Document:

<PAGE>
                                                                   EXHIBIT 10.12

                      MODIFICATION AND ASSUMPTION AGREEMENT

      This MODIFICATION AND ASSUMPTION AGREEMENT, dated as of June 12, 2003
(this "MODIFICATION AGREEMENT"), is by and between Wheeling-Pittsburgh Steel
Corporation, a Delaware corporation ("Purchaser"), and Danieli Corporation, a
Delaware corporation ("Supplier"), each sometimes referred to herein singularly
as a "PARTY" or collectively as the "PARTIES".

      WHEREAS, Purchaser and Supplier are parties to that certain Agreement,
dated July 6, 2000 (the "AGREEMENT") pursuant to which Supplier has agreed to
sell to Purchaser services and equipment to design, fabricate, assemble, test,
ship, perform field machining of Purchaser's mill housings and assist Purchaser
with the installation and start-up of certain automatic roll changing equipment
(the "PROJECT") at Purchaser's hot strip mill. Capitalized terms used herein
unless otherwise defined shall have the respective meanings set forth in the
Agreement;

      WHEREAS, Purchaser and Supplier desire to amend the Agreement, on
the terms and subject to the conditions set forth herein;

      NOW, THEREFORE, in consideration of the foregoing premises, the parties
hereto hereby agree as follows:

      SECTION 1. AMENDMENT TO AGREEMENT. The Agreement is hereby amended with
effect from the Effective Date of this Modification Agreement as follows:

            (1) Section 2.1(a) of the Agreement is deleted in its entirety and
      replaced with the following:

            "2.1 (a) The aggregate purchase price of the Equipment (the
      "Purchase Price") is Fourteen Million Four Hundred Eighty-Five Thousand
      Nine Hundred Sixty-Seven Dollars and 81/100 Cents ($14,485,967.81).

                  (1) Pre-Petition Work. Prior to Purchaser's filing its
            petition for relief under Chapter 11 of the Bankruptcy Code in the
            United States Bankruptcy Court for the Northern District of Ohio
            (the "Bankruptcy Court") on November 16, 2000 (the "Filing Date"),
            Supplier completed certain work on the Project (the "Pre-Petition
            Work") for which Supplier was due an amount of Eleven Million Four
            Hundred Eight-Six Thousand Five Hundred Eleven
<PAGE>
                                     - 2 -

            Dollars and 50/100 Cents ($11,486,511.50). Purchaser rendered and
            Supplier accepted payment in the amount of Four Million One Hundred
            Twenty-Five Thousand Dollars and 00/100 Cents ($4,125,000.00) for
            certain Pre-Petition Work, leaving an amount of Seven Million Three
            Hundred Sixty-One Thousand Five Hundred Eleven Dollars and 50/100
            Cents ($7,361,511.50) due Supplier for the Pre-Petition Work. On the
            day of the initial funding (the "Funding Date") under the Term Loan
            Agreement, Purchaser shall deposit (1) Two Million Three Hundred
            Sixty-One Thousand Five Hundred Eleven Dollars and 50/100 Cents
            ($2,361,511.50) (the "Pre-Petition Partial Payment Amount"), and (2)
            the Promissory Note (as defined below) with Commonwealth Land Title
            Insurance Company (the "Escrow Agent") to be held and released in
            accordance with the terms of that certain joint written direction
            (the "Joint Written Direction"), substantially in the form attached
            hereto as Exhibit D. The balance of the amounts owing for the
            Pre-Petition Work (Five Million Dollars ($5,000,000)) shall be
            converted into (1) an unsecured promissory note, in the original
            principal amount of One Million Two Hundred Ten Thousand Five
            Hundred Twenty-Six Dollars and 00/100 Cents ($1,210,526) (the
            "Promissory Note"), in substantially the form attached hereto as
            Exhibit E, and (2) a participation by Supplier (the "Supplier's
            Participation") on the Funding Date in Three Million Seven Hundred
            Eighty-Ninety Thousand Four Hundred Seventy-Four Dollars and 00/100
            Cents ($3,789,474) of the Tranche C Loan (as defined in the Term
            Loan) that will be held by RBC under the Term Loan Agreement.
            Purchaser hereby agrees to cause RBC to execute and deliver to
            Supplier a participation agreement in substantially the form
            attached hereto as Exhibit F (the "Participation Agreement")
            evidencing the Supplier's Participation and Supplier hereby agrees
            to execute and deliver the Participation Agreement to RBC together
            with such other documentation necessary and appropriate to
            Supplier's Participation. The Escrow Agent shall release the
            Pre-Petition Partial Payment Amount and the Promissory Note to
            Supplier in accordance with the Joint Written Direction in partial
            satisfaction of the amounts owing for the Pre-Petition Work.
            Supplier hereby agrees that the Five Million Dollar ($5,000,000)
            balance of the amounts owing for the Pre-Petition Work shall be
            extinguished on the Effective Date. Supplier acknowledges that
            Purchaser has submitted the Term Sheet to Supplier together with a
            draft of the CIM and that Supplier has had sufficient time to review
            the Term Sheet and the CIM. The final terms of the Term Loan
            Agreement shall be substantially consistent with the Term Sheet.

                  (2) Post-Petition Work. The price for the Work to be performed
            and completed after the Filing Date (the "Post-Petition Work") shall
            total Two Million Nine Hundred Ninety-Nine Thousand Four Hundred
            Fifty-Six Dollars and 31/100 Cents ($2,999,456.31) (the
            "Post-Petition Price"). Purchaser has paid Supplier Four Hundred
            Twenty-Three Thousand Nine Hundred Forty-Five Dollars and 28/100
            Cents ($423,945.28) in partial satisfaction of the amounts owing for
            certain Post-Petition Work performed by Supplier subsequent to the
            Filing Date. On the Funding Date, Purchaser shall deposit Ninety Six
            Thousand Forty-Two Dollars and 49/100 Cents ($96,042.49) (the
            "Post-Petition Partial Payment
<PAGE>
                                     - 3 -

            Amount") with the Escrow Agent to be held and released in accordance
            with the terms of the Joint Written Direction. The Escrow Agent
            shall release the Post-Petition Partial Payment Amount to Supplier
            in accordance with the Joint Written Direction on account of the
            remainder of the amounts owing from Purchaser to Supplier on account
            of certain Post-Petition Work that was performed by Supplier
            subsequent to the Filing Date. The remaining Post-Petition Price of
            Two Million Four Hundred Seventy-Nine Thousand Four Hundred
            Sixty-Eight Dollars and 54/100 Cents ($2,479,468.54) (which
            represents the balance of the Post-Petition Work to be performed by
            Supplier subsequent to the Filing Date) shall be paid to Supplier
            (subject to Supplier's rights explicitly set forth herein to
            withhold amounts) in installments within thirty (30) days from each
            date that Supplier submits an invoice to Purchaser with five percent
            (5%) of the amount of each invoice retained (the "Retainage") by
            Purchaser to secure Supplier's obligations hereunder. Each invoice
            submitted by Supplier to Purchaser for Post-Petition Work shall
            describe and set forth all Work milestones achieved or reached
            according to the schedule attached hereto as Exhibit B (the "Project
            Schedule") and the sum of all prior payments made by Purchaser to
            Supplier through the last day of the previous month. Invoices for
            the Post-Petition Work shall be submitted by Supplier to Purchaser
            no more often than once a month.

                  (3) Release of Retainage. The Retainage shall be released to
            Supplier on the earlier of (a) thirty (30) days after Final
            Acceptance, (b) ninety (90) days after the later of (i) the final
            shipment of all of the Equipment (other than minor items of the
            Equipment that do not affect the performance or safe and continuous
            operation of the Project), and (ii) the completion of the field
            machining of Purchaser's mill housings, and (c) June 1, 2004 if
            Final Acceptance has not occurred prior to such date through no
            fault of Supplier. Supplier acknowledges and agrees that in the
            event amounts are owing from Supplier to Purchaser as a result of a
            breach or default by Supplier hereunder or the failure of Supplier
            to otherwise fulfill any of its obligations and agreements
            hereunder, Purchaser shall have the right to retain such reasonable
            amounts from the Retainage prior to releasing the Retainage to
            Supplier."

            (2) Article 18 of the Agreement is deleted in its entirety and
      replaced with the following:

            "                      ARTICLE 18
                                PARENT GUARANTEE

            18.1 Danieli & C. Officine Meccaniche SpA, Via Nazionale (the
      "Parent Guarantor") has provided Purchaser with a written guarantee (the
      "Parent Guarantee") in the form of Exhibit C guaranteeing the performance,
      including
<PAGE>
                                     - 4 -

      specifically, but not limited to, payments to Purchaser, of Supplier under
      this Agreement."

            (3) Section 20.1 of the Agreement is amended to the extent of adding
      the words "or Parent Guarantor" immediately after the words "If Supplier"
      in the first line thereof.

            (4) Exhibit A of the Agreement is deleted in its entirety and
      replaced with Exhibit A attached hereto.

            (5) Exhibit B of the Agreement is deleted in its entirety and
      replaced with Exhibit B attached hereto.

            (6) Exhibit C attached hereto is annexed to the Agreement as Exhibit
      C.

            (7) Exhibit D attached hereto is annexed to the Agreement as Exhibit
      D.

            (8) Exhibit E attached hereto is annexed to the Agreement as Exhibit
      E.

            (9) Exhibit F attached hereto is annexed to the Agreement as Exhibit
      F.

            (10) The Agreement shall be deemed amended to include capitalized
      defined terms used in this Modification Agreement to the extent not
      defined in the Agreement.

      SECTION 2. DELIVERY OF CERTAIN EQUIPMENT; WARRANTY. Supplier's obligation
to deliver the Equipment specified in Sections 4.2 (a) and (b) of the Agreement
shall be deemed satisfied as such Equipment was delivered to Purchaser prior to
the date hereof in accordance with such sections. Purchaser hereby agrees that
Supplier's warranty obligations set forth in Section 8.3 of the Agreement shall
be limited to defects resulting from the design, fabrication and assembly of the
Equipment by Supplier and shall be deemed to have expired to the extent of any
defects in the Equipment unrelated to such design, fabrication and assembly by
Supplier.

      SECTION 3. RESTART DATE. Purchaser shall issue a notice (the "NOTICE TO
RESTART") to Supplier specifying the date (the "NOTICE TO RESTART DATE") for
restart of the Post-Petition Work by Supplier. In the event Purchaser does not
issue the Notice to Restart with a Notice to Restart Date that is on or before
January 1, 2004, Supplier shall be entitled to receive an equitable adjustment
to the Purchase Price under Section 22.1(a) of the Agreement based upon actual
demonstrated Supplier escalation costs with no premium markup and Supplier
expressly waives any other compensation therefor. Supplier acknowledges and
agrees that it will restart the Post-Petition Work after the
<PAGE>
                                     - 5 -

Notice to Restart Date specified in the Notice to Restart and continue to
diligently pursue the Work, assigning to it a priority that will assure
performance of the services and delivery of the Equipment in accordance with the
Project Schedule.

      SECTION 4. MECHANIC'S LIENS. Supplier has filed a mechanic's lien (THE
"MECHANIC'S LIEN") against the Project in the amount of Seven Million Two
Hundred Twenty-Seven Thousand One Hundred Fifty-Six Dollars and 00/100 Cents
($7,227,156.00) and a Proof of Claim (the "PROOF OF CLAIM") with the Bankruptcy
Court in the amount of Seven Million Four Hundred Sixty-Nine Thousand Four
Hundred Sixty-Six Dollars and 88/100 Cents ($7,469,466.88). Supplier hereby
agrees to deliver documentation (collectively, the "RELEASE DOCUMENTATION")
sufficient to cause the Mechanic's Lien and the Proof of Claim to be released as
of the Effective Date to the Escrow Agent to be held and released in accordance
with the terms of the Joint Written Direction.

      SECTION 5. CONDITIONS TO EFFECTIVENESS. The effectiveness of this
Modification Agreement shall be conditioned upon the satisfaction of the
following conditions precedent:

      SECTION 5.1. DELIVERY OF DOCUMENTS.

      (a) This Modification Agreement shall have been executed and delivered to
Purchaser and Supplier.

      (b) The Parent Guarantor shall have executed and delivered the Parent
Guarantee to Purchaser on and as of the date hereof.

      (c) Purchaser shall have submitted drafts of (1) Purchaser's term sheet
(the "TERM SHEET") for the new term loan agreement (the "TERM LOAN AGREEMENT")
that will be agented by Royal Bank of Canada ("RBC"), and (2) the Confidential
Information Memorandum (the "CIM") prepared by Royal Bank of Canada that is
related to the Term Loan Agreement, to Supplier on and as of the date hereof.

      (d) Supplier and each of the other parties to the Participation Agreement
shall have executed and delivered the Participation Agreement and the Funding
Date shall have occurred.

      (e) Each of Purchaser, Supplier and the Escrow Agent shall have executed
and delivered the Joint Written Direction.

      (f) Purchaser shall have deposited the Pre-Petition Partial Payment
Amount, the Promissory Note and the Post-Petition Partial Payment Amount with
the Escrow Agent to be held and released in accordance with the terms of the
Joint Written Direction.

      (g) Supplier shall have deposited the Release Documentation with the
Escrow Agent to be held and released in accordance with the terms of the Joint
Written Direction.
<PAGE>
                                     - 6 -

      (h) The "Effective Date" under and as defined in Purchaser's plan of
reorganization shall have occurred and Purchaser shall have emerged from its
current bankruptcy.

      SECTION 5.2. LEGALITY OF TRANSACTION. No change in applicable law shALL
have occurred as a consequence of which it shall have become and continue to be
unlawful on the date this Modification Agreement is to become effective for (a)
either Party to perform any of its agreements or obligations under the
Agreement, or (b) Parent Guarantor to perform any of its agreements or
obligations under the Parent Guarantee.

      SECTION 5.3. PROCEEDINGS AND DOCUMENTS. All corporate, governmental AND
other proceedings of each Party in connection with the transactions contemplated
by this Modification Agreement and all instruments and documents incidental
thereto shall be in form and substance reasonably satisfactory to the other
Party and the each Party shall have received all such counterpart originals or
certified or other copies of all such instruments and documents of the other
Party as it shall have reasonably requested.

      SECTION 6. REPRESENTATIONS AND WARRANTIES. Each Party hereby repreSENTS
and warrants to the other Party as follows:

      (a) The execution, delivery and performance by it of this Modification
Agreement and the consummation of the transactions contemplated hereby: (i) are
within its corporate powers and have been duly authorized by all necessary
corporate action on its part, (ii) except for the approval of the Bankruptcy
Court as contemplated herein, do not require any approval or consent of, or
filing with, any governmental agency or authority, or any other person,
association or entity, which bears on the validity or enforceability of this
Modification Agreement and which is required by law or any regulation or rule of
any agency or authority, or other person, association or entity, (iii) do not
violate any provisions of any order, writ, judgment, injunction, decree,
determination or award presently in effect in which it is named, any law,
regulation or rule binding on or applicable to it or any provision of its
charter documents or by-laws, (iv) do not result in any breach of or constitute
a default under any agreement or instrument to which it is a party or to which
it or any of its properties are bound, including without limitation any
indenture, credit or loan agreement, lease, debt instrument or mortgage, except
for such breaches and defaults which would not have a material adverse effect on
it, and (v) do not result in or require the creation or imposition of any
mortgage, deed of trust, pledge or encumbrance of any nature upon any of its
assets or properties; and

      (b) This Modification Agreement and the Agreement constitute the legal,
valid and binding obligations of it, enforceable against it in accordance with
their respective terms, provided that (i) enforcement may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws of
general application affecting the rights and remedies of creditors, and (ii)
enforcement may be subject to general principles of equity, and the availability
of the remedies of specific performance and
<PAGE>
                                     - 7 -

injunctive relief may be subject to the discretion of the court before which any
proceeding for such remedies may be brought.

      SECTION 7. REAFFIRMATION. Except as expressly modified herein, Purchaser
and Supplier hereby reaffirm in all respects all the covenants, agreements,
terms and conditions of the Agreement which are incorporated in full herein by
reference, and all terms, conditions and provisions thereof shall remain in full
force and effect.

      SECTION 8. EXECUTION IN COUNTERPARTS. This Modification Agreement MAY be
executed in any number of counterparts and by each party on a separate
counterpart, each of which when so executed and delivered shall be an original,
but all of which together shall constitute one instrument. In proving this
Modification Agreement, it shall not be necessary to produce or account for more
than one such counterpart signed by the party against whom enforcement is
sought.

      SECTION 9. RELEASE. Other than the obligations of each Party expressly set
forth or described in the Agreement, as amended hereby, the Promissory Note, and
the Supplier's Participation and any and all documents related thereto each
Party acknowledges and agrees that, as of the Effective Date: (i) it has no
claim or cause of action against the other Party (or any of the other Party's
respective directors, officers, employees or agents); (ii) it does not have any
offset right, counterclaim or defense of any kind against any of its
obligations, indebtedness or liabilities to the other Party; and (iii) the other
Party has heretofore properly performed and satisfied in a timely manner all of
its obligations to it. Each Party wishes to eliminate any possibility that any
past conditions, acts, omissions, events, circumstances or matters would impair
or otherwise adversely affect any of the other Party's rights, interests,
contracts, collateral security or remedies. Therefore, other than the
obligations of each Party expressly set forth or described in the Agreement, as
amended hereby, each Party unconditionally releases, waives and forever
discharges (A) any and all liabilities, obligations, duties, promises or
indebtedness of any kind of the other Party to it except the obligations to be
performed by the other Party on or after the date hereof as expressly stated in
this Modification Agreement and the Agreement, and (B) all claims, offsets,
causes of action, suits or defenses of any kind whatsoever (if any), whether
arising at law or in equity, whether known or unknown, which the other Party
might otherwise have it or any of its directors, officers, employees or agents,
in either case (A) or (B), on account of any condition, act, omission, event,
contract, liability, obligation, indebtedness, claim, cause of action, defense,
circumstance or matter of any kind existing as of the date hereof, or occurring
prior to the date hereof.

      SECTION 10. EFFECTIVE DATE. This Modification Agreement shall be deEMED to
be effective as of the date of satisfaction of the last conditions precedent set
forth in Section 5 hereof (the "EFFECTIVE DATE").

                  [Remainder of Page Intentionally Left Blank]
<PAGE>
      IN WITNESS WHEREOF, the undersigned have duly executed this Modification
and Assumption Agreement as of the date first set forth above.

