Company within this

                                       42
<PAGE>

                  period and with reasonable proof of such employment, be given
                  an additional seven (7) calendar days to report for and begin
                  work, to allow the Employee to give reasonable notice to his
                  current employer.

SECTION 3 - PROBATIONARY EMPLOYEES

      New Employees and those hired after a break in continuous of service will
be regarded as probationary Employees for the first five hundred twenty (520)
hours of actual work and will receive no continuous service credit during such
period. Probationary Employees may initiate complaints under this Agreement but
may be laid off or discharged as exclusively determined by Management; provided
that this will not be used for purpose of discrimination because of race, color,
religious creed, national origin, sex, age or disability as defined under the
ADA of 1990, or because of membership in the Union. Probationary Employees
continued in the service of the Company subsequent to the first five hundred
twenty (520) hours of actual work shall receive full continuous service credit
from date of original hiring.

SECTION 4 - PROMOTION

(A) POSTING

      When the Company decides that a position needs to be filled, a notice to
that effect will be posted by the Company for seven (7) working days in the
Plant having the open position. Employees who apply will be considered in the
following category order:

      1.    the department where the vacancy exists;

      2.    the Plant where the vacancy exists;

      3.    all other Plants within the Company: provided; however, if there is
            no qualified Employee applicant, the Company may hire a new
            employee.

(B) SELECTION

      Employees who apply under Paragraph (A) above will be awarded the
vacancies in accordance with Section 1 of this

                                       43
<PAGE>

Article. All promotions are subject to a ninety (90) day qualification period in
the new job. Employees selected for a new job will be entitled to return to
their previous job in the event the Company determines their performance during
the qualification period is not satisfactory, subject to dispute resolution
procedure.

(C) PERIOD BETWEEN PROMOTIONS

      To promote efficient and economical operations, the parties agree that
continuity for a period of time in a position is important. Therefore, the
following limitations shall apply to Employees applying for new jobs or
vacancies:

      1.    Employees who apply for a position may strike their name from the
            posting at any time during the seven (7) working day period that the
            position is posted. If an Employee leaves his name in consideration
            and is selected for a position but refuses to take it, he cannot
            apply for another position for two (2) months after the date on
            which he was selected for the position.

      2.    If an Employee applies, is selected, and then works in the position,
            he cannot apply for another position for six (6) months after the
            date he begins working in that position, following any training
            period.

SECTION 5 - TEMPORARY VACANCIES

      Temporary vacancies will be filled at the Company's discretion. If two (2)
Employees are equally qualified to do the work, the Company will take seniority
into consideration.

SECTION 6 - TEMPORARY TRANSFERS

      In the event an Employee is temporarily transferred to a higher rated job,
the Employee shall receive the higher rate. If an Employee is temporarily
transferred to a lower rated job, the Employee shall continue to receive the
Employee's regular rate.

SECTION 7 - UNION OFFICERS

      When Management decides that the workforce in any seniority unit in any
plant is to be reduced, the member of the plant

                                       44
<PAGE>

Grievance Committee, if any, in that unit shall, if the reduction in force
continues to the point at which he would otherwise be laid off, be retained at
work and for such hours per week as may be scheduled in the work area in which
he is employed, provided he can perform the work of the job to which he must be
demoted. The intent of this provision is to retain in active employment the
plant grievance committeemen for the purpose of continuity in the administration
of the labor agreement in the interest of Employees so long as a workforce is at
work; provided that no grievance committeeman shall be retained in employment
unless work which he can perform is available to him in the designated work area
which he represents. The Local Union shall designate and advise the Company of
such area of representation.

      This provision shall apply also to Employees who hold any of the following
offices in the Local Union or Unions in which the Employees of the plant are
members: President, General Grievance Committeeman, Unit Chairperson, Vice
President, Recording Secretary, Financial Secretary, and Treasurer unless
legally prohibited.

SECTION 8 - CONTINUOUS SERVICE LISTS

      The Company shall make available to each Local Union lists showing the
relative continuous service of each Employee in each seniority unit. The Company
from time to time shall revise such lists, as necessary, but at least every six
(6) months, to keep them reasonably up to date. The seniority right of
individual Employees shall in no way be prejudiced by errors, inaccuracies, or
omission in such lists.

                                   ARTICLE 25

                               SEVERANCE ALLOWANCE

SECTION 1 - PERMANENT CLOSING

      When, in the sole judgment of the Company, it decides

                                       45
<PAGE>

to close permanently a plant or discontinue permanently a department of a plant
or substantial portion thereof and terminate the employment of individuals, an
Employee whose employment is terminated either directly or indirectly as a
result thereof because he was not entitled to other employment with the Company
under the provisions of the Article 24 - Seniority of this Agreement and Section
3 of this Article, shall be entitled to a severance allowance in accordance and
subject to the provisions hereinafter set forth in this Article.

SECTION 2 - ELIGIBILITY

An Employee, to be eligible for a severance allowance, must have accumulated
three (3) or more years of continuous Company service as computed in accordance
with the Article 24 - Seniority of this Agreement.

SECTION 3 - OTHER JOB

      In lieu of severance allowance, the Company may offer an eligible Employee
a job in the same job class for which he is qualified, in the same general
locality. The Employee shall have the option of either accepting such new
employment or requesting his severance allowance. If an Employee accepts such
other employment, his continuous service record shall be as provided in the
Article 24 - Seniority of this Agreement, except that for the purpose of
severance pay under this Article and for the purposes of the Article 20 -
Vacation of this Agreement, his previous continuous service record shall be
maintained and not be deemed to have been broken by the transfer.

SECTION 4 - TRANSFER

      As an exception to Section 3 of this Article, an Employee otherwise
eligible for severance pay who is entitled under the Article 24 - Seniority of
this Agreement to a job in the same job class in another part of the same plant
shall not be entitled to severance pay whether he accepts or rejects the
transfer. If such transfer results directly in the permanent displacement of
some

                                       46
<PAGE>

other Employee, the latter shall be eligible for severance pay provided he
otherwise qualifies under the terms of this Article.

SECTION 5 - BENEFITS

      An eligible individual shall receive severance allowance based upon the
following weeks for the corresponding continuous Company service:

<TABLE>
<CAPTION>
Continuous Company Service        Weeks of Severance Allowance
<S>                               <C>
3 years but less than 5 years                   4
5 years but less than 7 years                   6
7 years but less than 10 years                  7
10 years or more                                8
</TABLE>

      A week's severance allowance shall be determined in accordance with the
provisions for calculation of vacation allowance as set forth in the Article 20
- Vacation of this Agreement.

SECTION 6 - DUPLICATION

      Severance allowance shall not be duplicated for the same severance,
whether the other obligation arises by reason of contract, law, or otherwise. If
an individual is or shall become entitled to any discharge, liquidation,
severance or dismissal allowance or payment of similar kind by reason of any law
of the United States of America or any of the states, districts or territories
thereof subject to its jurisdiction, the total amount of such payments shall be
deducted from the severance allowance to which the individual may be entitled
under this Article, or any payment made by the Company under this Article may be
offset against such payments. Statutory unemployment payments shall be excluded
from the non-duplication provision of this section.

SECTION 7 - ELECTION CONCERNING LAYOFF STATUS

      Notwithstanding any other provision of this Agreement, an Employee who
could otherwise have been terminated in accordance with the applicable
provisions of this Agreement and under the circumstances specified in Section 1
of this Article

                                       47
<PAGE>

may, at such time, elect to be placed on layoff status for thirty (30) days or
to continue on layoff status for an additional thirty (30) days if he had
already been on layoff status. At the end of such thirty (30) day period, he may
elect to continue on layoff status or be terminated and receive severance
allowance if he is eligible for any such allowance under the provisions of this
Article; provided, however, if he elects to continue on layoff status after the
thirty (30) day period specified above and is unable to secure employment with
the Company within an additional sixty (60) day period, at the conclusion of
such additional sixty (60) day period he may elect to be terminated and receive
severance allowance if he is eligible for such allowance.

      If an Employee elects to continue on layoff status, he shall continue to
be in such status notwithstanding the expiration or termination of this
Agreement.

      In the event of a strike, nothing in this Agreement shall be interpreted
as extending the benefits beyond the term otherwise provided for in the
Agreement.

SECTION 8 - PAYMENT OF ALLOWANCE

Payment shall be made in a lump sum at the time of termination. Acceptance of
severance allowance shall terminate employment and continuous service for all
purposes under this Agreement.

                                   ARTICLE 26

                                      WAGES

SECTION 1 - STANDARD HOURLY WAGE SCALES

      The standard hourly wage scales of rates for the respective job classes
and the effective date thereof shall be those set forth in Appendix A of this
Agreement.

