Document:

<PAGE>
                                                                   EXHIBIT 10.22

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

                            ASSET PURCHASE AGREEMENT

                                     Between

                WEIRTON STEEL CORPORATION, FW HOLDINGS, INC. and
                WEIRTON VENTURE HOLDINGS CORPORATION, as Sellers,

                                       AND

                      WSC ACQUISITION CORPORATION, as Buyer

                            Dated as of April 6, 2004

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

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                                    PAGE
<S>                                                                                                                 <C>
ARTICLE 1. PURCHASE AND SALE OF THE ACQUIRED ASSETS .............................................................     2
       SECTION 1.1 Transfer of Acquired Assets ..................................................................     2
       SECTION 1.2 Excluded Assets ..............................................................................     4
       SECTION 1.3 Assumption of Liabilities. ...................................................................     6
       SECTION 1.4 Retention of Liabilities. ....................................................................     7
       SECTION 1.5 Non-Assignment of Contracts ..................................................................     9
       SECTION 1.6 Identification of Additional and Excluded Contracts ..........................................     9
       SECTION 1.7 Transition Services Agreement ................................................................    10
       SECTION 1.8 Exclusion of Nonoperating Assets .............................................................    10

ARTICLE 2. CONSIDERATION ........................................................................................    10
       SECTION 2.1 Total Consideration ..........................................................................    10
       SECTION 2.2 Accounts Payable and Payroll Liabilities .....................................................    11
       SECTION 2.3 Directors and Officers Insurance .............................................................    12

ARTICLE 3. CLOSING AND DELIVERIES ...............................................................................    12
       SECTION 3.1 Closing ......................................................................................    12
       SECTION 3.2 Sellers' Deliveries ..........................................................................    13
       SECTION 3.3 Buyer's Deliveries ...........................................................................    13

ARTICLE 4. REPRESENTATIONS AND WARRANTIES .......................................................................    15
       SECTION 4.1 Representations and Warranties of Sellers ....................................................    15
       SECTION 4.2 Representations and Warranties of Buyer ......................................................    22
       SECTION 4.3 Warranties Are Exclusive. ....................................................................    23

ARTICLE 5. COVENANTS AND OTHER AGREEMENTS .......................................................................    24
       SECTION 5.1 Pre-Closing Covenants of Sellers .............................................................    24
       SECTION 5.2 Pre-Closing Covenants of Buyer ...............................................................    28
       SECTION 5.3 Other Covenants of Sellers and Buyer .........................................................    29
       SECTION 5.4 Employment Covenants and Other Undertakings ..................................................    30
       SECTION 5.5 Covenants Relating to Offerings, Financings and Securities Law Compliance ....................    33
       SECTION 5.6 Administration of Payroll Liabilities ........................................................    34
       SECTION 5.7 Ownership and Use of Weirton Steel Name ......................................................    35

ARTICLE 6. TAXES ................................................................................................    36
       SECTION 6.1 Taxes Related to Purchase of Acquired Assets .................................................    36
       SECTION 6.2 Cooperation on Tax Matters ...................................................................    36
       SECTION 6.3 Allocation of Total Consideration ............................................................    37

ARTICLE 7. CONDITIONS PRECEDENT TO PERFORMANCE BY PARTIES .......................................................    37
       SECTION 7.1 Conditions Precedent to Performance by Sellers ...............................................    37
       SECTION 7.2 Conditions Precedent to the Performance by Buyer .............................................    38

ARTICLE 8. TERMINATION ..........................................................................................    41
       SECTION 8.1 Conditions of Termination. ...................................................................    41
</TABLE>

                                       i

<PAGE>

<TABLE>
<S>                                                                                                                  <C>
       SECTION 8.2 Effect of Termination ........................................................................    42

ARTICLE 9. SURVIVAL AND INDEMNIFICATION .........................................................................    42
       SECTION 9.1 Survival; Indemnification. ...................................................................    42
       SECTION 9.2 Specific Performance .........................................................................    42
       SECTION 9.3 Exclusive Remedy .............................................................................    43

ARTICLE 10. MISCELLANEOUS .......................................................................................    43
       SECTION 10.1 Allowed Administrative Expenses .............................................................    43
       SECTION 10.2 Further Assurances ..........................................................................    43
       SECTION 10.3 Successors and Assigns ......................................................................    43
       SECTION 10.4 Governing Law; Jurisdiction .................................................................    44
       SECTION 10.5 Expenses ....................................................................................    44
       SECTION 10.6 Broker's and Finder's Fees ..................................................................    44
       SECTION 10.7 Severability ................................................................................    44
       SECTION 10.8 Notices .....................................................................................    45
       SECTION 10.9 Amendments; Waivers .........................................................................    46
       SECTION 10.10 Public Announcements .......................................................................    46
       SECTION 10.11 Entire Agreement ...........................................................................    46
       SECTION 10.12 No Third Party Beneficiaries ...............................................................    46
       SECTION 10.13 Headings ...................................................................................    47
       SECTION 10.14 Counterparts ...............................................................................    47
       SECTION 10.15 Joint Drafting .............................................................................    47
       SECTION 10.16 Construction ...............................................................................    47
       SECTION 10.17 Schedules ..................................................................................    47

ARTICLE 11. DEFINITIONS .........................................................................................    47
       SECTION 11.1 Certain Terms Defined .......................................................................    47

</TABLE>

                                    SCHEDULES

Schedule 1.1(a)    -      Real Property
Schedule 1.1(b)    -      Owned Machinery and Equipment
Schedule 1.1(c)    -      Acquired Contracts
Schedule 1.1(e)    -      Inventory and Inventory Locations
Schedule 1.1(f)    -      Supplies and Supply Locations
Schedule 1.1(g)    -      Acquired Intellectual Property
Schedule 1.1(i)    -      Information Technology Owned, Leased or Licensed
Schedule 1.1(j)    -      Permits
Schedule 1.2(a)    -      Excluded Assets
Schedule 1.2(f)    -      Excluded Contracts
Schedule 1.2(k)    -      Miscellaneous Excluded Assets
Schedule 1.3       -      Assumed Liabilities
Schedule 1.3(d)    -      Real and Personal Property Taxes
Schedule 1.3(e)    -      Payroll Liabilities
Schedule 1.3(g)    -      Mechanics Liens
Schedule 1.6(b)    -      Cure Costs

                                       ii

<PAGE>

Schedule 1.7          -    Transition Services Assets
Schedule 1.8          -    Nonoperating Assets
Schedule 4.1(d)(i)    -    WSC Reports not Filed
Schedule 4.1(f)       -    Subsidiaries
Schedule 4.1(g)       -    Sellers Consents and Approvals
Schedule 4.1(h)       -    Compliance with Laws
Schedule 4.1(i)       -    Litigation
Schedule 4.1(k)(i)    -    Overdue Intellectual Property Fees
Schedule 4.1(k)(ii)   -    Violations of Intellectual Property
Schedule 4.1(k)(iii)  -    Claims and Investigations of Intellectual Property
Schedule 4.1(m)       -    Permit Violations
Schedule 4.1(n)       -    Contract Actions; Invalid Contracts
Schedule 4.1(o)       -    Environmental Matters
Schedule 4.1(p)       -    Insurance
Schedule 4.1(q)       -    Real Property Matters
Schedule 4.1(r)       -    Accounts Receivable
Schedule 4.1(s)       -    Inventories
Schedule 4.1(t)       -    Absence of Certain Changes
Schedule 4.1(w)       -    Status under DIP Agreement and Certain Senior Debt
Schedule 4.2(e)       -    Buyer's Consents and Approvals
Schedule 4.2(h)       -    Litigation
Schedule 5.1(a)       -    Exceptions to Sellers Conduct of Business

                                      iii

<PAGE>

                            ASSET PURCHASE AGREEMENT

         THIS ASSET PURCHASE AGREEMENT (this "AGREEMENT"), dated as of April 6,
2004, is made by and among Weirton Steel Corporation, a Delaware corporation
("WSC"), FW Holdings, Inc., a Delaware corporation ("FWH"), Weirton Venture
Holdings Corporation, a Delaware corporation ("WVHC"; collectively with WSC and
FWH; "SELLERS" and each of them individually, "Seller"), and WSC Acquisition
Corporation, a Delaware corporation ("BUYER"). Capitalized terms used in this
Agreement are defined or cross-referenced in Article 12.

                             BACKGROUND INFORMATION

         A.       On May 19, 2003 (the "WSC PETITION DATE"), WSC commenced a
voluntary case for reorganization (the "WSC BANKRUPTCY CASE") under chapter 11
of the Bankruptcy Code, 11 U.S.C. Section 101-1330 (the "BANKRUPTCY CODE"), in
the United States Bankruptcy Court for the Northern District of West Virginia
(the "BANKRUPTCY COURT"). Concurrently with the filing of the Bidding Procedures
and Sale Motion (the "FWH PETITION DATE"), FWH has commenced or will commence a
voluntary case for reorganization (the "FWH BANKRUPTCY CASE") under the
Bankruptcy Code in the Bankruptcy Court. Concurrently with the filing of the
Bidding Procedures and Sale Motion (the "WVHC PETITION DATE"; collectively with
the WSC Petition Date and the FWH Petition Date, the "PETITION DATES"), WVHC has
commenced or will commence a voluntary case for reorganization (the "WVHC
BANKRUPTCY CASE"; collectively with the WSC Bankruptcy Case and the FWH
Bankruptcy Case, the "BANKRUPTCY CASES") under the Bankruptcy Code in the
Bankruptcy Court.

         B.       On February 18, 2004 (the "EXECUTION DATE"), Sellers, ISG
Weirton Inc. ("ISG WEIRTON") and International Steel Group Inc. ("ISG") entered
into an asset purchase agreement, pursuant to which ISG Weirton agreed to
purchase the Acquired Assets and assume the Assumed Liabilities from Sellers
(the "ORIGINAL ISG AGREEMENT"). On February 25, 2004 (the "AMENDMENT DATE"),
Sellers, ISG Weirton and ISG entered into an amended and restated asset purchase
agreement (the "AMENDED ISG AGREEMENT"). The Amended ISG Agreement replaced and
superceded the Original ISG Agreement. The Amended ISG Agreement was further
amended pursuant to the terms of that certain Amendment No. 1 to Amended and
Restated Asset Purchase Agreement by and among Sellers, ISG Weirton and ISG.

         C.       Buyer desires to purchase the Acquired Assets and assume the
Assumed Liabilities from Sellers, and Sellers desire to sell, convey, assign and
transfer to Buyer the Acquired Assets together with the Assumed Liabilities, all
in the manner and subject to the terms and conditions set forth in this
Agreement and in accordance with sections 105, 363, 365 and 1146 and other
applicable provisions of the Bankruptcy Code.

         D.       The Acquired Assets and Assumed Liabilities are assets and
liabilities of Sellers that are to be purchased and assumed by Buyer pursuant to
an order, in form and substance satisfactory to Buyer, in its sole discretion
(the "BANKRUPTCY SALE ORDER"), approving such sale pursuant to sections 105, 363
and 365 of the Bankruptcy Code, which order will include the authorization for
the assumption by Sellers and assignment to Buyer of the Acquired Contracts and
liabilities thereunder in accordance with section 365 of the Bankruptcy Code,
all in the manner and subject to the terms and conditions set forth in this
Agreement and the Bankruptcy

                                       1
<PAGE>

Sale Order and in accordance with other applicable provisions of the Bankruptcy
Code, and the Federal Rules of Bankruptcy Procedure (the "BANKRUPTCY RULES").

         E.       On March 8, 2004, the Bankruptcy Court entered the Order (A)
Approving Bidding Procedures and, Under Certain Circumstances, Termination
Payments to ISG Weirton Inc., and International Steel Group Inc.; (B) Scheduling
Bidding Deadline, Auction Date and Sale Hearing Date; (c) Establishing Procedure
for Determining Cure Costs; and (D) Fixing Notice Procedures and Approving Form
of Notice (the "BIDDING PROCEDURES ORDER").

         F.       Buyer acknowledges that: (1) the Buyer's offer to purchase the
Acquired Assets and assume the Assumed Liabilities from Sellers, all in the
manner and subject to the terms and conditions of this Agreement, is subject to
the Sellers' obligations to pay the Break-Up Fee (as that term is defined in the
Bidding Procedures Order) and the Expense Reimbursement (as that term is defined
in the Bidding Procedures Order); and (2) the Buyer will assume those
obligations related to the Sale Assets (as that term is defined in the Bidding
Procedures Order) that arise after the Closing under each of the Active Consent
Orders and Administrative Orders set forth on Schedule 1.1(j) to the Original
Agreement.

         G.       Buyer's offer to purchase the Acquired Assets and assume the
Assumed Liabilities from Sellers pursuant to this Agreement is being made as a
credit bid with the Notes Trustee and Bonds Trustee in accordance with the terms
of the Bidding Procedures Order and under the authority conferred under Section
363(k) of the Bankruptcy Code.

         H.       The transactions contemplated by this Agreement are essential
and necessary to the confirmation of the Sellers' liquidating plan of
reorganization.

                             STATEMENT OF AGREEMENT

         NOW, THEREFORE, in consideration of the foregoing and their respective
representations, warranties, covenants and agreements herein contained, and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Sellers and Buyer hereby agree as follows:

              ARTICLE 1. PURCHASE AND SALE OF THE ACQUIRED ASSETS

         SECTION 1.1 Transfer of Acquired Assets.

         At the Closing, and upon the terms and conditions herein set forth,
Sellers shall sell to Buyer, and Buyer shall acquire from Sellers, all right,
title and interest of Sellers in, to and under the Acquired Assets, free and
clear of all Liens other than Permitted Liens. "ACQUIRED ASSETS" shall mean all
of the properties, assets and rights of Sellers, wherever located, whether real
or personal, tangible or intangible, existing or hereafter acquired and whether
or not reflected on the books or financial statements of Sellers, excluding only
the Excluded Assets, including, without limitation:

         (a)      all owned real property (the "OWNED REAL PROPERTY"), and
                  leased real property (the "LEASED REAL PROPERTY," and together
                  with the Owned Real Property, the "REAL PROPERTY") together
                  with all appurtenant, subsurface and mineral rights,

                                       2
<PAGE>

                  licenses, rights-of-way, privileges and easements belonging
                  to, appertaining to or benefiting the Real Property in any way
                  and all Improvements erected thereon, including, without
                  limitation, the Real Property listed on Schedule 1.1(a);

         (b)      all (i) owned equipment, machinery, furniture, fixtures and
                  improvements, tooling and spare parts of Sellers (the "OWNED
                  MACHINERY AND EQUIPMENT"), including, without limitation, all
                  Owned Machinery and Equipment that is being stored, repaired,
                  refurbished, modified or updated at a location other than the
                  Real Property, including without limitation the Owned
                  Machinery and Equipment listed on Schedule 1.1(b), and (ii)
                  rights of Sellers to the warranties and licenses received from
                  manufacturers and sellers of the Owned Machinery and
                  Equipment;

         (c)      those Contracts listed on Schedule 1.1(c) (collectively, the
                  "ACQUIRED CONTRACTS") and all deposits made under any Acquired
                  Contract;

         (d)      all accounts receivable and notes receivable of Sellers (the
                  "ACCOUNTS RECEIVABLE");

         (e)      all (i) Inventory of Sellers, including, without limitation,
                  all (A) Inventory at the locations listed on Schedule 1.1(e),
                  (B) Inventory held by third parties on a consignment basis,
                  (C) Inventory held by third-party processors, and (D)
                  Inventory located on any Real Property, and (ii) rights of
                  Sellers to the warranties received from suppliers with respect
                  to such Inventory (to the extent assignable) and related
                  Claims;

         (f)      all Supplies of Sellers, including, without limitation, the
                  Supplies located on any Real Property or at the locations
                  listed on Schedule 1.1(f);

         (g)      all Intellectual Property and Technology owned by any Seller
                  or licensed to any Seller pursuant to an Acquired Contract
                  (collectively, the "ACQUIRED INTELLECTUAL PROPERTY"),
                  including, without limitation, all rights to the name "Weirton
                  Steel Corporation" and the Intellectual Property and
                  Technology listed on Schedule 1.1(g);

         (h)      all cars, trucks, forklifts, railcars, other industrial
                  vehicles and other motor vehicles owned by Sellers ("OWNED
                  MOTOR VEHICLES");

         (i)      all computer hardware and software (including, without
                  limitation, process control software) owned by any Seller or
                  licensed to any Seller pursuant to an Acquired Contract,
                  including, without limitation, the hardware and software
                  listed on Schedule 1.1(i);

         (j)      all permits, authorizations and licenses (collectively, the
                  "PERMITS") issued to Sellers by any Government and all pending
                  applications therefor, including, without limitation, those
                  Permits set forth on Schedule 1.1(j) all to the extent
                  assignable;

                                       3
<PAGE>

         (k)      except for the Employment Records or such records as may be
                  subject to the attorney/client privilege, copies or originals
                  of all books, files, documents and records owned by Sellers
                  (in whatever format they exist, whether in hard copy or
                  electronic format), including, without limitation, customer
                  lists, historical customer files, accounting records, test
                  results, product specifications, plans, data, studies,
                  drawings, diagrams, training manuals, engineering data, safety
                  and environmental reports and documents, maintenance schedules
                  and operating and production records, inventory records,
                  business plans, credit records of customers, and marketing
                  materials;

         (l)      to the extent assignable, all air emissions credits,
                  allowances, allotment trading units and other creditable
                  emission reductions that Sellers have, are entitled to or have
                  applied for, including, without limitation, any air emissions
                  where Sellers have credit for or have banked, applied to bank
                  or agreed to sell or trade;

         (m)      except as provided in Section 1.2(c) and Section 1.2(d), all
                  Claims of Sellers;

         (n)      all of Sellers' rights arising prior to Closing in all
                  proceeds (whenever received) under any Contract of insurance
                  or indemnity (or similar agreement) relating to any Acquired
                  Asset or any Assumed Liability;

         (o)      all prepaid expenses and deposits made by or on behalf of any
                  Seller;

         (p)      all goodwill of Sellers;

         (q)      all of WVHC's interests in WeBco International, L.L.C. and all
                  of WSC's interests in W&A Manufacturing Co., LLC; and

         (r)      except as provided on Schedule 1.2(k), all of the Nonoperating
                  Assets.

         SECTION 1.2 Excluded Assets.

         Notwithstanding anything to the contrary in this Agreement, Sellers
shall retain only the properties and assets of Sellers set forth below (all such
properties and assets not being acquired by Buyer being herein referred to as
the "EXCLUDED ASSETS"):

         (a)      all Sellers' cash held in the bank accounts listed on Schedule
                  1.2(a) on the Closing Date, and the assets of Sellers set
                  forth on Schedule 1.2(a) (and any proceeds from the
                  disposition thereof);

         (b)      other than as set forth in Section 1.1(n), all of Sellers'
                  rights to insurance proceeds or other Contracts of insurance
                  or indemnity (or similar agreement) recoveries, including,
                  without limitation, Sellers' Directors, Officers and Corporate
                  Liability Insurance Policy;

         (c)      all rights to or Claims for refunds, overpayments or rebates
                  of Taxes, as well as any rights to drawbacks, rebates or
                  reimbursements related to duties imposed on

                                       4
<PAGE>

                  imported steel for periods (or portions thereof) ending on or
                  prior to the Closing Date;

         (d)      all Claims (i) arising under the Bankruptcy Code or under
                  similar state law, (ii) filed or commenced in any court by
                  Sellers as a plaintiff or (iii) not relating to any Acquired
                  Asset or any Assumed Liability, including but not limited to
                  claims arising from or related to sections 544 through 550 of
                  the Bankruptcy Code;

         (e)      any asset of Sellers that otherwise would constitute an
                  Acquired Asset but for the fact that it is conveyed, leased or
                  otherwise disposed of during the time from the Execution Date
                  until the Closing Date;

         (f)      all Contracts that are not Acquired Contracts, including,
                  without limitation, those listed on Schedule 1.2(f);

         (g)      all amounts due to Sellers from any Affiliate of any Seller;

         (h)      all books, files and records owned by Sellers that relate to
                  current or former employees and other personnel, including,
                  without limitation, books, files and records that are related
                  to medical history, medical insurance or other medical matters
                  and to workers' compensation and to the evaluation, appraisal
                  or performance of current or former employees and other
                  personnel of Sellers (collectively, the "EMPLOYMENT RECORDS");

         (i)      other than as set forth in Section 1.1(g), all (i) shares of
                  capital stock or equity or other ownership interest of any
                  Seller in any other Person and (ii) corporate seals, minute
                  books, charter documents, stock transfer records, record
                  books, original Tax and financial records and such other
                  files, books and records relating to any of the Excluded
                  Assets or to the organization, existence or capitalization of
                  Sellers or of any other Person;

         (j)      all Employee Benefit Plans sponsored by any Seller or any of
                  the Sellers' ERISA Affiliates (collectively, the "SELLERS
                  CONTROLLED GROUP") or their respective predecessors or with
                  respect to which the Sellers Controlled Group or their
                  respective predecessors has made or is required to make
                  payments, transfers or contributions in respect of any present
                  or former employees, directors, officers, shareholders,
                  consultants or independent contractors of any Seller or any of
                  the Sellers' ERISA Affiliates or their respective predecessors
                  (collectively, the "SELLERS BENEFIT PLANS") and all insurance
                  policies, fiduciary liability policies, benefit administration
                  contracts, actuarial contracts, trusts, escrows, surety bonds,
                  letters of credit and other contracts primarily relating to
                  any Sellers Benefit Plan; and

         (k)      all of the assets set forth on Schedule 1.2(k).

                                       5
<PAGE>

         SECTION 1.3 Assumption of Liabilities.