                                   WHEELING-PITTSBURGH STEEL CORPORATION

                                   By: /s/ Harry L. Page
                                       ---------------------------------
                                      Name: Harry L. Page
                                      Title: VP Engr, Tech & Metallurgy

                                   DANIELI CORPORATION

                                   By: /s/ Mark Brandon
                                       ---------------------------------
                                      Name: Mark Brandon
                                      Title: President<PAGE>

                                                                   EXHIBIT 10.13

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

                 AGREEMENT FOR SUPPLY OF EQUIPMENT AND SERVICES

                                     between

                            JUNCTION INDUSTRIES, INC.

                                       and

                      WHEELING-PITTSBURGH STEEL CORPORATION

                            Dated as of June 12, 2003

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

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<S>                                                                                                        <C>
ARTICLE 1. GENERAL MATTERS..............................................................................    1

    SECTION 1.1.    DEFINED TERMS.......................................................................    1
    SECTION 1.2.    INTERPRETATION......................................................................    6
    SECTION 1.3.    EXHIBITS............................................................................    7
    SECTION 1.4.    CONDITION PRECEDENT.................................................................    7

ARTICLE 2. RETENTION OF CONTRACTOR......................................................................    7

    SECTION 2.1.    RETENTION OF CONTRACTOR.............................................................    7
    SECTION 2.2.    STATUS OF CONTRACTOR; NO PARTNERSHIP................................................    8
    SECTION 2.3.    SUBCONTRACTORS......................................................................    8

ARTICLE 3. CERTAIN OBLIGATIONS AND RESPONSIBILITIES OF CONTRACTOR.......................................    8

    SECTION 3.1.    WORK................................................................................    8
    SECTION 3.2.    CONTROL AND METHOD OF THE WORK......................................................    8
    SECTION 3.3.    COMPLIANCE WITH LAW AND STANDARDS OF PERFORMANCE....................................    8
    SECTION 3.4.    CERTAIN MATTERS PERTAINING TO JOB SITE AND WORK.....................................    9
    SECTION 3.5.    ENGINEERING AND DESIGN..............................................................    9
    SECTION 3.6.    INSPECTION AND TESTING..............................................................    9
    SECTION 3.7.    CONTRACTOR PERMITS..................................................................   10
    SECTION 3.8.    LABOR, TRAINING.....................................................................   10
    SECTION 3.9.    PROJECT MANAGEMENT..................................................................   10
    SECTION 3.10.   COOPERATION WITH OTHER CONTRACTORS..................................................   11
    SECTION 3.11.   REPORTS, PLANS AND INSTRUCTION BOOKS................................................   11
    SECTION 3.12.   DRAWINGS, ENGINEERING DATA, OPERATING MANUAL AND OTHER MATERIALS....................   12
    SECTION 3.13.   ACCOUNTING INFORMATION..............................................................   12
    SECTION 3.14.   CONTRACTOR TAXES....................................................................   12
    SECTION 3.15.   CLAIMS AND LIENS FOR LABOR AND MATERIALS............................................   13
    SECTION 3.16.   PRELIMINARY SERVICES................................................................   13
    SECTION 3.17.   GUARANTY............................................................................   13

ARTICLE 4. CERTAIN OBLIGATIONS OF OWNER.................................................................   13

    SECTION 4.1.    PERMITS.............................................................................   13
    SECTION 4.2.    OWNER SERVICES......................................................................   13
    SECTION 4.3.    PERSONNEL AND OPERATIONS............................................................   13
    SECTION 4.4.    OWNER TAXES.........................................................................   14

ARTICLE 5. PROJECT SCHEDULE.............................................................................   14

    SECTION 5.1.    COMMENCEMENT OF WORK................................................................   14
    SECTION 5.2.    PROJECT SCHEDULE....................................................................   14

ARTICLE 6. CHANGE ORDERS................................................................................   14

    SECTION 6.1.    CHANGE ORDER AT OWNER'S REQUEST.....................................................   14
    SECTION 6.2.    CHANGE ORDERS REQUESTED BY CONTRACTOR...............................................   15
    SECTION 6.3.    CHANGES TO CONTRACT PRICE; DISPUTES.................................................   16
    SECTION 6.4.    CHANGE IN LAW.......................................................................   16

ARTICLE 7. CONTRACT PRICE; PAYMENTS TO CONTRACTOR.......................................................   17

    SECTION 7.1.    CONTRACT PRICE......................................................................   17
    SECTION 7.2.    REQUESTS FOR PAYMENT................................................................   18
</TABLE>

                                      - i -

<PAGE>

<TABLE>
<S>                                                                                                        <C>
    SECTION 7.3.    GENERAL PROVISIONS PAYMENTS.........................................................   19
    SECTION 7.4.    LIENS...............................................................................   20
    SECTION 7.5.    FINANCING...........................................................................   20

ARTICLE 8. TITLE, RISK OF LOSS AND POSSESSION...........................................................   21

    SECTION 8.1.    CLEAR TITLE.........................................................................   21
    SECTION 8.2.    RISK OF LOSS........................................................................   21

ARTICLE 9. INSURANCE....................................................................................   21

    SECTION 9.1.    CONTRACTOR INSURANCE................................................................   21
    SECTION 9.2.    OWNER'S INSURANCE...................................................................   23
    SECTION 9.3.    RELATIONSHIP TO HOLD HARMLESS PROVISIONS AND WARRANTIES.............................   24
    SECTION 9.4.    ADDITIONAL INSUREDS.................................................................   24
    SECTION 9.5.    CERTIFICATE OF INSURANCE............................................................   24
    SECTION 9.6.    CANCELLATION........................................................................   24
    SECTION 9.7.    PREMIUMS............................................................................   24
    SECTION 9.8.    SUBROGATION.........................................................................   24
    SECTION 9.9.    SUBCONTRACTOR'S INSURANCE...........................................................   25
    SECTION 9.10.   RIGHT TO INSURE.....................................................................   25
    SECTION 9.11.   INSURED VS. INSURED.................................................................   25

ARTICLE 10. TESTING, SUBSTANTIAL COMPLETION AND FINAL ACCEPTANCE........................................   25

    SECTION 10.1.   TESTING PROTOCOLS...................................................................   25
    SECTION 10.2.   COLD TEST, START-UP AND HOT TEST....................................................   26
    SECTION 10.3.   PERFORMANCE TESTS...................................................................   26
    SECTION 10.4.   FINAL ACCEPTANCE....................................................................   28

ARTICLE 11. SCHEDULE AND PERFORMANCE GUARANTEES.........................................................   28

    SECTION 11.1.   SCHEDULE GUARANTEE..................................................................   28
    SECTION 11.2.   SCHEDULE LIQUIDATED DAMAGES.........................................................   28
    SECTION 11.3.   PAYMENT OF LIQUIDATED DAMAGES.......................................................   29
    SECTION 11.4.   SCHEDULE BONUS......................................................................   29
    SECTION 11.5.   REBATE OF SCHEDULE LIQUIDATED DAMAGES...............................................   30
    SECTION 11.6.   REBATE OF SCHEDULE BONUS............................................................   30
    SECTION 11.7.   OTHER LIMITATIONS...................................................................   30

ARTICLE 12. CONTRACTOR'S WARRANTIES.....................................................................   31

    SECTION 12.1.   WARRANTIES..........................................................................   31
    SECTION 12.2.   OWNER REPAIR OF NONCONFORMING WORK..................................................   32
    SECTION 12.3.   SUBCONTRACTORS......................................................................   32

ARTICLE 13. REPRESENTATIONS AND WARRANTIES..............................................................   32

    SECTION 13.1.   REPRESENTATIONS AND WARRANTIES......................................................   32

ARTICLE 14. FORCE MAJEURE AND OWNER CAUSED DELAY........................................................   33

    SECTION 14.1.   DEFINITION OF FORCE MAJEURE EVENT...................................................   33
    SECTION 14.2.   NOTICE OF FORCE MAJEURE EVENT.......................................................   33
    SECTION 14.3.   CHANGE DUE TO FORCE MAJEURE EVENT...................................................   33
    SECTION 14.4.   DEFINITION OF OWNER CAUSED DELAY....................................................   34
    SECTION 14.5.   NOTICE OF OWNER CAUSED DELAY........................................................   34
    SECTION 14.6.   CHANGE DUE TO OWNER CAUSED DELAY....................................................   34

ARTICLE 15. TERMINATION.................................................................................   34
</TABLE>

                                     - ii -

<PAGE>

<TABLE>
<S>                                                                                                        <C>
    SECTION 15.1.   CONTRACTOR EVENTS OF DEFAULT........................................................   34
    SECTION 15.2.   TERMINATION BY OWNER DUE TO CONTRACTOR EVENT OF DEFAULT.............................   36
    SECTION 15.3.   TERMINATION BY OWNER FOR CONVENIENCE................................................   37
    SECTION 15.4.   SUSPENSION BY OWNER FOR CONVENIENCE.................................................   37
    SECTION 15.5.   TERMINATION DUE TO FORCE MAJEURE EVENT..............................................   38
    SECTION 15.6.   TERMINATION BY CONTRACTOR...........................................................   38
    SECTION 15.7.   CONTINUING OBLIGATIONS DURING DEFAULT...............................................   39
    SECTION 15.8.   OBLIGATIONS UPON TERMINATION........................................................   39
    SECTION 15.9.   TERMINATION AND SURVIVAL OF TERMS...................................................   39

ARTICLE 16. INDEMNIFICATION.............................................................................   39

    SECTION 16.1.   CONTRACTOR INDEMNIFICATION..........................................................   39
    SECTION 16.2.   OWNER INDEMNIFICATION...............................................................   40
    SECTION 16.3.   CONDITIONS OF INDEMNIFICATION.......................................................   40
    SECTION 16.4.   INTELLECTUAL PROPERTY WARRANTY......................................................   41
    SECTION 16.5.   SURVIVAL OF INDEMNIFICATION.........................................................   42

ARTICLE 17. DISPUTE RESOLUTION..........................................................................   42

    SECTION 17.1.   DISPUTE RESOLUTION..................................................................   42
    SECTION 17.2.   CONTINUING OBLIGATIONS..............................................................   42
    SECTION 17.3.   ARBITRATION.........................................................................   42

ARTICLE 18. MISCELLANEOUS...............................................................................   43

    SECTION 18.1.   ASSIGNMENT..........................................................................   43
    SECTION 18.2.   CONFIDENTIALITY.....................................................................   43
    SECTION 18.3.   NOTICES.............................................................................   44
    SECTION 18.4.   OVERALL LIMITATION..................................................................   44
    SECTION 18.5.   WAIVER OF CONSEQUENTIAL DAMAGES.....................................................   45
    SECTION 18.6.   WAIVER..............................................................................   45
    SECTION 18.7.   OFFSET..............................................................................   45
    SECTION 18.8.   SEVERABILITY........................................................................   45
    SECTION 18.9.   GOVERNING LAW.......................................................................   45
    SECTION 18.10.  ENTIRE AGREEMENT; AMENDMENTS........................................................   45
    SECTION 18.11.  EXPENSES AND PREPARATION............................................................   46
    SECTION 18.12.  COUNTERPARTS........................................................................   46
</TABLE>

                                     - iii -

<PAGE>

         THIS AGREEMENT FOR THE SUPPLY OF EQUIPMENT AND SERVICES (this
"AGREEMENT") is made and entered into as of the 12th of June, 2003 by and
between JUNCTION INDUSTRIES, INC. (the "CONTRACTOR"), a corporation duly
established and validly existing under the laws of Ohio, and WHEELING-PITTSBURGH
STEEL CORPORATION (the "OWNER"), a corporation duly organized and validly
existing under the laws of Delaware with its principal place of business at 1134
Market Street, Wheeling, West Virginia 26003, each sometimes referred to herein
singularly as a "PARTY" or collectively as the "PARTIES".

         Owner proposes to construct an electric arc furnace melt shop (the
"MELT SHOP") to be located at the Owner's Steubenville South Plant in Mingo
Junction, Ohio. Owner desires to purchase from Contractor, and Contractor
desires to sell to Owner, equipment and services to design, engineer, procure,
fabricate, and assist Owner in the installation, commissioning, start-up and
testing of one 250 ton (tap weight) A.C. electric arc furnace ("EAF"), one
Consteel scrap conveyor system, ladle metallurgy furnace ("LMF"), baghouse
("BAGHOUSE") and certain other associated equipment (the EAF, the conveyor
system, the LMF and the baghouse, collectively, the "FACILITY") for
incorporation into the Melt Shop.

         Contractor has been provided and has reviewed the conceptual drawings
and other information for the Melt Shop and all other documents relating to the
Melt Shop which Contractor has deemed necessary in connection with this
Agreement, and performed or reviewed such other investigations, studies and
analyses which Contractor has determined to be necessary or prudent in
connection with the performance of its work.

         Owner and Contractor, intending to be legally bound, agree as follows:

                                   ARTICLE 1.
                                 GENERAL MATTERS

         SECTION 1.1.      DEFINED TERMS. As used in this Agreement, including
the Exhibits hereto, each of the following terms shall have the meaning assigned
to such term as set forth below:

         "AFFILIATE" means, in relation to any Person, any Person: (i) which
directly or indirectly controls, or is controlled by, or is under common control
with, such other Person, or (ii) which directly or indirectly beneficially owns
or holds fifty percent (50%) or more of any class of voting stock of such other
Person, or (iii) which has fifty percent (50%) or more of any class of voting
stock that is directly or indirectly beneficially owned or held by such other
Person, or (iv) who either holds a general partnership interest in such other
Person or such other Person holds a general partnership interest in the Person.

         "AGREEMENT" has the meaning set forth in the Preamble hereto, as same
may be amended, supplemented or modified from time to time in accordance with
the terms hereof.

         "APPLICABLE LAWS" means any act, statute, law, regulation, ordinance,
rule, judgment, order, decree, directive, guideline or policy (to the extent
mandatory or applicable) or any similar form of decision or determination by, or
any interpretation or administration of, any of the

<PAGE>

foregoing by any Government Authority with jurisdiction, if any, over the
locations or countries where the Work is or is to be performed.

         "APPLICABLE PERMITS" means any and all permits, clearances, licenses,
authorizations, consents, filings, exemptions or approvals from or required by
any Government Authority that are necessary to perform the Work in accordance
with Applicable Laws. Contractor has informed Owner, and Owner acknowledges,
that except for supervision of erection, commissioning, Start-Up and testing,
all or virtually all of the Work will be performed at locations or countries
other than the State of Ohio. No Ohio engineering license will be required to be
obtained by Contractor for the drawings, supervision of the engineering,
commissioning, Start-Up or testing of the Facility included in the Work.

         "CHANGE" has the meaning set forth in Section 6.1(a).

         "CHANGE IN LAW" means any of the following events or circumstances
occurring after the date hereof: (i) an amendment, modification, supplement or
other change in or repeal of an existing Applicable Law or the interpretation
thereof by a Governmental Authority having the force of law, or (ii) an
enactment or making of a new Applicable Law.

         "CHANGE ORDER" has the meaning set forth in Section 6.1(a).

         "COLD TEST" means a single-acting or inter-acting unloaded test run of
the Facility performed in accordance with the Cold Test Protocol.

         "COLD TEST PROTOCOL" means the testing, measurement and calculation
methods, procedures and technical standards pursuant to which the Cold Test will
be conducted, as approved by the Parties in accordance with Section 10.1.

         "COMPLETED BAGHOUSE TEST" has the meaning set forth in Section 10.3(b).

         "COMPLETED INDEX AT COST TEST" has the meaning set forth in Section
10.3(b).

         "COMPLETED PRODUCTIVITY ACCEPTANCE TEST" has the meaning set forth in
Section 10.3(b).

         "CONFIDENTIAL INFORMATION" has the meaning set forth in Section 18.2.

         "CONSTRUCTION MANAGER" has the meaning set forth in Section 3.10(b).

         "CONTRACT DOCUMENTS" shall mean this Agreement and all Exhibits, as the
same may be amended, supplemented or modified from time to time in accordance
with the terms hereof.

         "CONTRACT PRICE" has the meaning set forth in Section 7.1(a).

         "CONTRACTOR EVENT OF DEFAULT" has the meaning set forth in Section
15.1.

                                      - 2 -

<PAGE>

         "CONTRACTOR PERMITS" has the meaning set forth in Section 3.7(a).

         "CONTRACTOR PROJECT MANAGER" means the individual designated by
Contractor as having authority and supervisory power of Contractor for
performance of the Work.

         "CONTRACTOR TAXES" has the meaning set forth in Section 3.14.

         "DAMAGES" has the meaning set forth in Section 16.1.

         "DEFECT" means any design, engineering, software, drawing, component,
tool, Equipment, fabrication, workmanship or Work (i) that is not performed in
accordance with the terms of the Contract Documents, or (ii) that is not of good
quality, free from defects or deficiencies in design, application, manufacture
or workmanship, or that contains improper or inferior workmanship. The term
"DEFECTS" shall neither be construed to include material damage caused by
Owner's acts or omissions nor those of other contractors or suppliers engaged by
Owner or material damage arising out of abuse, misuse, negligence in operations,
installation, maintenance and repair (unless any act or omission was taken or
made at the direction of Contractor) or failure to operate the Facility in
accordance with the Operating Manual, nor shall the term "DEFECTS" be construed
to include ordinary wear and tear. Work shall be considered to be defective if
it is not performed in accordance with Prudent Engineering Practices.

         "EAF" has the meaning set forth in the preamble.

          "EQUIPMENT" means all of the equipment, related systems, materials,
apparatus, structures, tools, supplies, goods and other items provided by
Contractor and Subcontractors as specified or implied within Contractor's scope
as indicated in EXHIBIT A that are, or are to be, installed in or incorporated
into the Facility by Owner or others.

         "FACILITY" has the meaning set forth in the preamble.