SECTION 2 - SHIFT DIFFERENTIAL

   (a)   For hours worked on the afternoon shift, there shall be

                                       48
<PAGE>

            paid a premium rate of 20 cents per hour. For hours worked on the
            night shift, there shall be paid a premium rate of 30 cents per
            hour.

      (b)   Shifts shall be identified as follows:

            i.    Day shift includes all shifts scheduled to commence between
                  6:00 A.M. and 8:00 A.M., inclusive;

            ii.   Afternoon shift includes all shifts scheduled to commence
                  between 2:00 P.M. and 4:00 P.M., inclusive;

            iii.  Night shift includes all shifts scheduled to commence between
                  10:00 P.M. and 12:00 Midnight, inclusive.

      (c)   Any hours worked by an Employee on a shift which commences at a time
            not provided for in Subsection B of this Article 26 shall be paid as
            follows:

            i.    For hours worked which would fall in the prevailing day shift
                  of the department, no shift differential shall be paid;

            ii.   For hours worked which would fall in the prevailing afternoon
                  shift of the department, the afternoon shift differential
                  shall be paid;

            iii.  For hours worked which would fall in the prevailing night
                  shift of the department, the night shift differential shall be
                  paid.

      (d)   Shift differential shall be included in the calculation of overtime
            compensation. Shift differential shall not be included in the
            calculation of incentive earnings but shall be computed by
            multiplying the hours worked by the applicable differential and the
            amount so determined added to earnings.

      (e)   Shift differential shall be paid for allowed time or

                                       49
<PAGE>

      reporting time provided for in the Article 17 - Hours of Work of this
      Agreement when the hours for which payment is made would have called for a
      shift differential if worked.

SECTION 3 - CORRECTION OF ERRORS

      Notwithstanding any provisions of this Article, errors in the application
of rates of pay shall be corrected.

                                   ARTICLE 27

                                 INCENTIVE PLAN

      The incentive plan will be a broad-based performance incentive plan based
upon total quality tons shipped. The plan will be developed and installed during
the first ninety (90) days following the effective date of this Agreement, and
presented to the Union. Such plan shall include administrative guideline
provisions as those of the 1969 Industry-wide Incentive Arbitration Award. Any
dispute over the structure or design of such plan will be presented to immediate
interest arbitration. The plan will be paid retroactively to the effective date
of installation.

                                   ARTICLE 28

                                 PROFIT SHARING

1.    INTRODUCTION

      The parties agree to establish a profit sharing plan (the "Plan").

2.    LEVEL OF PAYOUT

      The Company agrees that it will create a profit sharing pool (the "Pool")
consisting of fifteen percent (15%) of the Company's Quarterly Pre-Tax Profits,
as defined below, and to distribute the Pool within 45 days of the end of each
fiscal quarter, in the manner described below.

                                       50
<PAGE>

3.    CALCULATION OF PROFITS

      For the purposes of this Plan, Quarterly Profits shall be defined as the
excess of (A) Pre-Tax Income over (B) the Threshold, where:

      A.    Pre-Tax Income is Earnings Before Taxes ("EBT")* of the Company
            calculated on a consolidated basis in accordance with United States
            Generally Accepted Accounting Policies ("GAAP") with the following
            exclusions:

            1.    Income or loss related to any charges or credits (whether or
                  not identified as special credits or charges) for unusual,
                  infrequently occurring or extraordinary items, including
                  credits or charges for plant closures, business dispositions
                  and asset sales that are not normal operating charges or
                  credits of the Company under internal Company accounting
                  policies consistently applied (but excluding any charge
                  representing a cash expense incurred by the Company in
                  connection with the Company's planned asset re-configuration
                  in the 12 months following the closing of the transaction);

            2.    Any cost or expense associated with the Plan or any other
                  profit sharing or similar plan for any of the Company's
                  employees; and

            3.    Any management fees (in excess of expense re-imbursement)
                  actually paid to the Perry Strategic Capital entities as
                  monitoring fees.

            4.    Any cash interest payments in excess of $2.5 million
                  attributable to incremental debt placed on the Company in
                  connection with a cash shareholder realization. and

      B.    The Threshold is $12.5 million

4.    INDIVIDUAL ENTITLEMENT

      The Pool will be divided as follows:

                                       51
<PAGE>

      A.    25% of the Pool will be divided among all USWA represented employees
            covered by the Collective Bargaining Agreement ("Participants") on
            the basis of the Hours (as defined below) of each such Participant
            in the calendar weeks within each fiscal quarter.

            1.    Hours shall include the following, but shall not exceed 40
                  hours for any week for any Participant. Hours worked
                  (including straight time and overtime hours), vacation and
                  holiday hours at the rate of 8 hours for each holiday or day
                  of vacation, hours on USWA business, and hours, at the rate of
                  8 hours a day, while receiving Workers' Compensation benefits
                  (based on the number of days absent from work while receiving
                  such benefits).

            2.    Any payments made to a Participant pursuant to this Profit
                  Sharing Plan shall not be included in the Participant's
                  earnings for purposes of determining any other pay, benefit,
                  or allowance of the Participant.

      B.    75% of the Pool will be contributed to the Benefit Trust.

5.    ADMINISTRATION OF THE PLAN

      A.    The Plan will be administered by the Company in accordance with its
            terms and the costs of administration shall be the responsibility of
            the Company. Upon determination of each Quarterly Profit
            calculation, such calculation shall be forwarded to the Chair of the
            Union Negotiating Committee accompanied by a Certificate signed by
            the Chief Financial Officer of the Company, providing a detailed
            description of any adjustments made to Earnings Before Taxes and
            stating that EBT was determined in accordance

                                       52
<PAGE>

            with GAAP and that Quarterly Profit was calculated in accordance
            with this Article.

      B.    The Union, through its Negotiating Committee Chair or his/her
            designee, shall have the right to review and audit any information,
            calculation or other matters concerning the Plan. The Company shall
            provide said designee with any information reasonably requested in
            connection with such review. The reasonable actual costs incurred by
            the Union in connection with any such audit shall be paid from the
            Pool and deducted from the amount otherwise available under the Pool
            for distribution to employees.

      C.    In the event that a discrepancy exists between the Company's Profit
            Sharing calculation and the results obtained by the Union designee's
            review, the Company Chair and the Union Chair of the respective
            Negotiating Committees shall attempt to reach an agreement regarding
            the discrepancy.

            In the event that they cannot resolve the dispute, either party may
            submit such dispute to final and binding arbitration under Article
            12 - Grievance Procedure in the Collective Bargaining Agreement.

6.    PROMPT PAYMENT

      Notwithstanding the above, the Company shall comply with the requirements
of paragraph's 2-4 above based on its interpretation of the appropriate payout.
If the process described in paragraph 5 above results in a requirement for an
additional payout, said payout shall be made no more than 14 days after the date
of agreed resolution or issuance of the Arbitrator's award.

7.    SUMMARY DESCRIPTION

      The parties will jointly develop a description of the

                                       53
<PAGE>

calculations used to derive profit sharing payments under the Plan for each
quarter and distribute same to each Participant.

                                   ARTICLE 29

                        INSTITUTE FOR CAREER DEVELOPMENT

COMMENCING ON AUGUST 16, 2004:

      In recognition of the worldwide competitive challenges that confront the
Company and the entire work force, the United Steelworkers of America and
Republic Engineered Products, INC. have established a major new venture in
training and educating workers-The USWA/Republic Engineered Products, Inc.
Institute for Career Development (the "Institute")-which, in conjunction with
similar programs negotiated by the Union with various other employers, will be
administered under the rules and procedures of the Institute for Career
Development ("ICD"). The purpose of the Institute is to provide resources and
support services for the education, training and personal development of the
employees of the Company including upgrading the basic skills and educational
levels of active employees in order to enhance their ability to absorb craft and
non-craft training, their ability to progress in the workplace, their ability to
perform their assigned work tasks to the full extent of their potential, and
their knowledge and understanding of the workplace, and of new and innovative
work systems. Further purposes include education, training and counseling which
will enable employees to have more stable and rewarding personal and family
lives, alternative career opportunities in the event that their steelworker
careers are subject to dislocation, and long, secure and meaningful retirements.

      The Institute will be financed by a contribution from Republic Engineered
Products, Inc. in the amount of $0.10 per hour worked by USWA-represented
employees covered by this Agreement. The Institute will be administered jointly
by the Company and the Union in accordance with the procedures, rules,
regulations and policies as agreed to by the parties. The parties

                                       54
<PAGE>

will, of course, also seek and use funds from federal, state and local
governmental agencies.

      Consistent with this understanding, it would be appropriate for the
Institute to allocate funds to certain programs that are currently being offered
by Republic Engineered Products, Inc. and that are consistent with the goals and
limitations of this Agreement.

      Apprenticeship, craft training and training for position-rated jobs are
separately provided for in the collective bargaining agreement. The Company may,
however, contract with the Institute to provide services and resources in
support of such training.