         At the Closing, Buyer shall assume, and thereafter pay, perform and
discharge when due, all of the following liabilities (the "ASSUMED
LIABILITIES"), which Assumed Liabilities are listed by category, including
estimated amounts of such Assumed Liabilities on Schedule 1.3:

         (a)      all of Sellers' accounts payable that both (i) arise in the
                  ordinary course of business and (ii) in the case of each
                  Seller, arise after such Seller's respective Petition Date,
                  each of which are Allowed Administrative Expense Claims or
                  reasonably expected to be Allowed Administrative Expense
                  Claims (collectively, the "ACCOUNTS PAYABLE");

         (b)      all liabilities and obligations of Sellers first arising after
                  the Closing relating to the Acquired Contracts, including,
                  without limitation, all cure costs required to be paid
                  pursuant to section 365 of the Bankruptcy Code in connection
                  with the assumption and assignment of the Acquired Contracts
                  (such cure costs are, collectively, the "CURE COSTS");

         (c)      all liabilities and obligations of Sellers relating to the
                  Acquired Assets and arising under any Environmental Law (but
                  excluding, all liabilities and obligations of Sellers (i) for
                  any environmental health or safety matter (including any
                  liability or obligation arising under any Environmental Law)
                  relating to any property or assets other than the Acquired
                  Assets, (ii) resulting from the transport, disposal or
                  treatment of any Hazardous Materials by Sellers on or prior to
                  the Closing Date to or at any location other than the Real
                  Property, (iii) relating to any personal injury of any Person
                  resulting from exposure to Hazardous Materials or otherwise,
                  where such exposure or other event or occurrence occurred on
                  or prior to the Closing Date or as a consequence of any event
                  or occurrence prior to the Closing Date, and (iv) for any fine
                  or other monetary penalty arising under any Environmental Law
                  for acts or omissions of Sellers or otherwise relating to acts
                  or omissions or conditions with respect to the Acquired Assets
                  as of the Closing Date);

         (d)      all liabilities and obligations of Sellers as of the Closing
                  Date for real and personal property Taxes that are set forth
                  on Schedule 1.3(d);

         (e)      all liabilities and obligations of Sellers as of the Closing
                  Date for accrued but unpaid wages and salaries and related
                  liabilities as described on Schedule 1.3(e) (collectively,
                  "PAYROLL LIABILITIES");

         (f)      all liabilities and obligations for damages to Persons or
                  property (including, without limitation, liabilities and
                  obligations to repair or replace, or to refund the sales price
                  (or any other related expenses)) relating to alleged defects
                  in (i) products sold by, or arising under warranties issued
                  by, any Seller after such Seller's respective Petition Date or
                  (ii) buildings or structures that have been manufactured by,
                  or that incorporate products sold or manufactured by, any
                  Seller after such Seller's respective Petition Date;

                                       6
<PAGE>

         (g)      all liabilities and obligations of Sellers as of the Closing
                  Date for the mechanics liens that are as a matter of law held
                  to be valid and properly perfected and that are set forth on
                  Schedule 1.3(g);

         (h)      all liabilities and obligations of WSC under the term loan
                  made pursuant to the Loan Agreement by and between WSC and
                  Steel Works Community Federal Credit Union ("STEEL WORKS"),
                  dated August 15, 2002 (the "STEEL WORKS LOAN"); and

         (i)      all liabilities and obligations of Sellers for the payment of
                  (A) the D&O Tail Premium and the D&O Deductible under the D&O
                  Tail Policy and the D&O Policy and (B) the Employment
                  Practices Premium and the Employment Practices Deductible
                  under the Employment Practice Policy and the Employment
                  Practices Tail Policy (collectively, the "INSURANCE
                  PAYMENTS"), but only to the extent such liabilities and
                  obligations do not exceed the amount of the Insurance
                  Payments.

         SECTION 1.4 Retention of Liabilities.

         Buyer is assuming only the Assumed Liabilities and is not assuming any
other liability or obligation of any Seller of whatever nature, whether
presently in existence or arising hereafter. All such other liabilities and
obligations shall be retained by, and remain liabilities and obligations of,
Sellers (all such liabilities are, collectively, the "EXCLUDED LIABILITIES").
The Excluded Liabilities include, without limitation, the following liabilities
and obligations:

         (a)      all liabilities and obligations of Sellers relating to
                  Excluded Assets;

         (b)      all liabilities and obligations for damages to Persons or
                  property (including, without limitation, liabilities and
                  obligations to repair or replace, or to refund the sales price
                  (or any other related expenses)) relating to alleged defects
                  in (i) products sold by, or arising under warranties issued
                  by, any Seller on or prior to such Seller's respective
                  Petition Date or (ii) buildings or structures that have been
                  manufactured by, or that incorporate products sold or
                  manufactured by, any Seller on or prior to such Seller's
                  respective Petition Date;

         (c)      all liabilities and obligations of Sellers under any
                  applicable labor or employment laws, any collective bargaining
                  Contract or other Contract with any labor union (including but
                  not limited to any pending grievances), or any employment
                  Contract, severance Contract or any key employee retention
                  plan or similar plan;

         (d)      except as provided in Section 1.3(e) or Section 5.4(h), all
                  liabilities and obligations of Sellers or the Sellers
                  Controlled Group to all present and former employees of
                  Sellers (and their respective spouses and dependents),
                  including, without limitation, all liabilities for
                  continuation coverage under any Employee Benefit Plan pursuant
                  to the requirements of section 4980B of the Code and Part 6 of
                  Subtitle B of Title I of ERISA ("COBRA");

         (e)      all liabilities and obligations of Sellers or the Sellers
                  Controlled Group to all present and former employees of
                  Sellers (and their respective spouses and

                                       7
<PAGE>

                  dependents), including, without limitation, (i) all
                  liabilities under any Sellers Benefit Plan; (ii) all
                  liabilities in connection with and with respect to the Worker
                  Adjustment and Retraining Notification Act of 1988 ("WARN
                  ACT"); and (iii) all liabilities and obligations of Sellers
                  relating to employees, former employees, persons on laid-off
                  or inactive status, or their respective dependents, heirs or
                  assigns, who have received, who are receiving as of the
                  Closing Date, or who are or could become eligible to receive
                  any short-term or long-term disability benefits or any other
                  benefits of any kind arising out of or related in any way to
                  the employment of persons by the Sellers, including, without
                  limitation, benefits or claims under the West Virginia
                  unemployment compensation laws or any other similar state law,
                  Title VII of the Civil Rights Act of 1964, as amended, the Age
                  Discrimination in Employment Act, as amended, the Americans
                  with Disabilities Act of 1990, or the West Virginia Human
                  Rights Act;

         (f)      all liabilities and obligations of Sellers arising pursuant to
                  the West Virginia Workers' Compensation Act (West Virginia
                  Codess.23-1 et seq.), or pursuant to the actions, resolutions,
                  rules or regulations of the West Virginia Workers'
                  Compensation Commission, including all workers' compensation
                  claims or suits of any type, whether state or federal claims,
                  including, without limitation, any actions arising under West
                  Virginia Codess.23-4-2, actions for employment discrimination,
                  actions for wrongful opposition to a claim, or any other claim
                  or benefits of any kind, whether now known or unknown,
                  whenever incurred or filed, which have occurred or arise from
                  work-related injuries, diseases, death, exposures, intentional
                  torts, acts of discrimination or other incidents, acts, or
                  injuries prior to the Closing Date, or otherwise arising out
                  of or related to the employment of persons by the Sellers, and
                  all premiums, assessments or other obligations related in any
                  way to workers' compensation or work-related liabilities
                  arising prior to the Closing Date or otherwise arising out of
                  or related to the activities of Sellers;

         (g)      all liabilities and obligations of Sellers (i) for any
                  environmental health or safety matter (including any liability
                  or obligation arising under any Environmental Law) relating to
                  any property or assets other than the Acquired Assets, (ii)
                  resulting from the transport, disposal or treatment of any
                  Hazardous Materials by Sellers on or prior to the Closing Date
                  to or at any location other than the Real Property, (iii)
                  relating to any personal injury of any Person resulting from
                  exposure to Hazardous Materials or otherwise, where such
                  exposure or other event or occurrence occurred on or prior to
                  the Closing Date or as a consequence of any event or
                  occurrence prior to the Closing Date, and (iv) for any fine or
                  other monetary penalty arising under any Environmental Law for
                  acts or omissions of Sellers or otherwise relating to acts or
                  omissions or conditions with respect to the Acquired Assets as
                  of the Closing Date); and

         (h)      all liabilities and obligations of any Seller of whatever
                  nature whether presently in existence or hereafter arising,
                  other than the Assumed Liabilities.

                                       8
<PAGE>

         SECTION 1.5 Non-Assignment of Contracts.

         Anything contained herein to the contrary notwithstanding, this
Agreement shall not constitute an agreement to assign any Acquired Contract or
any Permit, if, notwithstanding the provisions of sections 363 and 365 of the
Bankruptcy Code, an attempted assignment thereof, without the consent of any
other Person party thereto, would constitute a breach thereof or in any way
negatively affect the rights of either of the Sellers or Buyer (unless the
restrictions on assignment would be rendered ineffective pursuant to sections
9-406 through 9-409, inclusive, of the Uniform Commercial Code, as amended (the
"UCC"), as the assignee of such Acquired Contract or Permit, as the case may be,
thereunder. If, notwithstanding the provisions of sections 363 and 365 of the
Bankruptcy Code, such consent or approval is required but not obtained, Sellers
shall cooperate with Buyer without further consideration, in any reasonable
arrangement designed to provide Buyer with the benefits of or under any such
Acquired Contract or Permit, including, without limitation, enforcement (at
Buyer's expense) for the benefit of Buyer of any and all rights of Sellers
against any Person party to the Acquired Contract or Permit arising out of the
breach or cancellation thereof by such Person; provided, however, that after
Closing, Buyer shall be responsible for all payment and other obligations under,
and for all costs of enforcing rights under, such Acquired Contract or Permit.
Any assignment to Buyer of any Acquired Contract or Permit that shall,
notwithstanding the provisions of sections 363 and 365 of the Bankruptcy Code,
require the consent or approval of any Person for such assignment as aforesaid
shall be made subject to such consent or approval being obtained.

         SECTION 1.6 Identification of Additional and Excluded Contracts.

         (a)      From time to time, at any time prior to the Closing, Buyer may
                  update Schedule 1.1(c) and/or Schedule 1.2(f) to add or remove
                  any Contract to or from such schedule. Any Contract added to
                  Schedule 1.1(c) shall become an Acquired Contract, shall be
                  deemed an Acquired Asset for all purposes of this Agreement,
                  and all liabilities and obligations first arising after the
                  Closing under such Contract shall be Assumed Liabilities for
                  all purposes of this Agreement. Any Contract removed from
                  Schedule 1.1(c) and/or added to Schedule 1.2(f) shall become
                  an Excluded Asset and shall not be an Acquired Contract for
                  all purposes of this Agreement and all liabilities and
                  obligations under such Contract shall be Excluded Liabilities
                  for all purposes of this Agreement.

         (b)      WSC has provided Buyer with a schedule of Sellers' reasonable
                  best estimates of Cure Costs for the Acquired Contracts
                  ("SCHEDULE 1.6(b)"). Sellers shall, within three days after
                  Buyer amends Schedule 1.1(c) in accordance with Section
                  1.6(a), supplement Schedule 1.6(b) to update the Cure Costs
                  and update Schedule 4.1(n) to make any required disclosure
                  with regard to any Contract added to Schedule 1.1(c).

         (c)      Sellers have filed a Motion to Assume and Assign Certain
                  Contracts and Unexpired Leases to ISG Weirton, effective as of
                  the Closing Date, and establish Cure Costs relating thereto.
                  Sellers shall make such additional filings with the Bankruptcy
                  Court as may be necessary or desirable to effect the
                  provisions of this

                                       9
<PAGE>

                  Section 1.6 as they shall apply to Buyer; provided, however,
                  that all such filings shall contain provisions reasonably
                  acceptable to Buyer.

         SECTION 1.7 Transition Services Agreement.

         The parties shall negotiate in good faith, agree on and execute prior
to the Closing the Transition Services Agreement, which Transition Services
Agreement shall set forth the nature, scope, extent and duration of (i) Sellers'
access to and use of the Acquired Assets (including, without limitation, access
to and use of the Acquired Assets listed in Schedule 1.7 as may be necessary to
meet Sellers' legal obligations after Closing and consistent with Buyer's
ability to use the Acquired Assets to operate the business being acquired
pursuant to this Agreement and (ii) Sellers' services, if any, as may be
reasonably requested by Buyer. The Transition Services Agreement shall provide
that the party receiving the services under the Transition Services Agreement
shall reimburse the party providing the services for all reasonable direct
costs, including, without limitation, all third-party costs, incurred by the
providing party in performing the requested services. All services under the
Transition Services Agreement shall be provided without representation or
warranty or liability to the other party.

         SECTION 1.8 Exclusion of Nonoperating Assets.

         If, prior to Closing, any Seller sells, or enters into a Contract to
sell (which conditions sale only upon approval of the Bankruptcy Court and other
customary closing conditions), any of the assets set forth on Schedule 1.8
(collectively, the "NONOPERATING ASSETS"), for a net realizable value equal to
or greater than the estimated realizable value set forth on Schedule 1.8 for
such Nonoperating Asset, then such Nonoperating Asset will become an Excluded
Asset for all purposes of this Agreement. Sellers shall promptly update Schedule
1.2(k) to include the Excluded Asset. Buyer may, in its sole discretion based
upon information provided to Buyer by Sellers during the ten-day period after
the Execution Date, determine that the net realizable value set forth on
Schedule 1.8 should be increased, and if Buyer so determines it will notify
Sellers of such determination in writing promptly after the end of such period.

                            ARTICLE 2. CONSIDERATION

         SECTION 2.1 Total Consideration.

         The aggregate consideration for the sale, transfer, assignment and
conveyance of the Acquired Assets will be:

         (a)      $164,240,000 (the "AGGREGATE PURCHASE PRICE") consisting of:
                  (i) cash (A) in the amount necessary to cause the indefeasible
                  and final payment and satisfaction of the Senior Debt in full
                  at the Closing, which as of the date of this Agreement is
                  $132,500,000,1 and (B) in the amount of $6,240,000
                  (collectively, the "CASH PURCHASE PRICE"); provided, however,
                  that if the Cash Purchase Price is less than

------------------
(1)      This amount reflects a $97.0 million balance on the revolving line of
credit, a $25.0 million balance on the term loan and $10.5 million for
Carveouts, Priming Liens and Sale Costs.

                                       10
<PAGE>

                  the amount of the Senior Debt, plus $6,240,000, then the Cash
                  Purchase Price will be further increased by the amount
                  necessary to indefeasibly and finally satisfy the Senior Debt
                  in cash in full at the Closing, plus $6,240,000 (such
                  increase, the "PURCHASE PRICE INCREASE"); and (ii) Senior
                  Secured Notes and/or Secured Pollution Control Bonds
                  (collectively, the "NOTES AND BONDS") with an aggregate face
                  amount (plus accrued and unpaid interest through the Petition
                  Date) in the amount of $25,500,0002 (the "CREDIT BID PURCHASE
                  PRICE"); and

         (b)      the assumption by Buyer of the Assumed Liabilities (such
                  assumption, together with the Aggregate Purchase Price and
                  Purchase Price Increase, the "TOTAL CONSIDERATION").

                  The Cash Purchase Price is subject to adjustment as provided
in Section 2.2 of this Agreement. The Aggregate Purchase Price shall be payable
in accordance with Section 3.3(b).

                  SECTION 2.2 Accounts Payable and Payroll Liabilities.

         (a)      From time to time, at any time prior to the Closing, upon
                  delivery of written notice thereof by Buyer to Sellers, Buyer
                  may remove any Accounts Payable otherwise includable in the
                  definition of Assumed Liabilities hereunder. Any Accounts
                  Payable so removed shall become an Excluded Liability for all
                  purposes of this Agreement.

         (b)      From time to time, at any time prior to the Closing, upon
                  delivery of written notice thereof by Buyer to Sellers, Buyer
                  may elect (in its sole discretion) not to assume the Payroll
                  Liabilities described on items 6 and 17 of Schedule 1.3(e), if
                  Buyer determines in its sole discretion that the
                  administration of such Payroll Liabilities will be unduly
                  burdensome or that it is reasonably likely that the accrual
                  for such liabilities will be inadequate to cover the actual
                  liabilities, and thereafter such Payroll Liabilities will not
                  be Assumed Liabilities.

         (c)      At the Closing, the Cash Purchase Price will be adjusted
                  upward and the Assumed Liabilities portion of the Total
                  Consideration will be adjusted downward, each on a
                  dollar-for-dollar basis, to reflect each dollar of Accounts
                  Payable and Payroll Liabilities so removed.

------------------
(2)      This amount is calculated based upon the $158.0 million in cash payment
included in the Amended ISG Agreement, plus the $6,240,000 initial over-bid,
minus the amount of cash necessary to pay the Senior Debt in full at Closing,
minus $6,240,000. If it is determined prior to the Auction by the Sellers that
the cash purchase price contained in the Amended ISG Agreement is less than
$158,000,000, due to working capital and other adjustments, then the Credit Bid
Purchase Price will be decreased to an amount equal to the cash purchase price
payable under the Amended ISG Agreement, plus $6,240,000, minus the Cash
Purchase Price. If it is determined prior to the Auction by the Sellers that the
cash purchase price contained in the Amended ISG Agreement is more than
$158,000,000, due to working capital and other adjustments, then the Credit Bid
Purchase Price will be increased to an amount equal to the cash purchase price
payable under the Amended ISG Agreement, plus $6,240,000, minus the Cash
Purchase Price.

                                       11
<PAGE>

         SECTION 2.3 Directors and Officers Insurance.

         WSC will arrange for the exercise of any option available under the D&O
Policy for the establishment of an extended reporting period, or shall arrange
for a new policy of insurance or an extension of the reporting period for the
existing coverage to become effective at Closing that insures the current and
former directors and officers of WSC and its subsidiaries against claims made
after the Closing Date but before the sixth anniversary thereof with respect to
wrongful acts committed prior to the Closing Date, and which would have been
covered under the D&O Policy had such claims been made prior to the Closing Date
(in either case, the "D&O TAIL POLICY"). WSC will arrange for the exercise of
any option available under the Employment Practices Policy for the establishment
of an extended reporting period, or shall arrange for a new policy of insurance
or an extension of the reporting period for the existing coverage to become
effective at Closing that insures the current and former directors and officers
of WSC and its subsidiaries against claims made after the Closing Date but
before the second anniversary thereof with respect to wrongful acts committed
prior to the Closing Date, and which would have been covered under the
Employment Practices Policy had such claims been made prior to the Closing Date
(in either case, the "EMPLOYMENT PRACTICES TAIL POLICY"). As soon as available
to WSC (but no later than five Business Days prior to the Closing), WSC shall
provide to Buyer a calculation of the maximum deductible amounts that could
apply, after the Closing, to claims pending or made under (i) either or both of
the D&O Policy and the D&O Tail Policy (the aggregate of such amounts being the
"D&O DEDUCTIBLE") and (ii) either or both of the Employment Practices Policy and
the Employment Practices Tail Policy (the aggregate of such amounts being the
"EMPLOYMENT PRACTICES DEDUCTIBLE"). As soon as available to WSC (but no later
than five Business Days prior to the Closing), WSC shall provide to Buyer its
calculations of the (x) D&O Deductible as well as the form of such D&O Tail
Policy and all pertinent information relating to premiums (the "D&O TAIL
PREMIUM") therefor and (y) Employment Practices Deductible as well as the form
of such Employment Practices Tail Policy and all pertinent information relating
to premiums for the Employment Practices Tail Policy (the "EMPLOYMENT PRACTICES
TAIL PREMIUM"). Buyer and WSC will review WSC's calculations and seek to jointly
determine the amount of the Insurance Payments. Buyer may elect, at its expense,
to purchase additional insurance under the D&O Policy, the D&O Tail Policy, the
Employment Practices Policy or the Employment Practices Tail Policy to eliminate
the deductibles thereunder (in which case the amount included in the term
"INSURANCE PAYMENT" will be adjusted accordingly).

                       ARTICLE 3. CLOSING AND DELIVERIES

         SECTION 3.1 Closing.

         The consummation of the transactions contemplated hereby (the
"CLOSING") shall take place at the offices of Akin Gump Strauss Hauer & Feld
LLP, 590 Madison Avenue, New York, New York 10022 at 10:00 a.m. (E.S.T.) on the
first Business Day following the satisfaction or waiver by the appropriate party
of all the conditions contained in Article 7 or on such other date or at such
other place and time as may be mutually agreed to by the parties (the "CLOSING
DATE"). All proceedings to be taken and all documents to be executed and
delivered by all parties at the Closing shall be deemed to have been taken and
executed simultaneously and no proceedings

                                       12
<PAGE>

shall be deemed to have been taken nor documents executed or delivered until all
have been taken, executed and delivered.

         SECTION 3.2 Sellers' Deliveries.

         At the Closing:

         (a)      the sale, transfer, assignment, conveyance and delivery by
                  Sellers of the Acquired Assets to Buyer shall be effected on
                  the Closing Date by special or limited warranty deeds; bills
                  of sale, endorsements, assignments and other instruments of
                  transfer and conveyance (including an assignment of insurance
                  proceeds from Sellers as contemplated by Section 1.1(n)
                  reasonably satisfactory in form and substance to counsel for
                  Buyer);

         (b)      Sellers shall deliver three executed counterparts of the
                  Transition Services Agreement;

         (c)      each Seller shall deliver a certificate, dated the Closing
                  Date and signed by each of its President and Chief Executive
                  Officer and attested by the Secretary of such Seller,
                  certifying to the accuracy of the matters set forth in Section
                  7.2(a) and Section 7.2(b);

         (d)      provided Buyer notifies each Seller in writing of the Leased
                  Real Property subject to required estoppel certificates and
                  non-disturbance agreements at least 15 days prior to the
                  Closing Date, each Seller shall deliver estoppel certificates
                  and non-disturbance agreements for Leased Real Property deemed
                  significant by Buyer's lenders; and

         (e)      Sellers shall deliver to Buyer a release from the Agent, on
                  its own behalf and on behalf of the Lenders, effective upon
                  receipt in cash in full of the payments set forth in Section
                  3.3(b)(i), that releases Buyer from all obligations for the
                  full and indefeasible satisfaction of the DIP Obligations, in
                  form and substance satisfactory to Agent and Buyer.

         SECTION 3.3 Buyer's Deliveries.

         (a)      Intentionally omitted.