         "FINAL ACCEPTANCE" means (i) (x) all aspects of the Performance Test
have been successfully performed, or (y) (A) all aspects of the Performance Test
other than the Productivity Acceptance Test and the Ic Test have been
successfully performed, (B) the Productivity Acceptance Test results
demonstrated a productivity level of at least 95% but less than 100% of the
level of productivity required for successful performance of the Productivity
Acceptance Test, as specified in Section 6.2 of EXHIBIT E, and Owner has
received proceeds of a draw on the letter of credit delivered at First Heat
Payment in an amount equal to 3% of the Contract Price, and (C) the Ic Test
results demonstrated an Index at Cost that exceeds the values specified in
Section 6.3 of EXHIBIT E by no more than 5%, and Owner has received proceeds of
a draw on the letter of credit delivered at First Heat Payment in an amount
equal to 3% of the Contract Price, (ii) all items on the Punch List have been
completed, (iii) any and all claims against Owner and Liens by Contractor or any
Subcontractor with respect to the Facility, the Melt Shop, the Job Site, the
Equipment or any fixtures or personal property included in the Work created by,
through or under Contractor or any Subcontractor have been released, and
Contractor and each

                                      - 3 -

<PAGE>

first-tier Subcontractor have delivered lien waivers, and (iv) Contractor has
paid all Schedule Liquidated Damages and any other amounts due under this
Agreement.

         "FINAL ACCEPTANCE CERTIFICATE" means the certificate issued by Owner
upon Final Acceptance.

         "FINAL ACCEPTANCE DATE" means the date of occurrence of Final
Acceptance.

          "FINANCING PARTIES" means the lenders, security holders, investors,
equity providers and others providing financing or refinancing to or on behalf
of Owner, for the development, construction, ownership, operation and
maintenance of the Melt Shop or any portion thereof, or any trustee or agent
acting on behalf of any of the foregoing.

         "FIRST HEAT" has the meaning set forth in Section 7.1(d).

         "FIRST HEAT PAYMENT" has the meaning set forth in EXHIBIT C-2.

         "FORCE MAJEURE EVENT" has the meaning set forth in Section 14.1.

         "GOVERNMENT AUTHORITY" means any and all federal, state, county, city,
municipal, local or regional authorities, departments, bodies, commissions,
corporations, branches, directorates, agencies, ministries, courts, tribunals,
judicial authorities, legislative bodies, administrative bodies or taxing
authorities of the United States of America or other governmental entity or any
department, municipality or other political subdivision thereof having
jurisdiction over either of the Parties, the Facility, the Melt Shop, the Job
Site or the performance of the Work.

         "GUARANTOR" means the guarantor under the Guaranty.

         "GUARANTY" means the guaranty, substantially in the form previously
agreed to by Owner, of Contractor's obligations under the Contract Documents,
delivered by Guarantor on the date of this Agreement.

         "HAZARDOUS MATERIAL" means any and all materials, substances, products
or wastes which are regulated or classified as toxic or hazardous under any
Applicable Law or Applicable Permit.

         "HOT TEST" means a period during which the Facility operates under the
design conditions contained in the Start-Up and Hot Test Protocol and during
which five heats are tapped consecutively, which period shall occur within 15
days following First Heat.

         "INITIAL PAYMENT" has the meaning set forth in EXHIBIT C-2.

         "INTELLECTUAL PROPERTY RIGHTS" means:

                  (a)      patents, trade marks, service marks, rights in
designs, trade names, copyrights, topography rights and know-how, in each case
whether registered or not;

                                      - 4 -

<PAGE>

                  (b)      applications for registration of any of them;

                  (c)      rights under licenses and consents in relation to any
of them; and

                  (d)      all forms of protection of a similar nature or having
equivalent or similar effect to any of them which may subsist anywhere in the
world.

         "JOB SITE" means the real property on which the Melt Shop is to be
located, as shown on the drawing included in EXHIBIT A.

         "LIEN" means any lien, security interest, mortgage, hypothecation,
encumbrance or other restriction on title or property interest.

         "LMF" has the meaning set forth in the preamble.

          "MILESTONE PAYMENT SCHEDULE" means the schedule of installments of the
Contract Price payable upon achievement of the milestones set forth therein,
attached as EXHIBIT C-2.

         "NOTICE TO PROCEED" means not only (a) the notice given from Owner to
Contractor directing Contractor to commence performance of the Work, but also
(b) Contractor's receipt of the Initial Payment from Owner and (c) Owner's
payment of any amounts then due and owing under Owner's Purchase Order 132313
for engineering and drawings previously performed or provided for the Facility.

         "OPERATING MANUAL" has the meaning set forth in Section 3.12(c).

         "OWNER CAUSED DELAY" has the meaning set forth in Section 14.4.

         "OWNER PERMITS" has the meaning set forth in Section 4.1.

         "PARTIES" means Contractor and Owner.

         "PERFORMANCE TEST" has the meaning set forth in Section 10.3.

         "PERSON" means an individual, partnership, corporation, limited
liability company, company, business trust, joint stock company, trust,
unincorporated association, joint venture, Government Authority or other entity.

         "PROJECT SCHEDULE" means the schedule for completion of the Work
attached hereto as EXHIBIT C-1.

         "PROVISIONAL ACCEPTANCE CERTIFICATE" has the meaning set forth in
Section 10.2.

         "PRUDENT ENGINEERING PRACTICES" means those sound and prudent
practices, methods, specifications or standards of design, engineering,
manufacturing, safety, workmanship, equipment and components prudently and
generally engaged in or observed by the majority of

                                      - 5 -

<PAGE>

the equipment manufacturers in the steel mill industry in the United States
performing work or services similar to the Work.

         "PUNCH LIST" has the meaning set forth in Section 10.2.

         "REQUEST FOR PAYMENT" means a written request from Contractor to Owner
for payment hereunder, which requests shall be in substantially the form of
EXHIBIT F.

         "SCHEDULE BONUS" has the meaning set forth in Section 11.4.

         "START-UP" means the first processing of raw material by the Facility,
which shall occur after Start-Up Conditions have been met and, in any case,
within two days following execution of the Provisional Acceptance Certificate.

         "START-UP CONDITIONS" means the technical and other parameters and
conditions required to be achieved prior to Start-Up, set forth in the Start-Up
and Hot Test Protocol.

         "START-UP AND HOT TEST PROTOCOL" means the parameters and conditions
required to be achieved prior to Start-Up of the Facility, and the testing,
measurement and calculation methods, procedures and technical standards pursuant
to which the Hot Test will be conducted, as approved by the Parties in
accordance with Section 10.1.

         "SUBCONTRACTOR" means any contractor, constructor or materialman who
performs any portion of the Work other than Contractor, and such term shall
include any and all suppliers, vendors and manufacturers of Equipment to
Contractor or any Subcontractor.

         "TERMINATION PAYMENT" has the meaning set forth in Section 15.3.

         "WARRANTY PERIOD" has the meaning set forth in Section 12.1(c).

         "WORK" has the meaning set forth in Section 3.1.

         SECTION 1.2.      INTERPRETATION. In this Agreement:

                  (a)      headings are used solely for convenience and do not
constitute a part of this Agreement;

                  (b)      unless the context otherwise requires, the gender of
all words used herein shall include the masculine, feminine and neuter;

                  (c)      the terms "HEREOF," "HEREIN," "HERETO" and similar
words refer to the Contract Documents as a whole and not to any particular
Article, Section, Exhibit or any other subdivision of this Agreement;

                  (d)      references to "ARTICLE," "SECTION," or "EXHIBIT" are
to this Agreement unless specified otherwise;

                                      - 6 -

<PAGE>

                  (e)      reference to "THIS AGREEMENT" (including any Exhibit)
or any other agreement, Exhibit, permit or document shall be construed as a
reference to such agreement or document as the same may be amended, modified,
supplemented or restated, and shall include a reference to any document which
amends, modifies, supplements or restates, or is entered into, made or given
pursuant to or in accordance with its terms;

                  (f)      unless the context otherwise requires, references to
any Person shall be construed as a reference to such Person's successors and
permitted assigns; and

                  (g)      references to "INCLUDES," "INCLUDING," and similar
phrases shall mean "including, without limitation."

         SECTION 1.3.      EXHIBITS. The following Exhibits are attached to and
incorporated into and made a part of this Agreement:

                  (a)      EXHIBIT A Description of Work

                  (b)      EXHIBIT B [Reserved]

                  (c)      EXHIBIT C-1 Project Schedule

                  (d)      EXHIBIT C-2 Milestone Payment Schedule

                  (e)      EXHIBIT D Standard and Codes

                  (f)      EXHIBIT E Performance Test Protocol

                  (g)      EXHIBIT F Form of Request for Payment

                  (h)      EXHIBIT G Forms of Letter of Credit

                  (i)      EXHIBIT H [Reserved]

                  (j)      EXHIBIT I Form of Owner's Note

         SECTION 1.4.      CONDITION PRECEDENT. The Parties shall not be
obligated to perform their respective obligations hereunder, and neither Party
nor Guarantor shall have any obligation or liability hereunder or under the
Guaranty, unless and until Owner's financing for the construction of the
Facility has closed and funds are available to Owner thereunder.

                                   ARTICLE 2.
                             RETENTION OF CONTRACTOR

         SECTION 2.1.      RETENTION OF CONTRACTOR. Owner hereby engages
Contractor, and Contractor hereby agrees, to perform the Work in accordance with
the terms and conditions of the Contract Documents.

                                      - 7 -

<PAGE>

         SECTION 2.2.      STATUS OF CONTRACTOR; NO PARTNERSHIP. Contractor
shall be an independent contractor with respect the Work, and this Agreement
shall not be interpreted or construed to create an association, joint venture or
partnership relationship between the Parties.

         SECTION 2.3.      SUBCONTRACTORS. Contractor shall have the right to
have portions of the Work performed by Subcontractors; provided, however, that
Contractor shall be solely responsible for all Work performed by Subcontractors.
All contracts, subcontracts and purchase orders with first-tier Subcontractors
must provide that the rights thereunder are assignable to Owner and the
Financing Parties or their designees in the event of any Contractor Event of
Default. In addition, all warranties contained in contracts with first-tier
Subcontractors must be assignable to Owner and the Financing Parties.

                                   ARTICLE 3.
             CERTAIN OBLIGATIONS AND RESPONSIBILITIES OF CONTRACTOR

         SECTION 3.1.      WORK. Contractor shall perform or cause to be
performed work and services required in connection with the design, engineering,
procurement and fabrication of the Equipment and supervision of the assembly and
installation of the Equipment and of commissioning, Start-Up and testing (as
described in Article 10), and shall provide or cause to be provided all
materials and equipment, machinery, tools, transportation, chemicals,
administration and other services and items specified or implied in Contractor's
scope of work described in EXHIBIT A (such scope, the "WORK"), all on a firm
fixed price basis and otherwise in accordance with the Agreement. Contractor
shall perform or supply the services, Equipment and other items indicated by a
"C" in EXHIBIT A in accordance with the Project Schedule and all other Work
specified or implied in Contractor's scope of Work. Contractor's scope of Work
does not include, for any purposes of the Contract Documents, any work, labor,
materials, equipment, tools or other items to be provided or performed by Owner,
other contractors or suppliers engaged by Owner or others, as described in
EXHIBIT A and elsewhere in the Contract Documents.

         SECTION 3.2.      CONTROL AND METHOD OF THE WORK. Contractor shall be
solely responsible for performing or causing the Subcontractors to perform the
Work in accordance with the terms of the Contract Documents, and for all means,
methods, techniques, sequences, procedures and safety programs in connection
with performance of the Work.

         SECTION 3.3.      COMPLIANCE WITH LAW AND STANDARDS OF PERFORMANCE.
Contractor shall, and shall cause all of its Subcontractors to, comply with, and
perform the Work in accordance with Applicable Laws. The Work and all items of
Equipment shall be designed, manufactured, commissioned and tested in accordance
with the published standards and codes of the organizations listed in EXHIBIT D.
In addition, Contractor shall perform the Work in conformity with Prudent
Engineering Practices to the extent not inconsistent with the foregoing
provisions of this Section 3.3.

                                      - 8 -

<PAGE>

         SECTION 3.4.      CERTAIN MATTERS PERTAINING TO JOB SITE AND WORK.

                  (a)      Contractor acknowledges and agrees that, within the
limits of its scope of Work, it has had sufficient opportunity to review such
information and make such investigations as it deems necessary and is familiar
with and has satisfied itself with respect to (i) the nature and location of the
Work, and (ii) the general and local conditions with respect to (a) environment,
(b) transportation (including to the Job Site), (c) access, (d) the handling,
storage and disposal of Hazardous Substances and other wastes brought to the Job
Site by Contractor or any of Contractor's Subcontractors, and (e) physical
conditions at the Job Site and the surrounding area as they apply to the design
and installation of the material handling system to be provided as a part of the
Work. Contractor has, or will, identify all climatic and geologic elements that
are critical to the design of the Equipment. Contractor has not reviewed, nor is
it bound by, any requirement of Owner's environmental permits. As noted earlier,
Contractor has informed Owner, and Owner acknowledges, that, except for the
Contractor's supervision of the erection, commissioning, Start-Up and testing
(as described in Article 10) of the Facility, the Work will be performed at
locations or countries other than the State of Ohio.

                  (b)      Contractor shall provide access at all times to the
Work to Owner, Owner's designees and other contractors and the Financing
Parties, and their respective employees, representatives, agents and
consultants.

         SECTION 3.5.      ENGINEERING AND DESIGN. Contractor shall provide all
engineering and design services necessary for the completion of the Work in
conformity with the Contract Documents.

         SECTION 3.6.      INSPECTION AND TESTING.

                  (a)      Contractor shall inspect and test each item of
Equipment during fabrication and upon completion of its fabrication and
installation at the Job Site, as required by applicable specifications, Prudent
Engineering Practices and the other requirements of the Contract Documents.

                  (b)      Owner, the Financing Parties and their designees
shall be entitled to inspect the Work of Contractor and Subcontractors from time
to time and, upon request, Contractor shall arrange for inspections of Equipment
at vendors' shops. Owner shall notify Contractor of any non-conforming Work
discovered during an inspection, and Contractor shall promptly correct, or cause
to be corrected, any such Work. No inspection, acceptance of Work, payment of
money or approval given by Owner or any Owner designee shall relieve Contractor
of its obligations for the proper performance of the Work in accordance with the
terms hereof. Owner in good faith may reject any non-conforming Work regardless
of the stage of completion, the time or place of discovery of error, and whether
Owner previously accepted such Work.

                  (c)      Contractor shall promptly replace any Equipment or
correct or reperform any Work that does not conform to the requirements of the
Contract Documents.

                                      - 9 -

<PAGE>

         SECTION 3.7.      CONTRACTOR PERMITS.

                  (a)      Contractor shall obtain and maintain in effect all
Applicable Permits pertaining to Contractor's performance of the Work
(collectively, "CONTRACTOR PERMITS"), including, without limitation, (a) all
licenses to permit Contractor to do business in the jurisdictions where the Work
is to be performed and (b) all Applicable Permits necessary to move, transport
and deliver the Equipment to the Job Site.

                  (b)      Contractor shall use its best efforts to assist Owner
by providing information and documents, relating to the Work, to Owner for
obtaining Owner Permits.

         SECTION 3.8.      LABOR, TRAINING.

                  (a)      Contractor shall be responsible for retaining all
labor and personnel necessary to perform the Work in a safe manner and in
accordance with the Project Schedule. When required by Applicable Laws,
Contractor shall employ licensed personnel in good standing with their
respective trades and licensing authorities to perform engineering, design,
architectural and other professional services in connection with the Work.

                  (b)      Contractor shall retain a qualified specialist
approved by Owner (which approval shall not be unreasonably withheld or delayed)
who shall provide supervision for up to five months during erection and
commissioning of the EAF system at the Job Site.

                  (c)      Contractor shall be responsible for the conduct and
deeds of its workforce and the workforce of Subcontractors.

                  (d)      Contractor shall notify Owner immediately, orally and
then in writing, of any labor dispute or anticipated labor dispute that might
reasonably be expected to affect performance of the Work.

                  (e)      Contractor shall conduct a training program, as
approved by Owner (which approval shall not be unreasonably withheld or
delayed), at the Job Site designed to train Owner's personnel to use, operate
and maintain the Facility efficiently and safely. Contractor shall submit its
proposed training program for Owner's approval (which approval shall not be
unreasonably withheld or delayed) or comments within one year following delivery
of the Notice to Proceed. Contractor shall incorporate Owner's reasonable
comments and requests in the final training program. Owner shall reimburse
Contractor, through a Change Order in accordance with Article 6, for the costs
of carrying out the training program, at per diem rates acceptable to Owner and
Contractor, plus expenses.

         SECTION 3.9.      PROJECT MANAGEMENT. Contractor shall designate a
Contractor Project Manager. Contractor's initial designee and any replacement
Contractor Project Manager must be approved by Owner in writing, which approval
shall not be unreasonably withheld or delayed. Subject to Section 6.1, the
Contractor Project Manager is authorized to act on behalf of Contractor, and
Owner may consult with, and rely on the statements and decisions by, the

                                     - 10 -

<PAGE>

Contractor Project Manager. Notwithstanding the foregoing, the Contractor
Project Manager shall not be authorized to execute any Change Order.

         SECTION 3.10.     COOPERATION WITH OTHER CONTRACTORS.

                  (a)      Contractor shall cooperate and cause its
Subcontractors to cooperate with Owner and other contractors working at or near
the Job Site to assure that Contractor and Subcontractors do not unreasonably
hinder the work being done by Owner and other contractors. Contractor shall
perform all Work in a manner designed to minimize interference with the
operation of Owner's existing plant and facilities at or near the Job Site.
Likewise, neither Owner nor its other contractors shall unreasonably hinder or
interfere with Contractor's or its Subcontractors' performance of the Work.

                  (b)      Owner has contracted, or intends to contract, with
Continental Design and Management Group to provide construction management
services for the Melt Shop (the "CONSTRUCTION MANAGER"). Contractor shall
coordinate its performance of the Work with the Construction Manager, adhere to
on-site safety and other procedures adopted by the Construction Manager for
Owner, its employees and Owner's contractors and provide Construction Manager
with such access to and information concerning the Work and its progress as the
Construction Manager reasonably requires to perform its construction management
services. Copies of all notices and other materials submitted to Owner under
this Agreement shall be submitted by Contractor to the Construction Manager
contemporaneously.

         SECTION 3.11.     REPORTS, PLANS AND INSTRUCTION BOOKS.