      In establishing this program, the USWA and the Company are implementing a
shared vision that workers must play a significant role in the design and
development of their jobs, their training and education, and their working
environment. In a world economy many changes are unforeseen and unpredictable.
Corporate success, worker security and employee satisfaction all require that
the work force and individual workers be capable of reacting to change,
challenge and opportunity. This, in turn, requires ongoing training, education
and growth. Experience has shown that worker growth and development are stunted
when programs are mandated from above but flourish in an atmosphere of voluntary
participation in self-designed and self-directed, training and education. These
shared beliefs shall be the guiding principles of the Institute.

      The Company agrees to continue to participate fully as a member of ICD in
accordance with policies, rules and regulations established by the ICD. The
Company's financial contributions to the Institute will continue to be
separately tracked. ICD will continue to be under the joint supervision of the
Union and participating employers with a Governing Board consisting of an equal
number of Union and employer appointees.

                                       55
<PAGE>

REPORTING, AUDITING, ACCOUNTABILITY AND OVERSIGHT

      The following minimum requirements shall govern reporting, auditing,
accountability and oversight of the funds provided for above:

1.    REPORTING

      For each calendar quarter, and within 30 days of the close of such
calendar quarter, the Company shall account to the ICD, the International
President of the Union and the Union Chair of the Negotiating Committee for all
changes in the financial condition of the Institute. Such reporting shall
include at least the following information for each such quarter:

      -     The Company's contribution of $0.10 per hour for steelworker
            represented employees per quarter with cumulative balance.

      -     A detailed breakdown of actual expenditures related to approved
            program activities during said quarter.

      -     Reports shall be broken down by plant and include all expenditures
            for that site.

      -     Reports shall be made on form(s) developed by the Institute.

      The Union Co-Chairs of each of the Local Joint Committees shall receive a
report with the same information for their plant or local union, as the case may
be.

2.    AUDITING

      The Company or the Union may, for good reason, request an audit of Company
reports described above and of the underlying Institute activities made in
accordance with the following: The Company and the Union shall jointly select an
independent outside auditor. The reasonable fees and expenses of the auditor
shall be paid from ICD funds. The scope of audits may be company-wide,
plant-specific, or on any other reasonable basis.

                                       56
<PAGE>

      3.    APPROVAL AND OVERSIGHT

      Each year, the Local Joint Committees shall submit a proposed
training/education plan to the Union and Company Negotiating Committee Chairs or
their designees. Upon their approval, said plans shall be submitted to the
Institute. The Institute must approve the annual plan before any expenditure in
connection with any activities may be charged against the funds provided for in
this Agreement. An expenditure shall not be charged against such funds until
such expenditure is actually made.

DISPUTE RESOLUTION MECHANISM

      Any dispute regarding the administration of the Institute at the Company
or plant level shall be subject to expedited resolution by the Company and the
Union Co-Chairs of the Negotiating Committee and the Executive Director of ICD
who shall apply the policies, rules and regulations of the Governing Board in
ruling on any such dispute. Rulings of the Executive Director on any such
dispute may be appealed to the Governing Board, but the Executive Director's
ruling shall become and remain effective unless stayed or reversed by action of
the Governing Board. Within 60 days of the effective date of this Labor
Agreement, the Union and the Company will develop such administrative procedures
as are necessary for the operation of this expedited Dispute Resolution
Mechanism, it being understood that the goal is to resolve disputes within no
more than two weeks after the Dispute Resolution Mechanism is invoked.

      Notwithstanding anything to the contrary in this provision, the Governing
Board shall not under any circumstances have any power or authority to require
the Company to bear costs or provide funds in connection with the ICD which
exceed the Company's contribution requirements under this Article.

                                       57
<PAGE>

                                   ARTICLE 30

                               STAND UP FOR STEEL

1.    The Company agrees to join the Stand Up For Steel Coalition ("SUFS") as of
      August 16, 2004, and subject to the Annual Program Cost.

2.    The parties agree that SUFS will serve as a focal point of their joint
      activities in combating unfair trade in steel and related products and
      other subjects as agreed to by the parties. The parties will continue to
      pursue other activities separately as appropriate and the funding and
      structure contemplated herein shall not be applicable to litigation to
      enforce the nation's trade laws.

3.    The Company will contribute $0.075 per ton shipped (other than tubular
      rounds) commencing on August 16, 2004, up to maximum of $100,000 per
      contract year.

4.    SUFS will have a Governing Board consisting of an equal number of Union
      and Company representatives. The Board will be co-chaired by the USWA
      International President and a CEO selected by the participating companies.

5.    The parties will jointly recruit all American steel (carbon and stainless)
      and iron ore companies and others to join the organization under the terms
      described herein. The Company agrees to work with the other participating
      companies so that the company representatives on the Governing Board will
      represent the interest of all participating companies.

6.    All activities conducted under the banner of Stand Up For Steel shall be
      approved by the Governing Board.

                                       58
<PAGE>

                                   ARTICLE 31

                               BOARD OF DIRECTORS

         The Company agrees to issue to the Union preferred stock on the
Effective Date as described below.

                            SERIES A PREFERRED STOCK

ISSUER            The Company.

SECURITY          One share of preferred stock.

HOLDER            United Steelworkers of America, AFL-CIO. CLC ("USWA"), or a
                  successor labor organization to the USWA.

ELECTION OF       The Holder will maintain the right to elect, remove and
DIRECTORS         replace one (1) member of the Issuer Board of Directors from
                  the Effective Date through the Termination Date.

AMENDMENT         The terms of the Series A Preferred Share cannot be amended
                  without the prior written consent of the Holder.

ADDITIONAL        The Company will not issue any additional shares of the Series
INSURANCE         A Preferred Stock.

DIVIDENDS         None.

TRANSFERABILITY   The Series A Preferred Share will automatically convert into a
                  single share of Issuer common stock if transferred to any
                  person or entity other than the Holder.

TERMINATION       The date the Holder is no longer the collective bargaining
                  representative for any of the Company's employees.

                                       59
<PAGE>

                                   ARTICLE 32

                                  COORDINATORS

      In this Agreement, the parties have committed themselves to a number of
joint undertakings crucial to the success of the Company, its employees, and the
Union. In recognition of the crucial role being served by the Union in
accomplishing the joint goals of the parties, the parties agree as follows, to
be effective August 16, 2004:

      (a)   The Union Chair of the Negotiating Committee shall select and direct
            two (2) Coordinators who shall be responsible throughout the Company
            for implementation and ongoing monitoring of joint undertakings of
            mutual interest to the Company and the Union as well as
            administration of the labor and benefits agreements. It is expected
            that Coordinators will visit each of the Company's locations on a
            regular basis in the performance of his/her duties.

      (b)   Each Coordinator shall be an employee of the Company. The
            Coordinator shall be compensated by the Company in the amount of the
            appropriate wages, benefits and other fringe benefits s/he would
            have earned during their normal course of employment with the
            Company, but for this assignment. In addition, each Coordinator
            shall be reimbursed for reasonable out-of-pocket expenses including,
            but not limited to, travel (coach airfare, hotel and per diem)
            incurred in connection with this assignment. In order to receive
            such lost time payments and expense reimbursements supporting
            vouchers must be provided by the Coordinator.

      (c)   The Company's annual costs under this Article will be capped at
            $150,000 per year.

                                       60
<PAGE>

                                   ARTICLE 33

                                    BENEFITS

SECTION 1 - HEALTH CARE PROGRAM

      The Health Care Program covers active employees as set forth below.

HEALTH CARE (FOR ACTIVE EMPLOYEES):

      Options reduced to a single PPO program (except in unusual situations
where a participant may have no network providers available). The Plan would
include the attached design, utilizing revised coverage limits for mental health
and substance abuse benefits, an in-network deductible and an 90% coverage level
for in-network services. Benefits would be administered through Medical Mutual
with network arrangements for the facilities and retirees outside of Ohio.
AultCare would continue as a PPO option for Stark County facilities with the
same PPO plan design.

PRESCRIPTION DRUG (FOR ACTIVE EMPLOYEES):

      Coverage to continue with Caremark, Inc. utilizing a participant co-pay
structure as follows:

<TABLE>
<CAPTION>
                Co-Pay Percent   Minimum      Maximum
                --------------   -------      -------
<S>             <C>              <C>          <C>
RETAIL

    Generic           15%          $ 5         $10
  Formulary           20%          $10         $20
      Brand           25%          $15         $30

MAIL

    Generic           10%          $10         $20
  Formulary           15%          $15         $30
      Brand           20%          $20         $40
</TABLE>

                                       61
<PAGE>

      Retail prescriptions will be limited to 30-day supplies and mail service
prescriptions will be limited to 90-day supplies.