         (b)      At the Closing, Buyer shall pay the Cash Purchase Price,
                  adjusted as provided in Section 2.2, and the Purchase Price
                  Increase at Closing as follows:

                  (i)      notwithstanding anything to the contrary in this
                           Agreement, the amount necessary to indefeasibly and
                           finally satisfy the DIP Obligations in cash in full
                           shall be paid to Agent (to be applied on behalf of
                           WSC to Agent's and Lenders' claims against WSC) in
                           cash or by wire transfer of immediately available
                           funds to an account designated for such purpose by
                           Agent, and Buyer hereby waives its right to seek
                           disgorgement or return from the Agent or any Lender
                           of such amount (except for any

                                       13
<PAGE>

                           such right that may result from any overpayment of
                           the amount necessary to indefeasibly and finally
                           satisfy the DIP Obligations in full);

                  (ii)     pursuant to the terms of an escrow agreement (the
                           "ESCROW AGREEMENT") to be negotiated by the parties
                           prior to the Closing Date, Buyer will deposit in
                           escrow with a financial institution to be agreed upon
                           prior to Closing, cash in the amount (the "PURCHASE
                           PRICE ESCROW") equal to the lesser of (A) the
                           Purchase Price Increase or (B) the amount reflected
                           on the Payoff Certificate of the claims that are
                           subject to the Carveouts and any other portion of the
                           Senior Debt (excluding the DIP Obligations) that has
                           not then been finally allowed by order of the
                           Bankruptcy Court (the "UNRESOLVED CLAIMS"), and any
                           portion of the Purchase Price Escrow not required to
                           satisfy the Unresolved Claims will promptly be
                           returned to Buyer in accordance with the terms of the
                           Escrow Agreement; and

                  (iii)    any remainder (computed by subtracting the amounts
                           paid pursuant to Section 3.3(b)(i) and (ii) and the
                           Purchase Price Increase from the sum of the Cash
                           Purchase Price, shall be paid to WSC, on behalf of
                           Sellers.

         (c)      At the Closing, Buyer shall cause the Notes and Bonds
                  constituting the Credit Bid Purchase Price, together with all
                  other Senior Secured Notes and Secured Pollution Control Bonds
                  that are issued and outstanding on the Closing Date, to be
                  surrendered for cancellation in accordance with the Notes
                  Indenture and Bonds Indenture. Such surrender and cancellation
                  will be made (i) through Depository Trust and Transfer Company
                  ("DTTC"), either by the manual delivery of the global Senior
                  Secured Note and the global Secured Pollution Control Bond, or
                  by book entry in accordance with DTTC's customary procedures;
                  or (ii) through such other means as shall be mutually
                  acceptable to the Sellers, Buyer, Notes Trustee and Bonds
                  Trustee;

         (d)      At the Closing or as soon as reasonably practicable
                  thereafter, Buyer shall deliver to DTTC a certificate issued
                  in the name of CEDE & Co. and evidencing 985,000 shares (the
                  "SHARES") of the common stock, $.001 par value per share (the
                  "COMMON STOCK"), of Weirton Holdings Corporation, a Delaware
                  corporation ("WHC"), which owns all of the capital stock of
                  Buyer. Such Shares shall be held by DTTC for the benefit of
                  the beneficial holders of the Senior Secured Notes and Secured
                  Pollution Control Bonds as of the close of business on the
                  Closing Date, and shall be received in exchange for such
                  Senior Secured Bonds and Secured Pollution Control Bonds and
                  the Liens securing the payment thereof. DTTC shall be
                  authorized to allocate the Shares pro rata among the
                  beneficial holders of the Senior Secured Notes and Secured
                  Pollution Control Bonds by book entry in accordance with
                  DTTC's customary procedures. As an alternative to the
                  provisions set forth in this Section 3.3(d), Buyer, acting in
                  consultation with the Notes Trustee and the Bonds Trustee, may
                  elect to distribute the Shares to or for the benefit of the
                  beneficial holders of the Senior Secured Notes and Secured

                                       14
<PAGE>

                  Pollution Control Bonds through a means of delivery and
                  distribution different from the means described herein;

         (e)      At the Closing or as soon as reasonably practicable
                  thereafter, Buyer shall deliver to the General Unsecured
                  Creditors Trustee a certificate issued in the name of the
                  General Unsecured Creditors Trustee and evidencing 15,000
                  shares (the "ADDITIONAL SHARES") of the Common Stock of WHC.
                  Such Additional Shares shall be held by the General Unsecured
                  Creditor Trustee for the benefit of the general unsecured
                  creditors (the "GENERAL UNSECURED CREDITORS") of the Sellers
                  as of the close of business on the Closing Date, and shall be
                  received in exchange for the claims of such General Unsecured
                  Creditors against the Sellers. As an alternative to the
                  provisions set forth in this Section 3.3(e), Buyer, acting in
                  consultation with the General Unsecured Creditors Trustee, may
                  elect to distribute the Additional Shares to or for the
                  benefit of the General Unsecured Creditors through a means of
                  delivery and distribution different from the means described
                  herein;

         (f)      At the Closing or as soon as reasonably practicable
                  thereafter, Buyer shall deliver to the General Unsecured
                  Creditors Trustee a warrant certificate issued in the name of
                  the General Unsecured Creditors Trustee and evidencing the
                  Warrants. Such Warrants shall be held by the General Unsecured
                  Creditors Trustee for the benefit of the General Unsecured
                  Creditors as of the close of business on the Closing Date, and
                  shall be received in exchange for the claims of such General
                  Unsecured Creditors against the Sellers. As an alternative to
                  the provisions set forth in this Section 3.3(f), Buyer, acting
                  in consultation with the General Unsecured Creditors Trustee,
                  may elect to distribute the Warrants to or for the benefit of
                  the General Unsecured Creditors through a means of delivery
                  and distribution different from the means described herein;

         (g)      At the Closing, Buyer shall deliver three executed
                  counterparts of the Transition Services Agreement;

         (h)      At the Closing, Buyer shall execute and deliver to Sellers an
                  instrument of assignment and assumption of liabilities with
                  respect to the Assumed Liabilities, reasonably satisfactory in
                  form and substance to counsel for Sellers; and

         (i)      At the Closing, Buyer shall each deliver a certificate, dated
                  the Closing Date, signed by its President and its Secretary,
                  certifying the accuracy of the matters set forth in Section
                  7.1(a) and Section 7.1(b).

                   ARTICLE 4. REPRESENTATIONS AND WARRANTIES

         SECTION 4.1 Representations and Warranties of Sellers.

         Sellers hereby represent and warrant to Buyer as follows:

         (a)      Corporate Organization. Each Seller is duly organized, validly
                  existing and in good standing under the laws of the State of
                  Delaware (other than with respect to

                                       15
<PAGE>

                  the payment of prepetition franchise and similar Taxes). Each
                  Seller has all requisite corporate power and authority to own
                  its properties and assets and to conduct its businesses as now
                  conducted.

         (b)      Qualification to Conduct Business. Each Seller is duly
                  qualified to do business and is in good standing in every
                  jurisdiction in which the character of the properties owned
                  or leased by it or the nature of the businesses conducted by
                  it makes such qualification necessary.

         (c)      Authorization and Validity. Each Seller has, or on the Closing
                  Date will have, as applicable, all requisite corporate power
                  and authority to enter into this Agreement and any Ancillary
                  Agreements to which such Seller is or will become a party and,
                  subject to the (i) Bankruptcy Court's entry of the Orders, and
                  (ii) receipt of all Consents, to perform its obligations
                  hereunder and thereunder, the execution and delivery of this
                  Agreement and each Ancillary Agreement to which such Seller is
                  or will become a party and the performance of such Sellers'
                  obligations hereunder and thereunder, has been, or on the
                  Closing Date will be, duly authorized by all necessary
                  corporate action of such Seller, and no other corporate
                  proceedings on the part of such Seller are necessary to
                  authorize such execution, delivery and performance. This
                  Agreement has been, and each Ancillary Agreement to which each
                  Seller is or will become a party has been, or on the Closing
                  Date will be, duly executed by each Seller, and, subject to
                  the Bankruptcy Court's entry of the Orders, constitute, or
                  will when executed and delivered constitute, each Seller's
                  valid and binding obligation, enforceable against each Seller
                  in accordance with their respective terms. The board of
                  directors of each Seller has resolved to request that the
                  Bankruptcy Court approve this Agreement and the transactions
                  contemplated hereby and each Ancillary Agreement to which such
                  Seller is or will become a party.

         (d)      Reports: Financial Statements.

                  (i)      Other than as set forth on Schedule 4.1(d)(i), since
                           May 19, 2003, WSC has filed all reports, registration
                           statements, proxy statements and other materials,
                           together with any amendments required to be made with
                           respect thereto, that were required to be filed with
                           the SEC under the Securities Act or the Exchange Act
                           (all such reports and statements are, collectively,
                           the "WSC REPORTS"). As of their respective dates, the
                           WSC Reports complied in all material respects with
                           all of the statutes and published rules and
                           regulations enforced or promulgated by the SEC and
                           did not as of the date of filing thereof (or, if
                           amended or superseded by a filing prior to the date
                           of this Agreement, then on the date of such filing)
                           with the SEC contain any untrue statement of a
                           material fact or omit to state any material fact
                           required to be stated therein or necessary in order
                           to make the statements therein, in light of the
                           circumstances under which they were made, not
                           misleading; and

                                       16
<PAGE>

                  (ii)     Each of the financial statements (including the
                           related notes) included in the WSC Reports presents
                           fairly, in all material respects, the consolidated
                           financial position and consolidated results of
                           operations and cash flows of Sellers as of the
                           respective dates or for the respective periods set
                           forth therein, all in conformity with GAAP
                           consistently applied during the periods involved
                           except as otherwise noted therein, and subject, in
                           the case of the unaudited interim financial
                           statements, to the absence of notes and normal
                           year-end adjustments that have not been and are not
                           expected to be material in amount. All of the WSC
                           Reports, as of their respective dates (and as of the
                           date of any amendment to the respective WSC Report),
                           complied as to form in all material respects with the
                           applicable requirements of the Securities Act and the
                           Exchange Act.

         (e)      No Conflict or Violation. Subject to the (i) receipt of all
                  Consents and (ii) the Bankruptcy Court's entry of the Orders,
                  the execution, delivery and performance by each Seller of this
                  Agreement and each Ancillary Agreement to which any of them is
                  or will become a party does not and will not (A) violate or
                  conflict with any provision of the Certificate of
                  Incorporation or By-laws of any Seller, (B) violate any
                  provision of law, or any order, judgment or decree of any
                  Government applicable to any Seller, (C) result in or require
                  the creation or imposition of any Liens (other than Permitted
                  Liens) on any of the Acquired Assets or (D) violate or result
                  in a breach of or constitute (with due notice or lapse of time
                  or both) a default under any Contract entered into by any
                  Seller after such Seller's respective Petition Date, by which
                  the applicable Seller is bound or to which the assets of the
                  applicable Seller are subject.

         (f)      Subsidiaries. Schedule 4.1(f) sets forth a true and complete
                  list of (i) each Person in which WSC owns, directly or
                  indirectly, any equity interests other than any equity
                  interests held by any Employee Benefit Plans and for each such
                  Person, (ii) all equity owners and the amount of equity owned
                  by each such equity owner.

         (g)      Consents and Approvals. Schedule 4.1(g) sets forth a true and
                  complete list of each consent, waiver, authorization or
                  approval of any Person and each material declaration to or
                  filing or registration with any Government that is required to
                  be obtained by any Seller in connection with the execution and
                  delivery by it of this Agreement and each Ancillary Agreement
                  to which it is or will become a party or the performance by it
                  of its obligations hereunder or thereunder, including, without
                  limitation, any and all material consents and approvals that
                  are required to be obtained, or rights of first refusal, first
                  offer or other similar preferential rights to purchase that
                  are required to be complied with, in connection with the
                  assignment or transfer of any Acquired Assets to Buyer in
                  accordance with the terms of this Agreement; provided,
                  however, that no Seller shall be required to comply with any
                  bulk sale rule that relates to any Taxes of any Seller
                  (collectively, the "CONSENTS").

                                       17
<PAGE>

         (h)      Compliance with Laws. Except as set forth on Schedule 4.1(h),
                  each Seller is in compliance with all applicable laws,
                  regulations, orders or other legal requirements to which such
                  Seller is subject. Except as set forth on Schedule 4.1(h), no
                  Seller has received written notice of any violation of any
                  law, regulation, order or other legal requirement and no
                  Seller is in default with respect to any order, writ,
                  judgment, award, injunction or decree of any Government.
                  Except as set forth on Schedule 4.1(h), no Seller is required
                  to maintain any bond, letter of credit or other similar
                  financial assurance instrument or to satisfy any financial
                  assurance obligation.

         (i)      Litigation. Except as set forth on Schedule 4.1(i), there are
                  no claims, actions, suits, proceedings, orders or
                  investigations pending or, to the Knowledge of Sellers,
                  threatened, before any Government that could reasonably be
                  expected to affect the ability of any Seller to consummate the
                  transactions contemplated by this Agreement and each Ancillary
                  Agreement.

         (j)      Title to Acquired Assets. Subject to the entry of the
                  Bankruptcy Sale Order, at the Closing, Sellers will obtain
                  good and marketable title to or a valid and enforceable right
                  by Contract to use, the Acquired Assets which shall be
                  transferred to Buyer free and clear of all Liens other than
                  Permitted Liens. Except for the Excluded Assets, the Acquired
                  Assets constitute all of the assets of Sellers and are
                  adequate to conduct the businesses of Sellers as currently
                  conducted.

         (k)      Intellectual Property.

                  (i)      Schedule 1.1(g) is a list of all material items of
                           Acquired Intellectual Property, and such list
                           contains a complete and correct description of the
                           owner, title (in the case of patents and copyrights)
                           or trademark (in the case of trademarks),
                           registration or application number, if in existence,
                           and country of registration or application of each
                           such listed item of Acquired Intellectual Property.
                           Except as set forth on Schedule 4.1(k)(i), any and
                           all renewal and maintenance fees, annuities or other
                           similar fees due and payable in respect of the
                           Acquired Intellectual Property required to have been
                           listed on Schedule 1.1(g) are not overdue.

                  (ii)     To the Knowledge of Sellers, the use of any
                           Technology (in the businesses conducted by Sellers)
                           does not infringe, constitute an unauthorized use of
                           or otherwise violate any Intellectual Property of any
                           other Person. Except as set forth on Schedule
                           4.1(k)(ii), to the Knowledge of Sellers, no other
                           Person is infringing, misappropriating or violating
                           any of the Acquired Intellectual Property owned by
                           Sellers.

                  (iii)    Except as set forth on Schedule 4.1(k)(iii), there
                           has not been and there are no claims or
                           investigations pending or, to the Knowledge of
                           Sellers, threatened that (A) challenge the rights of
                           Sellers in respect of any Acquired Intellectual
                           Property owned by any Seller, or otherwise challenge
                           the registration, validity, enforceability, scope or
                           sole and

                                       18
<PAGE>

                           exclusive ownership of the Acquired Intellectual
                           Property owned by Sellers or (B) assert that the
                           operation of the businesses conducted by Sellers or
                           the use of Technology therein is or will be
                           infringing or otherwise in violation of any
                           Intellectual Property of any other Person.

         (l)      Information Technology. Together, Schedule 1.1(c) and Schedule
                  1.1(i), set forth a true and complete list of all material
                  items of hardware, software, databases, computer equipment and
                  other information technology, owned, leased or licensed by any
                  Seller (collectively, the "INFORMATION TECHNOLOGY"). Schedule
                  1.1(i) includes a true and complete list of all Contracts to
                  which any Seller is a party relating to the current use of the
                  Information Technology. Subject to receipt of the Consents,
                  and except for the Excluded Assets, upon consummation of the
                  transactions contemplated by this Agreement and the Ancillary
                  Agreements, Buyer will own, or have a valid and enforceable
                  right by Contract to use, all of the Information Technology
                  that is necessary to operate the businesses conducted by
                  Sellers.

         (m)      Permits. Schedule 1.1(j) sets forth a true and complete list
                  of all Permits, and all pending applications therefor held by
                  any Seller. Except as set forth on Schedule 4.1(m), each
                  such Permit has been duly obtained, is valid and in full force
                  and effect, and is not subject to any pending or, to the
                  Knowledge of Sellers, threatened administrative or judicial
                  proceeding to revoke, cancel, suspend or declare such Permit
                  invalid in any respect. None of the operations of the
                  businesses conducted by Sellers are being conducted in a
                  manner that violates any of the terms or conditions under
                  which any Permit was granted. Subject to the receipt of the
                  Consents, the consummation of the transactions contemplated by
                  this Agreement and the Ancillary Agreements will not result in
                  the termination or suspension of any such Permit.

         (n)      Contracts. Schedule 1.6(b) sets forth all Cure Costs for each
                  Acquired Contract set forth on Schedule 1.1(c). Except as set
                  forth on Schedule 4.1(n) and except for those defaults that
                  will be cured in accordance with the Bankruptcy Sale Order, no
                  Seller, and no other party to any Acquired Contract, has
                  commenced any action against any of the parties to such
                  Acquired Contract or given or received any written notice of
                  any default or violation under any Acquired Contract that has
                  not been withdrawn or dismissed. Except as set forth on
                  Schedule 4.1(n), each Acquired Contract is, or will be at the
                  Closing, valid, binding and in full force and effect for the
                  benefit of Buyer in accordance with its terms, except as may
                  be limited by bankruptcy or other laws affecting creditors'
                  rights and by equitable principles.

         (o)      Environmental Matters. To the Knowledge of Sellers, except as
                  set forth on Schedule 4.1(o):

                  (i)      there has been no release, threatened release, spill,
                           leak, discharge or emission of any Hazardous
                           Materials to the air, surface water, groundwater or
                           soil of the Real Property requiring corrective,
                           response

                                       19
<PAGE>

                           or remedial action under, or that is a violation of,
                           any applicable Environmental Laws;

                  (ii)     there are no pending or threatened Claims or
                           investigations that affect or apply to the Real
                           Property or the Acquired Assets and that relate in
                           any way to any Environmental Laws; and

                  (iii)    Sellers have provided or made available to Buyer
                           copies of all information in possession of Sellers or
                           under the control of Sellers relating to the presence
                           or migration of Hazardous Materials on, in or under
                           the Real Property and the compliance with applicable
                           Environmental Laws associated with activities
                           conducted with respect to the Acquired Assets.

         (p)      Insurance. Schedule 4.1(p) sets forth a correct and complete
                  list of all current insurance policies covering any Seller and
                  a summary of each such policy, including any limits of
                  coverage, deductibles and premiums applicable to such policy.
                  Except as set forth on Schedule 4.1(p), all premiums required
                  to be paid under each insurance policy required to be set
                  forth on Schedule 4.1(g) have been paid when due, and all such
                  policies are in full force and effect.

         (q)      Real Property. Except as set forth on Schedule 4.1(g), Sellers
                  have not received any notice of (i) default from a landlord of
                  any Leased Real Property that might adversely affect the use
                  of any Leased Real Property as currently used by any Seller;
                  or (ii) threatened or contemplated condemnation or eminent
                  domain proceedings that might adversely affect the use of any
                  Real Property as currently used by any Seller. No Seller is a
                  "foreign person" within the meaning of section 1445(f)(3) of
                  the Code.

         (r)      Accounts Receivable. Except as set forth on Schedule 4.1(r),
                  all Accounts Receivable of Sellers have been properly recorded
                  on the books and records of Sellers in accordance with GAAP
                  consistently applied by Sellers in the ordinary course.

         (s)      Inventories. Except as set forth on Schedule 4.1(s), the
                  inventories of Sellers have been properly recorded on the
                  books and records of Sellers in accordance with GAAP
                  consistently applied by Sellers in the ordinary course.

         (t)      Absence of Certain Changes. Except as set forth on Schedule
                  4.1(t), since May 19, 2003, the businesses of Sellers have
                  been conducted in all respects in the ordinary course, and
                  there has not been:

                  (i)      any material damage, destruction or other casualty or
                           loss (whether or not covered by insurance) affecting
                           any of the Acquired Assets or any portion thereof
                           that has not been repaired; or

                  (ii)     any sale or other disposition of any assets
                           (including, without limitation, discounting of
                           accounts receivable) used or useful in the businesses
                           of

                                       20
<PAGE>

                           Sellers, other than sales of inventory in the
                           ordinary course of business consistent with Sellers'
                           past practice.

         (u)      Public Utility Matters. No Seller is subject to regulation by
                  any Government as a "public utility," an "electric utility," a
                  "gas utility," a "public utility holding company," a "holding
                  company," an "electrical corporation" or as a subsidiary or
                  affiliate of any of the foregoing, under (A) the Public
                  Utility Holding Company Act of 1935, as amended, the Federal
                  Power Act, as amended and the Public Utility Regulatory
                  Policies Act of 1978, as amended or (B) any similar Government
                  requirement.

         (v)      Coal Act. No Seller has any potential liability or obligation
                  of any nature, contingent or otherwise (including, without
                  limitation, any control group liability and liability as a
                  successor or as a successor-in-interest), arising under the
                  Coal Industry Retiree Health Benefit Act of 1992, 26 U.S.C.
                  Sections 9701-9722.

         (w)      DIP Agreement.

                  (i)      Concurrently with the execution and delivery of this
                           Agreement, Sellers have provided Buyer with true and
                           complete copies of the DIP Agreement, the DIP Order,
                           the current budget approved by the Agent and the
                           Lenders and the most current borrowing base
                           certificate provided by WSC to the Agent. As of the
                           Execution Date, the amount required to satisfy the
                           DIP Obligations in full is $162,704,565. Schedule
                           4.1(w) lists all Priming Liens that are senior in
                           payment to Sellers' obligations under the DIP
                           Agreement and Sellers' best estimate as of the
                           Amendment Date of the projected amount of the Priming
                           Liens, the Carveouts (by category) and the Sale Costs
                           (by category) as of the Closing Date. Except for the
                           Priming Liens, the Carveouts and the Sale Costs,
                           Sellers have not incurred any Indebtedness or any
                           other obligation that ranks senior to or pari passu
                           with Sellers' obligations under the DIP Agreement.

                  (ii)     Except as described on Schedule 4.1(w), no event or
                           condition has occurred that constitutes or would,
                           with the lapse of time or the giving of notice, or
                           both, constitute a "Default" or "Event of Default"
                           under the DIP Agreement.

                  (iii)    All consents of the Agent or the Lenders required
                           under the DIP Agreement to Sellers' execution and
                           delivery of this Agreement, the consummation of the
                           transactions contemplated hereby and Sellers'
                           performance of their obligations hereunder have been
                           obtained.

                  (iv)     Since February 17, 2004, Availability as evidenced by
                           WSC's borrowing base certificate has been greater
                           than $5,000,000 but less than $30,000,000.

                                       21
<PAGE>

                  (v)      WSC has not requested, and the Agent and the Lenders
                           have not made, any Overadvance or Collateral
                           Protection Loan.

                  (vi)     The budget referred to in Section 4.1(w)(i) contains
                           the true and correct budget for Sellers' professional
                           fees and expenses related to the Bankruptcy Case (as
                           defined in the DIP Agreement) as approved by the
                           Bankruptcy Court, the Agent and the Lenders.

                  (vii)    Schedule 4.1(w) lists all Letters of Credit and LC
                           Guaranties that are outstanding under the DIP
                           Agreement.