                  (a)      No later than the fifth day of each calendar month,
commencing with the first month following Owner's Notice to Proceed, Contractor
shall prepare and submit to Owner and the Financing Parties a written progress
report for the prior month, in a form reasonably acceptable to Owner and the
Financing Parties, which includes a description of the progress and status of
the Work (including a detailed description of material problems and proposed
solutions), status of Equipment and other scheduled deliveries, Subcontractors'
activities, engineering and fabrication progress and upcoming scheduled
activities and events. The report will include an assessment of how actual
progress of the Work compares to the Project Schedule and will specify the
estimated dates of remaining milestones. Photographs also shall be included
documenting the fabrication progress. Each photograph shall show the date,
Contractor's name and description of the view taken.

                  (b)      Contractor and Owner shall meet at least once during
each 30-day period at a mutually convenient time and place for the purpose of
reviewing the progress of the Work.

                  (c)      Contractor shall promptly inform Owner of (i) any
occurrence that could reasonably be expected to impact the schedule for delivery
of Equipment, (ii) any unanticipated technical problem, (iii) any Defect, and
(iv) any material changes to previously submitted information.

                                     - 11 -

<PAGE>

         SECTION 3.12.     DRAWINGS, ENGINEERING DATA, OPERATING MANUAL AND
OTHER MATERIALS.

                  (a)      Contractor shall prepare and deliver to Owner the
drawings, plans, reports and other information set forth as Contractor's
responsibilities in EXHIBIT A, in accordance with the Project Schedule. Owner
shall review and approve (which approval shall not be unreasonably withheld or
delayed) or comment on each drawing submitted by Contractor to Owner for
approval within 15 days. If Owner does not respond in 15 days, the drawing shall
be deemed approved. All drawings, plans, reports and other information prepared
by Contractor or any Subcontractor in connection with the Work shall be kept by
Contractor in an orderly and catalogued fashion for reference by Owner.
Contractor shall maintain in an electronic file format approved by Owner (which
approval shall not be unreasonably withheld or delayed) and at least one (1)
hard copy of each drawing, plan and Change Order in good order and marked to
record all changes made to the Work during performance of the Work, including
all field modifications to the Work. Prior to the Final Acceptance Date, or the
earlier termination of this Agreement, Contractor shall transfer all final plans
to Owner.

                  (b)      Contractor shall submit all drawings to Owner, in
accordance with the Project Schedule (it being agreed that all drawings
generated by Contractor or any first-tier Subcontractor, and, to the extent
available, other drawings, shall be provided in an electronic file format), for
Owner's review and comments. Contractor shall revise the drawings from time to
time to reflect changes to the Work or actual installation of the Equipment and
the final installation of any individual Equipment or the Facility as a whole to
provide final plans.

                  (c)      Within one year following delivery of the Notice to
Proceed, Contractor shall submit for Owner approval (which approval shall not be
unreasonably withheld or delayed) or comments a summary of the content, format
and quantity of a manual containing operating and maintenance instructions for
each major component of the Work. Within 15 days, Owner shall approve or comment
on the summary (Owner's reasonable comments to be incorporated by Contractor).
If Owner does not respond in 15 days, the summary shall be deemed approved. In
accordance with the Project Schedule and, in any case, prior to training of
Owner's personnel and commissioning of the Facility, Contractor shall deliver to
Owner 20 hard copies and one electronic copy of the final operating manual (the
"OPERATING MANUAL").

                  (d)      Prior to Final Acceptance, Contractor shall supply
Owner 20 bound instruction books including reduced drawings, Equipment
specifications, test and Start-Up reports, equipment manufacturers' instruction
books and spare parts lists.

         SECTION 3.13.     ACCOUNTING INFORMATION. During the term of this
Agreement and for three (3) years after the Final Acceptance Date, Contractor
will provide to taxing authorities, at Owner's or such authority's request and
otherwise as required by Applicable Laws, Contractor's and each first-tier
Subcontractor's billing information for the Work to support Owner's federal,
state or local tax filings, exemptions or positions, including sales, use and
property taxes.

         SECTION 3.14.     CONTRACTOR TAXES. Contractor shall, and shall cause
all Subcontractors to, pay all federal, state and local taxes in connection with
the Work, including without limitation

                                     - 12 -

<PAGE>

taxes (to the extent, if any, applicable) based on or related to Contractor's or
Subcontractors' labor and personnel or income, and all state or local sales or
use or excise taxes (to the extent, if any, applicable) in connection with the
purchase of Equipment, materials or supplies which Contractor uses or consumes
in connection with the Work (collectively, "CONTRACTOR TAXES").

         SECTION 3.15.     CLAIMS AND LIENS FOR LABOR AND MATERIALS. Contractor
shall discharge and cause to be released, whether by payment or posting of an
appropriate surety bond in accordance with Applicable Law, within ten days after
the creation or filing thereof, any claim or Lien relating to the Facility, this
Agreement, the Equipment, the Job Site, the Melt Shop or any fixtures or
personal property included in the Work (whether or not any such claim or Lien is
valid or enforceable) created by, through or under, or as a result of any act or
omission (or alleged act or omission) of, Contractor or any Subcontractor.

         SECTION 3.16.     PRELIMINARY SERVICES. Contractor has reviewed and
accepted certain preliminary equipment engineering services and drawings
prepared prior to the date of this Agreement. Contractor shall not, and shall
not be entitled to, raise any defect or deficiency in any of such services or
drawings as a defense to or excuse of any of its obligations under the Contract
Documents (including, without limitation, its warranties and guarantees
contained herein), or as a basis for any Change Order.

         SECTION 3.17.     GUARANTY. On the date hereof, Contractor has
delivered to Owner the Guaranty.

                                   ARTICLE 4.
                          CERTAIN OBLIGATIONS OF OWNER

         SECTION 4.1.      PERMITS. Owner or others shall obtain when required
and maintain all Applicable Permits required for the construction, ownership,
use, maintenance or operation of the Facility ("OWNER PERMITS"), provided,
however, that any delay in obtaining an Owner Permit shall constitute an
Owner-Caused Delay, and Contractor shall not be in breach of this Agreement
because of such delay, if the requirements of Sections 14.4, 14.5 and 14.6 are
met.

         SECTION 4.2.      OWNER SERVICES. Owner shall supply, or arrange for
the supply of, the work, labor, erection, construction, installation, services,
equipment, consumables and parts indicated by a "O" under the heading "Supply"
in EXHIBIT A, and all other labor, services, equipment, consumables and parts
specified or implied in Owner's scope in accordance with the Project Schedule,
provided that any delay by Owner in performing its obligations under the
Contract Documents caused by a delay by Contractor in supplying necessary data,
basic engineering or detailed engineering (to the extent indicated by a "C"
under the applicable heading in EXHIBIT A) shall not constitute an Owner-Caused
Delay.

         SECTION 4.3.      PERSONNEL AND OPERATIONS. Owner shall provide
qualified operating personnel for training by Contractor in accordance with the
Project Schedule. Owner's personnel will operate the Facility during testing,
under Contractor's supervision. Owner shall operate the Facility in accordance
with the Operating Manual.

                                     - 13 -

<PAGE>

         SECTION 4.4.      OWNER TAXES. Owner shall pay all real property taxes
assessed against the Job Site, any permanent use charges or taxes such as water,
sewer and construction utilities, and state and local sales and use taxes.

                                   ARTICLE 5.
                                PROJECT SCHEDULE

         SECTION 5.1.      COMMENCEMENT OF WORK. Contractor shall commence the
Work upon receipt of the Notice to Proceed and all payments, including the
Initial Payment to Contractor, required as a part of the Notice to Proceed. The
Notice to Proceed will not be effective unless and until the payments referred
to in the definition thereof have been paid. If all conditions and all payments
required for effectiveness of the Notice to Proceed are not met or made within
180 days after the date of this Agreement, Contractor shall have the right and
option to terminate this Agreement, in which event neither Party shall have any
further liability or responsibility hereunder.

         SECTION 5.2.      PROJECT SCHEDULE. Contractor shall perform the Work
in compliance with the Project Schedule, which (subject to extensions of the
Project Schedule to which Contractor is entitled under the Contract Documents)
shows the LMF commissioning and the EAF commissioning occurring at the end of
the 16th month. Contractor shall promptly notify Owner of any event or
circumstance that Contractor believes will adversely affect completion of the
Work in accordance with the Project Schedule and the corrective action planned.
Contractor shall thereafter implement such action in order to complete the Work
in accordance with the Project Schedule. Contractor shall be entitled to propose
a Change, in accordance with Article 6, to compensate it for any delays and
costs due to events or circumstances not attributable to Contractor, and the
Parties shall negotiate in good faith, and execute, a Change Order to which
Contractor is entitled under the Contract Documents with respect to any such
delays and costs.

                                   ARTICLE 6.
                                  CHANGE ORDERS

         SECTION 6.1.      CHANGE ORDER AT OWNER'S REQUEST.

                  (a)      Additions to or deletion from or other changes in
Contractor's scope of Work ("CHANGE" or "CHANGES") shall be made only in
accordance with this Article 6. Owner may request Changes, by written notice to
Contractor, from time to time. Contractor shall review and deliver a written
response to each such notice within ten days or, if the proposed Change
reasonably requires a longer response time, then within such longer time as is
reasonable in the circumstances. If Contractor reasonably determines that giving
effect to a requested Change will increase or decrease the Contract Price or
affect the Milestone Payment Schedule or the Project Schedule, its response to
the Change request shall set forth such proposed modifications, with supporting
documentation. If Contractor fails to respond to Owner's request in accordance
with this Section 6.1(a), Contractor shall be deemed to have accepted the
requested Change without changes to the Contract Price, the Milestone Payment
Schedule or the Project Schedule. If Contractor accepts, or is so deemed to
accept, the Change requested by

                                     - 14 -

<PAGE>

Owner, or if Owner accepts Contractor's modification to the Contract Price, the
Milestone Payment Schedule or the Project Schedule, the Parties shall set forth
the Change and any such modifications in a written change order prepared by
Contractor and accepted by Owner, and executed by duly authorized officer of
Contractor and a duly authorized officer or representative of Owner (a "CHANGE
ORDER"). Each Change Order shall constitute a final settlement of all items
covered therein.

                  (b)      If Owner requests changes or clarifications in the
Work that, in Owner's good faith opinion, are consistent with Contractor's scope
of Work and therefore do not constitute a Change, but, in Contractor's good
faith opinion, Owner's request constitutes a Change, Contractor shall so advise
Owner promptly, and within ten days, or within such longer period as Contractor
reasonably requires, Contractor shall set forth in a Change request its good
faith estimate of the change in the Contract Price, Project Schedule and
Milestone Schedule resulting from Owner's request. If Owner's request would
cause Contractor to incur costs less than $50,000, Contractor shall proceed with
the request, under protest with all rights reserved; if Contractor would incur
costs in excess of $50,000 up to $250,000, Contractor shall proceed with the
request, under protest with all rights reserved, provided Owner funds an escrow
account, or posts other security reasonably acceptable to Contractor, in the
amount of Contractor's reasonably estimated costs in excess of $50,000; if
Contractor would incur costs in excess of $50,000 and Owner has not provided
such funds or security or if Contractor would incur costs in excess of $250,000,
Contractor shall not be required to proceed with the request until the dispute
as to whether a Change results from Owner's request has been resolved. In each
case, the dispute as to whether a Change results from Owner's request will be
resolved in accordance with Article 17.

                  (c)      Owner may request, by written notice, a Change Order
if (i) a Force Majeure Event, (ii) an Owner Caused Delay, or (iii) a Change In
Law affects the Contract Price, the Milestone Payment Schedule or the Project
Schedule. The Parties shall negotiate in good faith the terms of, and execute, a
Change Order in such circumstances.

         SECTION 6.2.      CHANGE ORDERS REQUESTED BY CONTRACTOR.

                  (a)      Not used.

                  (b)      Subject to paragraphs (c) and (d) below, Contractor
may request a Change in the Work. If Owner approves the requested Change, the
Parties shall negotiate in good faith, and execute, a Change Order setting forth
the Change and any resulting increase or decrease in the Contract Price and/or
modification of the Milestone Payment Schedule or the Project Schedule resulting
therefrom.

                  (c)      Contractor may propose, by written notice to Owner,
Changes in the Work, the Milestone Payment Schedule or the Project Schedule if
(i) a Force Majeure Event, (ii) an Owner Caused Delay, (iii) a Change In Law or
(iv) a suspension of the Work in accordance with this Agreement increases the
Contract Price or adversely affects the Milestone Payment Schedule or the
Project Schedule, provided Contractor has complied with the

                                     - 15 -

<PAGE>

requirements of Article 14 or 15 or Section 6.4, as applicable. In any such
event, the Parties shall negotiate in good faith, and execute, a Change Order.

                  (d)      If Contractor knows of circumstances or events that
do or may affect the Contract Price, the Milestone Payment Schedule or the
Project Schedule, but Contractor fails to provide written notice to Owner within
15 days after the date Contractor becomes aware thereof, then Contractor shall
not be entitled to a Change Order with respect to such circumstances or events.

         SECTION 6.3.      CHANGES TO CONTRACT PRICE; DISPUTES. A Change Order
may have the effect of increasing or decreasing the Contract Price. Each
Contractor response to a Change Order under Section 6.1 and each Contractor
request for a Change under Section 6.2 shall be accompanied by a proposed
all-inclusive final lump sum cost (separating materials and labor) to Owner. If
the Parties are unable to reach an agreement on a final lump amount for a Change
Order, and if Owner requests Contractor to perform such Change, then Contractor
shall perform the Change and shall be compensated for its costs reasonably
incurred by Contractor in its performance of Work attributable to such Change,
including direct and actual labor costs, equipment costs, engineering costs,
material costs and subcontract costs (provided that any subcontract executed by
a first-tier Subcontractor together with all contracts executed with or between
any lower tier contractor or contractors which are affiliates of Contractor
shall include a cumulative mark-up and/or a cumulative fee of no more than 5%),
plus a fee equal to 5% of such costs. Contractor shall provide detailed
supporting documentation of such costs with the applicable Requests for Payment.

         SECTION 6.4.      CHANGE IN LAW. If a Change In Law occurs and affects
the Contract Price, the Milestone Payment Schedule or the Project Schedule, the
Parties shall negotiate in good faith, and execute, a Change Order with respect
thereto; provided, however, Contractor shall be entitled to Change Order only
if:

                  (a)      Contractor notifies Owner within 15 days of becoming
aware of the Change in Law and uses reasonable efforts to mitigate the effect of
the Change In Law;

                  (b)      Contractor substantiates the delay or costs incurred
by Contractor as a direct result of the Change In Law, to the reasonable
satisfaction of Owner; and

                  (c)      Contractor requests the Change Order within 15 days
of the date it becomes aware of the Change In Law (or within such longer period
as Contractor reasonably requires in the circumstances to prepare its request).

                                     - 16 -

<PAGE>

                                   ARTICLE 7.
                     CONTRACT PRICE; PAYMENTS TO CONTRACTOR

         SECTION 7.1.      CONTRACT PRICE.

                  (a)      Contractor shall perform the Work on a "lump-sum"
basis for a contract price of $34,365,000, as such amount may be increased or
decreased by Change Order in accordance with this Agreement (the "CONTRACT
PRICE"). Payments of the Contract Price shall be made based on achievement of
milestones in accordance with the Milestone Payment Schedule, subject to
withholding of amounts by Owner in accordance with this Agreement. The Contract
Price may only be adjusted, upward or downward, for Changes or as otherwise
provided in the Contract Documents.

                  (b)      Upon payment of each of the Initial Payment and the
First Heat Payment, Contractor shall deliver to Owner an irrevocable bank letter
of credit in substantially the form attached as EXHIBIT G and issued by a
financial institution acceptable to Owner and the Financing Parties, in the
amount of the Initial Payment or the First Heat Payment, as applicable. Owner
(or its transferee) shall be entitled to make demand under either letter of
credit, in accordance with the terms thereof.

                  (c)      The letter of credit delivered upon payment of the
Initial Payment shall be returned by Owner upon payment of the First Heat
Payment.

                  (d)      The stated amount of letter of credit delivered upon
payment of the First Heat Payment shall be reduced or drawn, in an aggregate
amount not in excess of 3/12 of the original stated amount of such letter of
credit, in accordance with Section 6.4 of EXHIBIT E. Up to 9/12 of the original
stated amount of the letter of credit delivered upon payment of the First Heat
Payment shall be reduced, as follows:

<TABLE>
<CAPTION>
Amount of
Reduction*                   Event Triggering Reduction**
----------                   ----------------------------
<S>             <C>
  1/12          First 250t +/- 10t ladle of steel is tapped ("FIRST HEAT")

  3/12          Successful Productivity Acceptance Test

  3/12          Successful Index at Cost Test

  2/12          Successful Baghouse Acceptance Test
</TABLE>

 * Fraction of original stated amount of letter of credit

** See EXHIBIT E for definitions and details

Notwithstanding the foregoing, if the Performance Test is not successfully
performed in accordance with Section 10.3 or any of the other requirements for
Final Acceptance are not fulfilled pursuant to Section 10.4 for reasons solely
attributable to Contractor within six months

                                     - 17 -

<PAGE>

after First Heat, Owner shall be entitled to draw down the full amount of the
letter of credit delivered at First Heat Payment in accordance with the terms
thereof and retain the proceeds as a rebate of a portion of the Purchase Price.

                  (e)      Upon payment of the Initial Payment, Owner shall
simultaneously deliver to Contractor its promissory note ("NOTE") in the amount
of $3,000,000, in the form attached as EXHIBIT I. Contractor authorizes Owner to
withhold $200,000 from each of milestone payments 1 through 7 and 9 through 16
(inclusive) made under this Agreement. Owner's obligation to repay to Contractor
such withheld amounts shall be under and subject to, and shall be honored and
performed, in accordance with the terms of the Note, the Note shall be
unsecured, and Owner's repayment obligations shall be unconditional,
irrevocable, autonomous, direct, legal and valid obligations of Owner, except
that Owner shall be entitled to offset against the principal amount of the Note
amounts owed by Contractor under this Agreement which are not paid when due. The
Note will be issued in favor of Contractor but will be freely endorsable by
Contractor without restriction. Owner shall bear the cost of any stamp taxes
levied on the Note in the United States, and Contractor shall bear the cost of
any stamp taxes levied on the Note in any other jurisdiction.

         SECTION 7.2.      REQUESTS FOR PAYMENT.