Maintenance medications will be limited to one prescription and one 30-day
refill at the retail level; all other maintenance prescriptions must be filled
through the mail service. When a generic is available, but the pharmacy
dispenses a brand name drug for any reason, the participant will pay the
difference in cost between the brand name drug and the generic drug plus the
appropriate non-formulary or formulary brand co-payment. However, under certain
medical circumstances, when determined by the patient's attending physician to
be medically necessary and approved by the pharmacy benefit manager, a
prescription for a brand name drug may be filled without penalty even though a
generic equivalent is available.

GENERAL EXCLUSIONS:

      -     Devices and other supplies (e.g. ostomy supplies, respiratory
            therapy, etc.)

      -     Alcohol wipes

      -     Hair loss prescriptions (e.g. Propecia)

      -     Renova

      -     Contraceptive devices, injectable contraceptives, Contraceptive kits

      -     Fertility drugs

      -     Erectile dysfunction medications, except Viagra (available through
            mail service only, limit 6 doses/ month)

      -     Nutritional/dietary supplements

      -     Over-the-counter medications

      -     Biotech drugs for hemophilia, cystic fibrosis & genetic emphysema

                                       62
<PAGE>

      -     Toxoids

      -     Vaccines

LIMITATIONS:

      -     Retin-A - Covered if the patient is under age 25,

            covered with an appropriate diagnosis if over age 25

      -     Smoking cessation - Pre-authorization required. Available through
            mail service only. One treatment per lifetime - maximum 90 days
            supply

      -     Oral contraceptives - For treatment of medical conditions only.
            Covered with an appropriate diagnosis

      -     Diet medications - Available through mail service only. Covered with
            an appropriate diagnosis

EMPLOYEE OPT-OUT:

      Employees will be given the option to opt-out of the medical and
prescription programs during the annual open enrollment process provided the
employee has other health coverage available. Employees electing to opt-out of
the health care plan will be paid 50% of the individual cost of such coverage,
as established by the applicable annual COBRA calculation (less administrative
charge of 2%, if applicable) per month for the period they remain out of the
plan. Employees will be able to re enroll in the plan during any open enrollment
or if other coverage is lost due to a "qualifying change in family status" as
defined in the flexible benefit rules as follows:

      -     Marriage

      -     Divorce

      -     Death of spouse

      -     Birth or adoption of child

                                       63
<PAGE>

      -     Termination of employment of spouse

      -     Change of employment status of you or your spouse

      -     Significant change in your or your spouse's health care coverage

      -     Other changes the IRS may allow

                                       64
<PAGE>

VISION BENEFITS:

      Return the plan to a 24-month benefit, continuing to utilize the network
option available through Cole Managed Vision as well as an out-of network
benefit level as outlined below.

<TABLE>
<CAPTION>
                                                        COLE VISION          OUT-OF-NETWORK
    COVERED SERVICE                FREQUENCY              NETWORK           MAXIMUM BENEFIT
    ---------------                ---------              -------           ---------------
<S>                             <C>                    <C>                  <C>
Eye Examination for                12 months           Covered in full       $37.50
eyeglasses (Additional          (calendar year)
charges related to a
contact lens exam are
the responsibility of
the patient.)

Lenses                           Calendar year if      Covered in full
-  Single Vision                   prescription                              $22.50 per lens
-  Bifocal                      changes; otherwise                           $30.00 per lens
-  Trifocal                      every 24 months                             $37.50 per lens
-  Lenticular                                                                $45.00 per lens

Lens Treatment Options                                    Discount             Not covered
                                                          schedule

Frames                           Calendar year if        Covered in          $50.00
                                   prescription          full (up to
                                changes; otherwise       $100 retail
                                  every 24 months          value)

Contact Lenses  -                Calendar year if      Covered in full       $37.50 per lens
Therapeutic                        prescription
In lieu of lenses and           changes; otherwise
frames                            every 24 months

Contact Lenses  -                Calendar year if      Covered in full       $37.50 per lens
Elective In lieu of                prescription
lenses and frames               changes; otherwise
                                  every 24 months

Additional pairs of                                       Discount             Not covered
Eyeglasses/Contact                                        schedule
Lenses
</TABLE>

DENTAL BENEFITS:

      Options reduced to a single fee-for-service plan with a plan design as
outlined on the attached sheet.

EAP SERVICES:

      The previous company proposal is withdrawn and the Company will accept
union proposal #5 from 10/18/2001 for active employees with the understanding
that any treatment at the

                                       65
<PAGE>

Compass House in Lorain will be counted toward the maximum limits for substance
abuse coverage.

HEALTH CARE COVERAGE FOR LAID OFF EMPLOYEES:

      For the first two years following the Effective Date, Republic will
provide a total pool of up to $550,000 for employees or former employees who are
subject to an involuntary layoff to be allocated in a manner determined by the
parties.

                                       66
<PAGE>

REPUBLIC                                                                 MEDICAL
      ENGINEERED PRODUCTS                                                 MUTUAL
                                                                         OF OHIO

                      PREFERRED PROVIDER ORGANIZATION (PPO)

<TABLE>
<S>                                        <C>
Primary Care Physician (PCP) Required                         No
      Provider Network                                    SuperMed Plus
    Dependent age limit                    19 dependent / 25 student to End of Month
      Lifetime Maximum                                     $1,000,000
</TABLE>

<TABLE>
<CAPTION>
                                                        BENEFIT
                                        ----------------------------------------
                                             NETWORK              NON-NETWORK
                                             -------              -----------
<S>                                     <C>                    <C>
Deductible                              $250 individual /      $500 individual /
                                           $500 family           $1,000 family
Annual out-of-pocket maximum              $2,000/$4,000             $10,000
Coinsurance                                    10%                    30%

           INPATIENT CARE
Semi-private room and board                    90%                    70%
Surgery                                        90%                    70%
Anesthesia                                     90%                    70%
Consultations                                  90%                    70%
Maternity care-employee and                    90%                    70%
Spouse only
Lab and X-ray services                         90%                    70%
Therapy services                               90%                    70%
Drugs and Medications                          90%                    70%

          OUTPATIENT CARE
Outpatient surgery                             90%                    70%
Second Surgical Opinion                       100%                   100%
Diagnostic services, lab and x-ray             90%                    70%
MRI (require prior authorization)              90%                    70%
Cardiac Rehabilitation                         90%                    70%
Physical, occupational & speech        90%, 10 visits each
therapy(1)                                   per year                 70%
Office visits                         $20 copayment then 90%          70%
Urgent Care                           $20 copayment then 90%          70%
Routine Physical exam                   $20 copayment then 100%   not covered
Routine Testing (5 standard)(2)           100%, once per
                                          benefit period          not covered
Well child exam(3)                    $20 copayment then 90%      not covered
Immunizations                                  90%                not covered
Routine Mammogram                         100%, once per
                                          benefit period          not covered
Routine Pap smear                         100%, once per
                                          benefit period          not covered
Routine PSA                                   100%                not covered
Prenatal and postnatal maternity care          90%                    70%
Sterilization                                  90%                    70%
Allergy test and treatment                     90%                    70%
Durable medical equipment                      90%                    70%

Hearing Services  -                    90%; exam, fitting, and aids not to exceed
Once every 5 years                                $850 per ear maximum

Emergency Room Services                 100% copayment then 90% (not subject to
                                                      deductible).

Ambulance                                  If admitted, copayment is waived.
                                            90% (not subject to deductible)
         MENTAL HEALTH AND
          SUBSTANCE ABUSE

Inpatient(4)                                   90%                Not covered
Outpatient benefit(5)                     $20 copayment           Not covered
Skilled nursing facilities              90%, 100 days per

                                          benefit period              70%
Home healthcare                        90%, 100 visits per
                                          benefit period              70%
Hospice                                        90%                    70%
Organ transplants                              90%                    70%
</TABLE>

                                       67
<PAGE>

ALL LIMITS ARE COMBINED NETWORK AND NON-NETWORK

      1.    After 10th visit, additional visits based upon medical necessity.

      2.    EKG, chest-x-ray, complete blood count, SMA 12, urinalysis.

      3.    Limited to $500 per benefit period.

ALL LIMITS ARE COMBINED NETWORK AND NON-NETWORK

      1.    After 10th visit, additional visits based upon medical necessity.

      2.    EKG, chest-x-ray, complete blood count, SMA 12, urinalysis.

      3.    Limited to $500 per benefit period.

      4.    Mental Health -- 60 days per calendar year maximum; Substance Abuse/
            Detoxification - 5 days per admission, 3 admissions per lifetime.