         SECTION 4.2 Representations and Warranties of Buyer.

         Buyer hereby represents and warrants to Sellers as follows:

         (a)      Corporate Organization. Buyer is a corporation duly organized,
                  validly existing and in good standing under the laws of the
                  State of Delaware and has all requisite corporate power and
                  authority to own its properties and assets and to conduct its
                  businesses as now conducted.

         (b)      Qualification to Conduct Business. Buyer is duly qualified to
                  do business as a foreign corporation and is in good standing
                  in every jurisdiction in which the character of the properties
                  owned or leased by it or the nature of the businesses
                  conducted by it makes such qualification necessary.

         (c)      Authorization and Validity. Buyer has, or on the Closing Date
                  will have, all requisite corporate power and authority to
                  enter into this Agreement and any Ancillary Agreement to which
                  Buyer is or will become a party and to perform its obligations
                  hereunder and thereunder. The execution and delivery of this
                  Agreement and any Ancillary Agreement to which Buyer is or
                  will become a party and the performance of Buyer's obligations
                  hereunder and thereunder have been, or on the Closing Date
                  will be, duly authorized by all necessary corporate action by
                  the Board of Directors of Buyer, and no other corporate
                  proceedings on the part of Buyer are necessary to authorize
                  such execution, delivery and performance. This Agreement has
                  been, and any Ancillary Agreement to which Buyer is or will
                  become a party has been, or on the Closing Date will be, duly
                  executed by Buyer and constitute, or will constitute, when
                  executed and delivered, Buyer's valid and binding obligations,
                  enforceable against it in accordance with their respective
                  terms except as may be limited by bankruptcy or other laws
                  affecting creditors' rights and by equitable principles.

         (d)      No Conflict or Violation. Subject to the receipt of the
                  consents set forth on Schedule 4.2(e), the execution, delivery
                  and performance by Buyer of this Agreement and any Ancillary
                  Agreement to which Buyer is or will become a party do not and
                  will not (i) violate or conflict with any provision of the
                  Certificate of Incorporation or Bylaws of Buyer, (ii) violate
                  any provision of law, or any order, judgment or decree of any
                  court or Government applicable to Buyer or (iii) violate or
                  result in a breach of or constitute (with due notice or lapse
                  of

                                       22
<PAGE>

                  time or both) a default under any Contract to which Buyer is
                  party or by which Buyer is bound or to which any of Buyer's
                  properties or assets is subject.

         (e)      Consents and Approvals. Schedule 4.2(e) sets forth a true and
                  complete list of each consent, waiver, authorization or
                  approval of any Person and each declaration to or filing or
                  registration with any Government that is required in
                  connection with the execution and delivery by Buyer of this
                  Agreement and each Ancillary Agreement to which Buyer is or
                  will become a party or the performance by Buyer of its
                  obligations hereunder or thereunder.

         (f)      Adequate Assurances Regarding Acquired Contracts. Buyer is
                  capable of satisfying the conditions contained in sections
                  365(b)(1)(C) and 365(f)(2)(B) of the Bankruptcy Code with
                  respect to the Acquired Contracts.

         (g)      Intentionally Deleted.

         (h)      Litigation. Except as set forth on Schedule 4.2(h), there are
                  no claims, actions, suits, proceedings or investigations
                  pending or, to the Knowledge of Buyer, threatened, before any
                  federal or state court, Government or Person brought by or
                  against Buyer, or any Related Person of Buyer that could
                  reasonably be expected to affect the ability of Buyer to
                  consummate the transactions contemplated by this Agreement and
                  each Ancillary Agreement.

         (i)      Adequacy of Funds. Buyer has access to sufficient resources to
                  fund the Total Consideration.

         SECTION 4.3 Warranties Are Exclusive.

         The parties acknowledge that the representations and warranties
contained in this Article 4 are the only representations or warranties given by
the parties and that all other express or implied warranties are disclaimed.
Without limiting the foregoing, Buyer acknowledges that, except for the
representations and warranties contained in Section 4.1, the Acquired Assets are
conveyed "AS IS," "WHERE IS" and "WITH ALL FAULTS" and that all warranties of
merchantability or fitness for a particular purpose are disclaimed. WITHOUT
LIMITING THE FOREGOING, BUYER ACKNOWLEDGES THAT, EXCEPT FOR THE REPRESENTATIONS
AND WARRANTIES CONTAINED IN SECTION 4.1, SELLERS AND THEIR RELATED PERSONS AND
AFFILIATES HAVE MADE NO REPRESENTATION OR WARRANTY CONCERNING ANY (A) USE TO
WHICH THE ACQUIRED ASSETS MAY BE PUT, (B) FUTURE REVENUES, COSTS, EXPENDITURES,
CASH FLOW, RESULTS OF OPERATIONS, FINANCIAL CONDITION OR PROSPECTS THAT MAY
RESULT FROM THE OWNERSHIP, USE OR SALE OF THE ACQUIRED ASSETS OR THE ASSUMPTION
OF THE ASSUMED LIABILITIES OR (C) OTHER INFORMATION OR DOCUMENTS MADE AVAILABLE
TO BUYER OR ITS AFFILIATES OR RELATED PERSONS.

                                       23
<PAGE>

                   ARTICLE 5. COVENANTS AND OTHER AGREEMENTS

         SECTION 5.1 Pre-Closing Covenants of Sellers.

         Sellers covenant to Buyer that, during the period from the Execution
Date through and including the Closing Date:

         (a)      Conduct of Business Before the Closing Date. Unless otherwise
                  agreed by Sellers and Buyer, Sellers shall conduct their
                  respective businesses in all material respects in the manner
                  in which they have been conducted since the WSC Petition Date,
                  the FWH Petition Date or the WVHC Petition Date, as the case
                  may be, and shall use commercially reasonable efforts to
                  preserve intact their respective businesses or organizations
                  and relationships with third parties. Except as set forth on
                  Schedule 5.1(a) or as required pursuant to the terms of this
                  Agreement, without obtaining the prior consent of Buyer to
                  take any actions not permitted or required by the following
                  clauses (i) - (xiv), Sellers:

                  (i)      shall not take or agree to commit to take any action
                           that would make any representation or warranty of any
                           Seller inaccurate in any material respect at, or as
                           of any time prior to, the Closing Date;

                  (ii)     shall not offer credit terms or trade promotions to
                           any customers except in all material respects in a
                           manner consistent with past practices with respect to
                           the applicable product lines of WSC or except to the
                           extent reasonably necessary to be competitive with
                           competitors' product offerings;

                  (iii)    shall not borrow funds from any Person or declare or
                           pay dividends, to any Person, except for (A)
                           intercompany borrowing and related cash management
                           practices in all material respects in the ordinary
                           course of business consistent with past practices,
                           (B) borrowing under the DIP Facility, and (C)
                           granting or obtaining trade credit terms in the
                           ordinary course of business;

                  (iv)     shall keep in full force and effect, and pay all
                           premiums and other amounts due under, the insurance
                           policies required to be set forth on Schedule 4.1(p);

                  (v)      shall continue to take all actions consistent with
                           past practice and existing plans to comply, in all
                           material respects, with Environmental Laws,
                           including, without limitation, disposal of all
                           Hazardous Materials;

                  (vi)     shall not make any change in its general pricing
                           practices or policies or any material change in its
                           credit or allowance practices or policies, except to
                           the extent reasonably necessary to be competitive;

                  (vii)    shall not enter into any material Contract or any
                           material amendment, modification or termination
                           (partial or complete) of, grant any material

                                       24
<PAGE>

                           waiver under or give any material consent with
                           respect to, any Contract set forth on Schedule 1.1(c)
                           or that is otherwise required to be disclosed in the
                           Schedules to Section 1.1;

                  (viii)   shall not place or impose any Lien other than
                           Permitted Liens on any material portion of the
                           Acquired Assets;

                  (ix)     shall not sell or dispose of any Acquired Assets
                           other than sales of products, inventory and obsolete
                           equipment in the ordinary course of business;

                  (x)      shall not enter into, amend, modify or terminate, in
                           any material respect, any Contract with respect to
                           the Intellectual Property rights of any Person;

                  (xi)     shall not shut down the Number One and Number Four
                           blast furnaces during the same period of time (the
                           "WSC SHUTDOWN"); and

                  (xii)    subject to Section 11.2, shall not take any other
                           action or enter into any other transaction (including
                           any transactions with Affiliates) other than in a
                           manner consistent with past practice or other than
                           the transactions contemplated by this Agreement or
                           any Ancillary Agreement to which Sellers are party,
                           or as required in connection with the Bankruptcy
                           Code.

         (b)      Cooperation. Sellers shall use commercially reasonable efforts
                  to (i) obtain the Consents, (ii) take, or cause to be taken,
                  all action and to do, or cause to be done, all things
                  necessary or proper, consistent with applicable law, to
                  consummate and make effective as soon as possible the
                  transactions contemplated hereby, including, without
                  limitation, commencing the FWH Bankruptcy Case and the WVHC
                  Bankruptcy Case and, after such commencement in the case of
                  FWH and WVHC, assuming and ratifying this Agreement in such
                  bankruptcy cases, and (iii) assist Buyer in the transfer of or
                  obtaining any Permits required to own the Acquired Assets.
                  Sellers acknowledge that Buyer has the right, in cooperation
                  with Sellers, to take any and all commercially reasonable
                  actions in order to obtain the Consents without the incurrence
                  of cost or obligation to Sellers. In addition, Sellers shall
                  use commercially reasonable efforts to obtain, and assist
                  Buyer in obtaining, such Consents; provided, however, that (A)
                  Buyer has no obligation to obtain the Consents (other than to
                  sign an assumption agreement, pay Cure Costs and provide
                  adequate assurances as contemplated by this Agreement), (B)
                  Buyer will not incur any liability under this Agreement or
                  otherwise for Buyer's failure to take any further actions to
                  obtain such Consents and (C) in no event will any failure of
                  Buyer to obtain such Consents be construed as a waiver by
                  Buyer of any of the conditions set forth in Section 7.2.

         (c)      Access to Records and Properties. Buyer shall be entitled, at
                  its expense, and Sellers shall permit Buyer, to conduct such
                  investigation of the condition

                                       25
<PAGE>

                  (financial or otherwise), businesses, assets, properties or
                  operations of Sellers as Buyer shall reasonably deem
                  appropriate. Sellers shall (i) provide Buyer and its Related
                  Persons full and complete access at any reasonable time to all
                  the facilities, offices and personnel of Sellers and to all of
                  the books and records of Sellers, including, without
                  limitation, to perform field examinations and inspections of
                  Sellers' inventories and other properties; (ii) cause Sellers'
                  respective Related Persons to furnish Buyer with such
                  financial and operating data and other information with
                  respect to the condition (financial or otherwise), businesses,
                  assets, properties or operations as Buyer shall reasonably
                  request; (iii) provide Buyer and the Title Company with all
                  customary documents, certificates and instruments required by
                  the Title Company to issue the title insurance contemplated by
                  Section 7.2(h); and (iv) permit Buyer to make such inspections
                  and copies thereof as Buyer may require, including, without
                  limitation, to conduct such environmental assessments and
                  investigations of the Real Property and surrounding real
                  property as Buyer or its advisors and consultants may deem
                  reasonably necessary or appropriate and to conduct sampling
                  and analysis of environmental media to detect the presence or
                  confirm the absence of contamination, including any
                  contamination which may be present in groundwater and the
                  sources of any such contamination; provided, however, that
                  Buyer shall use commercially reasonable efforts to prevent any
                  such investigation from unreasonably interfering with the
                  operation of the businesses of Sellers. In addition, at
                  Buyer's expense, Sellers shall (i) consistent with its
                  anti-trust guidelines, provide Buyer and its Related Persons
                  with full and complete access to its customers and suppliers
                  and the opportunity to make cooperative and investigative
                  sales calls on its customers; (ii) provide Buyer and its
                  Related Persons office space at its facilities and access to
                  such office space at all times; and (iii) permit Buyer and its
                  Related Persons to talk to the employees of any Seller as
                  Buyer deems appropriate for the purpose of determining the
                  suitability of such employees for employment by Buyer after
                  the Closing Date; provided, however, that Buyer shall use
                  reasonable efforts to prevent any such conversations from
                  unreasonably interfering with the operations of Sellers'
                  respective businesses and such employee's duties with Sellers.

         (d)      Notice of Certain Events. Sellers shall promptly notify Buyer
                  of, and furnish Buyer any information it may reasonably
                  request with respect to, the occurrence of any event or
                  condition or the existence of any fact that would reasonably
                  be expected to cause any of the conditions to Buyer's
                  obligations to consummate the transaction(s) contemplated by
                  this Agreement or by any Ancillary Agreement not to be
                  fulfilled.

         (e)      Buyer's Right to Advise. Buyer shall have the right to consult
                  with, and make specific recommendations to, Sellers regarding
                  all aspects of management and operations of Sellers and
                  potential cost-cutting measures that may be implemented prior
                  to the Closing Date. Sellers agree to consider in good faith,
                  and in their reasoned business judgment, any such
                  recommendations and to discuss such recommendations with
                  Buyer. Notwithstanding the foregoing, nothing in this
                  Agreement shall give Buyer or its Affiliates, directly or
                  indirectly, the right to

                                       26
<PAGE>

                  control or direct the management and operations of Sellers
                  prior to the Closing Date. Prior to the Closing Date, Sellers
                  shall exercise, consistent with the terms and conditions of
                  this Agreement, complete control, supervision and
                  decision-making authority over the management and operations
                  of Sellers.

         (f)      Reporting; Payoff Certificate. Sellers will provide Buyer with
                  periodic reports of the amount of the Senior Debt (including a
                  break-out of the components thereof) and all other
                  documentation reasonably requested by Buyer from time to time
                  prior to the Closing in connection with the determination of
                  the Aggregate Purchase Price and Sellers' compliance with the
                  covenants contained in Section 5.1(g). No later than two
                  Business Days prior to the Closing Date, Sellers will provide
                  Buyer with a certification of the amount required to
                  indefeasibly and finally satisfy the Senior Debt in full in
                  cash (except that for each Unresolved Claim Sellers will
                  instead certify as to their best estimate of the amount of
                  such Unresolved Claim as of the Closing Date) (the "PAYOFF
                  CERTIFICATE"), including a certification from the Agent of the
                  amount required to indefeasibly and finally satisfy the DIP
                  Obligations in full in cash on the Closing Date.

         (g)      Covenant Compliance.

                  (i)      From the Execution Date until the Closing Date, WSC
                           will comply with all of its covenants under the DIP
                           Agreement and will not cause or permit to occur any
                           event or condition that constitutes a "Default" or
                           "Event of Default" under the DIP Agreement; provided
                           that (A) WSC's failure to comply with the Minimum
                           Cumulative EBITDAR, Minimum Monthly EBITDAR,
                           Cumulative Restructuring Expenses and Individual
                           Restructuring Expenses covenants listed on Exhibit
                           8.3 to the DIP Agreement will not be a breach
                           hereunder (1) if such failure is waived by the Agent
                           and the Lenders without amendment to the DIP
                           Agreement; or (2) if such waiver is not made or
                           obtained, so long as the failure to comply with any
                           such covenant or covenants does not result in a
                           material change in the Agent's or the Lenders'
                           administration of the loans under the DIP Agreement;
                           and (B) the execution and delivery of this Agreement
                           by Sellers, and the consummation of the transactions
                           contemplated hereby, will not be a breach hereunder
                           notwithstanding Section 8.2.9 and Section 10.1.21 of
                           the DIP Agreement.

                  (ii)     From the Execution Date until the Closing Date, WSC
                           will not in any material respect amend or modify the
                           DIP Agreement or change its administration of its
                           borrowings thereunder, or permit any such amendment,
                           modification or change.

                  (iii)    From the Execution Date until the Closing Date, WSC
                           will not request or permit the issuance of any
                           additional Letters of Credit or LC Guaranties or
                           amend, modify or extend any outstanding Letters of
                           Credit or LC Guaranties.

                                       27
<PAGE>

                  (iv)     Nothing in this Agreement, including, without
                           limitation, the provisions of Section 4.1(w)(iii) and
                           Section 5.1(g)(i), shall be construed as a waiver by
                           the Agent or any Lender of any Default or Event of
                           Default under the DIP Agreement that may be
                           continuing on the Amendment Date or any Default or
                           Event of Default under the DIP Agreement that may
                           occur after the Amendment Date, and the parties
                           hereto acknowledge that the Agent and the Lenders
                           have not agreed to forbear with respect to any of
                           their respective rights or remedies concerning any
                           Default or Event of Default under the DIP Agreement
                           that may have occurred or are continuing as of the
                           Amendment Date or that may occur thereafter.

         (h)      Cash Sweeps. Sellers will continue to permit daily cash sweeps
                  of all of Sellers' bank accounts as currently required by the
                  Agent, and Agent will continue to apply all such cash to
                  reduce the DIP Obligations. Sellers do not currently own and
                  will not prior to the Closing Date acquire any cash
                  equivalents, including, without limitation, any money market
                  funds, certificates of deposit or similar investment
                  securities.

         (i)      Avoidance Claims. At or prior to Closing, the Debtors will
                  discharge and/or release all Claims with respect to the
                  Avoidance Actions and will take all actions necessary,
                  including, without limitation, filing all motions with the
                  Bankruptcy Court, to effectuate the foregoing.

         SECTION 5.2 Pre-Closing Covenants of Buyer.

         Buyer covenants to Sellers that, during the period from the date of
this Agreement through and including the Closing Date or the earlier termination
of this Agreement:

         (a)      Cooperation. Buyer shall use commercially reasonable efforts
                  to take, or cause to be taken, all action and to do, or cause
                  to be done, all things necessary or proper, consistent with
                  applicable law, to consummate and make effective as soon as
                  possible the transactions contemplated hereby.

         (b)      Adequate Assurances Regarding Acquired Contracts and Required
                  Orders. With respect to each Acquired Contract, Buyer shall
                  provide adequate assurance of the future performance of such
                  Acquired Contract by Buyer. Buyer shall promptly take such
                  actions as may be reasonably requested by Sellers to assist
                  Sellers in obtaining the Bankruptcy Court's entry of the
                  Bankruptcy Sale Order and any other order of the Bankruptcy
                  Court reasonably necessary to consummate the transactions
                  contemplated by this Agreement.

         (c)      Management of Expenses. Buyer shall use commercially
                  reasonable efforts to assist Sellers in minimizing the actual
                  amount of the Payroll Liabilities.

         (d)      Notice of Certain Events. Buyer shall promptly notify Sellers
                  of, and furnish Sellers any information it may reasonably
                  request with respect to, the occurrence of any event or
                  condition or the existence of any fact that would reasonably
                  be

                                       28
<PAGE>

                  expected to cause any of the conditions to Sellers'
                  obligations to consummate the transactions contemplated by
                  this Agreement or by any Ancillary Agreement not to be
                  fulfilled.

         (e)      Environmental Permits. Buyer shall use commercially reasonable
                  efforts to promptly obtain or consummate the transfer to Buyer
                  of any Permit required to operate the Acquired Assets under
                  applicable Environmental Laws and Buyer shall periodically
                  notify Sellers of the status of such efforts.

         SECTION 5.3 Other Covenants of Sellers and Buyer.

         (a)      Litigation Assistance. From and after the Closing Date, at the
                  request and at the sole expense of Sellers, Buyer shall use
                  commercially reasonable efforts to secure the cooperation of
                  Buyer's employees in Sellers' defense of any postpetition
                  Claims and in Sellers' prosecution of any Claims.

         (b)      Improper Receipt of Payment. From and after the Closing Date,
                  (i) Sellers shall promptly forward to Buyer any and all
                  payments received by Sellers from customers or any other
                  Persons that constitute part of the Acquired Assets and (ii)
                  Buyer shall promptly forward to Sellers any and all payments
                  received by Buyer from customers or any other Persons that
                  constitute part of the Excluded Assets.

         (c)      Management of Expenses. Sellers shall use commercially
                  reasonable efforts to minimize the actual amount of the
                  Retained Liabilities and the Assumed Liabilities.

         (d)      Disclosure Supplements. Sellers, on the one hand, shall notify
                  Buyer of, and Buyer on the other hand, shall notify Sellers
                  of, and shall supplement or amend the Schedules to this
                  Agreement with respect to, any matter that (i) may arise after
                  the Execution Date and that, if existing or occurring at or
                  prior to the Execution Date, would have been required to be
                  set forth or described in the Schedules to this Agreement or
                  (ii) makes it necessary to correct any information in the
                  Schedules to this Agreement or in any representation and
                  warranty of Sellers or Buyer, as applicable, that has been
                  rendered inaccurate thereby. Each such notification and
                  supplementation shall be made no later than three days before
                  the date set for the Closing by the parties. No supplement or
                  amendment to the Schedules to this Agreement or any delivery
                  of Schedules after the Execution Date, unless expressly
                  acknowledged by Buyer or Sellers, as applicable, as a cure or
                  modification, shall be deemed to cure any inaccuracy of any
                  representation or warranty made in this Agreement or modify,
                  affect or diminish Buyer's right to exclude Contracts as
                  provided in Section 1.6(a) or Buyer's or Sellers' right to
                  terminate this Agreement pursuant to Section 8.1.

         (e)      Bulk Sale Compliance. Notwithstanding anything contained in
                  this Agreement, Buyer hereby waives compliance with any bulk
                  sale rule that relates to any Taxes of Sellers.

                                       29
<PAGE>

         (f)      Government Consents. Within ten business days following the
                  date of this Agreement, each of Buyer and WSC will file or
                  cause to be filed a Notification and Report Form and related
                  material with the Federal Trade Commission and the Antitrust
                  Division of the United States Department of Justice under the
                  Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
                  amended, together with all of its implementing regulations
                  ("HSR ACT"), will use its respective reasonable best efforts
                  to obtain early termination of the applicable waiting period
                  under all Antitrust Laws and will take all further actions and
                  make all further filings pursuant to the Antitrust Laws that
                  may be necessary, proper or advisable. Fees payable to any
                  Government in connection with filings required by the
                  Antitrust Laws will be shared equally by Buyer and WSC.
                  Nothing contained in this Agreement will require Buyer or any
                  of its Affiliates or Related Persons to enter into any
                  agreement, consent decree or other commitment requiring Buyer
                  or any of its Affiliates or Related Persons to (x) divest or
                  hold separate any assets of Sellers, Buyer or any of their
                  Affiliates or Related Persons, (y) litigate, pursue or defend
                  any action or proceeding challenging any of the transactions
                  contemplated hereby as violative of any Antitrust Laws, or (z)
                  take any other action. In connection with the foregoing, each
                  party (a) will promptly notify the other party in writing of
                  any communication received by that party or its Affiliates or
                  Related Persons from any Government, and subject to applicable
                  law, provide the other party with a copy of any such written
                  communication (or written summary of any oral communication),
                  and (b) will not participate in any substantive meeting or
                  discussion with any Government in respect of any filing,
                  investigation or inquiry concerning the transactions
                  contemplated by this Agreement unless it consults with the
                  other party in advance, and to the extent permitted by such
                  Government, give the other party the opportunity to attend and
                  participate thereat.