                  (a)      Contractor shall submit to Owner a Request for
Payment within five days of the beginning of each month for the milestone
achieved in the previous month. Each Request for Payment shall describe the
milestone achieved according to the Milestone Payment Schedule and the sum of
all prior payments made by Owner to Contractor through the last day of the
previous month. Each Request for Payment will be accompanied by (i) releases and
waivers of liens from first-tier Subcontractors providing Equipment or services
described in the Request for Payment, which are effective to assure release of
mechanics' or materialmen's liens in accordance with Applicable Law upon payment
of amounts due, and (ii) any other information that Owner or the Financing
Parties may reasonably request. Each Request for Payment shall also contain
Contractor's certification that (i) each obligation mentioned in that Request
for Payment has been performed in accordance with the terms and conditions of
the Contract Documents, all physical progress is as represented therein,
Contractor has reviewed all data contained in the Request for Payment and that
the same is true and complete, (ii) each such obligation, item of cost or
expense has not been the basis of any previous payment, (iii) title to all
Equipment and other Work for which payment is requested in such Request for
Payment has passed or will at the time of such payment pass to Owner, (iv) the
Equipment is free of all Subcontractor's liens for the Work invoiced in such
Request for Payment and all previous Requests for Payment, and (v) upon receipt
of the amount invoiced, Contractor shall confirm in writing its waiver of its
right to a lien for any Work furnished or performed (provided that such
confirmation shall not be deemed to be a waiver by Contractor of any claims it
may then have against Owner hereunder). Subject to Section 7.2(b), and provided
Contractor submitted its Request for Payment within five days of the beginning
of the month, within a maximum of 30 days after receipt of a Request for Payment
and supporting documentation, Owner shall make payment to Contractor in the
amount set forth for the milestone achieved in the previous month

                                     - 18 -

<PAGE>

in the Milestone Payment Schedule, subject to its rights explicitly set forth
herein to withhold amounts from such payment.

                  (b)      Owner shall not be obligated to make any payment for
partially completed milestones, or to make payment in any month that Contractor
fails to provide a Request for Payment. Owner shall not be obligated to make
more than one payment during each month, but such payment shall include payment
of prior disputed payments that were withheld with respect to which all disputes
have been resolved. Owner may withhold any amount that it reasonably disputes,
by giving written notice to Contractor. Any disputed amount that is withheld
shall be paid upon resolution of the dispute. Any amount owed by Owner but not
paid when due shall bear interest at an annual rate of 5% from the date due to
the date of payment.

         SECTION 7.3.      GENERAL PROVISIONS PAYMENTS.

                  (a)      Contractor shall continue performance of the Work
pending the resolution of any disputed Request(s) for Payment or portion(s)
thereof. A pending dispute with respect to a Request for Payment shall not alone
relieve Owner of its obligation to make subsequent undisputed milestone payments
for milestones achieved in accordance with this Agreement or payments of other
undisputed amounts (if any) due and owing by Owner hereunder.

                  (b)      The making of any payment by Owner shall not
constitute an acceptance of the Work covered by the payment. If it is determined
that Contractor was not entitled to all or a portion of any payment made by
Owner, Contractor shall promptly refund the excess amount with interest at an
annual rate of 5% from the date that Contractor received the excess amount to
the date of refund.

                  (c)      Notwithstanding any other provision herein to the
contrary, (i) during the continuation of a Contractor Event of Default under
Section 15.1(c) or (d), Owner shall be entitled to withhold from payments to
Contractor an amount equal to 120% of Owner's reasonable good faith estimate of
the cost that Owner would incur in order to cure such Contractor Event of
Default, and (ii) Owner shall have no obligation to make payments to Contractor
hereunder during the continuation of any other Contractor Event of Default
unless, and only to the extent, the Financing Parties permit Owner to draw on
financing proceeds to make payments owed by Owner hereunder. Owner shall also be
entitled to deduct from any payment provided by Contractor its costs and losses
resulting from (i) Defects or other warranty breaches, (ii) Liens or claims
subject to Contractor's indemnities hereunder with respect to which Contractor
has not delivered a bond or insurance policy protecting Owner against the full
amount of the Liens or claims (provided that the delivery of a bond or policy
shall not be deemed to be a waiver of any rights Contractor has to make a claim
to for amounts withheld), (iii) failure of Contractor to make payments when due
to Subcontractors, or (iv) damage to property of Owner or Owner's other
contractors resulting from acts, omissions or negligence of Contractor or any of
its Subcontractors (except to the extent Owner has received, or has received
assurances from any insurer that Owner is entitled to receive, insurance
proceeds in respect of such damage).

                                     - 19 -

<PAGE>

                  (d)      Contractor shall pay each Subcontractor all amounts
owed in connection with the Work, on or before applicable due dates.

         SECTION 7.4.      LIENS. Within ten days of receiving notice of any
Lien made, filed or created against Owner, the Work, the Facility, the Melt Shop
or the Job Site by Contractor or a Subcontractor, Contractor shall discharge
such Lien (or deliver a bond protecting Owner against the full amount of the
Lien). Contractor shall indemnify, defend and hold harmless Owner from and
against any Lien against the property of Owner. Owner shall withhold from any
payment owed to Contractor or demand payment from Contractor of (and in the case
of a demand for payment, if Contractor fails to pay, Owner may draw on any
letter of credit provided by Contractor), an amount sufficient to indemnify
Owner against any such claim or Lien if the claim or Lien is not fully
discharged (or fully bonded around). Owner may apply such withheld or drawn
amounts or payments to discharge such Lien (if not fully bonded around).

         SECTION 7.5.      FINANCING.

                  (a)      Contractor acknowledges that Owner intends to borrow
funds from Financing Parties for the construction of the Facility and that, as a
condition to making loans to Owner, the Financing Parties may require
documentation from Contractor and Subcontractors. Contractor agrees to furnish
to the Financing Parties, and to use its best efforts to cause the
Subcontractors to furnish to the Financing Parties, such written information,
certificates, copies of invoices and receipts, lien waivers, affidavits and
other documents as the Contract Documents require.

                  (b)      Contractor shall promptly negotiate in good faith,
and execute, any additional documentation reasonably requested by the Financing
Parties, including a consent to assignment of this Agreement as security to the
Financing Parties, on terms and conditions reasonably acceptable to Contractor,
including Section 18.1 hereof.

                  (c)      Owner anticipates that the Financing Parties will
retain an independent technical consultant whose duties will include, among
others, verifying that conditions required to draw funds to make payments under
this Agreement have been satisfied, reviewing progress reports prepared by
Contractor and monitoring progress of the Work, witnessing tests and verifying
test results, verifying completion of the Work and visiting with Contractor and
Owner's other contractors. Contractor agrees to cooperate with the independent
technical consultant, and to provide information and access reasonably requested
by the independent technical consultant.

                  (d)      Once the technical consultant has verified that
conditions to Owner's draw of funds to make a payment requested in a Request for
Payment have been satisfied, Owner shall request, with the technical
consultant's approval, that the Financing Parties make the payment in accordance
with the Request for Payment, net of any amounts permitted to be withheld in
accordance with the Contract Documents, to such bank account as Contractor shall
have designated to the Financing Parties. Contractor acknowledges that any
payment so made shall constitute payment by Owner hereunder.

                                     - 20 -

<PAGE>

                                   ARTICLE 8.
                       TITLE, RISK OF LOSS AND POSSESSION

         SECTION 8.1.      CLEAR TITLE. Contractor warrants and guarantees that
title to and the ownership of the Work, including without limitation all
materials and Equipment, included in the Work, shall pass to Owner free and
clear of any and all Liens, upon delivery thereof and payment to Contractor for
such items. The provisions of this Section 8.1 shall survive the expiration or
termination of this Agreement.

         SECTION 8.2.      RISK OF LOSS. Notwithstanding a transfer of title
pursuant to Section 8.1, Contractor assumes the risk of loss for any portion of
the Work until delivery F.O.B. the Job Site/D.D.P. (Incoterms), and all risk of
loss shall shift to Owner upon such delivery. If any loss, damage, theft or
destruction occurs to the Work for which Contractor has the risk of loss,
Contractor shall promptly repair or replace the property affected thereby and,
if Contractor fails to do so, Owner shall be entitled to draw on any letter of
credit provided by Contractor by delivering to Contractor notice of its
intention to draw on the letter of credit within two business days, stating
details of Owner's calculation of the estimated cost of repair or replacement;
otherwise, any loss, damage, theft or destruction is for Owner's account.

                                   ARTICLE 9.
                                    INSURANCE

         SECTION 9.1.      CONTRACTOR INSURANCE. Contractor (or its first-tier
Subcontractors referred to Section 18.1) shall carry and maintain the following
minimum insurance coverages with respect to the Facility and Contractor's (and
first-tier Subcontractors') performance of the Work. All insurance carriers
shall be reasonably acceptable to Owner and the Financing Parties:

During a period no longer than eight weeks following the effective date of the
Notice to Proceed, the following minimum coverages shall be maintained by the
first-tier Subcontractors:

                                     TABLE A

Type of Coverages                            Minimum Amount of Coverage

Workers' Compensation that                   Statutory
complies with the laws of all
jurisdictions as may be applicable

Employer's Liability Insurance,              $1,000,000
including Occupational Disease

Product Liability                            $6,000,000 each occurrence,
                                             $7,000,000 aggregate per year

                                     - 21 -

<PAGE>

Third-Party Liability                        $6,000,000 each occurrence,
                                             $7,000,000 aggregate per year

E&O                                          $1,000,000 per occurrence and
                                             aggregate

During the period commencing no later than the eighth week following the
effective date of the Notice to Proceed and throughout the remaining period of
performance of the Work the following minimum coverages shall be maintained by
Contractor or by the first-tier Subcontractors (in which case Contractor will be
named as an Additional Insured on the policies maintained by the first-tier
Subcontractors (other than the Workers' Compensation, Employer's Liability and
E&O policies):

                                     TABLE B

Type of Coverages                            Minimum Amount of Coverage

Workers' Compensation that                   Statutory
complies with the laws of all
jurisdictions as may be applicable

Employer's Liability Insurance,              $1,000,000
including Occupational Disease

Comprehensive General Liability ("CGL")      $2,000,000 Each Occurrence;
insurance, occurrence form, for all          $6,000,000 General Aggregate
locations, including but not limited to      (Other than Products/Completed
coverage for products/completed operations   Ops.)
two years tail (coverage); broad form        $2,000,000 Aggregate for Products/
contractual liability covering all           Completed Operations
liabilities assumed by Contractor,
property damages and bodily injury

Professional Liability coverage              This policy will be maintained by
will be on a claims-made basis               first-tier Subcontractors
with two tail cover

E&O                                          This policy will be maintained by
                                             first-tier Subcontractors

                                             $1,000,000 Each Occurrence/Annual
                                             Aggregate

                                     - 22 -

<PAGE>

Comprehensive Automobile Liability,          $2,000,000 Combined Single Limit
on an occurrence basis, including
coverage for all owned, leased,
hired or non-owned automotive
equipment

Umbrella Excess Liability                    $8,000,000 Each Occurrence/
                                             Aggregate

The CGL insurance listed above shall contain an aggregate limit at least two
times the per occurrence limit and the sum of the per occurrence limit for CGL
plus Umbrella Excess Liability limit shall be at least $10,000,000.

If the coverages listed in Table B are maintained by the first-tier
Subcontractors and not by Contractor, the coverage limits will apply to
coverages maintained by Guarantor, and the coverage limits applicable to
coverages maintained by Core Furnace Systems Corp. shall instead be the limits
set forth in Table A.

         SECTION 9.2.      OWNER'S INSURANCE. During the period of Contractor's
performance of the Work, Owner shall carry and maintain the following minimum
insurance coverages with respect to the Facility. All insurance carriers shall
be reasonably acceptable to Contractor.

Type of Coverages                           Minimum Amount of Coverage

Workers' Compensation that complies         Statutory
with the laws of all jurisdictions
as may be applicable

Employer's Liability Insurance,             $1,000,000
including Occupational Disease

Comprehensive General Liability             $2,000,000 Each Occurrence;
insurance, occurrence form, for all         $6,000,000 General Aggregate
locations, including but not                (Other than Products/Completed Ops.)
limited to coverage for                     $2,000,000 Aggregate for Products/
products/completed operations;              Completed Operations
broad form contractual liability
covering all liabilities assumed by
Owner, property damages and bodily
injury

Comprehensive Automobile Liability,          $2,000,000 Combined Single Limit
on an occurrence basis, including
coverage for all owned, leased,
hired or non-owned automotive
equipment

                                     - 23 -

<PAGE>

Umbrella Excess Liability                    $8,000,000 Each Occurrence/
                                             Aggregate

Allrisk Property Insurance                   $250,000,000 Each Occurrence/
(including coverage for Builders             Aggregate
Risk exposures) for property damage                    except:
and business interruption to EAF
and Owner's other assets.                    $100,000,000 Each Occurrence/
Deductible is $2,500,000 per                 Aggregate Boiler & Machinery
occurrence for property damage               Coverage
(after risk of loss shifts to                $50,000,000 Each Occurrence/
Owner, Owner shall pay the                   Aggregate Earthquake and Flood
deductible) and 15 days ADV (Actual
Daily Value) for business
interruption.

         SECTION 9.3.      RELATIONSHIP TO HOLD HARMLESS PROVISIONS AND
WARRANTIES. Neither the carrying of any insurance coverages nor the failure to
carry any insurance coverages shall change or affect a Party's warranties, hold
harmless or other obligations or liabilities under this Agreement. Contractor
shall be required to complete the Work and perform its other obligations
hereunder, without additional payment from Owner, regardless of insurance
coverages carried by Contractor.

         SECTION 9.4.      ADDITIONAL INSUREDS. For the coverages specified in
Table B and in Section 9.2, Owner, Contractor, the Construction Manager, the
Financing Parties and the Emergency Steel Loan Guaranty Board, and their
respective officers, agents and employees, shall be named as additional insureds
on Owner's or Contractor's (as applicable) insurance policies required under
Sections 9.1 and 9.2. Each Party shall promptly notify the other Party and the
Financing Parties of any loss or damage to the Facility so that proof of loss
can be made.

         SECTION 9.5.      CERTIFICATE OF INSURANCE. Each of Contractor and
Owner will furnish to the other Party and the Financing Parties certificates of
insurance to evidence compliance with this Article 9.

         SECTION 9.6.      CANCELLATION. All insurance coverage obtained by
Contractor shall provide for a minimum of 30 days written notice in the event of
cancellation or modification to Contractor, Owner and the Financing Parties.

         SECTION 9.7.      PREMIUMS. The Parties shall be solely responsible for
paying all premiums for its insurance coverages required by this Article 9.

         SECTION 9.8.      SUBROGATION. With respect to the coverages specified
in Table B and in Section 9.2, each Party hereby releases and will require the
insurers (by policy endorsement) to waive all rights of subrogation against,
officers, directors, agents, servants and employees of the other Party and the
Financing Parties for loss covered by the policies of insurance required by this
Article 9.

                                     - 24 -

<PAGE>

         SECTION 9.9.      SUBCONTRACTOR'S INSURANCE. Before permitting any
first-tier Subcontractor to perform Work, Contractor shall obtain a certificate
of insurance evidencing that such Subcontractor has obtained insurance in such
amounts and against such risks as is customarily carried by Persons engaged in
similar businesses in the same geographic area.

         SECTION 9.10.     RIGHT TO INSURE. If Contractor fails to provide or
maintain any of the insurance coverages required under this Article 9, Owner
shall have the right to provide or maintain such coverage at Contractor's
expense, either by direct charge or setoff or by draw on any letter of credit
provided by Contractor.

         SECTION 9.11.     INSURED VS. INSURED. For all policies (other than
worker's compensation coverage) any insured versus insured exclusion will be
removed.

                                   ARTICLE 10.
                         TESTING, SUBSTANTIAL COMPLETION
                              AND FINAL ACCEPTANCE

         SECTION 10.1.     TESTING PROTOCOLS.

                  (a)      Contractor shall submit to Owner for review and
approval (which approval shall not be unreasonably withheld or delayed) a
proposed Cold Test Protocol at least 30 days prior to the expected date of the
Cold Test. Owner shall approve or comment on the Cold Test Protocol within ten
days. Owner's reasonable comments shall be incorporated in the final Cold Test
Protocol, and the Cold Test shall be performed in accordance with the final Cold
Test Protocol.

                  (b)      Contractor shall submit to Owner for review and
approval (which approval shall not be unreasonably withheld or delayed) a
proposed Start-Up and Hot Test Protocol at least 120 days prior to the expected
date of the Cold Test. Owner shall approve or comment on the Start-Up and Hot
Test Protocol within ten days. Owner's reasonable comments shall be incorporated
in the final Start-Up and Hot Test Protocol, and Start-Up and the Hot Test shall
be performed in accordance with the final Start-Up and Hot Test Protocol.

                  (c)      Contractor shall submit to Owner for review and
approval a proposed Performance Test Protocol that is consistent with the
parameters, procedures, calculations and performance levels set forth in EXHIBIT
E within one year following delivery of the Notice to Proceed. Owner shall
approve (which approval shall not be unreasonably withheld or delayed) or
comment on the Performance Test Protocol within 30 days. Owner's reasonable
comments shall be incorporated in the final Performance Test Protocol, and all
Performance Tests shall be performed in accordance with the final Performance
Test Protocol.

                  (d)      Contractor acknowledges that Owner's approval or
comments on any proposed protocol may be given only with the approval and
consent of the Financing Parties, but such approval shall not be unreasonably
withheld or delayed.

                                     - 25 -

<PAGE>

         SECTION 10.2.     COLD TEST, START-UP AND HOT TEST.

                  (a)      When all requirements and conditions set forth in the
Cold Test Protocol are achieved, the Cold Test shall be conducted by Owner's
personnel under Contractor's supervision. If the Cold Test is successfully
performed in accordance with the Cold Test Protocol, and items of Work, if any,
remaining to be completed, alone or in the aggregate, (i) do not prevent the
Facility from being used as described in EXHIBIT A, and (ii) do not prevent the
Facility from being safely and reliably placed in commercial operation, and
(iii) could not have an adverse effect on the operation, efficiency or
reliability of the Facility, Owner shall promptly issue a certificate to such
effect (the "PROVISIONAL ACCEPTANCE CERTIFICATE") together with a list (the
"PUNCH LIST") of Work items remaining to be completed, if any. If the Cold Test
is unsuccessful, Contractor shall act promptly to correct all Defects, Owner
shall act promptly to correct all other defects, and thereafter the Cold Test
will be rerun. If the Cold Test has not been performed or has not been
successfully performed, for reasons not attributable to Contractor, within nine
months after the date of the last delivery to the Job Site of any substantial
part of the Equipment, the Provisional Acceptance Certificate shall be deemed to
have been issued.