      5.    Rehabilitation - 56 days per lifetime.

      6.    Outpatient Substance Abuse - 90 visits lifetime.

                                       68
<PAGE>

DeltaPremier USA
Summary of Dental Plan Benefits
Benefit Year - January 1 through December 31

                                DELTAPREMIER USA
                         SUMMARY OF DENTAL PLAN BENEFITS
                  BENEFIT YEAR - January 1 through December 31

<TABLE>
<CAPTION>
                                                                  Delta
COVERED SERVICES -                                             Dental Pays   You Pay
------------------                                             -----------   -------
<S>                                                            <C>           <C>
                     CLASS I BENEFITS

DIAGNOSTIC AND PREVENTIVE SERVICES - Used to diagnose
and/or prevent dental abnormalities or disease (includes
exams, cleanings and fluoride treatments)                          100%         0%

EMERGENCY PALLIATIVE TREATMENT - Used to temporarily
relieve pain                                                       100%         0%

RADIOGRAPHS - X-rays                                               100%         0%

                    CLASS II BENEFITS

ORAL SURGERY SERVICES - Extractions and dental surgery,
including preoperative and postoperative care                       50%        50%

ENDODONTIC SERVICES - Used to treat teeth with diseased
or damaged nerves (for example, root canals)                        50%        50%

PERIODONTIC SERVICES - Used to treat diseases of the gums
and supporting structures of the teeth                              50%        50%

RELINES AND REPAIRS - Relines and repairs to bridges and
dentures                                                            50%        50%

MINOR RESTORATIVE SERVICES - Used to repair teeth damaged
by disease or injury (for example, amalgam [silver] and
resin [white] fillings)                                             50%        50%

MAJOR RESTORATIVE SERVICES - Used when teeth can't be
restored with another filling material (for example,crowns)         50%        50%

                    CLASS III BENEFITS

PROSTHODONTIC SERVICES - Used to replace missing natural
teeth (for example, bridges and dentures)                           50%        50%

                    CLASS IV BENEFITS

ORTHODONTIC SERVICES (TO AGE 19) - None                             50%        50%
</TABLE>

      Benefits are payable for routine prophylaxes twice in any 12-month period.
One additional periodontal prophylaxis is payable in any 12-month period.
Benefits for oral examinations, bitewing x-rays and fluoride treatment are
payable twice in any period of 12 consecutive months. Benefits for full mouth
x-rays (which include bitewing x-rays) are payable once in any three-year
period. There is no age limit for fluoride treatment. Sealants are only payable
for the occlusal surface of permanent teeth to

                                       69
<PAGE>

age 19. The surface must be free from decay and restorations. Sealants are
payable once per tooth per three-year period.

      Benefit payments for Delta Dental providers will be based upon the lesser
of the submitted amount or usual, customary and reasonable (UCR) charges;
benefit payments for non-Delta Dental providers will be based upon the lesser of
the submitted amount or Delta Dental's non-participating dentist fee schedule.
Maximum Payment - $1,400 per person total per calendar year on Class I, Class II
and Class III Benefits. $2,000 per covered person for Orthodontic services
lifetime.

ANNUAL DEDUCTIBLE - $50 single; $150 family. Does not apply to Class I benefits

                                       70
<PAGE>

                                   ARTICLE 33
                              BENEFITS (CONTINUED)

SECTION 2 - PENSION AND RETIREE MEDICAL

      The Company agrees to contribute a maximum of $3.00 per actual hour worked
by covered employees (which will increase to $3.50 per hour beginning on August
16, 2004 and, $3.80 per hour beginning on August 16, 2005 to provide pension
benefits and/or retiree medical coverage for future eligible employees, and/or
medical coverage for retirees of the predecessor employer (provided, however,
that no contributions may be utilized for the purpose of providing medical
coverage for the retirees of the predecessor employer if such contribution
creates, or results in, any liability whatsoever on the part of the Company for
any obligation of the predecessor employer, or any independent obligation to the
retirees of the predecessor employer.) Contributions for future eligible
employee pension benefits will be made to the Steelworkers Multi-Employer
Pension Trust and contributions for retiree medical benefits will be made to a
Benefit Trust, as provided in Section 3 below. Said contributions constitute the
Company's sole obligation with respect to providing these benefits.

SECTION 3 - BENEFIT TRUST

TRUST

The parties will establish a Benefit Trust which will be dedicated to the
payment of certain medical, welfare and life insurance benefits as set forth
herein.

BENEFICIARIES

Retirees and dependents from USWA represented bargaining units of the Company
and retirees and dependents from USWA represented bargaining units of RTI and
its predecessor companies who were entitled to receive retiree insurance
benefits under the MLA.

                                       71
<PAGE>

COMPANY CONTRIBUTION

      The Company shall make the following contributions to the Benefit Trust:

      (i)   on the Effective Date: $3 million;

      (ii)  that portion of the $3.00 per hour referred to in the SLA ($3.50 per
            hour in year three of the contract, $3.80 in year four and $3.80 in
            year five) which the Union directs the Company to contribute to the
            Benefit Trust (which direction shall be provided by the Union within
            nine months of the Effective Date);

      (iii) within 45 days of the end of calendar quarter, a Profit-Sharing
            Contribution consisting of 75% of the Pool in addition to the
            obligations outlined in (i) - (ii) above;

      (iv)  upon funds becoming available from a loan or lending facility
            secured in connection with a Government Loan, the Company shall make
            a one-time contribution to the Benefit Trust equal to two percent
            (2%) of the initial $100 million in net proceeds of the Government
            Loan plus ten percent (10%) of the net incremental liquidity created
            by net proceeds of the Government Loan in excess of $100 million.
            If, for example, the Company obtains net proceeds of a $150 million
            from a Government Loan, the Company will make a one-time
            contribution of $7 million to the Benefit Trust assuming that the
            Company pays down it's revolver by an incremental $50 million in
            connection with the Government Loan ($2 million in connection with
            the initial $100 million of proceeds and $5 million in connection
            with remaining $50 million of net incremental liquidity).

REVIEW OF CONTRIBUTIONS

      Upon determination of the amount of any Company Contribution, such
calculation shall be forwarded to the Union

                                       72
<PAGE>

for review. The Union shall have the right to review and audit any information,
calculation or other matter concerning the determination of the Company
Contribution. The Company shall provide the Union with any information
reasonably requested in connection with such review.

BOARD OF TRUSTEES

      A Board of Trustees consisting of six members will govern the Benefit
Trust. Any disputes between or among the Trustees shall be subject to the
dispute resolution procedures established by the Trust Agreement.

      The Trustees shall receive no compensation other than reimbursement for
reasonable and appropriate expenses.

BENEFITS

      The Board of Trustees shall determine the health care, welfare and life
insurance benefits to be provided by the assets of the Trust based upon Company
Contributions, participant contributions and investment income.

FUNCTIONS OF THE TRUSTEES

      The Board of Trustees shall be the plan sponsor and administrator and
Named Fiduciary of the Benefit Trust. The Trustees shall have all power and
authority provided under law for Named Fiduciaries and as specifically described
in the Trust Agreement, including, but not limited to, the management of the
assets of the Benefit Trust, the retention of such independent professionals as
the Trustees may deem necessary and appropriate and establishment and amendment
of the terms of the plan to provide health care and life insurance benefits.

EXPENSES

      The costs of establishing and administering the Benefit Trust shall be
paid out of the assets of the Benefit Trust.

                                       73
<PAGE>

TRUST AGREEMENT

      The parties shall adopt a mutually acceptable Trust Agreement establishing
the Benefit Trust.

SECTION 4 - LIFE INSURANCE

      Life insurance is provided to all hourly employees on the first day of the
month following completions of 520 hours worked.

      Life insurance benefits will be provided to active hourly employees based
upon the following schedule:

<TABLE>
<CAPTION>
                           SCHEDULE OF LIFE INSURANCE
                           --------------------------
INSURANCE CLASS WITH LESS THAN 15
   YEARS OF CONTINUOUS SERVICE                                LIFE INSURANCE
---------------------------------                             --------------
<S>                                                           <C>
              1*                                                  $15,000
              2                                                   $15,500
              3                                                   $16,000
              4                                                   $16,500
              5                                                   $17,000
15 OR MORE YEARS OF CONTINUOUS  SERVICE                            50,000
</TABLE>

* Labor grade is same as insurance class (adjusted annually).

SECTION 5 - SICKNESS & ACCIDENT BENEFITS

      Employees are provided with S&A benefits upon completion of 520 hours of
work. The amount of weekly Sickness and Accident Benefits are shown in the
following schedule.

<TABLE>
<CAPTION>
          SCHEDULE OF SICKNESS AND ACCIDENT BENEFITS
          ------------------------------------------
INSURANCE CLASS         SICKNESS AND ACCIDENT WEEKLY BENEFITS
---------------         -------------------------------------
<S>                     <C>
     1*                              $346.00
     2                               $359.00
     3                               $372.00
     4                               $385.00
     5                               $398.00
</TABLE>

*Same as labor grade (adjusted annually)

                                       74
<PAGE>

      For employees with less than 26 weeks of Continuous Service, the maximum
benefit period is the number of weeks of Continuous Service as of the date of
illness/injury.