         SECTION 5.4 Employment Covenants and Other Undertakings.

         (a)      Employee Benefits. Except as provided in Section 1.3(e),
                  Sellers shall retain all liabilities and obligations in
                  respect of its past, present and future employees under
                  applicable laws and the Sellers Benefit Plans. Without
                  limiting the generality of the foregoing or of Section 1.4,
                  Buyer shall have no liability or obligation whatsoever under
                  the Sellers Benefit Plans nor shall Buyer assume the
                  sponsorship of the Sellers Benefit Plans. Unless and until
                  such Sellers Benefit Plans are terminated, Sellers shall
                  retain sponsorship and all of its rights and obligations under
                  all of the Sellers Benefit Plans. Prior to or upon
                  commencement of employment with Buyer of any employees of
                  Sellers hired by Buyer as of or after the Closing, Buyer shall
                  offer such employees and their dependents employee benefits on
                  such terms and conditions as Buyer may, in its sole
                  discretion, determine, including, without limitation, such
                  terms and conditions as Buyer may in its sole discretion agree
                  with the ISU or with any other labor organization representing
                  such employees.

         (b)      Future Employment. Buyer, in its sole discretion, may offer
                  employment from and after the Closing to such employees or
                  former employees of Sellers, and on such terms and conditions
                  as required by an Acquired Contract or as Buyer may

                                       30
<PAGE>

                  determine, in its sole discretion, including, without
                  limitation, such terms and conditions as Buyer may in its sole
                  discretion agree with the ISU or with any other labor
                  organization representing such employees.

         (c)      No Right to Employment. Nothing herein expressed or implied
                  shall confer upon any of the employees of any Seller, Buyer or
                  any of their or its respective Affiliates, any rights or
                  remedies, including any right to employment or continued
                  employment for any specified period, of any nature or kind
                  whatsoever under or by reason of this Agreement. Except as
                  required by law or labor agreement, Buyer shall not be
                  required to hire any employee of any Seller after the Closing,
                  and the employment of any such employees may be terminated
                  after the Closing in accordance with the applicable law or
                  labor agreement.

         (d)      Employment Records. Except as otherwise provided in the
                  Transition Services Agreement and for those records required
                  by law to be maintained by Buyer, Sellers shall use
                  commercially reasonable efforts to remove the Employment
                  Records from the Real Property as soon as practicable after
                  Sellers no longer require the use of such Employment Records.
                  Any Employment Records remaining on the Real Property after
                  Sellers no longer require the use of such Employment Records
                  may be removed, disposed of or destroyed by Buyer; provided,
                  however, that Buyer must give Sellers 30 days written notice
                  before removing, disposing of or destroying such Employment
                  Records, except as otherwise required by law.

         (e)      Labor Matters. During the period between the date of this
                  Agreement and the Closing Date, Buyer and Sellers shall
                  reasonably cooperate on labor matters to effect the
                  transactions contemplated by this Agreement and the orderly
                  transition of the operations of the Acquired Assets from
                  Sellers to Buyer. Sellers shall comply with any obligations to
                  bargain with any labor organizations representing their
                  employees with respect to the transactions contemplated by
                  this Agreement and/or the effects of such transactions on
                  their represented employees, in accordance with applicable
                  law.

         (f)      Plant Closing Laws. Other than the implementation of layoffs
                  associated with WSC's current coke shortage, without Buyer's
                  prior written consent, Sellers shall take no action that
                  results in a "plant closing" or "mass layoff" within the
                  definitions of the WARN Act or any applicable state laws prior
                  to the Closing. At least 60 days prior to the Closing, Sellers
                  shall provide a contingent notice (in a form subject to the
                  review and comment of Buyer) to all affected employees or
                  their labor representatives, as well as appropriate state and
                  local government officials, in compliance with the WARN Act
                  and any applicable state laws.

         (g)      Other Obligations. Except as otherwise required by law,
                  specified in this Agreement, or otherwise agreed in writing by
                  Buyer and/or its Affiliates, neither Buyer nor its Affiliates
                  shall be obligated to provide any severance, separation pay,
                  or other payments or benefits, including any key employee
                  retention payments, to any employee of any Seller on account
                  of any termination of such

                                       31
<PAGE>

                  employee's employment on or before the Closing Date, and such
                  benefits (if any) shall be payable by Sellers.

         (h)      Health Insurance Coverage. (i) Sellers shall comply with the
                  provisions of the Order Authorizing Termination of Benefits
                  entered on March 15, 2004 by the Bankruptcy Court in
                  connection with the Bankruptcy Cases.

                  (ii)     Sellers shall, either directly or through a third
                           party at Sellers' expense, provide all notices that
                           Sellers' former employees and retirees are entitled
                           to receive under COBRA in connection with a group
                           health plan provided by Sellers, subject to the
                           timely review and comment of Buyer. Notices required
                           as a result of a qualifying event under Code section
                           4980B(f)(3) shall be provided promptly after the
                           qualifying event and shall include information with
                           regard to an individual's ability to receive the tax
                           credit provided under Code section 35. Sellers shall,
                           at Buyer's reasonable request, include with any
                           notice described in this Section 5.4(h) any materials
                           requested by Buyer in a timely manner, which
                           materials shall be subject to Sellers' review and
                           comment. If the materials included at Buyer's request
                           with the notice described in this Section 5.4(h)
                           increase the cost of such notice, Buyer shall be
                           responsible for paying the amount equal to such
                           increase in cost.

                  (iii)    Sellers shall take reasonable actions necessary to
                           ensure that the initial COBRA continuation coverage
                           elections of its former employees, retirees and their
                           dependents are reported to Sellers. Sellers shall
                           maintain records ("COBRA RECORDS") of each of
                           Sellers' former employees, retirees and their
                           dependents who elect COBRA continuation coverage as a
                           result of receiving the notice described in this
                           Section 5.4(h) or who were receiving COBRA
                           continuation coverage from Sellers on the Closing
                           Date. Such COBRA Records shall include (i) the name
                           and address of the former employee or retiree, (ii)
                           the specific qualifying event (listed under Code
                           section 4980B(f)(3)) that entitled the former
                           employee or retiree and his or her dependents to
                           elect COBRA continuation coverage, (iii) the date on
                           which COBRA continuation coverage was elected, (iv)
                           the type of health plan coverage elected, and (v) the
                           name of the former employee or retiree's dependents
                           who elected COBRA continuation coverage.

                  (iv)     Sellers shall provide Buyer with the COBRA Records
                           after the expiration of the time period during which
                           Sellers' former employees and retirees are entitled
                           to elect the COBRA continuation coverage. Beginning
                           on the later of the Closing Date or 60 days or such
                           shorter time as the parties may reasonably agree
                           after Seller provides Buyer with the COBRA Records,
                           Buyer shall provide the continuation coverage
                           pursuant to COBRA to any of Sellers' former
                           employees, retirees or their dependents who are "m &
                           a qualified beneficiaries" (as defined in 26
                           C.F.R. Section 54.4980B-9) and who elect such
                           coverage, if

                                       32
<PAGE>

                           entitled to do so. Sellers shall provide the
                           continuation coverage pursuant to COBRA to any of
                           Sellers' former employees, retirees and their
                           dependents until Buyer begins COBRA continuation
                           coverage for such persons in accordance with this
                           paragraph.

         (i)      Employee and Retiree Information. To the extent necessary to
                  enable Buyer to meet any obligation Buyer may have to any
                  employees, former employees and retirees of Sellers after the
                  Closing Date, Sellers shall provide to Buyer, at Buyer's
                  request, in a format reasonably acceptable to Buyer, the name,
                  social security number, dates of service, most recent job
                  position, seniority, and most recent annual salary or wage
                  rate of each employee, retiree and any former employee with
                  reemployment or recall rights of Sellers and the name or names
                  of each such employee's, retiree's and former employee's
                  spouse and dependents; provided, however, that Sellers shall
                  be obligated to provide only such information as may be
                  reflected on Sellers' records. Sellers shall also provide to
                  Buyer, at Buyer's request, such additional available
                  information with regard to employees, former employees and
                  retirees of Sellers as Buyer may reasonably request in
                  connection with any obligation Buyer may have to such
                  employees, former employees and retirees of Sellers after the
                  Closing Date.

         SECTION 5.5 Covenants Relating to Offerings, Financings and Securities
Law Compliance.

         From and after the date of this Agreement, in connection with (i) any
Offering or (ii) obtaining any debt financing necessary to consummate the
transactions contemplated hereby (the "FINANCING"), Sellers shall (a) cooperate
with Buyer in all reasonable respects in connection with efforts by Buyer to
complete the Financing or the Offering, as the case may be, including with
respect to (x) the preparation and filing with the SEC of a registration
statement or, in the case of any private placement, a private placement
memorandum or similar document ("OFFERING MEMORANDUM") and (y) access to all
financial and other information in possession of Sellers reasonably necessary in
connection therewith upon reasonable advance notice; (b) make available, upon
reasonable advance notice, the senior management of Sellers for their
participation in any "road shows" or other meetings with potential financing
sources or investors for the Financing and any Offering and assist with
responding to questions and inquiries of financing sources and investors
regarding the Financing and any Offering; (c) upon the discovery of the
occurrence of any event which causes any prospectus included in any registration
statement or Offering Memorandum (or amendment or supplement thereto) to contain
any untrue statement of a material fact with respect to Sellers or to omit any
material fact necessary to make the statements therein with respect to Sellers,
in light of the circumstances under which they were made, not misleading,
promptly notify Buyer of such event and use their commercially reasonable
efforts to assist Buyer in preparing and filing with the SEC an appropriate
amendment or supplement to any such registration statement (and any prospectus
contained therein) or Offering Memorandum and, in the case of any registration
statement, filing the same with the SEC; (d) deliver to Buyer all financial
statements of Sellers, including historical audited and/or unaudited
consolidated balance sheets and related combined statements of net income and
cash flows (including selected financial data), for any periods ending on or
prior to the Closing Date, including, without limitation, the one-year period
ended December 31, 2003 and the partial year

                                       33
<PAGE>

period ended on the Closing Date, to be included or incorporated into any
registration statement, to the extent required by the Securities Act, and the
Exchange Act (collectively, the "SECURITIES LAWS") to be included therein (or in
the case of a private placement, as would be required for a registered offering
of similar securities), which financial statements and other information shall
comply with the requirements of Regulation S-X, and such other financial
statements and information as otherwise may be requested by any financing source
in connection with the Financing or required under the Securities Laws to be
included in any registration statement or Offering Memorandum not later than
five business days prior to the date such financial statements and information
are so required; (e) if the Securities Laws require financial statements
(including pro forma financial statements) for periods beginning before the
Closing Date to be provided in any registration statement (or in the case of a
private placement, as would be required for a registered offering of similar
securities) that do not conform to the historical financial statements prepared
by Sellers, deliver such financial information and provide Buyer with reasonable
assistance in the preparation of the additional financial statements required by
the Securities Laws not later than five business days prior to the date such
financial statements are so required; (f) use commercially reasonable efforts to
cause Sellers' independent public accountants to conduct all reviews and provide
all financial reports and information required by the Securities Laws, or as may
otherwise be customary for transactions such as any Offering, including
customary "comfort" letters and consents, to be completed in connection with the
preparation of any registration statement or Offering Memorandum; (g) reasonably
assist Buyer with the hosting of one or more meetings with Buyer's prospective
arrangers, agents and lenders in connection with any Offering; (h) reasonably
assist with the preparation of one or more confidential memoranda and other
marketing materials to be used in connection with the syndication of the credit
facilities contemplated by any Offering; and (i) use commercially reasonable
efforts to assist Buyer in obtaining ratings of the credit facilities
contemplated by any debt securities to be issued in any Offering, including,
without limitation, to cause Sellers senior management to meet with applicable
ratings agencies. Buyer shall pay all out-of-pocket expenses reasonably incurred
by Sellers in taking any actions contemplated by this Section 5.5.

         SECTION 5.6 Administration of Payroll Liabilities.

         WSC shall supply Buyer with such information regarding the Payroll
Liabilities as Buyer may reasonably request. At Buyer's request, WSC shall act
as Buyer's agent for the limited purpose of paying any or all Payroll
Liabilities assumed at the Closing. In such case, Buyer shall notify WSC of
those current and former employees of WSC, and those Payroll Liabilities, for
which WSC shall act as Buyer's agent. As promptly as practicable after such
notice is given, and in any event not less than three Business Days prior to the
date on which any assumed Payroll Liability is due to be paid, WSC shall provide
to Buyer a statement of the gross amount of the Payroll Liabilities and a
breakdown thereof in reasonable detail. WSC shall pay any Payroll Liability
assumed by Buyer on the later to occur of (i) the date on which such payment is
due and (ii) one Business Day after WSC receives from Buyer the funds to pay
such Payroll Liability. At Buyer's request and expense, WSC shall take such
steps as Buyer may reasonably request (including, without limitation,
establishment of one or more separate bank accounts not subject to the control
of any lender of WSC) to segregate and protect funds advanced by Buyer pursuant
to this Section 5.6.

                                       34
<PAGE>

         SECTION 5.7 Ownership and Use of Weirton Steel Name.

         (a)      Sellers covenant and agree that Sellers shall, and Sellers
                  shall cause all of their Affiliates which use the Weirton
                  Steel Name, to pass all required resolutions and to amend
                  their respective articles or certificate of incorporation or
                  other organizational documents to change their corporate or
                  company name to a name that does not include the words
                  "Weirton Steel" or any name intended or likely to be confused
                  or associated with any Weirton Steel Name no later than the
                  Closing Date. Promptly following receipt of confirmation that
                  each such name change has been effected, Sellers shall provide
                  to Buyer written proof that each such name change has been
                  effected.

         (b)      Sellers acknowledge that the Weirton Steel Name shall be and
                  remain, subsequent to the Closing, the sole and exclusive
                  property of Buyer or its Affiliates.

         (c)      On the Closing Date, Sellers shall grant Buyer an exclusive,
                  world-wide, royalty-free and irrevocable license to the use of
                  the Weirton Steel Name.

         (d)      Subsequent to the Closing, neither Sellers nor any of their
                  Affiliates shall have any right, title or interest in or to,
                  and Buyer is not granting Sellers or any of their Affiliates,
                  a license to use, the Weirton Steel Name.

         (e)      Sellers agree that, as soon as reasonably practicable, but, in
                  any event, within ten days following the Closing, no
                  stationery, purchase order, invoice, receipt or other similar
                  document containing any reference to the Weirton Steel Name
                  shall be printed, ordered or produced for use by any Seller or
                  any of its Affiliates and that Sellers shall, and Sellers
                  shall cause each of their respective Affiliates to, following
                  the Closing, cease to use any stationery, purchase order,
                  invoice, receipt or other similar document containing any
                  reference to the Weirton Steel Name or shall only use such
                  stationery, purchase order, invoice, receipt or other similar
                  document after having deleted, pasted over or placed a sticker
                  over such references. The obligations in this paragraph (e)
                  shall not apply (y) to the extent use of the Weirton Steel
                  Name is required by law or otherwise reasonably required
                  pending the registration of the change of corporate names (as
                  set out in this Section 5.7) or (z) to the extent use of the
                  Weirton Steel Name is reasonably required in order to enable
                  collection or payment of invoices issued by a Seller or any of
                  its Affiliates.

         SECTION 5.8 Registration Statement.

         As soon as reasonably practicable after the date of this Agreement, WHC
shall prepare and cause to be filed with the SEC a registration statement (the
"REGISTRATION STATEMENT") on an appropriate form relating to the offering and
distribution of the Shares, Additional Shares and Warrants, and shall use its
commercially reasonable efforts to cause the Registration Statement to become
effective under the Securities Act within 60 days thereafter (including, without
limitation, appropriate qualification under applicable blue sky or other state
securities laws and appropriate compliance with applicable regulations issued
under the Securities Act and any other

                                       35
<PAGE>

governmental requirements or regulations. The provisions of Section 5.5 shall
apply to the Registration Statement with the same effect as if the Registration
Statement was the registration statement described therein.

                                ARTICLE 6. TAXES

         SECTION 6.1 Taxes Related to Purchase of Acquired Assets.

         All Taxes, including, without limitation, all state and local Taxes in
connection with the transfer of the Acquired Assets, and all recording and
filing fees (collectively, "TRANSACTION TAXES"), that may be imposed by reason
of the sale, transfer, assignment and delivery of the Acquired Assets and that
are not exempt under section 1146(c) of the Bankruptcy Code, shall be borne by
Buyer. Buyer and Sellers shall cooperate to (a) determine the amount of
Transaction Taxes payable in connection with the transactions contemplated under
this Agreement, (b) provide all requisite exemption certificates and (c) prepare
and file any and all required Tax Returns for or with respect to such
Transaction Taxes with any and all appropriate Government taxing authorities.

         SECTION 6.2 Cooperation on Tax Matters.

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

         (b)      Buyer shall retain possession of all accounting, business,
                  financial and Tax records and information (i) relating to the
                  Acquired Assets or the Assumed Liabilities that are in
                  existence on the Closing Date and transferred to Buyer
                  hereunder and (ii) coming into existence after the Closing
                  Date that relate to the Acquired Assets or the Assumed
                  Liabilities before the Closing Date, for a period of at least
                  three years from the Closing Date. Buyer shall give Sellers
                  notice and an opportunity to retain any such records in the
                  event that Buyer determines to destroy or dispose of them
                  after such period. In addition, from and after the Closing
                  Date, Buyer shall provide access to Sellers and their Related
                  Persons (after reasonable notice and during normal business
                  hours and without charge), to the books, records, documents
                  and other information relating to the Acquired Assets or the
                  Assumed Liabilities as Sellers may reasonably deem necessary
                  to (i) properly prepare for, file, prove, answer, prosecute
                  and/or defend any such Tax Return, claim, filing, tax audit,
                  tax protest, suit, proceeding or answer or (ii) administer or
                  complete any cases under chapter 11 of the Bankruptcy Code of
                  Sellers. Such access shall include, without limitation, access
                  to any computerized information retrieval systems relating to
                  the Acquired Assets or the Assumed Liabilities.

                                       36
<PAGE>

         SECTION 6.3 Allocation of Total Consideration.

         Buyer and Sellers will allocate the Total Consideration among the
Acquired Assets in accordance with a schedule to be reasonably agreed by them
prior to the Closing Date (the "ALLOCATION"). If the parties are not able to
agree upon the Allocation prior to the Closing Date, then Buyer's allocation
shall be the Allocation. The Allocation will be binding upon Buyer and Sellers
and their respective successors and assigns, and none of the parties to this
Agreement will take any position (whether in returns, audits or otherwise) that
is inconsistent with the Allocation. Buyer and Sellers will report the purchase
and sale of the Acquired Assets on all tax returns, including, without
limitation, Form 8594 as provided for in section 1060 of the Code, in accordance
with the Allocation and will cooperate in timely filing with the Internal
Revenue Service their respective Forms 8594.

            ARTICLE 7. CONDITIONS PRECEDENT TO PERFORMANCE BY PARTIES

         SECTION 7.1 Conditions Precedent to Performance by Sellers.

         The obligation of Sellers to consummate the transactions contemplated
by this Agreement is subject to the fulfillment, at or before the Closing, of
the following conditions, any one or more of which (other than the conditions
contained in Section 7.1(c) and Section 7.1(e)) may be waived by Sellers, in
their sole discretion:

         (a)      Representations and Warranties of Buyer. The representations
                  and warranties of Buyer made in Section 4.2 of this Agreement,
                  in each case, shall be true and correct as of the date of this
                  Agreement and as of the Closing Date as though made by Buyer
                  again as of the Closing Date, except to the extent (i) such
                  representations and warranties expressly relate to an earlier
                  date, in which case such representations and warranties shall
                  be true and correct on and as of such earlier date, and (ii)
                  any inaccuracies in such representations and warranties would
                  not, individually or in the aggregate, reasonably be expected
                  to result in a Buyer Material Adverse Effect.

         (b)      Performance of the Obligations of Buyer. Buyer shall have
                  performed in all material respects all obligations required
                  under this Agreement or any Ancillary Agreement to which it is
                  party which are to be performed by it on or before the Closing
                  Date (except with respect to the obligation to pay the Total
                  Consideration in accordance with the terms of this Agreement
                  and any obligations qualified by materiality, which
                  obligations shall be performed in all respects as required
                  under this Agreement).

         (c)      Governmental Consents and Approvals. The Bankruptcy Court
                  shall have entered the Bankruptcy Sale Order, the Bankruptcy
                  Sale Order shall be in full force and effect, and no order
                  staying, reversing, modifying, vacating or amending the
                  Bankruptcy Sale Order shall be in effect on the Closing Date.

         (d)      No Violation of Orders. No preliminary or permanent injunction
                  or other order of any court or Government that declares this
                  Agreement invalid or unenforceable in

                                       37
<PAGE>

                  any material respect or which prevents the consummation of the
                  transactions contemplated hereby shall be in effect.

         (e)      HSR Act. All applicable waiting periods under any Antitrust
                  Laws shall have expired or been terminated.

         (f)      No Litigation. There shall not be pending or threatened in
                  writing by any Government any suit, action or proceeding (i)
                  challenging or seeking to restrain, prohibit, alter or
                  materially delay the consummation of any of the transactions
                  contemplated by this Agreement or (ii) seeking to obtain from
                  any Seller any damages in connection with the transactions
                  contemplated hereby.

         (g)      Workers' Compensation. Sellers shall have received a release
                  from the West Virginia Workers' Compensation Commission or the
                  West Virginia Workers' Compensation Fund (collectively, the
                  "WVWCF") and/or the "Commissioner" (as defined in WVA CSR
                  Sections 85-11-2.4) or the "Executive Director" (as defined in
                  WVA CSR Section 85-11-2.10) of, or other confirmation
                  reasonably satisfactory to Sellers from the WVWCF that it will
                  not assert, any claims the WVWCF may have against any "person"
                  (as defined in WVA CSR Section 85-11-3.10)) of any Seller or
                  any "responsible person" (as defined in WVA CSR Section
                  85-11-2.9(b)) of any Seller.