                  (b)      Within two days following issuance (or deemed
issuance) of the Provisional Acceptance Certificate, Owner's personnel, acting
under Contractor's supervision, will Start-Up the Facility in accordance with
the Start-Up and Hot Test Protocol. If Start-Up has not occurred for reasons not
attributable to Contractor within eleven months after the last delivery to the
Job Site of any substantial part of the Equipment, Start-Up shall be deemed to
have been successfully achieved.

                  (c)      Within 15 days following First Heat, when all
requirements and conditions for conducting the Hot Test, as set forth in the
Start-Up and Hot Test Protocol, are achieved, the Hot Test shall be conducted by
Owner's personnel under Contractor's supervision. If the Hot Test is
unsuccessful, Contractor shall act promptly to correct all Defects, Owner shall
act promptly to correct all other defects, and thereafter the Hot Test will be
rerun. If the Hot Test has not been performed or has not been performed
successfully, for reasons not attributable to Contractor, within eleven months
after the last delivery to the Job Site of any substantial part of the
Equipment, the Hot Test shall be deemed to have been successfully completed.

                  (d)      Notwithstanding the foregoing, the nine, eleven and
eleven month time periods stated in subsections (a), (b) and (c), respectively,
may be extended at Owner's request by Change Order, provided that Contractor is
compensated by such Change Order for the time value of money to the extent such
milestone payments are delayed as a result of the extension(s) of such
period(s), in addition to any increase in the Contract Price and/or modification
of the Milestone Payment Schedule or the Project Schedule resulting from such
Change.

         SECTION 10.3.     PERFORMANCE TESTS.

                  (a)      When (i) the Facility is sufficiently complete so
that all systems are capable of safe and normal operation in accordance with
Prudent Engineering Practices, the Contract Documents and the Operating Manual,
(ii) the Cold Test, Start-Up and the Hot Test

                                     - 26 -

<PAGE>

have been successfully performed or achieved, (iii) Owner's personnel have been
duly trained and are sufficiently experienced in the operation of the Facility
and (iv) the preconditions for performance testing set forth in the Performance
Test Protocol have been achieved, Contractor and Owner shall schedule a test
period of ten consecutive days of operation at "full production" (24 hours per
day). At the end of this period, two sets of ten consecutive heats will be
chosen from among the heats produced during the period. Each parameter specified
in the Performance Test Protocol set forth in EXHIBIT E will be measured for
each of the selected heats. The maximum and minimum of the measured values will
be discarded and the average of the remaining heats will constitute the basis
for calculating the values of the Index at Cost Test (the "PERFORMANCE TEST").

                  (b)      The Parties anticipate that the Performance Test will
be performed within six months following Start-Up. The Performance Test will be
successfully completed only when all of the following occur: (i) First Heat is
achieved, (ii) the Productivity Acceptance Test is successfully performed, or
the Productivity Acceptance Test results demonstrate production capacity of at
least 95% of the level of productivity required for successful performance of
the Productivity Acceptance Test, as specified in Section 6.2 of EXHIBIT E, and
Owner has received proceeds of a draw on the letter of credit delivered at First
Heat Payment in an amount equal to 3% of the Contract Price ("COMPLETED
PRODUCTIVITY ACCEPTANCE TEST"), (iii) the Index at Cost is equal to or less than
the values specified in Section 6.3 of Exhibit E, or the Index at Cost exceeds
the values specified in Section 6.3 of EXHIBIT E by no more than 5% and Owner
has received proceeds of a draw on the letter of credit delivered at First Heat
Payment in an amount equal to 3% of the Contract Price ("COMPLETED INDEX AT COST
TEST"), and (iv) the Baghouse Acceptance Test is successfully performed
("COMPLETED BAGHOUSE TEST"). The Performance Test will be conducted by Owner's
personnel under Contractor's supervision, and Contractor shall have access to
the Facility at all times during the Performance Test in order to take
measurements and supervise ordinary course adjustments to the Facility. The log
of test results will be approved in writing by each of Contractor and Owner at
each tapping time. If the Performance Test is unsuccessful, Contractor shall act
promptly to correct all Defects, Owner shall act promptly to correct all other
defects, and thereafter the Performance Test will be rerun (or partially rerun,
as necessary).

                  (c)      If the preconditions for performance of the
Performance Tests are not achieved during the six-month period following
Start-Up due to any Owner's breach of its obligations hereunder, the Performance
Tests will be deemed to have been passed. If the Performance Test has not been
performed or has not been successfully performed, for reasons not attributable
to Contractor, within 11 months after the last delivery to the Job Site of any
substantial part of the Equipment, then, at Owner's request, (i) the Performance
Test shall be run or rerun (or partially rerun, as necessary) until it is
successfully performed (when all requirements and conditions set forth in this
Section 10.3 are achieved), (ii) Contractor shall be compensated by Change Order
for the time value of money to the extent milestone payments are delayed as a
result of the failure of the Performance Test to be performed successfully for
reasons not attributable to Contractor, in addition to any increase in the
Contract Price and/or modification of the Milestone Payment Schedule or the
Project Schedule resulting from such

                                     - 27 -

<PAGE>

failure, and (iii) Owner shall return to Contractor the letter of credit
delivered at the time of the Initial Payment (and Contractor shall be required
to deliver the second letter of credit only when the First Heat Payment is made
in accordance with this Agreement).

         SECTION 10.4.     FINAL ACCEPTANCE. When Contractor believes that the
Performance Test has been completed successfully, as described in Section
10.3(b) and the other requirements of Final Acceptance have been satisfied,
Contractor shall notify Owner and the Financing Parties in writing, and shall
provide a copy of the log of test results and all calculations necessary to
demonstrate that each element of the Performance Test was completed
successfully. Within ten days, Owner shall deliver a certificate stating that
Final Acceptance has occurred (the "FINAL ACCEPTANCE CERTIFICATE"), or a notice
describing any Defects and deficiencies noted. Contractor promptly shall correct
all Defects, Owner shall promptly correct all other defects and the Performance
Test will be rerun (or partially rerun, as necessary), subject to Contractor's
rights under Sections 6.2 and 6.3 with respect to any Owner-Caused Delay.

                                   ARTICLE 11.
                       SCHEDULE AND PERFORMANCE GUARANTEES

         SECTION 11.1.     SCHEDULE GUARANTEE. The Milestone Payment Schedule
contains seven milestones (numbers 10, 11, 12, 13, 14, 15 and 16) comprising
delivery of five key equipment lots ("EQUIPMENT LOTS") and the commissioning of
the Baghouse, LMF, Consteel conveyor and EAF. Contractor guarantees that each
Equipment Lot will be delivered F.O.B. the Job Site/D.D.P. (Incoterms) no later
than the applicable delivery date in the Milestone Payment Schedule (as such
date may be extended in accordance with the Contract Documents) so that First
Heat occurs within 16 months (as such date may be extended in accordance with
the Contract Documents) of the effective date of the Notice to Proceed.

         SECTION 11.2.     SCHEDULE LIQUIDATED DAMAGES.

                  (a)      If any Equipment Lot is not delivered F.O.B. the Job
Site/D.D.P. (Incoterms) by the delivery date specified in the Milestone Payment
Schedule (as such date may be extended in accordance with the Contract
Documents) and as a result First Heat does not occur within 16 months (as such
date may be extended in accordance with the Contract Documents) of the effective
date of the Notice to Proceed, Contractor shall pay to Owner, as liquidated and
agreed damages and not as a penalty, an amount ("SCHEDULE LIQUIDATED DAMAGES")
for each week of delay in achieving First Heat resulting from the late delivery
of Equipment Lots, as follows:

                                     - 28 -

<PAGE>

<TABLE>
<CAPTION>
Delayed time
  (weeks)            Liquidated Damages to be Paid
------------         -----------------------------
<S>                  <C>
   First               None

    2-3                $50,000 per week delayed

    4-5                $50,000 per week delayed
</TABLE>

Notwithstanding the foregoing, Contractor's aggregate liability for Schedule
Liquidated Damages shall be limited to 5% of the First Heat Payment. (A delay of
four days or more is deemed to be a week's delay.) It is further agreed that if
First Heat does not occur within such 16-month period (as extended in accordance
with the Contract Documents) for reasons other than late deliveries of Equipment
Lots, Contractor will not be required to pay Schedule Liquidated Damages.

                  (b)      It is understood and agreed between the Parties that
the terms, conditions and amounts fixed pursuant to this Article 11 as
liquidated damages are reasonable, considering the damages that Owner would
sustain if Equipment Lot deliveries occur after applicable delivery dates, and
the difficulty of ascertaining the exact amount of damages that would be
sustained as a result of delay. Receipt of such liquidated damages shall be
Owner's sole and exclusive remedy for damages incurred due to late deliveries of
Equipment Lots that result in a delay in achieving First Heat, but payment of
such liquidated damages shall not relieve Contractor of obligations to deliver
the Equipment to the Job Site or to perform its other obligations hereunder.

         SECTION 11.3.     PAYMENT OF LIQUIDATED DAMAGES. Schedule Liquidated
Damages shall be payable by Contractor upon demand. Any amount not paid when due
shall accrue interest from the due date until the date paid at an annual rate of
5%.

         SECTION 11.4.     SCHEDULE BONUS. If any Equipment Lot is delivered
F.O.B. the Job Site prior to the delivery date specified in the Milestone
Payment Schedule (as such date may be extended in accordance with the Contract
Documents) as necessary to commission the EAF within the 16-month period (as
such period may be extended in accordance with the Contract Documents) following
the effective date of the Notice to Proceed, and early delivery of the Equipment
Lot positively affects the achievement of First Heat earlier than 16 months (as
such date may be extended in accordance with the Contract Documents) after the
effective date of the Notice of Proceed, Contractor shall have an opportunity to
earn a bonus (the "SCHEDULE BONUS") for each week of early delivery, as follows:

                                     - 29 -

<PAGE>

<TABLE>
<CAPTION>
Anticipated time
    (weeks)                  Bonus to be Paid to Supplier
----------------          ----------------------------------
<S>                       <C>
     First                None

      2-3                 $25,000 per week of early delivery

      4-5                 $25,000 per week of early delivery

   6 and over             $25,000 per week of early delivery
</TABLE>

Notwithstanding the foregoing, the aggregate Schedule Bonus that may be earned
by Contractor shall not exceed 5% of the First Heat Payment. (Early delivery by
four to seven days is deemed to be early delivery by a week.) Any Schedule Bonus
shall be payable within 30 days following First Heat, except that if Owner is
not then permitted to draw proceeds under its financing to pay the Schedule
Bonus, the Schedule Bonus shall be payable when Owner is permitted to draw
proceeds of its financing for such purpose. It is agreed, however, that if First
Heat is achieved earlier than scheduled due to the effects of Change Orders or
actions taken by or at the direction of Owner, Contractor shall not earn any
Schedule Bonus.

         SECTION 11.5.     REBATE OF SCHEDULE LIQUIDATED DAMAGES. If (a) as a
result of late delivery of one or more Equipment Lots Start-Up occurs after the
16th month (as such period may be extended in accordance with the Contract
Documents) following delivery of the Notice to Proceed, and (b) during the
six-month period following Start-Up the Facility achieves 1630 heats, Owner
promptly shall rebate to Contractor all Schedule Liquidated Damages paid by
Contractor.

         SECTION 11.6.     REBATE OF SCHEDULE BONUS. If (a) Start-Up occurs
prior to the 16th month (as such period may be extended in accordance with the
Contract Documents) following the effective date of the Notice to Proceed, and
(b) during the sixth-month period following the date which is 16 months (as such
date may be extended in accordance with the Contract Documents) from the date of
the effective date of the Notice to Proceed, the Facility fails to achieve 1630
heats, Contractor promptly shall refund all Schedule Bonuses to Owner or Owner
may draw such amount under any letter of credit provided by Contractor.

         SECTION 11.7.     OTHER LIMITATIONS. If the Productivity Acceptance
Test, Index at Cost Test or Baghouse Test is not performed or is not performed
successfully, in accordance with the Contract Documents within six months from
First Heat, for reasons solely attributable to Contractor, Owner shall be
entitled to draw on the letter of credit delivered upon First Heat Payment in
the following amounts: (i) failure to perform or perform successfully the
Productivity Acceptance Test: 3% of the Contract Price; (ii) failure to perform
or perform successfully the Index at Cost Test: 3% of the Contract Price; and
(iii) failure to perform or perform successfully the Baghouse Test: 2% of the
Contract Price. If Contractor performs a Productivity Acceptance Test during
which the demonstrated production capacity exceeds 95% of the productivity level
specified in Section 6.2 of EXHIBIT E, Owner's right to draw on the letter

                                     - 30 -

<PAGE>

of credit shall be Owner's sole and exclusive remedy with respect to shortfall
in tested productivity. If Contractor performs an Index at Cost Test that
demonstrates an Index at Cost no greater than 105% of the values specified in
Section 6.3 of EXHIBIT E, Owner's right to draw on the letter of credit shall be
Owner's sole and exclusive remedy with respect to the excess tested Index at
Cost. In no event shall Contractor be relieved of its obligations to perform a
Completed Productivity Acceptance Test, a Completed Index at Cost Test and a
Completed Baghouse Test (each as defined in Section 10.3(b)), and to achieve
Final Acceptance. The limitations contained in this Section 11.7 shall not limit
Owner's rights to terminate the Contract Documents upon a Contractor Event of
Default under Section 15.1(i).

                                   ARTICLE 12.
                             CONTRACTOR'S WARRANTIES

         SECTION 12.1.     WARRANTIES.

                  (a)      Contractor warrants to Owner that all Equipment and
materials furnished under this Agreement by Contractor shall be new and of good
quality and shall be free from Defects.

                  (b)      Contractor warrants to Owner that the Work shall be
performed in a good and workmanlike manner and shall be free from Defects, and
that the Facility, if assembled and installed by Owner or others strictly in
accordance with Contractor's design, drawings and specifications, will (i)
conform to and be designed, engineered and fabricated in accordance with the
approved drawings and the terms of the Contract Documents, and (ii) conform
with, and be designed and engineered according to, the standards and codes
listed in EXHIBIT D and, to the extent not conflicting with such standards and
codes, Prudent Engineering Practices.

                  (c)      Contractor shall remedy any Defects in the Work and
any other failure to meet its warranties in this Section 12.1 which appear
within a period of one year following the date of Start-Up (as extended in
accordance with the next sentence, the "WARRANTY PERIOD"). If Owner notifies
Contractor of a Defect or other warranty breach within the Warranty Period,
Contractor, at Contractor's expense, shall perform all Work necessary to remedy
the Defect or other warranty breach and the repair or replacement work performed
by Contractor to accomplish that purpose shall be subject to an additional
one-year warranty from the date that the repair or replacement is completed. If
as a result of any Defects in the EAF transformer or the LMF transformer, such
transformer is required to be removed from the Job Site, Contractor shall bear
all costs incurred to remove, transport and reinstall the transformer.

                  (d)      THE WARRANTIES OF CONTRACTOR SET FORTH IN THIS
AGREEMENT ARE EXCLUSIVE AND IN LIEU OF ALL OTHER WARRANTIES, WHETHER STATUTORY,
EXPRESS OR IMPLIED (INCLUDING ALL WARRANTIES OF MERCHANTABILITY AND FITNESS FOR
A PARTICULAR PURPOSE AND ALL WARRANTIES ARISING FROM COURSE OF DEALING AND USAGE
OF TRADE). The

                                     - 31 -

<PAGE>

foregoing sentence is not intended to disclaim any other obligations of
Contractor set forth herein.

         SECTION 12.2.     OWNER REPAIR OF NONCONFORMING WORK. If during the
Warranty Period Contractor fails to complete or undertake with due diligence to
complete the correction of any Defect or cure of any other breach of warranty as
required herein within 30 days after receipt of written notice by Owner, Owner
may correct or cause to be corrected such Defect or cure such breach of
warranty. Contractor shall reimburse Owner on demand for, or, if Contractor
fails to reimburse Owner following demand, Owner may draw on any letter of
credit provided by Contractor in the amount of, all costs, charges and expenses
incurred by Owner in connection therewith. Any amount not paid when due shall
accrue interest at an annual rate of 5% from the date due until the date paid.

         SECTION 12.3.     SUBCONTRACTORS. Contractor shall, for the protection
of Contractor and Owner, obtain from Subcontractors such guarantees and
warranties with respect to Work performed and Equipment supplied, used and
installed hereunder as are reasonably obtainable. Upon the expiration of the
Warranty Period, or earlier termination of this Agreement, Contractor shall
deliver to Owner copies of all contracts providing for such guarantees and
warranties.

                                   ARTICLE 13.
                         REPRESENTATIONS AND WARRANTIES

         SECTION 13.1.     REPRESENTATIONS AND WARRANTIES.

                  (a)      Contractor represents and warrants to Owner that (i)
Contractor is a corporation duly organized, validly existing, and in good
standing under the laws of the State of Ohio and, prior to the Notice to Proceed
effective date, will be duly authorized and qualified to conduct business in the
State of Ohio, (ii) Contractor has all requisite corporate power and authority
to conduct its business, own its properties and execute and deliver this
Agreement and perform its obligations hereunder in accordance with the terms
hereof, (iii) the execution, delivery, and performance of this Agreement have
been duly authorized by all necessary corporate action and this Agreement
constitutes the legal, valid and binding obligation of Contractor, enforceable
against Contractor in accordance with its terms, except as such enforceability
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or other similar laws affecting the enforcement of creditors' rights generally
and by general principles of equity (regardless of whether enforcement thereof
is sought in a proceeding at law or in equity), and (iv) Contractor is, or prior
to the time required by Applicable Law will be, the holder of all governmental
consents, licenses, permissions and other authorizations required to perform the
Work in accordance with this Agreement.

                  (b)      Owner represents and warrants to Contractor that (i)
Owner is a corporation duly organized, validly existing, and in good standing
under the laws of the State of Delaware, (ii) Owner has all requisite corporate
power and authority to conduct its business, own its properties and execute and
deliver this Agreement and perform its obligations hereunder in accordance with
the terms hereof, and (iii) the execution, delivery, and performance of this

                                     - 32 -

<PAGE>

Agreement have been duly authorized by all requisite corporate action and this
Agreement constitutes the legal, valid and binding obligation of Owner,
enforceable against Owner in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and by general principles of equity (regardless of
whether enforcement thereof is sought in a proceeding at law or in equity).