      For all other employees with less than two years of Continuous Service,
the maximum benefit period is 26 weeks.

      For employees with more than two but less than 20 years of Continuous
Service, the maximum benefit period is 52 weeks.

      For employees with more than 20 years of Continuous Service, the maximum
benefit period is 104 weeks.

                                       75
<PAGE>

                                   ARTICLE 34

                              MISCELLANEOUS MATTERS

A.    LETTERS OF UNDERSTANDING

      1.    PREFERENTIAL HIRING

April 12, 2002

Mr. David R. McCall
Director
U.S.W.A., District 1
777 Dearborn Park Lane, Suite J
Columbus, OH 43085-5716

      SUBJECT: PREFERENTIAL HIRING FOR [NEWCO]

Dear Dave,

      This is to confirm our understanding regarding the process that will be
utilized to provide preferential hiring opportunities at [NEWCO] ("the Company")
for former Republic Technologies International, INC. ("Predecessor Company")
employees. The governing principle of the parties in establishing this procedure
is to maintain the seniority rights and preferences of the RTI USWA represented
employees. The anticipated result is that the positions required by the Company
will initially be filled by hiring those employees who were displaced from those
positions with the Predecessor Company.

      (A)   Employees of the Predecessor Company will, for this purpose, be
            considered as terminated by the Predecessor Company as of the
            effective date of this MSLA, or if applicable, on the last day
            worked in conjunction with any transition operations of the
            Predecessor Company. Employees for the Company will be hired
            directly into positions as though the Company were recalling such
            employees from lay off

                                       76
<PAGE>
      under the terms of the Master Agreement and/or Plant Specific Agreement
      between the Predecessor Company and the United Steelworkers of America
      ("the USWA" or "the Union").

      In the event no Predecessor Company employees are available on the
seniority rosters from any Predecessor Company location, hiring will be
permitted for other Predecessor Company locations in accordance with the
procedures of the Plant Transfer provisions (IJOP) of the Predecessor Company
MLA, without reference to the sixty (60) day layoff requirement.

All offers of hiring will be in writing and will be sent by certified letter to
the last address of record for the employee.

Sincerely,

__________________________
NEWCO

Confirmed:

__________________________
David R. McCall
Director, USWA, District 1

                                       77
<PAGE>

2.    LORAIN EMPLOYEE MOVEMENT

April 12, 2002

Mr. David R. McCall
Director
U.S.W.A., District 1
777 Dearborn Park Lane, Suite J
Columbus, OH 43085-5716

            SUBJECT:     EMPLOYEE MOVEMENT BETWEEN
                         NEWCO AND USS-LORAIN TUBULAR

Dear Dave,

      The parties agree to continue to facilitate movement of employees between
the two companies as follows:

      1.    The declared shutdown of the RTI-Lorain Plant gives the RTI
            employees preference for hiring by the USS-Lorain Tubular plant, in
            the manner spelled out in the Hiring Preference provisions of the
            RTI Master Agreement and the RTI Plant Specific Agreement relative
            to transfers between RTI-Lorain and Lorain Tubular Company; as well
            as hiring preference by Newco as agreed to between the parties to
            this MSLA.

      2.    Employees who transfer to Lorain Tubular (inter-company bid) will
            have a thirty (30) day return right. Once the thirty (30) period is
            completed, no return right or regression rights will be permitted.
            An employee exercising a "30 day voluntary return right" will not be
            permitted to apply for another inter-company transfer for a period
            of one (1) year following such event. The two step bidding procedure
            will be retained.

                                       78
<PAGE>

      3.    In order to maintain continuity of operations, and permit training
            of a replacement, it is agreed that an employee, who is the
            successful bidder on an inter-company bid, may be retained in his
            then-current position for a period of up to ninety (90) days before
            being released for transfer.

      4.    Employees moving between companies under this process shall maintain
            continuous service for all purposes, as if the companies had not
            been separated, except as inconsistent with relevant federal laws
            and regulations.

Sincerely,

_____________________________
NEWCO

Confirmed:

_____________________________
David R. McCall
Director, USWA, District 1

                                       79
<PAGE>

3.    OVERTIME EQUALIZATION

April 12, 2002

Mr. David R. McCall
Director
U.S.W.A., District 1
777 Dearborn Park Lane, Suite J
Columbus, OH 43085-5716

      SUBJECT: OVERTIME EQUALIZATION

Dear Dave:

      This is to confirm our understanding regarding the process that will be
utilized for overtime distribution. It is agreed that within 30 days of the
Effective Date of the MSLA, the parties will develop procedures for the
equalization of overtime opportunities. While it is desired that such procedures
be consistent throughout the Company, it is recognized that some variations may
exist from location to location. It is agreed, however, that all such procedures
will include a requirement that participants must be qualified to perform the
work included in the overtime opportunity offered and shall provide similar
standards and criteria as are currently established under the USWA/RTI Basic
Labor Agreements.

Sincerely,

____________________________
NEWCO

Confirmed:

____________________________
David R. McCall
Director, USWA, District 1

                                       80
<PAGE>

B.    EMERGENCY STEEL LOAN GUARANTEE

      The Company will vigorously pursue financing under the Emergency Steel
Loan Guarantee Program (a "Government Loan") on acceptable terms.

C.    INVESTMENT COMMITMENT

      The Company will not make any investment outside the steel industry
without the approval of the Union (such approval to not be unreasonably
withheld).

                                       81
<PAGE>

                                   ARTICLE 35

                                TERMINATION DATE

SECTION 1

      Except as otherwise provided below, this Agreement shall terminate at the
expiration of sixty (60) days after either party shall be given written notice
of termination to the other party but in any event shall not terminate earlier
than August 15, 2007 at 11:59 P.M.

SECTION 2

      If either party gives such notice, the parties shall meet within thirty
(30) days thereafter to negotiate. If the parties shall not agree with respect
to such matters by the end of sixty (60) days after the giving of such notice,
either party may; thereafter resort to strike or lockout as the case may be in
support of its position.

SECTION 3

      Any notice to be given under this Agreement shall be given by registered
mail; to be completed by and at the time of mailing; and, if by the Company, be
addressed to:

                         United Steelworkers of America
                                5 Gateway Center
                         Pittsburgh, Pennsylvania 15222

and if by the Union, addressed to:

                       Republic Engineered Products, Inc.
                              3770 Embassy Parkway
                                 Akron, OH 44333

Either party may, by like written notice, change the address to which registered
mail notice to it shall be given.

                                       82
<PAGE>

UNITED STEEL WORKERS                                   REPUBLIC ENGINEERED
AFL-CIO-CLC                                            PRODUCTS, INC.

LEO W. GERARD                                          JOSEPH F. LAPINSKY
President                                              President & CEO

JAMES D. ENGLISH                                       JOHN A. WILLOUGHBY
Secretary-Treasurer                                    Vice President Human
                                                       Resources

ANDREW V. PALM                                         RONALD E. MESSNER
Vice President, Administration                         Director, Employee
                                                          Relations

LEON LYNCH
Vice President, Human Affairs

DAVID R. MCCALL
Chairman of the Negotiating Committee Director,
   District 1

MICHAEL MILLSAP
Secretary of the Negotiating Committee
   Sub-District Director, District 7

DENNIS BROMMER
Sub-District Director, District 1

PATRICK GALLAGHER
Sub-District Director, District 4

LEN SAURO
Staff Representative, District 4

                                       83
<PAGE>

                                   APPENDIX A

                                  WAGE SCALES -
                 CANTON, MASSILLON MACHINE/FAB SHOP & LACKAWANNA

<TABLE>
<CAPTION>
LABOR                     EFFECTIVE
GRADE           JC          DATE         8/16/04       8/16/05      8/16/06
-----           --        ---------      -------       -------      -------
<S>             <C>       <C>            <C>           <C>          <C>
                 1
                 2
  1              3          $12.84        $13.34        $13.84       $14.34
                 4

                 5
                 6
  2              7          $13.73        $14.23        $14.73       $15.23
                 8
                 9
                10

                11
                12
                13
  3             14          $14.77        $15.27        $15.77       $16.27
                15
                16
                17

                18
                19
                20
  4             21          $15.97        $16.47        $16.97       $17.47
                22
                23
                24
                25

                26
                27
                28
                29
  5             30          $17.31        $17.81        $18.31       $18.81
                31
                32
                33
                34
</TABLE>

            NOTE: Rates in effect at Cast Roll(TM) Canton will remain

                                       84
<PAGE>

                                   APPENDIX A

                                  WAGE SCALES -
                   COLD FINISHED FACILITIES (MASSILLON & GARY)