         (h)      Closing Deliveries. Buyer shall have made the deliveries
                  contemplated under Section 3.3.

         SECTION 7.2 Conditions Precedent to the Performance by Buyer.

         The obligations of Buyer to consummate the transactions contemplated by
this Agreement are subject to the fulfillment, at or before the Closing, of the
following conditions, any one or more of which (other than the conditions
contained in Section 7.2(c) and Section 7.2(e)) may be waived by Buyer, in its
sole discretion:

         (a)      Representations and Warranties of Sellers. The representations
                  and warranties of Sellers made in Section 4.1 of this
                  Agreement shall be true and correct as of the Execution Date
                  and as of the Closing Date as though made by Sellers again as
                  of the Closing Date, except to the extent (i) such
                  representations and warranties expressly relate to an earlier
                  date, in which case such representations and warranties shall
                  be true and correct on and as of such earlier date and (ii)
                  any inaccuracies in such representations and warranties would
                  not, individually or in the aggregate, reasonably be expected
                  to result in a Sellers Material Adverse Effect.

         (b)      Performance of the Obligations of Sellers. Sellers shall have
                  performed in all material respects all obligations required
                  under this Agreement or any Ancillary Agreement to which any
                  Seller is party to be performed by any Seller on or before the
                  Closing Date (except with respect to any obligations qualified
                  by materiality, which obligations shall be performed in all
                  respects as required under this Agreement).

                                       38
<PAGE>

         (c)      Governmental Consents and Approvals. The Orders shall have
                  been entered and become Final Orders.

         (d)      No Violation of Orders. No preliminary or permanent injunction
                  or other order of any court or Government that declares this
                  Agreement invalid in any material respect or prevents the
                  consummation of the transactions contemplated hereby shall be
                  in effect.

         (e)      HSR Act. All applicable waiting periods under any Antitrust
                  Laws shall have expired or been terminated.

         (f)      No Litigation. There shall not be pending or threatened in
                  writing by any Government any suit, action or proceeding, (i)
                  challenging or seeking to restrain, prohibit, alter or
                  materially delay the consummation of any of the transactions
                  contemplated by this Agreement, (ii) seeking to obtain from
                  Buyer or any of its Affiliates any damages in connection with
                  the transactions contemplated hereby or (iii) seeking to
                  prohibit Buyer or any of its Affiliates from effectively
                  controlling or operating any portion of the Acquired Assets.

         (g)      Third Party Consents and Approvals. Those Consents listed on
                  Schedule 4.1(g) as being closing conditions shall have been
                  obtained.

         (h)      Title Insurance. The Title Company shall have issued (or
                  advised Buyer in writing that it will issue), upon Buyer's
                  payment of the cost therefor and all fees and expenses of the
                  Title Company and upon Sellers' delivery of all customary
                  documents, certificates and instruments reasonably required by
                  the Title Company, an ALTA (or local equivalent) owner's
                  policy of title insurance or a signed marked up binder in
                  respect thereof, dated the Closing Date for each of the Real
                  Properties listed on Schedule 1.1(a) as requiring title
                  insurance, insuring in Buyer or its designee the interest
                  being acquired by Buyer in each property, subject only to
                  Permitted Liens (specifically deleting the standard exceptions
                  other than (i) the standard survey exception except for
                  properties where Buyer has obtained a survey; and (ii) the
                  parties-in-possession exception; provided, however, that
                  Sellers shall nonetheless agree to make a reasonable
                  knowledge-based representation for the Title Company as to
                  parties-in-possession as part of the customary title affidavit
                  requested by the Title Company) and including such
                  endorsements as are available in the particular states in
                  which the properties are located and as Buyer or its lenders
                  may reasonably require, and in each case in an amount not less
                  than the portion of the Total Consideration allocated to the
                  property being insured thereunder.

         (i)      Labor Agreement. The members of the ISU shall have ratified
                  the collective bargaining agreement between the ISU and Buyer.

         (j)      No Material Adverse Effect. There shall not have occurred any
                  event, fact or circumstance that has had, or is reasonably
                  likely to have, a Sellers Material Adverse Effect.

                                       39
<PAGE>

         (k)      Intentionally Omitted.

         (l)      Workers' Compensation. Buyer shall have reached an agreement
                  with the WVWCF (and other relevant parties), which agreement:
                  (1) will provide that (i) Buyer will enter the WVWCF as a
                  subscriber with an experience modification factor of .65 that
                  remains effective until the earlier of (A) July 1, 2005 or (B)
                  the date that Buyer becomes self-insured for its workers'
                  compensation risk in the State of West Virginia and (ii) if
                  Buyer does not become self-insured on or before July 1, 2005,
                  then as of July 1, 2005, Buyer's experience modification
                  factor shall be calculated based upon the experience of Buyer
                  from the period beginning the day after the Closing Date and
                  ending on July 1, 2005; or (2) shall include such other terms
                  and conditions as shall be mutually acceptable to Buyer and
                  the WVWCF.

         (m)      MABCO Lease. The MABCO Lease shall have been amended on terms
                  satisfactory to Buyer in its absolute discretion.

         (n)      Closing Deliveries. Sellers shall have made the deliveries
                  contemplated under Section 3.2.

         (o)      Coke Supply Agreement. Buyer shall have assumed WSC's rights
                  under the Amended Coke Supply Agreement, effective as of
                  January 1, 2004, by and between United States Steel
                  Corporation and WSC at a price per net ton for coke shipments
                  of screened metallurgical blast furnace coke that is
                  acceptable to Buyer in its absolute discretion.

         (p)      Amount of Senior Debt. The amount of the Senior Debt
                  (excluding the DIP Obligations) is not more than $10,500,000.

         (q)      Assignment of Liens. The Notes Trustee and Bonds Trustee each
                  shall have executed and delivered to Buyer an instrument (the
                  "Lien Assignment") pursuant to which the Notes Trustee and
                  Bonds Trustee shall assign, transfer and convey to Buyer any
                  and all Liens that have been granted to the Notes Trustee and
                  Bonds Trustee by any of the Sellers for the purpose of
                  securing the payment of the Senior Secured Notes and Secured
                  Pollution Control Bonds. Each such Lien Assignment shall be in
                  form and substance acceptable to Buyer, the Notes Trustee and
                  the Bonds Trustee.

         (r)      Name Change. Sellers shall have provided Buyer written
                  confirmation acceptable to Buyer evidencing Seller's
                  compliance with Section 5.7(a).

         (s)      Registration Statement. The SEC shall have declared the
                  Registration Statement effective pursuant to the requirements
                  of the Securities Act.

                                       40
<PAGE>

                             ARTICLE 8. TERMINATION

         SECTION 8.1 Conditions of Termination.

         This Agreement may be terminated only in accordance with this Section
8.1. This Agreement may be terminated at any time before the Closing as follows:

         (a)      By mutual written consent of Sellers and Buyer;

         (b)      By WSC, by written notice to Buyer, or by Buyer, by written
                  notice to WSC, on or after the date that is 180 days after the
                  date of this Agreement (the "TERMINATION DATE"), subject,
                  however, to extension by the mutual written consent of Sellers
                  and Buyer, if the Closing shall not have occurred on or prior
                  to the Termination Date; provided, however, that a party shall
                  not have the right to terminate this Agreement under this
                  Section 8.1(b) if any Seller (in case of termination by WSC)
                  or Buyer (in case of termination by Buyer) is then in material
                  breach of this Agreement;

         (c)      By WSC, by written notice to Buyer, or by Buyer, by written
                  notice to WSC, if any injunction or other order contemplated
                  by Section 7.1(d) and Section 7.2(d) shall have become
                  effective; provided, however, that the party seeking to
                  terminate this Agreement pursuant to this Section 8.1(c) has
                  used its commercially reasonable efforts to remove such
                  injunction or other order;

         (d)      By WSC, by written notice to Buyer, if WSC has previously
                  provided Buyer with notice of any inaccuracy of any
                  representation or warranty contained in Section 4.2 which
                  inaccuracy could reasonably be expected to result in,
                  individually or in the aggregate with the results of other
                  inaccuracies, a Buyer Material Adverse Effect, or a material
                  failure to perform any covenant of Buyer contained in this
                  Agreement or any Ancillary Agreement to which Buyer is party,
                  and Buyer has failed, within 10 days after such notice, to
                  remedy such inaccuracy or perform such covenant or provide
                  reasonably adequate assurance to WSC of Buyer's ability, to
                  remedy such inaccuracy or perform such covenant; provided,
                  however, that WSC shall not have the right to terminate this
                  Agreement under this Section 8.1(d) if any Seller is then in
                  material breach of this Agreement;

         (e)      By Buyer, by written notice to WSC, if Buyer has previously
                  provided WSC with notice of any inaccuracy of any
                  representation or warranty of any Seller contained in Section
                  4.1, which inaccuracy could reasonably be expected to result
                  in, individually or in the aggregate with the results of other
                  inaccuracies, a Sellers Material Adverse Effect, or a material
                  failure to perform any covenant of any Seller contained in
                  this Agreement or any Ancillary Agreement to which any Seller
                  is party, and any Seller has failed, within 10 Business Days
                  after such notice, to remedy such inaccuracy or perform such
                  covenant or provide reasonably adequate assurance to Buyer of
                  such Seller's ability to remedy such inaccuracy or perform
                  such covenant; provided, however, that Buyer shall not

                                       41
<PAGE>

                  have the right to terminate this Agreement under this Section
                  8.1(e) if Buyer is then in material breach of this Agreement;

         (f)      By Buyer, by written notice to WSC, if any event, fact or
                  circumstance identified in Section 7.2(j) shall have occurred;
                  provided, however, that Buyer shall not have the right to
                  terminate this Agreement under this Section 8.1(f) if Buyer is
                  then in material breach of this Agreement;

         (g)      By Buyer, by written notice to WSC, if the Bankruptcy Sale
                  Order (in the form attached as Exhibit A or in other form
                  satisfactory to Buyer) is not entered by the Bankruptcy Court
                  within 30 days of the date of this Agreement;

         (h)      By Buyer, by written notice to WSC, if (i) a WSC Shutdown
                  occurs or WSC ceases substantially all of its business
                  operations, or either of the foregoing events is authorized by
                  WSC's board of directors, (ii) the Bankruptcy Court enters an
                  order authorizing (A) a WSC Shutdown or a cessation of
                  substantially all of WSC's business operations or (B) the
                  liquidation of WSC's estate or (iii) WSC's chapter 11 case is
                  converted to a chapter 7 case; or

         (i)      By Buyer, by written notice to WSC on or prior to May 31,
                  2004, if the members of the ISU have not ratified the
                  collective bargaining agreement between the ISU and Buyer.

         SECTION 8.2 Effect of Termination.

         In the event of termination pursuant to Section 8.1, this Agreement
shall become null and void and have no effect (other than Article 8, Article 11
and Article 12, which shall survive termination), with no liability on the part
of Sellers or Buyer, or their respective Affiliates or respective Related
Persons, with respect to this Agreement or any Ancillary Agreement, except for
any liability provided for in this Article 8.

                    ARTICLE 9. SURVIVAL AND INDEMNIFICATION

         SECTION 9.1 Survival; Indemnification.

         None of the representations and warranties of Sellers and Buyer made in
this Agreement shall survive the Closing Date, and all of such representations
and warranties shall be extinguished by the Closing. All covenants and
agreements of the parties contained in this Agreement shall survive the Closing,
except that Sellers shall have no monetary obligation to Buyer for breach of any
covenant or agreement. If the Closing occurs, Buyer shall indemnify and hold
harmless Sellers and their respective Affiliates and Related Persons against any
and all losses, liability, expense or damage that result from or arise out of
the Assumed Liabilities.

         SECTION 9.2 Specific Performance.

         Each party acknowledges that in case of any breach of their covenants
or other obligations, the others would suffer immediate and irreparable harm,
which money damages would be inadequate to remedy, and accordingly, in case of
any such breach each non-breaching

                                       42
<PAGE>

party shall be entitled to obtain specific performance and other equitable
remedies, in addition to other remedies provided in this Article 9.

         SECTION 9.3 Exclusive Remedy.

         Following the Closing Date, the respective parties' sole and exclusive
remedies for any claim arising out of or in connection with this Agreement shall
be those set forth in this Article 9.

                           ARTICLE 10. MISCELLANEOUS

         SECTION 10.1 Allowed Administrative Expenses.

         Any and all amounts owed to Buyer by Sellers hereunder or under any
Ancillary Agreement after the date of this Agreement shall constitute allowed
administrative expenses of the Sellers under sections 503(b)(1) and 507(A)(1),
as applicable, of the Bankruptcy Code.

         SECTION 10.2 Further Assurances.

         At the request and the sole expense of the requesting party, Buyer or
Sellers, as applicable, shall execute and deliver, or cause to be executed and
delivered, such documents as Buyer or Sellers, as applicable, or their
respective counsel may reasonably request to effectuate the purposes of this
Agreement and the Ancillary Agreements.

         SECTION 10.3 Successors and Assigns.

         (a)      Buyer shall have the right to assign to an Affiliate (each, an
                  "ASSIGNEE") any of its rights or obligations (including the
                  right to acquire any of the Acquired Assets) and may require
                  any such Assignee to pay all or a portion of the Aggregate
                  Purchase Price and/or to assume all or a portion of those
                  Assumed Liabilities that are both described in Section 1.3 and
                  relate to the Acquired Assets acquired by the Assignee
                  ("ASSIGNABLE LIABILITIES"). In addition, Buyer shall have the
                  right to assign to any person or persons other than an
                  Affiliate (each, an "OTHER ASSIGNEE") any of its rights or
                  obligations to acquire any of the Nonoperating Assets or the
                  portion of the Owned Real Property constituting [THE
                  HEADQUARTERS,] the Owned Real Property located in Jefferson
                  County, Ohio [AND THE ISLAND] and the personal property
                  located thereon (including the right to acquire such assets)
                  and may require any such Other Assignee to pay a portion of
                  the Aggregate Purchase Price and to assume the Assignable
                  Liabilities. In the event of any assignment pursuant to this
                  Section 10.3(a), Buyer shall not be relieved of any liability
                  or obligation hereunder; provided that, if any Other Assignee
                  fails to pay the portion of the Aggregate Purchase Price for
                  which such Other Assignee is obligated, Buyer will be liable
                  to Sellers for the payment of such amount; and provided
                  further that Buyer shall, with Sellers' approval, which shall
                  not be unreasonably withheld, be fully released from such
                  Assignable Liabilities upon their assumption by an Assignee or
                  an Other Assignee.

                                       43
<PAGE>

         (b)      Buyer shall have the right to assign this Agreement or any of
                  its rights or obligations hereunder collaterally to any lender
                  of Buyer; provided, however, that no such assignment shall
                  relieve Buyer of its obligations to Sellers hereunder.

         (c)      Sellers shall not assign this Agreement or any of their rights
                  or obligations hereunder. This Agreement shall inure to the
                  benefit of and shall be binding upon the successors and
                  permitted assigns of the parties hereto.

         SECTION 10.4 Governing Law; Jurisdiction.

         This Agreement shall be construed, performed and enforced in accordance
with, and governed by, the laws of the State of New York (without giving effect
to the principles of conflicts of laws thereof), except to the extent that the
laws of such State are superseded by the Bankruptcy Code or other applicable
federal law. For so long as Sellers are subject to the jurisdiction of the
Bankruptcy Court, the parties irrevocably elect, as the sole judicial forum for
the adjudication of any matters arising under or in connection with the
Agreement, and consent to the exclusive jurisdiction of, the Bankruptcy Court.
After Sellers are no longer subject to the jurisdiction of the Bankruptcy Court,
the parties irrevocably elect, as the sole judicial forum for the adjudication
of any matters arising under or in connection with this Agreement, and consent
to the jurisdiction of, any state or federal court having competent jurisdiction
over the Borough of Manhattan, New York, New York.

         SECTION 10.5 Expenses.

         Except as otherwise provided in this Agreement, each of the parties
shall pay its own expenses in connection with this Agreement and the
transactions contemplated hereby, including, without limitation, any legal and
accounting fees, whether or not the transactions contemplated hereby are
consummated. Buyer shall pay the cost of all surveys, title insurance policies
and title reports ordered by Buyer.

         SECTION 10.6 Broker's and Finder's Fees.

         Each of the parties represents and warrants that it has not engaged any
broker or finder in connection with any of the transactions contemplated by this
Agreement other than Houlihan Lokey Howard & Zukin whose fees and expenses
shall, as between the parties, be the sole responsibility of Sellers, and other
than Imperial Capital LLC whose fees and expenses shall, as between the parties,
be the sole responsibility of Buyer, and, insofar as such party knows, no other
broker or other Person is entitled to any commission or finder's fee in
connection with any of these transactions.

         SECTION 10.7 Severability.

         In the event that any part of this Agreement is declared by any court
or other judicial or administrative body to be null, void or unenforceable, said
provision shall survive to the extent it is not so declared, and all of the
other provisions of this Agreement shall remain in full force and effect only
if, after excluding the portion deemed to be unenforceable, the remaining terms
shall provide for the consummation of the transactions contemplated hereby in
substantially the same

                                       44
<PAGE>

manner as originally set forth at the later of (a) the date of this Agreement
and (b) the date this Agreement was last amended.

       SECTION 10.8 Notices.

       (a)    All notices, requests, demands, consents and other communications
              under this Agreement shall be in writing and shall be deemed to
              have been duly given: (i) on the date of service, if served
              personally on the party to whom notice is to be given; (ii) on the
              day of transmission, if sent via facsimile transmission to the
              facsimile number given below; (iii) on the day after delivery to
              Federal Express or similar overnight courier or the Express Mail
              service maintained by the United States Postal Service addressed
              to the party to whom notice is to be given; or (iv) on the fifth
              day after mailing, if mailed to the party to whom notice is to be
              given, by first class mail, registered or certified, postage
              prepaid and properly addressed, to the party as follows:

If to Sellers:

               Weirton Steel Corporation
               400 Three Springs Drive
               Weirton, WV 26062-4997
               Attention: Mark E. Kaplan, President
               Facsimile: (304) 797-2991

With a copy to:

               McGuire Woods LLP               and: Kirkpatrick & Lockhart
               23rd Floor, Dominion Tower           535 Smithfield Street
               625 Liberty Avenue                   Pittsburgh, PA 15222-2312
               Pittsburgh, PA 15222                 Attention: Michael C. McLean
               Attention: Mark E. Freedlander       Facsimile: (412) 355-6501
               Facsimile: (412) 667-7967

If to Buyer:

               WSC Acquisition Corporation     and: WSC Acquisition Corporation
               c/o Corsair Partners LLC             c/o Ritchie Capital
               747 Third Avenue - 36th Floor          Management, LLC
               New York, NY 10017                   2100 Enterprise Avenue
               Attention: Ronald J. Buck            Geneva, IL 60134
               Facsimile: (212) 351-5969            Attention: Michael J.
                                                    Holmberg
                                                    Facsimile: (630) 406-9662

                                       45
<PAGE>

With a copy to:
                    Akin Gump Strauss Hauer & Feld LLP
                    590 Madison Avenue
                    New York, NY 10022
                    Attention: Lisa Beckerman
                    Facsimile: (212) 872-1002

         (b)      Any party may change its address or facsimile number for the
                  purpose of this Section 10.8 by giving the other parties
                  written notice of its new address in the manner set forth
                  above.

         SECTION 10.9 Amendments; Waivers.

         This Agreement may be amended or modified, and any of the terms,
covenants, representations, warranties or conditions hereof may be waived, only
by a written instrument executed by Buyer and Sellers, or in the case of a
waiver, by the party waiving compliance. Any waiver by any party of any
condition, or of the breach of any provision, term, covenant, representation or
warranty contained in this Agreement, in any one or more instances, shall not be
deemed to be or construed as a furthering or continuing waiver of any such
condition, or of the breach of any other provision, term, covenant,
representation or warranty of this Agreement.

         SECTION 10.10 Public Announcements.

         Promptly after the date of this Agreement, the parties shall make a
joint press release in form and substance reasonably satisfactory to both of
them regarding the transaction contemplated herein. Thereafter, no party shall
make any press release or public announcement concerning the transactions
contemplated by this Agreement without first coordinating their communications
strategy with the other party, unless a press release or public announcement is
required by law, the rules of any stock exchange or order of the Bankruptcy
Court. If any such announcement or other disclosure is required by law, the
rules of any stock exchange or order of the Bankruptcy Court, the disclosing
party agrees to give the nondisclosing party or parties prior notice of, and an
opportunity to comment on, the proposed disclosure. The parties acknowledge that
Sellers shall file this Agreement with the Bankruptcy Court in connection with
obtaining the Bankruptcy Sale Order and with the SEC.

         SECTION 10.11 Entire Agreement.

         This Agreement and the Ancillary Agreements contain the entire
understanding between the parties with respect to the transactions contemplated
hereby and supersede and replace all prior and contemporaneous agreements and
understandings, oral or written, with regard to such transactions. Subject to
the provisions of Section 10.17, all Schedules hereto and any documents and
instruments delivered pursuant to any provision hereof are expressly made a part
of this Agreement as fully as though completely set forth herein.

         SECTION 10.12 No Third Party Beneficiaries.

         Nothing in this Agreement is intended to or shall confer any rights or
remedies under or by reason of this Agreement on any Persons other than Sellers
and Buyer and their respective

                                       46
<PAGE>

successors and permitted assigns. Nothing in this Agreement is intended to or
shall relieve or discharge the obligator or liability of any third Persons to
Sellers or to Buyer. This Agreement is not intended and shall not give any third
Persons any right of subrogation or action over or against Sellers or against
Buyer.

         SECTION 10.13 Headings.

         The article and section headings in this Agreement are for reference
purposes only and shall not affect the meaning or interpretation of this
Agreement.

         SECTION 10.14 Counterparts.

         This Agreement may be executed in counterparts, each of which shall be
deemed an original, but all of which shall constitute the same agreement.

         SECTION 10.15 Joint Drafting.

         The parties have participated jointly in the negotiation and drafting
of this Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any of the provisions of
this Agreement.

         SECTION 10.16 Construction.

         Any reference to any law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise. The
word "including" shall mean including without limitation. Any reference to the
singular in this Agreement shall also include the plural and vice versa.

         SECTION 10.17 Schedules.