                                   ARTICLE 14.
                      FORCE MAJEURE AND OWNER CAUSED DELAY

         SECTION 14.1.     DEFINITION OF FORCE MAJEURE EVENT. As used herein,
the term "FORCE MAJEURE EVENT" shall mean any event or circumstance (or
combination of events or circumstances), that arises after the date hereof, is
beyond the reasonable control of the Party claiming the Force Majeure Event, is
unavoidable or could not be prevented or overcome by the reasonable efforts and
due diligence of the Party claiming the Force Majeure Event and has an impact
which will actually and demonstrably affect such Party's ability to perform its
obligations in accordance with the terms of this Agreement. Without limiting the
generality of the foregoing, events that may give rise to a Force Majeure Event
include acts of God, natural disasters, fires, earthquakes, explosions,
lightning, floods, storms of an unusual duration, nature or severity in the
geographic area, insurrections, civil disturbances, riots, war, the action of or
failure to act on the part of any Government Authority, and strikes, lockouts or
other labor disputes with respect to the labor or personnel of the Party (or the
Subcontractors or, in the case of Owner, its other contractors and
subcontractors) desiring to claim a Force Majeure Event (provided that in no
event shall a Change Order executed as a result of any strike, lockout or other
labor dispute increase the Contract Price).

         SECTION 14.2.     NOTICE OF FORCE MAJEURE EVENT. The Party claiming a
Force Majeure Event shall, within 15 days after it actually knows of the
occurrence of the Force Majeure Event, give the other Party written notice
describing, to the extent then known by the Party, the details of the cause and
nature of the Force Majeure Event, the anticipated length of delay due to the
Force Majeure Event and any other effect on the Party's performance of its
obligations hereunder. The Party claiming the Force Majeure Event shall give
prompt notice to the other Party of the cessation of the Force Majeure Event and
the cessation of the effects of such Force Majeure Event on the performance by
it of its obligations under this Agreement. No Force Majeure Event shall relieve
either Party from performing its obligations that are not affected by the Force
Majeure Event.

         SECTION 14.3.     CHANGE DUE TO FORCE MAJEURE EVENT. So long as the
conditions set forth in Section 14.2 and this Section 14.3 are satisfied,
neither Party shall be in breach of this Agreement because of any failure or
delay in complying with its obligations under this Agreement to the extent that
such failure has been caused, or contributed to, by one or more Force Majeure
Events or its effects, and in such event:

                  (a)      except as otherwise provided herein, the performance
by the Party claiming the Force Majeure Event of its obligations hereunder shall
be suspended, and if such

                                     - 33 -

<PAGE>

Party is required to start or complete an action during a specific period of
time, such start date or period for completion shall be extended, on the
condition that: (i) such suspension of performance and extension of time shall
be of no greater scope and of no longer duration than is required by the effects
of the Force Majeure Event, (ii) the Party claiming the Force Majeure Event
complies with Section 14.2, and (iii) the Party claiming the Force Majeure Event
uses its reasonable efforts to alleviate and mitigate the cause and effect of
the Force Majeure Event and remedy its inability to perform (provided that
Contractor shall be entitled to a Change Order for any such additional costs
reasonably incurred by Contractor, in accordance with Article 6);

                  (b)      Notwithstanding the occurrence of a Force Majeure
Event, the provisions of this Article 14 shall not excuse the payment
obligations hereunder of either Party; and

                  (c)      A Party's failure to comply with this Section 14.3
shall constitute a waiver of any claims as a result of a Force Majeure Event.

         SECTION 14.4.     DEFINITION OF OWNER CAUSED DELAY. The term "OWNER
CAUSED DELAY" shall mean a delay that actually and adversely affects
Contractor's ability to achieve a milestone in accordance with the Milestone
Payment Schedule and the Project Schedule that is caused by Owner's failure to
perform, or cause its third party contractors to perform, its obligations as and
when required pursuant to the terms of this Agreement for reasons other than the
occurrence of a Force Majeure Event or a Contractor Event of Default or other
act or omission of Contractor or a Subcontractor.

         SECTION 14.5.     NOTICE OF OWNER CAUSED DELAY. If Contractor desires
to claim an Owner Caused Delay, Contractor shall, within 15 days after it knows
of the occurrence of the Owner Caused Delay, give Owner written notice
describing the details of the Owner Caused Delay and the anticipated length of
delay due to Owner Caused Delay.

         SECTION 14.6.     CHANGE DUE TO OWNER CAUSED DELAY. So long as the
conditions set forth in Section 14.5 and this Section 14.6 are satisfied,
Contractor shall not be in breach of this Agreement because of any delay in
achieving a milestone to the extent caused by one or more Owner Caused Delays,
and in such event, the Milestone Payment Schedule and the Project Schedule shall
be extended, on the condition that such extension of time shall be of no longer
duration than is required by the effects of Owner Caused Delay, and the Contract
Price shall be increased to the extent Contractor's cost of performing the Work
is increased by the Owner Caused Delay. Contractor's failure to comply with
Section 14.5 or this Section 14.6 shall constitute a waiver of all claims for an
extension of time as a result of an Owner Caused Delay.

                                   ARTICLE 15.
                                   TERMINATION

         SECTION 15.1.     CONTRACTOR EVENTS OF DEFAULT. The occurrence and
continuation of any of the following events shall constitute an event of default
by Contractor (each, a "CONTRACTOR EVENT OF DEFAULT"):

                                     - 34 -

<PAGE>

                  (a)      (i) the failure of Contractor to achieve, for reasons
solely attributable to Contractor, First Heat within 16 months (as such date may
be extended in accordance with the Contract Documents) following the effective
date of the Notice to Proceed, (ii) the lapse of a period of time thereafter
during which Contractor is obligated to pay Schedule Liquidated Damages in an
aggregate amount equal to 5% of the First Heat Payment (if in connection with
the delayed First Heat Schedule Liquidated Damages are payable) and (iii) the
lapse of all Change Orders executed by the Parties to extend the date for
achievement of First Heat;

                  (b)      the failure by Contractor to make any payment
required to be made under this Agreement within ten days after the due date,
except where such payment is disputed by Contractor in good faith, or to deliver
any letter of credit when required under this Agreement;

                  (c)      the material breach by Contractor of any
representation or warranty contained herein, unless the events or circumstances
causing any representation and warranty to be untrue or incomplete are remedied
within 30 days following Contractor's knowledge thereof;

                  (d)      the material breach by Contractor of any obligation,
covenant or agreement in this Agreement that is not otherwise addressed in this
Section 15.1 and that continues 30 days or more after notice thereof from Owner,
or if such breach is susceptible of cure and Contractor is unable, despite due
diligence, to complete the cure within such 30-day period, Contractor shall be
afforded an additional reasonable period in which to complete the cure provided
Contractor diligently pursues the cure;

                  (e)      any of the following occurs: (i) Contractor or
Guarantor consents to the appointment of or taking possession by, a receiver, a
trustee, custodian, or liquidator of itself or of a substantial part of its
assets, or fails or admits in writing its inability to pay its debts generally
as they become due, or makes a general assignment for the benefit of creditors,
(ii) Contractor or Guarantor files a voluntary petition in bankruptcy or a
voluntary petition or an answer seeking reorganization in a proceeding under any
applicable bankruptcy or insolvency laws or an answer admitting the material
allegations of a petition filed against it in any such proceeding, or seeks
relief by voluntary petition, answer or consent, under the provisions of any now
existing or future bankruptcy, insolvency or other similar law providing for the
liquidation, reorganization, or winding up of corporations, or providing for an
agreement, composition, extension, or adjustment with its creditors, (iii) a
substantial part of Contractor's or Guarantor's assets is subject to the
appointment of a receiver, trustee, liquidator, or custodian by court order and
such order shall remain in effect for more than 30 days, or (iv) Contractor or
Guarantor is adjudged bankrupt or insolvent, has any property sequestered by
court order and such order shall remain in effect for more than 30 days, or has
filed against it a petition under any bankruptcy, reorganization, arrangement,
insolvency, readjustment of debt, dissolution or liquidation law of any
jurisdiction, whether now or hereafter in effect, and such petition shall not be
dismissed within 30 days of such filing, and in any such case affecting only
Guarantor, Contractor fails to deliver a replacement guaranty or other security
reasonably acceptable to Owner and the Financing Parties within 45 days;

                                     - 35 -

<PAGE>

                  (f)      the dissolution of Contractor or Guarantor and, in
the case of Guarantor, Contractor fails to deliver a replacement guaranty or
other security reasonably acceptable to Owner and the Financing Parties within
45 days;

                  (g)      the transfer (i) by Contractor of all or a
substantial portion of the rights or obligations of Contractor hereunder, except
as permitted herein, or (ii) by Contractor or Guarantor of all or substantially
all of its assets and, in the case of Guarantor, Contractor fails to deliver a
replacement guaranty or other security reasonably acceptable to Owner and the
Financing Parties within 45 days;

                  (h)      the Guaranty ceases to be in full force and effect,
or Guarantor so claims, and in any such case, Contractor fails to deliver a
replacement guaranty or other security reasonably acceptable to Owner and the
Financing Parties within 45 days; or

                  (i)      A successful Performance Test, as described in
Section 10.3(b), is not completed within six months from First Heat for reasons
solely attributable to Contractor.

Owner shall be obligated to make payments coming due to Contractor during any
cure period provided in Section 15.1(e), (f), (g) or (h) if and only to the
extent financing proceeds are available to Owner to make such payments (unless
the unavailability of such proceeds is the result of a cause or reason other
than the uncured Contractor default). Notwithstanding any provision of this
Agreement, Contractor shall continue to perform its obligations hereunder during
any cure period.

         SECTION 15.2.     TERMINATION BY OWNER DUE TO CONTRACTOR EVENT OF
DEFAULT.

                  (a)      Upon the occurrence and during the continuance of a
Contractor Event of Default, Owner may terminate this Agreement, without
prejudice to any other rights and remedies available to Owner, by giving 15
days' written notice to Contractor.

                  (b)      In the event of a termination by Owner under this
Section 15.2, Owner may employ any Person to complete the Work by whatever
method Owner may deem necessary. Owner may make such expenditures as in Owner's
reasonable judgment will accomplish the timely completion of the Work in
accordance with the terms hereof.

                  (c)      In the event of termination by Owner under this
Section 15.2, Contractor shall not be entitled to receive any further payments
under this Agreement, except for payment for Work completed prior to such
termination for which Contractor has not previously been paid. Owner shall be
entitled to offset against such amount due to Contractor any amounts due to
Owner by Contractor. The amount, if any, due to Contractor under this Section
15.2(c) shall be paid to Contractor within 30 days after the Final Acceptance
Date (if achieved by a substitute contractor).

                  (d)      In the event of termination by Owner under this
Section 15.2, and without limiting Owner's rights or remedies, Contractor shall
be responsible for and shall reimburse

                                     - 36 -

<PAGE>

Owner for the following amounts subject to the limitations in Section 18.4: (i)
all costs and expenses incurred by Owner to engage a substitute contractor to
complete (or cure Defects in) the Work, including overhead and legal,
engineering and other professional expenses, (ii) all costs and expenses
incurred in connection with the termination of this Agreement, including costs
and expenses incurred in connection with the obligations set forth under Section
15.8, and (iii) the amount by which (A) the cost to complete (or cure Defects
in) the Work exceeds (B) the balance of the Contract Price unpaid at the time of
the termination.

         SECTION 15.3.     TERMINATION BY OWNER FOR CONVENIENCE. Owner may
terminate this Agreement pursuant to this Section 15.3 at any time in its sole
discretion by giving written notice to Contractor, which termination shall be
effective upon the giving of such notice by Owner. Upon receiving any such
notice of termination, Contractor shall immediately stop performing the Work and
shall use its reasonable efforts to cancel as quickly as possible all orders
placed by it with Subcontractors and shall use its reasonable efforts to
minimize cancellation charges and other costs and expenses associated with the
termination of the Agreement. In the event of a termination by Owner under this
Section, Contractor shall be entitled to receive a termination payment (the
"TERMINATION PAYMENT") equal to the sum of the following, without duplication:
(a) that portion of the Contract Price that is applicable to Work completed up
to the date of termination (including amounts withheld in accordance with
Section 7.1(e)) that has not previously been paid to Contractor, and, upon such
payment, the Note shall be canceled and returned to Owner, (b) the documented
expenses reasonably incurred by Contractor in terminating contracts with
Subcontractors pertaining to the Work, except to the extent Owner has instructed
Contractor not to terminate such contracts, and (c) Contractor's lost profit
calculated by multiplying $3,500,000 by a fraction the numerator of which is the
aggregate amount under the foregoing clauses (a) and (b) and the denominator of
which is the Contract Price, but in no event shall the profit under clause (c)
be less than $500,000. Contractor shall submit an invoice to Owner for the
Termination Payment with the supporting information and documents referred to
above, and Owner shall pay such invoice and return any letter of credit or
guaranty provided by Contractor hereunder within 30 days after receipt of the
invoice unless it disputes any portion thereof, in which event the dispute over
any part of the Termination Payment shall be resolved pursuant to Article 17.
Contractor shall use reasonable efforts to include a termination for convenience
provision with terms similar to the foregoing in all subcontracts, contracts and
purchase orders with Subcontractors.

         SECTION 15.4.     SUSPENSION BY OWNER FOR CONVENIENCE. Owner may
suspend all or a portion of the Work to be performed under this Agreement at any
time for any reason in its sole discretion by giving written notice thereof to
Contractor. Upon receiving any such notice of suspension, unless the notice
requires otherwise, Contractor shall: (a) immediately discontinue the Work on
the date and to the extent specified in the notice, (b) place no further orders
or subcontracts for Equipment, services or facilities with respect to suspended
Work, other than to the extent required in the notice, (c) promptly make every
reasonable effort to obtain suspension, with terms satisfactory to Owner, of all
orders, subcontracts and rental agreements to the extent they relate to
performance of suspended Work, (d) continue to protect and maintain the Work
performed, including those portions on which Work has been suspended, and (e)
take any other

                                     - 37 -

<PAGE>

reasonable steps to minimize costs and expenses associated with such suspension.
As full compensation for any suspension under this Section, Contractor will be
reimbursed by Owner for the following costs: (a) a standby charge sufficient to
compensate Contractor for keeping its organization committed to the Work on a
standby basis, (b) an equitable amount to reimburse Contractor for the cost of
receiving, maintaining and protecting that portion of Work upon which
performance has been suspended, (c) all additional costs, expenses and damages
actually incurred by Contractor as a result of such suspension, and (d) 15% of
the sum of (a), (b) and (c). Upon delivery of notice by Owner to Contractor to
resume suspended Work, Contractor shall immediately resume performance under
this Agreement to the extent required in the notice. Contractor shall include a
suspension for convenience provision with terms similar to the foregoing in all
subcontracts and purchase orders with Subcontractors. Contractor shall be
entitled to a Change Order, upon expiration of any such suspension, to the
extent the suspension affects the Milestone Payment Schedule or the Project
Schedule.

         SECTION 15.5.     TERMINATION DUE TO FORCE MAJEURE EVENT. If a Force
Majeure Event has occurred and continues for a period of at least 180 days,
then, notwithstanding that the Parties may have executed a Change Order with
respect thereto, Owner may deliver a written notice to Contractor stating its
intention to terminate this Agreement. If, at the expiration of 30 days after
the Contractor's receipt of such notice, the Force Majeure Event is continuing,
either Party may terminate this Agreement. In the event of such termination,
Contractor shall be entitled to receive recoveries provided in Section 15.3.

         SECTION 15.6.     TERMINATION BY CONTRACTOR. Contractor may suspend or
terminate this Agreement upon the terms and conditions set forth in this Section
15.6.

                  (a)      If Owner fails to make any payment within 15 days of
the due date hereunder, other than disputed amounts and amounts permitted to be
withheld in accordance with the Contract Documents, and other than as provided
in Section 15.1, through no act or fault of Contractor or any Subcontractor,
Contractor may give written notice thereof to Owner. If the amount due is not
paid within 15 days after the date of Owner's receipt of such notice from
Contractor, then Contractor shall have the right to suspend its performance of
the Work. If Contractor so suspends performance of the Work, it shall
immediately resume performance of the Work upon receipt of payment of the
amounts due (other than disputed or properly withheld amounts). At any time
after suspension of Work by Contractor under this Section 15.6 in excess of 30
days, Contractor may give written notice to Owner of its intent to terminate
this Agreement. If all amounts due (other than reasonably disputed or properly
withheld amounts) are not paid by Owner within 15 days after Owner's receipt of
such notice from Contractor, Contractor shall have the right to suspend or
terminate this Agreement. Upon any such suspension, Contractor shall have its
full rights and remedies set forth in Section 15.4. Upon any such termination,
Contractor shall have its full rights and remedies set forth in Section 15.3,
and Owner shall return any letters of credit and guaranties provided by
Contractor.

                  (b)      If Owner materially breaches its obligations,
covenants or agreement (other than its payment obligations) in this Agreement,
and such breach continues for 30 days or

                                      - 38 -

<PAGE>

more after notice from Contractor, or if such breach is susceptible of cure and
Owner is unable, despite due diligence, to complete the cure within the 30-day
period, Owner shall be afforded an additional reasonable period to effect such
cure, provided Owner diligently pursues the cure. If Owner fails to effect the
cure, Contractor may terminate this Agreement upon 15 days' notice to Owner, and
may pursue any rights and remedies set forth in Section 15.3, and Owner shall
return any letters of credit and guaranties provided by Contractor.

         SECTION 15.7.     CONTINUING OBLIGATIONS DURING DEFAULT. The Parties
shall continue performance of their obligations during defaults (except as
otherwise provided in the Contract Documents) and all cure periods, until this
Agreement is terminated.