<TABLE>
<CAPTION>
LABOR                     EFFECTIVE
GRADE           JC          DATE         8/16/04       8/16/05      8/16/06
-----           --        ---------      -------       -------      -------
<S>             <C>       <C>            <C>           <C>          <C>
                 1
                 2
  1              3          $12.73        $13.23        $13.73       $14.23
                 4
                 5

                 6
                 7
                 8
  2              9          $13.93        $14.43        $14.93       $15.43
                10
                11
                12
                13

                14
                15
                16
  3             17          $15.12        $15.62        $16.12       $16.62
                18
                19
                20
                21

                22
                23
                24
                25
  4             26          $16.46        $16.96        $17.46       $17.96
                27
                28
                29
                30

                31
  5             32          $17.06        $17.56        $18.06       $18.56
                33
                34
</TABLE>

                                       85
<PAGE>

                                   APPENDIX A

                                  WAGE SCALES -
                                     LORAIN

<TABLE>
<CAPTION>
LABOR                     EFFECTIVE
GRADE           JC          DATE         8/16/04       8/16/05      8/16/06
-----           --        ---------      -------       -------      -------
<S>             <C>       <C>            <C>           <C>          <C>
                 1
                 2
                 3
  1              4          $13.98        $14.48        $14.98       $15.48
                 5
                 6
                 7
                 8

                 9
  2             10          $14.70        $15.20        $15.70       $16.20
                11
                12

                13
  3             14          $15.42        $15.92        $16.42       $16.92
                15
                16

                17
                18
                19
  4             20          $16.67        $17.17        $17.67       $18.17
                21
                22
                23

                24
                25
  5             26          $17.56        $18.06        $18.56       $19.06
                27
                28
</TABLE>

                                       86

<PAGE>

                                   APPENDIX A

                                  WAGE SCALES -
                          OFFICE AND TECHNICAL (LORAIN)

<TABLE>
<CAPTION>
LABOR
GRADE         JC          EFFECTIVE DATE        8/16/04    8/16/05     8/16/06
-----         --          --------------        -------    -------     -------
<S>          <C>       <C>          <C>        <C>         <C>        <C>
               1
               2         Hourly     $  17.10   $  17.60   $  18.10    $  18.60
               3       Equivalent
1              4
               5        BiWeekly    $1368.00   $1408.00   $1448.00    $1488.00
               6         Salary
               7
               8

                         Hourly     $  18.10   $  18.60   $  19.10    $  19.60
                       Equivalent
             9 and
2            above
                        BiWeekly    $1448.00   $1488.00   $1528.00    $1568.00
                         Salary
</TABLE>

                                  WAGE SCALES -
                           OFFICE AND TECHNICAL (GARY)

<TABLE>
<CAPTION>
   EFFECTIVE DATE                8/16/04        8/16/05       8/16/06
   --------------                -------        -------       -------
<S>          <C>                 <C>            <C>           <C>
Hourly       $14.137             $14.637        $15.137       $15.637
 Rate
</TABLE>

                                       87
<PAGE>

                                      2004

<TABLE>
<S>                                       <C>                                      <C>
               JANUARY                                 FEBRUARY                                   MARCH
S     M     T     W     T    F    S       S    M     T    W    T     F    S        S     M    T     W     T    F     S
                         1    2    3       1    2     3    4    5     6    7              1    2     3     4    5     6
 4     5     6     7     8    9   10       8    9    10   11   12    13   14        7     8    9    10    11   12    13
11    12    13    14    15   16   17      15   16    17   18   19    20   21       14    15   16    17    18   19    20
18    19    20    21    22   23   24      22   23    24   25   26    27   28       21    22   23    24    25   26    27
25    26    27    28    29   30   31      29                                       28    29   30    31
</TABLE>

<TABLE>
<S>                                       <C>                                      <C>
                APRIL                                    MAY                                       JUNE
S     M     T     W     T    F    S       S    M     T    W    T     F    S        S     M    T     W     T    F     S
                         1    2    3                                       1                   1     2     3    4     5
 4     5     6     7     8    9   10       2    3     4    5    6     7    8        6     7    8     9    10   11    12
11    12    13    14    15   16   17       9   10    11   12   13    14   15       13    14   15    16    17   18    19
18    19    20    21    22   23   24      16   17    18   19   20    21   22       20    21   22    23    24   25    26
25    26    27    28    29   30   31      23   24    25   26   27    28   29       27    28   29    30
                                          30   31
</TABLE>

<TABLE>
<S>                                       <C>                                      <C>
                 JULY                                   AUGUST                                  SEPTEMBER
S     M     T     W     T    F    S       S    M     T    W    T     F    S        S     M    T     W     T    F     S
                         1    2    3       1    2     3    4    5     6    7                         1     2    3     4
 4     5     6     7     8    9   10       8    9    10   11   12    13   14        5     6    7     8     9   10    11
11    12    13    14    15   16   17      15   16    17   18   19    20   21       12    13   14    15    16   17    18
18    19    20    21    22   23   24      22   23    24   25   26    27   28       19    20   21    22    23   24    25
25    26    27    28    29   30   31      29   30    31                            26    27   28    29    30
</TABLE>

<TABLE>
<S>                                       <C>                                      <C>
               OCTOBER                                   NOVEMBER                                DECEMBER
S     M     T     W     T    F    S       S    M     T    W    T     F    S        S     M    T     W     T    F     S
                              1    2            1     2    3    4     5    6                         1     2    3     4
 3     4     5     6     7    8    9       7    8     9   10   11    12   13        5     6    7     8     9   10    11
10    11    12    13    14   15   16      14   15    16   17   18    19   20       12    13   14    15    16   17    18
17    18    19    20    21   22   23      21   22    23   24   25    26   27       19    20   21    22    23   24    25
24    25    26    27    28   29   30      28   29    30                            26    27   28    29    30   31
31
</TABLE>

<PAGE>

                                      2005

<TABLE>
<S>                                       <C>                                      <C>
               JANUARY                                FEBRUARY                                    MARCH
S     M     T     W     T    F    S       S    M     T    W    T     F    S        S     M    T     W     T    F     S
                                   1                  1    2    3     4    5                   1     2     3    4     5
 2     3     4     5     6    7    8       6    7     8    9   10    11   12        6     7    8     9    10   11    12
 9    10    11    12    13   14   15      13   14    15   16   17    18   19       13    14   15    16    17   18    19
16    17    18    19    20   21   22      20   21    22   23   24    25   26       20    21   22    23    24   25    26
23    24    25    26    27   28   29      27   28                                  27    28   29    30    31
30    31
</TABLE>

<TABLE>
<S>                                       <C>                                      <C>
                APRIL                                    MAY                                       JUNE
S     M     T     W     T    F    S       S    M     T    W    T     F    S        S     M    T     W     T    F     S
                              1    2       1    2     3    4    5     6    7                         1     2    3     4
 3     4     5     6     7    8    9       8    9    10   11   12    13   14        5     6    7     8     9   10    11
10    11    12    13    14   15   16      15   16    17   18   19    20   21       12    13   14    15    16   17    18
17    18    19    20    21   22   23      22   23    24   25   26    27   28       19    20   21    22    23   24    25
24    25    26    27    28   29   30      29   30    31                            26    27   28    29    30
</TABLE>

<TABLE>
<S>                                       <C>                                      <C>
                 JULY                                   AUGUST                                  SEPTEMBER
S     M     T     W     T    F    S       S    M     T    W    T     F    S        S     M    T     W     T    F     S
                              1    2            1     2    3    4     5    6                               1    2     3
 3     4     5     6     7    8    9       7    8     9   10   11    12   13        4     5    6     7     8    9    10
10    11    12    13    14   15   16      14   15    16   17   18    19   20       11    12   13    14    15   16    17
17    18    19    20    21   22   23      21   22    23   24   25    26   27       18    19   20    21    22   23    24
24    25    26    27    28   29   30      28   29    30   31                       25    26   27    28    29   30
31
</TABLE>

<TABLE>
<S>                                       <C>                                      <C>
               OCTOBER                                NOVEMBER                                  DECEMBER
S     M     T     W     T    F    S       S    M     T    W    T     F    S        S     M    T     W     T    F     S
                                   1                  1    2    3     4    5                               1    2     3
 2     3     4     5     6    7    8       6    7     8    9   10    11   12        4     5    6     7     8    9    10
 9    10    11    12    13   14   15      13   14    15   16   17    18   19       11    12   13    14    15   16    17
16    17    18    19    20   21   22      20   21    22   23   24    25   26       18    19   20    21    22   23    24
23    24    25    26    27   28   29      27   28    29   30                       25    26   27    28    29   30    31
30    31
</TABLE>