         Except as expressly provided herein, the Schedules designated herein
are the Schedules delivered by the Sellers to ISG Weirton and ISG, or delivered
by ISG Weirton and ISG to the Sellers, as the case may be, in connection with
the Original ISG Agreement, and are incorporated herein by reference. Schedule
1.3(e), in the form delivered by the Sellers, and Schedule 4.2(e), in the form
delivered by Weirton ISG or ISG (collectively, the "ORIGINAL SCHEDULES"), are
hereby deleted, and Schedules 1.3(e) and 4.2(e), in the form attached hereto,
are deemed to be substituted for the Original Schedules.

                            ARTICLE 11. DEFINITIONS

         SECTION 11.1 Certain Terms Defined.

         As used in this Agreement, the following terms have the following
meanings:

         "ACCOUNTS PAYABLE" has the meaning set forth in Section 1.3(a).

                                       47
<PAGE>

         "ACCOUNTS RECEIVABLE" has the meaning set forth in Section 1.1(d).

         "ACQUIRED ASSETS" has the meaning set forth in Section 1.1.

         "ACQUIRED CONTRACTS" has the meaning set forth in Section 1.1(c).

         "ACQUIRED INTELLECTUAL PROPERTY" has the meaning set forth in Section
1.1(g).

         "ADDITIONAL SHARES" has the meaning set forth in Section 3.3(e).

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

         "AGENT" has the meaning given that term in the DIP Agreement.

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

         "AGGREGATE PURCHASE PRICE" has the meaning set forth in Section 2.1.

         "ALLOWED ADMINISTRATIVE EXPENSE CLAIM" means a claim under section
503(b) of the Bankruptcy Code entitled to priority under section 507(a)(1) of
the Bankruptcy Code, which is not disputed by Sellers.

         "AMENDMENT DATE" has the meaning set forth in Recital B.

         "ANCILLARY AGREEMENT" means the Transition Services Agreement.

         "ANTITRUST LAWS" means the HSR Act and the other applicable
competition, merger control, antitrust or similar laws or regulations.

         "ASSIGNABLE LIABILITIES" has the meaning set forth in Section 10.3(a).

         "ASSIGNEE" has the meaning set forth in Section 10.3(a).

         "ASSUMED LIABILITIES" has the meaning set forth in Section 1.3.

         "AVAILABILITY" has the meaning given that term in the DIP Agreement.

         "AVOIDANCE ACTIONS" means all Claims of a Debtor assertable or arising
under chapter 5 of the Bankruptcy Code, including, without limitation, all
preference, fraudulent transfer, and other Claims to avoid a transfer.

         "BANKRUPTCY CASES" has the meaning set forth in Recital A.

         "BANKRUPTCY CODE" has the meaning set forth in Recital A.

         "BANKRUPTCY COURT" has the meaning set forth in Recital A.

         "BANKRUPTCY RULES" has the meaning set forth in Recital D.

                                       48
<PAGE>

         "BANKRUPTCY SALE ORDER" has the meaning set forth in Recital D.

         "BIDDING PROCEDURES ORDER" has the meaning set forth in Recital E.

         "BOND INDENTURE" means that certain Indenture of Trust dated as of June
18, 2002 between the City of Weirton, West Virginia, and the Bond Trustee,
pursuant to which the Secured Pollution Control Bonds were issued, as in effect
on the date thereof and as amended, supplemented, restated or otherwise modified
from time to time.

         "BONDS TRUSTEE" means J.P. Morgan Trust Company, National Association,
a national banking association, in its capacity as trustee under the Bond
Indenture.

         "BUSINESS DAY" means any day other than Saturday, Sunday and any day
that is a legal holiday or a day on which banking institutions in New York City,
New York are authorized by law or other governmental action to close.

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

         "BUYER MATERIAL ADVERSE EFFECT" means a state of facts, events, change
or effect with respect to Buyer and its subsidiaries that results in a material
adverse effect on the financial condition, business, operations, assets or
liabilities of Buyer and its subsidiaries, taken as a whole, but excludes any
state of facts, event, change or effect caused by events, changes or
developments relating to (A) changes or conditions affecting the steel industry
generally or (B) changes in economic, regulatory or political conditions
generally.

         "CARVEOUTS" has the meaning given that term in the DIP Order.

         "CASH" means all cash and cash equivalents.

         "CASH PURCHASE PRICE" has the meaning set forth in Section 2.1(a).

         "CLAIM" means all rights, claims, causes of action, defenses, debts,
demands, damages, obligations, and liabilities of any kind or nature under
contract, at law or in equity, known or unknown, contingent or matured,
liquidated or unliquidated, and all rights and remedies with respect thereto,
including, without limitation, causes of action arising under chapter 5 of the
Bankruptcy Code or similar state statutes.

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

         "CLOSING DATE" has the meaning set forth in Section 3.1.

         "COBRA" has the meaning set forth in Section 1.4(d).

         "COBRA RECORDS" has the meaning set forth in Section 5.4(h).

         "CODE" means the Internal Revenue Code of 1986, as amended.

         "COLLATERAL PROTECTION LOAN" has the meaning given that term in the DIP
Agreement.

                                       49
<PAGE>

         "COMMON STOCK" has the meaning set forth in Section 3.3(d).

         "CONSENTS" has the meaning set forth in Section 4.1(g).

         "CONTRACT" means any written contract, agreement, lease or sublease,
license or sublicense, instrument, indenture, commitment or undertaking.

         "CURE COSTS" has the meaning set forth in Section 1.3(b).

         "DIP AGREEMENT" means that certain Debtor-in-Possession Loan and
Security Agreement dated as of May 20, 2003 by and among WSC, Fleet Capital
Corporation, as agent thereunder, and the financial institutions party thereto
as lenders from time to time, as amended, modified or supplemented through the
Amendment Date.

         "DIP FACILITY" means the Debtor-in-Possession Loan and Security
Agreement dated as of May 20, 2003, by and among Sellers and the lenders named
therein and including Fleet Capital Corporation, as lender and agent, as
amended.

         "DIP OBLIGATIONS" means WSC's Obligations (as defined in the DIP
Agreement) as of the Closing Date except for any such obligations for
indemnification of the Agent or any Lender, as set forth in the certification of
the Agent referred to in Section 5.1(f). Buyer may elect, in its sole
discretion, to satisfy the portion of such obligations relating to Letters of
Credit or LC Guaranties by cash collateralizing such obligations as required
under the DIP Agreement (and any such cash collateral will be held in escrow and
upon the expiration of the Letter of Credit or LC Guaranties giving rise thereto
any cash collateral not required to satisfy such obligations will promptly be
returned to Buyer) or by causing a letter of credit for any remaining
obligations to be issued to the Agent), and in either such case the amount of
the DIP Obligations used in determining the Cash Purchase Price will not double
count any amounts arising from such Letters of Credit or LC Guaranties.

         "DIP ORDER" means the Bankruptcy Court Order dated June 16, 2003
approving the DIP Agreement on a final basis, as amended, modified or
supplemented through the Amendment Date.

         "DIRECTORS, OFFICERS AND CORPORATE LIABILITY INSURANCE POLICY" or "DSO
POLICY" means the D&O Policy issued by National Fire Insurance Co. of
Pittsburgh, Pennsylvania, Policy No. 4455673.

         "DTTC" has the meaning set forth in Section 3.3(c).

         "D&O DEDUCTIBLE" has the meaning set forth in Section 2.3.

         "D&O TAIL POLICY" has the meaning set forth in Section 2.3.

         "D&O TAIL PREMIUM" has the meaning set forth in Section 2.3.

         "EMPLOYEE BENEFIT PLANS" means all employee benefit plans as defined in
section 3(3) of ERISA, all compensation, pay, severance pay, salary
continuation, bonus, incentive, stock

                                       50
<PAGE>

option, retirement, pension, profit sharing or deferred compensation plans,
Contracts, programs, funds or arrangements of any kind and all other employee
benefit plans, programs, funds or arrangements (whether written or oral,
qualified or nonqualified, funded or unfunded, foreign or domestic, currently
effective or terminated, and whether or not subject to ERISA) and any trust,
escrow or similar agreement related thereto, whether or not funded.

         "EMPLOYMENT PRACTICES DEDUCTIBLE" has the meaning set forth in Section
2.3.

         "EMPLOYMENT PRACTICES POLICY" means the Employment Practices Policy
issued by Max Re Managers, Policy No. 31263-10-UMB-2003.

         "EMPLOYMENT PRACTICES PREMIUM" has the meaning set forth in Section
2.3.

         "EMPLOYMENT PRACTICES TAIL POLICY" has the meaning set forth in Section
2.3.
         "EMPLOYMENT RECORDS" has the meaning set forth in Section 1.2(h).

         "ENVIRONMENTAL LAWS" means all applicable federal, state and local
statutes, ordinances, rules, orders, judgments, junctions, decrees, regulations
and other provisions having the force of law, all judicial and administrative
orders and determinations, and all common law concerning pollution or protection
of human health and the environment, including, without limitation, all those
relating to the presence, use, production, generation, handling, transportation,
treatment, storage, disposal, distribution, labeling, testing, processing,
discharge, release, threatened release, control or cleanup of any Hazardous
Materials.

         "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.

         "ERISA AFFILIATE" means, with respect to any Person, any trade or
business (whether or not incorporated) (i) under common control within the
meaning of section 4001(b)(1) of ERISA with such Person or (ii) which together
with such Person is treated as a single employer under sections 414(b), (c),
(m), (n) or (o) of the Code.

         "ESCROW AGREEMENT" has the meaning set forth in Section 3.3(b)(ii).

         "EXCLUDED ASSETS" has the meaning set forth in Section 1.2.

         "EXCLUDED LIABILITIES" has the meaning set forth in Section 1.4.

         "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.

         "EXECUTION DATE" has the meaning set forth in Recital B.

         "FINAL ORDER" means (i) an order or judgment of the Bankruptcy Court or
any other court or adjudicative body as to which the time to appeal, petition
for certiorari, or move for reargument or rehearing has expired and as to which
no appeal, petition for certiorari, or other proceedings for reargument or
rehearing shall then be pending, or (ii) in the event that an appeal, writ of
certiorari, reargument, or rehearing thereof has been sought, such order of the
Bankruptcy

                                       51
<PAGE>

Court or any other court or adjudicative body shall have been affirmed by the
highest court to which such order was appealed, or certiorari has been denied,
or from which reargument or rehearing was sought, and the time to take any
further appeal, petition for certiorari or move for reargument or rehearing
shall have expired; provided, however, that no order shall fail to be a Final
Order solely because of the possibility that a motion pursuant to Rule 60 of the
Federal Rules of Civil Procedure or Bankruptcy Rule 9024 may be filed with
respect to such order.

         "FINANCING" has the meaning set forth in Section 5.5.

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

         "FWH BANKRUPTCY CASE" has the meaning set forth in Recital A.

         "FWH PETITION DATE" has the meaning set forth in Recital A.

         "GAAP" means United States generally acceptable accounting principles
as in effect as of the Execution Date.

         "GENERAL UNSECURED CREDITORS TRUSTEE" means the financial institution
selected by the Buyer and the Official Committee of Unsecured Creditors
appointed in connection with the Bankruptcy Cases, for the purpose of holding
and distributing the Additional Shares and Warrants.

         "GOVERNMENT" means any agency, division, subdivision or governmental or
regulatory authority or any adjudicatory body thereof, of the United States, or
any state thereof.

         "HAZARDOUS MATERIALS" means any hazardous or toxic substance or waste
or any contaminant or pollutant regulated or otherwise creating liability under
Environmental Laws, including, without limitation, "hazardous substances" as
defined by the Comprehensive Environmental Response Compensation and Liability
Act, as amended, "toxic substance" as defined by the Toxic Substance Control
Act, as amended, "hazardous wastes" as defined by the Resource Conservation and
Recovery Act, as amended, "hazardous materials" as defined by the Hazardous
Materials Transportation Act, as amended, thermal discharges, radioactive
substances, PCBs, natural gas, petroleum products or byproducts and crude oil.

         "HSR ACT" has the meaning set forth in Section 5.3(f).

         "INDEBTEDNESS" has the meaning given that term in the DIP Agreement.

         "IMPROVEMENTS" means the buildings, improvements and structures of
Sellers now existing on the Real Property or demised under any lease of, or
other Contract for the use of, real property.

         "INFORMATION TECHNOLOGY" has the meaning set forth in Section 4.1(l).

         "INSURANCE PAYMENTS" has the meaning set forth in Section 1.3(i).

                                       52
<PAGE>

         "INTELLECTUAL PROPERTY" means any and all patents, patent applications,
trademarks, service marks, trade names, trade dress rights, internet domain
names, trade secrets and copyrights; foreign equivalent or counterpart rights
having similar effect in any jurisdiction throughout the world; and
registrations and applications for registration of any of the foregoing.

         "INVENTORY" means all the finished goods, raw materials, work in
process and inventoriable supplies owned by Sellers on the Closing Date.

         "ISU" means Independent Steelworkers Union.

         "KNOWLEDGE OF BUYER" or any other similar term or knowledge
qualification means the actual knowledge of Ronald J. Buck, Michael J. Holmberg
and Charles Cheever.

         "KNOWLEDGE OF SELLERS" or any other similar term or knowledge
qualification means the actual knowledge of D. Leonard Wise, the Chief Executive
Officer of Sellers, Mark E. Kaplan, President and Chief Financial Officer, and
Mark Vignovic, Director of Environmental Control.

         "LC GUARANTIES" has the meaning given that term in the DIP Agreement.

         "LEASED REAL PROPERTY" has the meaning set forth in Section 1.1(a).

         "LENDERS" has the meaning given that term in the DIP Agreement.

         "LETTERS OF CREDIT" has the meaning given that term in the DIP
Agreement.

         "LIEN" means any mortgage, pledge, security interest, encumbrance, lien
(statutory or other), conditional sale agreement, claim or liability.

         "MABCO LEASE" means the Lease Agreement, dated as of October 26, 2001,
by and between MABCO Steam Company, LLC, as lessor, and FWH, as lessee.

         "MOTION DATE" means the date on which the Bidding Procedures and Sale
Motion is filed with the Bankruptcy Court.

         "NOTES AND BONDS" has the meaning set forth in Section 2.1(a).

         "NOTES INDENTURE" means that certain Indenture dated as of June 18,
2002 between WSC and the Notes Trustee, pursuant to which the Senior Secured
Notes were issued, as in effect on the date thereof, and as amended,
supplemented, restated or otherwise modified from time to time.

         "NOTES TRUSTEE" means J.P. Morgan Trust Company, National Association,
a national banking association, in its capacity as trustee under the Notes
Indenture.

         "NONOPERATING ASSETS" has the meaning set forth in Section 1.8.

         "OFFERING" shall mean any offering of securities of Buyer, any
Affiliate of Buyer or any other Person, whether offered or sold in a registered
public offering or in a private placement.

                                       53
<PAGE>

         "OFFERING MEMORANDUM" has the meaning set forth in Section 5.5.

         "ORDERS" means the Bankruptcy Sale Order and the Bidding Procedures
Order.

         "ORIGINAL AGREEMENT" has the meaning set forth in Recital B.

         "ORIGINAL SCHEDULES" has the meaning set forth in Section 10.17.

         "OVERADVANCE" has the meaning given that term in the DIP Agreement.

         "OWNED MACHINERY AND EQUIPMENT" has the meaning set forth in Section
1.1(b).

         "OWNED MOTOR VEHICLES" has the meaning set forth in Section 1.1(h).

         "OWNED REAL PROPERTY" has the meaning set forth in Section 1.1(a).

         "PAYOFF CERTIFICATE" has the meaning set forth in Section 5.1(f).

         "PAYROLL LIABILITIES" has the meaning set forth in Section 1.3(e).

         "PCB" has the meaning set forth in the definition of Hazardous
Materials.

         "PERMITS" has the meaning set forth in Section 1.1(j).

         "PERMITTED LIENS" mean: (a) Liens for Taxes, assessments and Government
or other similar charges that are not yet due and payable, (b) easements,
licenses, unrecorded real estate agreements, restrictions and other matters of
record which either (i) the title company has agreed to affirmatively insure
against loss caused thereby in the applicable title policy, by way of ALTA
coverage or other affirmative cover, reasonably acceptable to Buyer, or (ii) do
not materially and adversely effect the operation of the Real Property in
question as currently operated, (c) any state of facts a survey or other visual
inspection would show that do not materially and adversely effect the operation
of the Real Property in question as currently and previously used in the
operation of Sellers' businesses, and (d) Liens arising from the Assumed
Liabilities.

         "PERSON" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization or Government.

         "PETITION DATES" has the meaning set forth in Recital A.

         "PRIMING LIENS" means "Permitted Liens" as defined in the DIP
Agreement.

         "PURCHASE PRICE ESCROW" has the meaning set forth in Section 2.1.

         "PURCHASE PRICE INCREASE" has the meaning set forth in Section 2.1.

         "REAL PROPERTY" has the meaning set forth in Section 1.1(a).

         "RELATED PERSON" means, with respect to any Person, all past, present
and future directors, officers, members, managers, stockholders, employees,
controlling persons, agents,

                                       54
<PAGE>

professionals, attorneys, accountants, lenders, investment bankers or
representatives of any such Person.

         "SALE COSTS" means any costs of the sale (including Sellers'
professional fees) of the Acquired Assets or other claims that are required
under the Sale Order to be paid prior to the satisfaction of the DIP
Obligations.

         "SEC" means the U.S. Securities and Exchange Commission.

         "SECURED POLLUTION CONTROL BONDS" means those certain Secured Pollution
Control Revenue Refunding Bonds (Weirton Steel Corporation Project) Series 2002
issued by the City of Weirton, West Virginia.

         "SECURITIES ACT" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.

         "SECURITIES LAWS" has the meaning set forth in Section 5.5.

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

         "SELLERS BENEFIT PLANS" has the meaning set forth in Section 1.2(j).

         "SELLERS CONTROLLED GROUP" has the meaning set forth in Section 1.2(j).

         "SELLERS MATERIAL ADVERSE EFFECT" means a state of facts, event, change
or effect with respect to the Acquired Assets, the Assumed Liabilities or the
enforceability of any Contract(s), that results in a material adverse effect on
the value of the Acquired Assets, taken as a whole, or a material increase in
the amount of the Assumed Liabilities, taken as a whole, but excludes any state
of facts, event, change or effect caused by events, changes or developments
relating to (A) changes or conditions affecting the steel industry generally;
(B) changes in economic, regulatory or political conditions generally; (C)
changes resulting from or from any motion, application, pleading or order filed
related to, the Bankruptcy Cases; or (D) any action of Sellers pursuant to any
order of the Bankruptcy Court entered prior to the date hereof, including,
without limitation, the transactions contemplated by this Agreement or any of
the Ancillary Agreements or the announcement thereof.

         "SENIOR DEBT" means the DIP Obligations, the Carveouts, the Priming
Liens and any Sale Costs; provided that if any obligation constituting Senior
Debt is also an Assumed Liability, the amount of that obligation will not be
included in calculating Senior Debt.

         "SENIOR SECURED NOTES" means those certain 10% Senior Secured Notes due
2008 issued by WSC.

         "SHARES" has the meaning set forth in Section 3.3(d).

         "STEEL WORKS" has the meaning set forth in Section 1.3(h).

         "STEEL WORKS LOAN" has the meaning set forth in Section 1.3(h).

                                       55
<PAGE>

         "SUPPLIES" means all supplies, items and materials (including spare
parts) owned by Sellers on the Closing Date.

         "TAX RETURN" means any report, return, information return, filing or
other information, including any schedules, exhibits or attachments thereto, and
any amendments to any of the foregoing required to be filed or maintained in
connection with the calculation, determination, assessment or collection of any
Taxes (including estimated Taxes).

         "TAXES" means all taxes, however denominated, including any interest,
penalties or additions to tax that may become payable in respect thereof,
imposed by any Government, whether payable by reason of contract, assumption,
transferee liability, operation of law or Treasury Regulation section
1.1502-6(a) (or any predecessor or successor thereof or any analogous or similar
provision under state, local or foreign law), which taxes shall include all
income taxes, payroll and employee withholding, unemployment insurance, social
security (or similar), sales and use, excise, franchise, gross receipts,
occupation, real and personal property, stamp, transfer, workmen's compensation,
customs duties, registration, documentary, value added, alternative or add-on
minimum, estimated, environmental (including taxes under section 59A of the
Code) and other assessments or obligations of the same or a similar nature,
whether arising before, on or after the Closing Date.

         "TECHNOLOGY" means any and all inventions, discoveries, ideas,
processes, formulae, designs, models, industrial designs, know-how, confidential
information and proprietary information, whether or not patented or patentable,
writings and other copyrightable works and works in progress, databases and
software.

         "TERMINATION DATE" has the meaning set forth in Section 8.1(b).

         "TITLE COMPANY" means any one or more of Chicago Title Insurance
Company or such other title insurance company reasonably acceptable to Buyer.

         "TOTAL CONSIDERATION" has the meaning set forth in Section 2.1(b).

         "TRANSITION SERVICES AGREEMENT" means the Transition Services Agreement
to be entered into by Sellers and Buyer, in a form to be agreed to by Sellers
and Buyer on or prior to the Closing Date.

         "UCC" has the meaning set forth in Section 1.5.

         "UNRESOLVED CLAIMS" has the meaning set forth in Section 3.3(b)(ii).

         "WARN ACT" has the meaning set forth in Section 1.4(e).

         "WARRANTS" means Warrants to purchase 1.0% of the Common Stock to be
issued on the Closing Date (without regard to the Common Stock issuable under
the Warrants or any management incentive plan). The Warrants shall be
exercisable on or after January 1, 2005 and expire on the third anniversary of
the Closing Date and shall have an exercise price per share equal to the
aggregate face amount of the Senior Secured Notes and Secured Pollution Control
Bonds, plus accrued and unpaid interest thereon and all unpaid fees and charges
payable in

                                       56
<PAGE>

connection therewith, through the Petition Date, divided by the number of shares
of Common Stock to be issued on the Closing Date.

         "WEIRTON STEEL NAME" shall mean any name that contains or is derived
from the words "Weirton Steel", any derivative thereof, or any name intended or
likely to be confused or associated with any such words.

         "WHC" has the meaning set forth in Section 3.3(e).

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

         "WSC BANKRUPTCY CASE" has the meaning set forth in Recital A.

         "WSC PETITION DATE" has the meaning set forth in Recital A.

         "WSC REPORTS" has the meaning set forth in Section 4.1(d)(i).

         "WSC SHUTDOWN" has the meaning set forth in Section 5.1(a)(xi).

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

         "WVHC BANKRUPTCY CASE" has the meaning set forth in Recital A.

         "WVHC PETITION DATE" has the meaning set forth in Recital A.

         "WVWCF" has the meaning set forth in Section 7.1 (g).