         SECTION 15.8.     OBLIGATIONS UPON TERMINATION. Upon a termination of
this Agreement pursuant to this Article 15, (a) Owner shall take possession of
the Job Site and of the Equipment (whether at the Job Site, in transit or
otherwise), (b) Contractor shall promptly assign to Owner or its designee any
contract rights (including warranties, licenses, patents and copyrights) that
Contractor has to any and all Equipment and the Work, including contracts with
Subcontractors that Owner elects to continue, and Contractor shall execute such
documents as may be reasonably requested by Owner to evidence such assignment,
(c) Contractor shall assist Owner in preparing an inventory of all Equipment in
use or transit, (d) Contractor shall promptly furnish Owner with copies of all
drawings and, to the extent prepared, final plans and the provisions of Section
16.4 and Section 18.2 shall apply with respect to all such drawings and final
plans (and Contractor shall execute such documents as may be reasonably
requested by Owner to evidence Owner's rights to use such drawings and final
plans), and (e) Contractor shall take such other action as may be reasonably
required hereunder upon termination of this Agreement.

         SECTION 15.9.     TERMINATION AND SURVIVAL OF TERMS. Upon termination
of this Agreement pursuant to this Article 15, the rights and obligations of the
Parties hereunder shall terminate, except for (a) rights and obligations accrued
as of the date of termination, (b) rights and obligations arising out of events
occurring prior to the date of termination, and (c) the rights and obligations
of the Parties which, by the terms of this Agreement, survive termination of
this Agreement.

                                   ARTICLE 16.
                                 INDEMNIFICATION

         SECTION 16.1.     CONTRACTOR INDEMNIFICATION. Contractor agrees to
indemnify, defend and hold Owner, the Financing Parties and their contractors
and subcontractors, partners, directors, officers, employees, representatives,
agents, advisors and consultants harmless from and against any and all losses,
claims, obligations, demands, assessments, penalties, liabilities, costs,
damages and expenses (including attorneys' fees and expenses) (collectively,
"DAMAGES") asserted against or incurred by any such indemnitee by reason of or
resulting from any and all of the following:

                                     - 39 -

<PAGE>

                  (a)      any third party claims in connection with bodily
injury or death or property damage to the extent arising out of (i)
Contractor's, any Subcontractor's or their respective employees' negligence or
(ii) performance of the Work;

                  (b)      claims made by any Government Authority for any
Contractor Taxes;

                  (c)      any Lien in respect to the Facility, the Melt Shop,
this Agreement, the Equipment, the Job Site or any fixtures or personal property
included in the Work (whether or not any such Lien is valid or enforceable)
created by, through or under, or as a result of any act or omission (or alleged
act or omission) of, Contractor or any Subcontractor or other Person providing
labor or materials to Contractor or any Subcontractor; or

                  (d)      actual or alleged contamination, pollution or public
or private nuisance to the extent resulting from or arising out of the acts or
omissions of Contractor or any Subcontractor.

         SECTION 16.2.     OWNER INDEMNIFICATION. Owner agrees to indemnify,
defend and hold Contractor and its Subcontractors and their directors, officers,
employees, representatives, agents, advisors and consultants harmless from and
against any and all Damages asserted against or incurred by any such indemnitee
by reason of or resulting from any and all of the following:

                  (a)      any third party claims in connection with bodily
injury or death or property damage to the extent arising out of Owner's, any of
Owner's other contractor's or their respective employees' negligence;

                  (b)      claims made by Government Authority for any Owner
taxes; or

                  (c)      actual or alleged contamination, pollution or public
or private nuisance to the extent existing or occurring prior to the effective
date of the Notice to Proceed or thereafter resulting from or arising out of the
acts or omissions of Owner or any of Owner's other contractors.

         SECTION 16.3.     CONDITIONS OF INDEMNIFICATION. The respective rights
and obligations of the Parties and the other indemnitees under this Article 16
with respect to claims resulting from the assertion of liability by third
parties shall be subject to the following terms and conditions:

                  (a)      Within a reasonable time after receipt of notice of
commencement of any action evidenced by service of process or other legal
pleading, the Person claiming to be indemnified under the terms of this Article
16 (the "INDEMNIFIED PERSON") shall give the Party from which indemnification is
sought (the "INDEMNIFYING PARTY") written notice thereof, together with a copy
of such claim, process or other legal pleading.

                  (b)      Each Party and each other indemnitee shall have the
right, but not the obligation, to contest, defend and litigate any claim,
action, suit or proceeding by any third party alleged or asserted against it
arising out of any matter in respect of which it is entitled to be

                                     - 40 -

<PAGE>

indemnified hereunder and the reasonable costs and expenses thereof (including
reasonable attorneys' fees and expert witness fees) shall be subject to the
indemnity; provided, however, that the indemnifying Party shall be entitled, at
its option, to assume and control the defense of such claim, action, suit or
proceeding at its expense. The indemnifying Party shall not settle any claim
except with the prior written approval of the indemnified Person, whose said
approval shall not be unreasonably withheld or delayed.

                  (c)      If the indemnifying Party assumes control of the
defense, the indemnified Person shall have the right to employ its own counsel,
but the reasonable fees and expenses of such counsel shall be at the expense of
such indemnified Person, unless the indemnifying Party engages the same counsel
for itself and for the indemnified Person and there is a conflict of interest
between the indemnifying Party and the indemnified Person in the conduct of the
defense of such action or there are specific defenses available to it which are
different from or additional to those available to the indemnifying Party. In
such event, counsel for the indemnified Person shall have the right to direct
the defense of such claim, action, suit or proceeding on behalf of the
indemnified Person, and the reasonable fees and expenses of such counsel shall
be reimbursed by the indemnifying Party.

         SECTION 16.4.     INTELLECTUAL PROPERTY WARRANTY. Contractor warrants
that Contractor and/or Guarantor have all necessary rights and interests in all
Intellectual Property Rights which may subsist in any drawing or other work
product included in the Work to grant a license therein to Owner pursuant to
Section 16.4(b) or pursuant to the license referred to below.

                  (a)      All drawings, processes and other work product
included in the Work or subject to the license referred to below may be used by
Owner, its successors and any subsequent owner of the Facility for operation,
maintenance, repair and alteration of the Facility, but for no other purpose.
Contractor and Subcontractors shall have the right to retain and use copies
thereof and the information contained therein, and shall retain copyright
thereto subject to the foregoing rights of Owner and subsequent owners and
operators of the Facility.

                  (b)      Contractor hereby grants to Owner, its successors and
subsequent owners and operators of the Facility an irrevocable, non-exclusive,
royalty-free license:

                           (i)      for use solely in connection with operation,
                  maintenance, repair, modification or alteration of the
                  Facility or any component, any Intellectual Property Rights
                  which may subsist in the drawings, processes and other work
                  product included in the Work; and

                           (ii)     under Intellectual Property Rights solely to
                  the extent necessary for the operation, maintenance, repair,
                  modification or alteration of the Facility or any component
                  designed, specified or constructed by Contractor under this
                  Agreement or by any Subcontractor.

In addition, contemporaneously herewith, Owner and Guarantor shall enter into a
non-exclusive license in the form previously agreed by Owner and Guarantor.

                                     - 41 -

<PAGE>

                  (c)      Contractor shall defend, indemnify and hold harmless
Owner and the Financing Parties and their Affiliates and their respective
directors, officers, partners, employees, representatives, agents, advisors and
consultants against any and all Damages (including reasonable legal fees and
court costs) arising from any claim or legal action for infringement of any
Intellectual Property Right arising from Contractor's performance (or that of
its Subcontractors) that either:

                           (i)      concerns any written information, equipment,
                  materials, supplies, processes, or other items provided by
                  Contractor or any Subcontractor under this Agreement or under
                  the license referred to above, or

                           (ii)     is based upon or arises out of the
                  performance of the Work by Contractor or any Subcontractor; or

                           (iii)    is based upon or arises out of the design or
                  construction and use of any item or unit provided under this
                  Agreement or under any subcontract or as contemplated hereby.

                  (d)      In the event of any claim or legal action for
infringement to which the foregoing indemnity is applicable, Contractor shall,
at its expense, promptly procure the rights alleged to have been infringed or
promptly modify the infringing item, in a manner satisfactory to Owner, so that
it becomes non-infringing or falls within the scope of authorized use.

         SECTION 16.5.     SURVIVAL OF INDEMNIFICATION. The indemnification
provisions of this Article 16 shall survive the Final Acceptance Date and the
termination of this Agreement.

                                   ARTICLE 17.
                               DISPUTE RESOLUTION

         SECTION 17.1.     DISPUTE RESOLUTION. In the event of any dispute,
controversy or claim between the Parties arising out of or relating to this
Agreement, or the breach, termination or invalidity thereof (collectively, a
"DISPUTE"), the Parties shall attempt in the first instance to resolve the
Dispute through good faith friendly consultations.

         SECTION 17.2.     CONTINUING OBLIGATIONS. Contractor shall continue the
Work in accordance with the Project Schedule and the terms hereof during any
Dispute, except as otherwise expressly provided herein.

         SECTION 17.3.     ARBITRATION. Disputes shall be decided by
arbitration, by a panel of three arbitrators, which shall be conducted in New
York, New York in accordance with the Construction Industry Arbitration Rules of
the American Arbitration Association then obtaining unless the Parties agree
otherwise. The award rendered by the arbitrators shall be final and binding, and
judgment may be entered upon it in accordance with Applicable Law in any court
having jurisdiction thereof. Notwithstanding the foregoing provisions of this
Section 17.3, in the event that either Party is sued or subjected to any other
action or proceeding in any other state or

                                     - 42 -

<PAGE>

forum, then such Party shall have the right to join the other Party and
prosecute its claims, or any one or more of its claims against such other Party
in such other suit, action or proceeding.

                                   ARTICLE 18.
                                  MISCELLANEOUS

         SECTION 18.1.     ASSIGNMENT. Except as expressly permitted in this
Agreement, neither Party shall assign this Agreement or any portion hereof, or
any of the rights or obligations hereunder, whether by operation of law or
otherwise, without the prior written consent of the other Party. Notwithstanding
the foregoing, Owner may, without Contractor's consent, assign any or all of its
rights under this Agreement to the Financing Parties, and such parties may
further assign such rights, but no such assignment or assignments shall relieve
the assignees of any past, present or further obligations or liabilities of
Owner under the Contract Documents, unless Contractor agrees otherwise.
Notwithstanding the foregoing, Contractor may subcontract all or substantial
portions of the Work, subject to the provisions of the Contract Documents
regarding Subcontractors, and Owner hereby consents to Contractor's
subcontracting of any portion or portions of the Work to Guarantor and to Core
Furnace Systems Corp. This Agreement shall inure to the benefit of, and be
binding upon, the successors and permitted assigns of the Parties.

         SECTION 18.2.     CONFIDENTIALITY.

                  (a)      Contractor and Owner agree that the contents of this
Agreement and any written information provided by either Party relating to the
Melt Shop, the Facility or such Party, which information is marked as
confidential at the time of disclosure (the "CONFIDENTIAL INFORMATION"), shall
not be disclosed by the receiving Party to any Person, except as permitted
herein. Notwithstanding the foregoing, this Section 18.2 shall not prevent
either Party from disclosing any Confidential Information if and to the extent:
(a) required to do so by Applicable Law or any Government Authority, provided
that such Party shall give 30 days' prior notice (unless Applicable Law requires
disclosure in a shorter time frame) to the other Party of such required
disclosure and, if requested, shall use all reasonable efforts to oppose the
requested disclosure, (b) disclosed to its contractors, subcontractors
(including Subcontractors), employees, directors, officers, agents, advisors or
representatives and to the Financing Parties and their counsel and consultants,
provided that the disclosing Party informs each entity and each individual to
whom such Confidential Information is disclosed of its confidential nature and
obtains their written agreement (on a form reasonably acceptable to Owner and
Contractor) not to disclose such Confidential Information except as permitted
under this Section 18.2, or (c) such information which prior to disclosure was
already in the public domain, or which after disclosure entered the public
domain other than by a breach of this Agreement. Obligations under this Section
18.2 shall remain in effect for a period of ten (10) years following the date of
this Agreement.

                  (b)      Owner and Contractor each recognizes and acknowledges
that the other Party may be irreparably damaged in the event of any violation of
any covenant under Section 18.2(a) and that money damages will not be a
sufficient remedy for any such violation or breach.

                                     - 43 -

<PAGE>

Owner and Contractor each agrees that in the event of any such violation or
breach, the other Party, in addition to and without limiting any other remedy or
right, including recovery of damages, that the other Party may have at law or in
equity, shall be entitled to an injunction or other equitable relief, including
but not limited to specific performance.

         SECTION 18.3.     NOTICES. Whenever this Agreement requires or permits
any consent, approval, notice, request, or demand from one Party to the other,
the consent, approval, notice, request, or demand must be in writing and shall
be deemed to be delivered and received (a) if personally delivered or if
delivered by recognized overnight courier service or by United States certified
or registered mail, postage prepaid, when actually received, or (b) if delivered
by facsimile, on the first business day following the day transmitted (with
confirmation of receipt), in each case addressed to the appropriate Party at the
address or facsimile number of such Party set forth below (or at such other
address or facsimile number as such Party may designate by written notice to the
other Party given in accordance with this Section 18.3):

                  If to Contractor:

                  Junction Industries, Inc.
                  c/o Meyer, Unkovic & Scott LLP
                  Attn: Richard Kotarba
                  1300 Oliver Building
                  Pittsburgh, PA 15222
                  Phone: (412) 456-2815
                  Facsimile: (412) 456-2864

                  If to Owner:

                  Mr. Harry Page
                  Vice President, Engineering
                  1134 Market Street
                  Wheeling, WV 26003
                  Phone: (304) 234-2499
                  Facsimile: (304) 234-2453

         SECTION 18.4.     OVERALL LIMITATION. Notwithstanding any other
provision of the Contract Documents, Contractor's liability for any and all
losses, injuries, damages, costs, expenses, charges and fees sustained or
incurred by Owner arising out of, or by reason of, this Agreement (including any
liquidated damages), and whether such injury, loss, damage, cost, expense,
charge or fee be caused by or result from Contractor's act, omission, negligence
or any act, omission or negligence of Contractor's Subcontractors or their
respective employees, or otherwise, shall not exceed an amount equal to 20% of
the Contract Price (draws by Owner under any letter of credit provided by
Contractor under this Agreement and amounts set off by Owner against payments
made by Owner under the Note, if any, shall be included in determining whether
Contractor has paid 20% of the Contract Price for purposes of the foregoing
limitation of liability). This limitation shall apply regardless of the theory
of recovery and regardless of whether the liability

                                     - 44 -

<PAGE>

claimed is in contract, warranty, equity, tort (including negligence, gross
negligence and strict tort liability) or otherwise.

         SECTION 18.5.     WAIVER OF CONSEQUENTIAL DAMAGES. Notwithstanding any
other provision of the Contract Documents, to the fullest extent permitted by
law, neither Party nor its Affiliates nor its subcontractors or contractors
shall be liable to the other Party or the Financing Parties or their respective
Affiliates for any special, incidental, indirect or consequential damages or the
equivalency thereof including without limitation loss of profit or revenue, down
time, loss of operating time, loss of return on investment, loss of business
opportunity, loss of goodwill, cost of capital, loss of production, loss of
reduction of use or value of any facilities including existing facilities, or
increased costs of operations or maintenance (except to the extent, if any,
liquidated damages provided for in the Contract Documents or payments described
in Sections 15.3 and 15.4 include such damages).

         SECTION 18.6.     WAIVER. No delay, failure or refusal on the part of a
Party to exercise or enforce any right under this Agreement shall impair such
right or be construed as a waiver of such right or any obligation of the other
Party, nor shall any single or partial exercise of any right hereunder preclude
other or further exercise of any right. Any waiver of any obligation or right
hereunder shall not constitute a waiver of any other obligation or right, then
existing or arising in the future. To be effective, a waiver of any obligation
or right must be in writing and signed by the Party waiving such obligation or
right.

         SECTION 18.7.     OFFSET. All amounts payable by Owner to Contractor
hereunder or under the Note shall be subject to offset and reduction by amounts
owed by Contractor hereunder.

         SECTION 18.8.     SEVERABILITY. If any provision of this Agreement is
held to be illegal, invalid, or unenforceable under present or future laws, such
provision shall be fully severable; this Agreement shall be construed and
enforced as if such illegal, invalid or unenforceable provision had never
comprised a part of this Agreement; the Parties shall negotiate in good faith an
alternative provision designed to give effect to the agreement of the Parties;
and the remaining provisions of this Agreement shall remain in full force and
effect and shall not be affected by the illegal, invalid, or unenforceable
provision or by its severance from this Agreement.

         SECTION 18.9.     GOVERNING LAW. This Agreement, and the rights and
obligations of the Parties under or pursuant to this Agreement, shall be
interpreted and construed according to the substantive laws of the State of New
York without giving effect to the conflicts-of-law provisions thereof that would
require the application of the laws of another jurisdiction.

         SECTION 18.10.    ENTIRE AGREEMENT; AMENDMENTS. This Agreement
(including the Exhibits) contains the entire understanding of the Parties with
respect to the subject matter hereof and supersedes all prior agreements,
arrangements, discussions and undertakings between the Parties (whether written
or oral) with respect to the subject matter hereof. This Agreement may only be
amended by a written instrument signed by both Parties.

                                     - 45 -

<PAGE>

         SECTION 18.11.    EXPENSES AND PREPARATION. Each Party shall pay its
own costs and expenses in relation to the negotiation, preparation, execution
and carrying into effect of this Agreement. The Contract Documents were
negotiated and prepared by both Parties with advice of counsel to the extent
deemed necessary by each Party and were not prepared by either Party to the
exclusion of the other, and, accordingly, should not be construed against either
Party by reason of its preparation.

         SECTION 18.12.    COUNTERPARTS. This Agreement may be executed in
multiple counterparts, all of which together shall constitute one and the same
instrument.

                  (Remainder of page intentionally left blank.)

                                     - 46 -

<PAGE>

         IN WITNESS WHEREOF the Parties have executed and delivered this
Agreement as of the date first above written.

                                         JUNCTION INDUSTRIES, INC.

                                         By: /s/ Raimondo Di Carpegna Varini
                                             Name:  Raimondo Di Carpegna Varini
                                             Title: President

                                         WHEELING-PITTSBURGH STEEL
                                         CORPORATION

                                         By: /s/ Harry L. Page
                                             Name:  Harry L. Page
                                             Title: Vice Pres., Engineering,
                                                    Technology & Metallurgy

                [Agreement for Supply of Equipment and Services]

                                     - 47 -

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00054-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00054-of-00352.parquet"}]]