                                       89
<PAGE>

                                      2006

<TABLE>
<S>                                       <C>                                      <C>
               JANUARY                                FEBRUARY                                    MARCH
S     M     T     W     T    F    S       S    M     T    W    T     F    S        S     M    T     W     T    F     S
 1     2     3     4     5    6    7                       1    2     3    4                         1     2    3     4
 8     9    10    11    12   13   14       5    6     7    8    9    10   11        5     6    7     8     9   10    11
15    16    17    18    19   20   21      12   13    14   15   16    17   18       12    13   14    15    16   17    18
22    23    24    25    26   27   28      19   20    21   22   23    24   25       19    20   21    22    23   24    25
29    30    31                            26   27    28                            26    27   28    29    30   31
</TABLE>

<TABLE>
<S>                                       <C>                                      <C>
                APRIL                                    MAY                                       JUNE
S     M     T     W     T    F    S       S    M     T    W    T     F    S        S     M    T     W     T    F     S
                              1    2       1    2     3    4    5     6    7        1     2    3     4     5    6     7
 3     4     5     6     7    8    9       8    9    10   11   12    13   14        8     9   10    11    12   13    14
10    11    12    13    14   15   16      15   16    17   18   19    20   21       15    16   17    18    19   20    21
17    18    19    20    21   22   23      22   23    24   25   26    27   28       22    23   24    25    26   27    28
24    25    26    27    28   29   30      29   30    31                            29    30
</TABLE>

<TABLE>
<S>                                       <C>                                      <C>
                 JULY                                   AUGUST                                  SEPTEMBER
S     M     T     W     T    F    S       S    M     T    W    T     F    S        S     M    T     W     T    F     S
             1     2     3    4    5                                  1    2              1    2     3     4   5      6
 6     7     8     9    10   11   12       3    4     5    6    7     8    9        7     8    9    10    11   12    13
13    14    15    16    17   18   19      10   11    12   13   14    15   16       14    15   16    17    18   19    20
20    21    22    23    24   25   26      17   18    19   20   21    22   23       21    22   23    24    25   26    27
27    28    29    30    31                24   25    26   27   28    29   30       28    29   30
                                          31
</TABLE>

<TABLE>
<S>                                       <C>                                      <C>
              OCTOBER                                 NOVEMBER                                  DECEMBER
S     M     T     W     T    F    S       S    M     T    W    T     F    S        S     M    T     W     T    F     S
                   1     2    3    4                                       1              1    2     3     4    5     6
 5     6     7     8     9   10   11       2    3     4    5    6     7    8        7     8    9    10    11   12    13
12    13    14    15    16   17   18       9   10    11   12   13    14   15       14    15   16    17    18   19    20
19    20    21    22    23   24   25      16   17    18   19   20    21   22       21    22   23    24    25   26    27
26    27    28    29    30   31           23   24    25   26   27    28   29       28    29   30    31
                                          30
</TABLE>

                                       90
<PAGE>

                                      2007

<TABLE>
<S>                                       <C>                                      <C>
              JANUARY                                  FEBRUARY                                   MARCH
S     M     T     W     T    F    S       S    M     T    W    T     F    S        S     M    T     W     T    F     S
                         1    2    3                  1    2    3     4    5                   1     2     3    4     5
 4     5     6     7     8    9   10       6    7     8    9   10    11   12        6     7    8     9    10   11    12
11    12    13    14    15   16   17      13   14    15   16   17    18   19       13    14   15    16    17   18    19
18    19    20    21    22   23   24      20   21    22   23   24    25   26       20    21   22    23    24   25    26
25    26    27    28    29   30   31      27   28                                  27    28   29    30    31
</TABLE>

<TABLE>
<S>                                       <C>                                      <C>
                 APRIL                                   MAY                                      JUNE
S     M     T     W     T    F    S       S    M     T    W    T     F    S        S     M    T     W     T    F     S
                              1    2       1    2     3    4    5     6    7                         1     2    3     4
 3     4     5     6     7    8    9       8    9    10   11   12    13   14        5     6    7     8     9   10    11
10    11    12    13    14   15   16      15   16    17   18   19    20   21       12    13   14    15    16   17    18
17    18    19    20    21   22   23      22   23    24   25   26    27   28       19    20   21    22    23   24    25
24    25    26    27    28   29   30      29   30    31                            26    27   28    29    30
</TABLE>

<TABLE>
<S>                                       <C>                                      <C>
                JULY                                    AUGUST                                  SEPTEMBER
S     M     T     W     T    F    S       S    M     T    W    T     F    S        S     M    T     W     T    F     S
                              1    2            1     2    3    4     5    6                               1    2     3
 3     4     5     6     7    8    9       7    8     9   10   11    12   13        4     5    6     7     8    9    10
10    11    12    13    14   15   16      14   15    16   17   18    19   20       11    12   13    14    15   16    17
17    18    19    20    21   22   23      21   22    23   24   25    26   27       18    19   20    21    22   23    24
24    25    26    27    28   29   30      28   29    30   31                       25    26   27    28    29   30
31
</TABLE>

<TABLE>
<S>                                       <C>                                      <C>
              OCTOBER                                  NOVEMBER                                 DECEMBER
S     M     T     W     T    F    S       S    M     T    W    T     F    S        S     M    T     W     T    F     S
                                   1                  1    2    3     4    5                               1    2     3
 2     3     4     5     6    7    8       6    7     8    9   10    11   12        4     5    6     7     8    9    10
 9    10    11    12    13   14   15      13   14    15   16   17    18   19       11    12   13    14    15   16    17
16    17    18    19    20   21   22      20   21    22   23   24    25   26       18    19   20    21    22   23    24
23    24    25    26    27   28   29      27   28    29   30                       25    26   27    28    29   30    31
30    31
</TABLE>

                                     91
<PAGE>

                                      2008

<TABLE>
<S>                                       <C>                                      <C>
               JANUARY                                 FEBRUARY                                  MARCH
S      M     T    W     T    F    S        S    M     T    W    T    F    S        S    M    T     W    T     F    S
       1     2    3     4    5    6                   1    2    3    4    5                        1    2     3    4
 7     8     9   10    11   12   13        6    7     8    9   10   11   12        5    6    7     8    9    10   11
14    15    16   17    18   19   20       13   14    15   16   17   18   19       12   13   14    15   16    17   18
21    22    23   24    25   26   27       20   21    22   23   24   25   26       19   20   21    22   23    24   25
28    29    30   31                       27   28    29                           26   27   28    29   30    31
</TABLE>

<TABLE>
<S>                                       <C>                                      <C>
                APRIL                                     MAY                                    JUNE
S      M     T    W     T    F    S        S    M     T    W    T    F    S        S    M    T     W    T     F    S
                                  1             1     2    3    4    5    6                              1    2    3
 2     3     4    5     6    7    8        7    8     9   10   11   12   13        4    5    6     7     8    9   10
 9    10    11   12    13   14   15       14   15    16   17   18   19   20       11   12   13    14    15   16   17
16    17    18   19    20   21   22       21   22    23   24   25   26   27       18   19   20    21    22   23   24
23    24    25   26    27   28   29       28   29    30   31                      25   26   27    28    29   30
30
</TABLE>

<TABLE>
<S>                                       <C>                                      <C>
                 JULY                                   AUGUST                                SEPTEMBER
S      M     T    W     T    F    S        S    M     T    W    T    F    S        S    M    T     W    T     F    S
                                  1                   1    2    3    4    5                                   1    2
 2     3     4    5     6    7    8        6    7     8    9   10   11   12        3    4    5     6     7    8    9
 9    10    11   12    13   14   15       13   14    15   16   17   18   19       10   11   12    13    14   15   16
16    17    18   19    20   21   22       20   21    22   23   24   25   26       17   18   19    20    21   22   23
23    24    25   26    27   28   29       27   28    29   30   31                 24   25   26    27    28   29   30
30    31
</TABLE>

<TABLE>
<S>                                       <C>                                      <C>
               OCTOBER                                 NOVEMBER                                DECEMBER
S      M     T    W     T    F    S        S    M     T    W    T    F    S        S    M    T     W    T     F    S
 1     2     3    4     5    6    7                        1    2    3    4                                   1    2
 8     9    10   11    12   13   14        5    6     7    8    9   10   11        3    4    5     6     7    8    9
15    16    17   18    19   20   21       12   13    14   15   16   17   18       10   11   12    13    14   15   16
22    23    24   25    26   27   28       19   20    21   22   23   24   25       17   18   19    20    21   22   23
29    30    31                            26   27    28   29   30                 24   25   26    27    28   29   30
                                                                                  31
</TABLE>

                                       92
<PAGE>

                                      NOTES

                                       93
<PAGE>

                                      NOTES

                                       94
<PAGE>

                                      NOTES

                                       95

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00081-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00081-of-00352.parquet"}]]