                         [SIGNATURES ON FOLLOWING PAGE.]

                                       57
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the date
first above written.

                                            BUYER:

                                            WSC ACQUISITION CORPORATION

                                            By: /s/ Ronald J. Buck
                                                --------------------------------
                                                Name: Ronald J. Buck
                                                Title: President

                                            SELLERS:

                                            WEIRTON STEEL CORPORATION

                                            By:
                                                --------------------------------
                                                Name: D. Leonard Wise
                                                Title: Chief Executive Officer

                                            FW HOLDINGS INC.

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

                                            WEIRTON VENTURE HOLDINGS CORPORATION

                                            By:
                                                --------------------------------
                                                Name:
                                                      --------------------------
                                                Title:
                                                       -------------------------
<PAGE>

                                 SCHEDULE 1.3(e)

                               PAYROLL LIABILITIES

1.       ISU Represented and WSC Acquisition Hires Wages and Holiday Pay Payable

2.       Withholding for ISU Represented and WSC Acquisition Hires

3.       ISU Represented and WSC Acquisition Hires Vacation

4.       FICA for ISU Represented and WSC Acquisition Hires

5.       Withholding Taxes for persons hired by WSC Acquisition after Closing

6.       Incurred but Not Reported Health Care Benefits for persons hired by WSC
         Acquisition

7.       Incurred but Not Paid Health Care Benefits for retirees and persons not
         hired by WSC Acquisition after Closing

8.       Supplemental Unemployment Benefits for ISU Represented and WSC
         Acquisition Hires

9.       Unemployment Taxes for ISU Represented and WSC Acquisition Hires

10.      Guards, Nurses & Exempt Not Hired By WSC Acquisition Wages and Holiday
         Pay Payable

11.      Withholding for Guards, Nurses & Exempt Not Hired By WSC Acquisition

12.      Guards, Nurses & Exempt Not Hired By WSC Acquisition Accrued Vacation

13.      FICA for Guards, Nurses & Exempt Not Hired By WSC Acquisition

14.      Withholding Taxes for Guards, Nurses & Exempt Not Hired By WSC
         Acquisition

15.      Incurred but Not Reported Benefits for Guards, Nurses & Exempt Not
         Hired By WSC Acquisition

16.      Unemployment Taxes for Guards, Nurses & Exempt Not Hired By WSC
         Acquisition

17.      Misc. Incentive & other Benefits Payable e.g., Service Plan Bonus, rate
         retention

                                       2
<PAGE>

                                 SCHEDULE 4.2(e)

                         BUYER'S CONSENTS AND APPROVALS

1.       HSR. Notices and approvals required under the Hart-Scott-Rodino
         Antitrust Improvements Act of 1976, as amended.

2.       Bankruptcy Court. Any consents or approvals required of the Bankruptcy
         Court, including, without limitation, the Orders.

                                       3<PAGE>
                                                                    EXHIBIT 10.6

                      DISPOSITION AND DEVELOPMENT AGREEMENT

                                 by and between

                         LANCASTER REDEVELOPMENT AGENCY

                                    "AGENCY",

                                       and

                            REXHALL INDUSTRIES, INC.

                                   "DEVELOPER"

                                     IN THE

                                    AMARGOSA

                           REDEVELOPMENT PROJECT AREA

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                   Page
<S>                                                                                <C>
I. SUBJECT OF AGREEMENT
              [Section 1.01] Purpose of Agreement ..............................     1
              [Section 1.02] The Redevelopment Plan ............................     1
              [Section 1.03] The Site ..........................................     1
              [Section 1.04] Parties to the Agreement ..........................     1
              [Section 1.05] Prohibition Against Change in Ownership,
                             Management and Control of Developer ...............     2

II. ACQUISITION AND DISPOSITION OF THE SITE
              [Section 2.01] Disposition of the Site ...........................     3
                          A.  Agency Site Acquisition ..........................     3
                          B.  Sale and Purchase ................................     3
                          C.  Payment of the Purchase Price ....................     3
              [Section 2.02] Escrow ............................................     4
                          A.  Escrow Agent .....................................     4
                          B.  Developer's Costs ................................     4
                          C.  Agency's Costs ...................................     4
                          D.  Escrow Agent's Authority .........................     5
              [Section 2.04] Form of Deed for the Conveyance ...................     6
              [Section 2.05] Condition of Title ................................     6
              [Section 2.06] Time for and Place of Delivery of Deed ............     6
              [Section 2.07] Recordation of Grant Deed and Right-of-Easements ..     7
              [Section 2.08] Title Insurance ...................................     7
              [Section 2.09] Taxes and Assessments .............................     7
              [Section 2.10] Condition of the Site .............................     7
              [Section 2.11] Preliminary Work ..................................     8
              [Section 2.12] Environmental Matters .............................     8
                          A.  Definitions ......................................     8
                          B.  Environmental Site Evaluation ....................     9
                          C.  Obligation of Developer to Remediate the Site ....    10
                          D.  Agency's Indemnification of Developer ............    10
                          E.  Developer's Indemnification of Agency ............    11
              [Section 2.13] Conditions Precedent to the Conveyance ............    11
              [Section 2.14] Employment Incentive Program ......................    12

III. DEVELOPMENT OF THE SITE
              [Section 3.02] Construction Drawings and Related Documents .......    17
              [Section 3.03] Agency Approval of Plans, Drawings, and Related
                             Documents .........................................    17
              [Section 3.04] Cost of Construction ..............................    18
              [Section 3.05] Construction Schedule .............................    18
              [Section 3.06] Bodily Injury and Property Damage Insurance .......    18
              [Section 3.07] City and Other Governmental Agency Permits ........    19
              [Section 3.08] Rights of Access ..................................    19
              [Section 3.09] Local, State and Federal Laws .....................    19
              [Section 3.10] Anti-discrimination During Construction ...........    20
              [Section 3.11] Taxes, Assessments, Encumbrances and Liens ........    20
              [Section 3.12] Prohibition Against Transfer of the Site, the
                             Buildings or Structures Thereon and Assignment
                             of Agreement ......................................    20
</TABLE>

                                       i
<PAGE>

<TABLE>
<S>                                                                                 <C>
              [Section 3.13] No Encumbrances Except Mortgages, Deeds of
                             Trust, Sale and Lease-Back for Development ........    20
              [Section 3.14] Holder Not Obligated to Construct
                             Improvements ......................................    21
              [Section 3.15] Notice of Default to Mortgagee or Deed of Trust
                             Holders ...........................................    21
              [Section 3.17] Right of the Agency to Cure Mortgage or Deed of
                             Trust Default .....................................    22
              [Section 3.18] Right of the Agency to Satisfy Other Liens on
                             the Site After Title Passes .......................    22
              [Section 3.19] Release of Construction Covenants .................    23

IV. USE OF THE SITE
              [Section 4.01] Uses ..............................................    24
              [Section 4.02] Effect and Duration of Covenants ..................    26
              [Section 4.03] Maintenance of the Site ...........................    26
              [Section 4.04] Rights of Access ..................................    26
              [Section 4.05] Effect of Violation of the Terms and Provisions
                             of this Agreement After Completion of
                             Construction ......................................    26
V. GENERAL PROVISIONS
              [Section 5.01] Notices, Demands and Communications Among the
                             Parties ...........................................    27
              [Section 5.02] Conflicts of Interest .............................    27
              [Section 5.03] Enforced Delay ....................................    27
              [Section 5.04] Non-liability of Officials and Employees of the
                             Agency ............................................    28
VII. DEFAULTS AND REMEDIES
              [Section 6.01] Defaults-General ..................................    28
              [Section 6.02] Institution of Legal Actions ......................    29
              [Section 6.03] Applicable Law ....................................    29
              [Section 6.04] Acceptance of Service of Process ..................    29
              [Section 6.05] Rights and Remedies Are Cumulative ................    29
              [Section 6.06] Inaction Not a Waiver of Default ..................    29
              [Section 6.07] Remedies and Rights Prior to Conveyance ...........    29
                          A.  Default by Agency ................................    30
                          B.  Default by Developer .............................    30
              [Section 6.08] Remedies of the Parties for Default After the
                             Conveyance ........................................    30
                          A.  Termination and Damages ..........................    30
                          B.  Action for Specific Performance ..................    30
                          C.  Reentry and Revesting of Title in the Agency
                              After Conveyance .................................    31
VIII. SPECIAL PROVISIONS
              [Section 7.01] Submission of Documents to the Agency for
                             Approval ..........................................    33
              [Section 7.02] Real Estate Commission ............................    33
              [Section 7.03] Successors In Interest ............................    33
              [Section 7.04] Amendments to this Agreement ......................    33
              [Section 7.05] Project Sign ......................................    33
              [Section 7.06] Ground Breakings and Grand Openings - Coordination
                             with Agency Staff .................................    34
              [Section 7.07] Developer Requested Amendments ....................    34
</TABLE>

                                       ii
<PAGE>

<TABLE>
<S>                                                                                 <C>
              [Section 7.08] Administration.....................................    34
VIII. ENTIRE AGREEMENT, WAIVERS
              [Section 8. 01] Entire Agreement, Waivers.........................    35
IX. ACCEPTANCE OF AGREEMENT BY AGENCY, AND RECORDATION
              [Section 9. 01] Time for Acceptance of Agreement by the
                             Agency.............................................    35
              [Section 9.02] Recordation........................................    35
</TABLE>

                               ATTACHMENTS

ATTACHMENT NO. 1     SITE MAP
ATTACHMENT NO. 2     LEGAL DESCRIPTION
ATTACHMENT NO. 3     SCOPE OF DEVELOPMENT
ATTACHMENT NO. 4     SCHEDULE OF PERFORMANCE
ATTACHMENT NO. 5     AGENCY GRANT DEED
ATTACHMENT NO. 6     RELEASE OF CONSTRUCTION COVENANTS
ATTACHMENT NO. 7     MEMORANDUM OF AGREEMENT
ATTACHMENT NO. 8     SIGN PROGRAM
ATTACHMENT NO. 9     LRA EVENT INFORMATION FORM
ATTACHMENT NO. 10    EMPLOYMENT PROGRAM PROMISSORY NOTE
ATTACHMENT NO. 11    PURCHASE PRICE PROMISSORY NOTE
ATTACHMENT NO. 12    CERTIFICATE OF QUALIFYING EMPLOYEES

                                       iii
<PAGE>

                      DISPOSITION AND DEVELOPMENT AGREEMENT

         THIS DISPOSITION AND DEVELOPMENT AGREEMENT ("Agreement") is entered
into by and between the LANCASTER REDEVELOPMENT AGENCY, a public body,
corporate and politic, (the "Agency") and REXHALL INDUSTRIES, INC., a California
Corporation (the "Developer"). The Agency and the Developer hereby agrees as
follows:

                            I. SUBJECT OF AGREEMENT

         [Section 1.01] Purpose of Agreement. The purpose of this Agreement is
to effectuate the Redevelopment Plan (as hereinafter defined) for the Amargosa
Redevelopment Project (the "Project") by providing for the disposition and
development of certain property situated within the Project Area (the "Project
Area") for the expansion of the existing recreational vehicle manufacturing
facility. That portion of the Project Area to be developed pursuant to this
Agreement (the "Site") is depicted on the "Site Map" attached hereto as
Attachment No. 1 and incorporated herein by reference. This Agreement is entered
into for the purpose of developing the Site and not for speculation in land
holding. Completing the development on the Site pursuant to this Agreement is in
the vital and best interest of the City of Lancaster, California (the "City")
and the health, safety, and welfare of its residents, and in accord with the
public purposes and provisions of applicable state and local laws and
requirements.

         [Section 1.02] The Redevelopment Plan. The Amargosa Redevelopment
Project was approved and adopted on October 17, 1983 by Ordinance No. 321, and
amended by Ordinance No. 672 adopted on December 5, 1994, and by Ordinance No.
727 adopted on March 27, 1997, of the City Council of the City of Lancaster;
said ordinances and the Redevelopment Plan as so approved (the "Redevelopment
Plan") are incorporated herein by reference.

         [Section 1.03] The Site. The Site is that portion of the Project Area
designated on the Site Map (Attachment No. 1). The Site is approximately 13.98
acres in size. The Site is located within the Avenue H Industrial Park and is to
be developed in accordance to the regulations and development standards outlined
for HI (Heavy Industrial) zone of Lancaster's Zoning Ordinance. The legal
description for the Site is attached hereto as Attachment No. 2 and is
incorporated herein by this reference.

         [Section 1.04] Parties to the Agreement. The Agency is a public body,
corporate and politic, exercising governmental functions and powers and
organized and existing under the Community Redevelopment Law of the State of
California. The principal office of the Agency is located at 44933 North Fern
Avenue, Lancaster, California 93534.

                                      -1-
<PAGE>
         "Agency", as used in this Agreement, includes the Lancaster
Redevelopment Agency, and any assignee of or successor to its rights, powers and
responsibilities.

         The Developer is Rexhall Industries, Inc. a California Corporation. The
principal office address of the Developer for the purposes of this Agreement is
46147 7th Street West, Lancaster, California 93534. The principal mailing
address of Developer for the purposes of this Agreement is the same as
identified above.

         [Section 1.05] Prohibition Against Change in Ownership, Management and
Control of Developer. The qualifications and identity of the Developer are of
particular concern to the Agency. It is because of those qualifications and
identity that the Agency has entered into this Agreement with the Developer. No
voluntary or involuntary successor in interest of the Developer shall acquire
any rights or powers under this Agreement except as expressly set forth herein.

         The Developer shall not assign all or any part of this Agreement or any
rights hereunder without the prior written approval of the Agency, which the
Agency may reasonably withhold provided, however, that the Agency shall not
unreasonably withhold its approval of an assignment if the assignment is to an
entity which includes the Developer as a general partner or majority shareholder
and (1) the assignee entity shall expressly assume respective obligations of the
Developer pursuant to this Agreement in writing satisfactory to the Agency; (2)
the original Developer shall remain fully responsible for the performance and
liable for the obligations of the Developer pursuant to this Agreement; and (3)
the assignee is financially capable of performing the duties and discharging the
obligations it is assuming. The Developer shall promptly notify the Agency in
writing of any and all changes whatsoever in the identity of the persons in
control of the Developer and the degree thereof.

         All of the terms, covenants and conditions of this Agreement shall be
binding upon and shall inure to the benefit of the Developer and the permitted
successors and assigns of the Developer. Whenever the term "Developer" is used
herein, such term shall include any other permitted successors and assigns as
herein provided.

         The restrictions of this Section 1.05 shall terminate and be of no
further force and effect upon issuance by the Agency of a "Release of the
Construction Covenants" for all improvements to be provided by the Developer
pursuant to this Agreement as described in the Scope of Development (Attachment
No. 3). Upon completion of the Developer Improvements, the Developer shall
request in writing to the Agency the issuance of the Release of Construction
Covenants pursuant to Section 3.19 of this Agreement. Within

                                      -2-
<PAGE>

thirty (30) days of said written request, the Agency shall either issue the
Release of Construction Covenants, or provide a written statement identifying
specific reasons for the Agency's refusal to issue the Release of Construction
Covenants.

                   II. ACQUISITION AND DISPOSITION OF THE SITE

         [Section 2.01] Disposition of the Site.

         A.       Sale and Purchase.

         In accordance with and subject to all the terms, covenants and
conditions of this Agreement, and specific escrow instructions as specified
herein, the Agency agrees to sell the Site to the Developer and the Developer
agrees to buy the Site from the Agency and pay therefore the amount of One
Dollar and Fifty Cents ($1.50) per square foot, for a total of $913,453, herein
referred to as the "Purchase Price".

         B.       Payment of the Purchase Price.

         The Developer shall execute with the Agency an Employment Program
Promissory Note (Attachment No. 10) which will provide a credit toward a portion
of the Purchase Price in the amount of $300,000, combined with a separate
Promissory Note for the balance of the Purchase Price (Attachment No. 11) in the
amount of $613,453. The above mentioned Promissory Notes combined equal the
total value of Purchase Price of $913,453. The Developer shall execute and
deposit said Notes with the Escrow Agency prior to the close of escrow, along
with funds in the amount of One Dollar ($1.00) which entitles the Developer to
water credits required for development of the Site in an amount not to exceed
$70,501.

         The cash portion of the Purchase Price, including Buyer's escrow
charges and other cash charges, if any, shall be deposited with the Escrow
Holder, no later than the business day prior to the escrow closing date,
provided Seller's documents have been deposited in escrow.

         Should the Agency fail to deliver the Site to the Developer consistent
with this Agreement, then the Developer may request in writing to the Agency
that this Agreement be terminated. In no event will the transfer of the Site
occur later than thirty (30) days following completion of all the conditions
precedent to the conveyance by the Developer and Agency, as specified in Section
2.13 of this Agreement.

                                      -3-
<PAGE>

         [Section 2.02] Escrow.

         A.       Escrow Agent. The Agency agrees to open an escrow ("Escrow")
with Antelope Valley Escrow Company, or with another mutually agreeable escrow
company (the "Escrow Agent") in Lancaster, by the time established therefor in
the "Schedule Performance" attached hereto as Attachment No. 4 and incorporated
herein by this reference. The escrow described in this Section 2.02 shall be
referred to as "Escrow", and the conveyance as provided for in Section 2.03 and
2.04 shall be referred to as "Conveyance". This Agreement constitutes the joint
basic escrow instructions of the Agency and the Developer for the Conveyance and
a duplicate original of this Agreement shall be delivered the Escrow Agent upon
the opening of Escrow. The Agency and Developer shall provide such additional
escrow instructions as shall be necessary for and consistent with this
Agreement. The Escrow Agent is hereby empowered to act under this Agreement, and
the Escrow Agent, upon indicating within five (5) days after opening of Escrow
its acceptance of the provisions of this section 2.02, in writing, delivered to
the Agency and the Developer, shall carry out its duties as the Escrow Agent
hereunder.

         B.       Developer's Costs. Except as otherwise indicated, the
Developer shall submit or pay in Escrow to the Escrow Agent all of the following
items and costs after the Escrow Agent has notified the Developer of the amount
of such fees, charges and costs, but not earlier than ten (10) days prior to the
scheduled date for closing Escrow:

         1.       one half (1/2) of the escrow fee; and

         2.       Fees for recording and filing all documents required in this
                  Agreement other than the Grant Deed recording fees;

         3.       cost of drawing the deed, if any; and

         4.       the costs of any extended coverage, American Land Title
                  Association insurance coverage, if required, includes any land
                  survey costs, or other title policy in excess of the premium
                  for the standard coverage (CLTA) policy to be provided by
                  Agency pursuant to Section 2.08.

         C.       Agency's Costs. The Agency shall pay in escrow to Escrow Agent
the following fees, charges and costs promptly after the Escrow Agent has
notified the Agency of the amount of such fees, charges and costs, but not
earlier than ten (10) days prior to the scheduled date for closing Escrow:

         1.       one half (1/2) of the escrow fee; and

                                      -4-
<PAGE>

         2.       Ad valorem taxes, if any, upon the Site for any time prior to
                  the Conveyance; and

         3.       costs of drawing the Grant Deed, if any; and

         4.       the cost of any documentary transfer taxes on the Grant Deed;
                  and

         5.       the cost of a premium for a California Land Title Association
                  (CLTA) Standard Policy of title insurance insuring the Site in
                  the amount of estimated market value.

         D.       Escrow Agent's Authority. The Escrow Agent is authorized to:

         1.       Pay, and charge the Agency and Developer, respectively, for
                  any fees, charges and costs payable under this Section 2.02 of
                  this Agreement. Before such payments or charges are made, the
                  Escrow Agent shall notify the Agency and the Developer of the
                  fees, charges and costs necessary to clear title and close
                  Escrow.

         2.       Disburse funds and deliver the Agency Grant Deed (Attachment
                  No. 5) and other documents to the parties entitled thereto
                  when the conditions of this Escrow have been fulfilled by the
                  Agency and the Developer.

         3.       Record any instruments delivered through this Escrow, if
                  necessary or proper, to vest title of the Site in the
                  Developer, all in accordance with the terms and provisions of
                  this Agreement.

         All funds received in this Escrow shall be deposited by the Escrow
Agent with other escrow funds of the Escrow Agent in an interest earning general
escrow account or accounts with any state or national bank doing business in the
State of California. Such funds may be transferred to any other general escrow
account or accounts. All disbursements shall be made by check of the Escrow
Agent. All adjustments are to be made on the basis of a thirty (30) day month.

         If this Escrow is not in condition to close on or before the time for
conveyance established in Section 2.03 of this Agreement because of a failure of
either party to perform any of the Conditions Precedent to the Conveyance or
because either party has committed some other default which is not cured in time
for the close of Escrow, the Escrow Agent shall cancel and not close Escrow, and
return without demand all papers, documents and money deposited in Escrow to the
party who deposited said papers, documents and money into Escrow. In the event
Escrow is canceled pursuant to this paragraph, the rights of the parties shall
be established by Section 6.07 of this Agreement.

                                      -5-
<PAGE>

         Any amendment to these escrow instructions shall be in writing and
signed by both the Agency and the Developer. At time of any amendment, the
Escrow Agent shall agree to carry its duties as the Escrow Agent under such,
amendment.

         All communications from the Escrow Agent to the Agency Developer shall
be directed to the addresses and in the manner established in Section 5.01 of
this Agreement for notices, and communications between the Agency and the
Developer.

         The liability of the Escrow Agent under this Agreement limited to
performance of the obligations imposed upon it under Sections 2.02 through 2.13,
inclusive, of this Agreement.

         [Section 2.03] Conveyance of Title and Delivery of Possession. Subject
to any extensions of time mutually agreed upon between Agency and the Developer,
the Conveyance shall be completed prior to the date specified therefor in the
Schedule of Performance attached hereto as Attachment No. 4 and incorporated
herein by reference. Said Schedule of Performance is subject to revision from
time to time as mutually agreed upon in writing between the Developer and the
Agency. The Agency and the Developer agree to perform all acts necessary for
conveyance title in sufficient time for title to be conveyed in accordance with
the foregoing provisions.

         Developer shall only be entitled to limited access to the Site before
the Conveyance as permitted in Section 2.11 of the Agreement.

         [Section 2.04] Form of Deed for the Conveyance. The Agency shall convey
to the Developer title to the Site in the condition provided in Section 2.05 of
this Agreement by grant deed in the form of the Agency Grant Deed in Attachment
No. 5 (the "Agency Grant Deed").

         [Section 2.05] Condition of Title. The Agency shall convey to the
Developer fee simple merchantable title to the Site free and of all recorded and
unrecorded liens, encumbrances, assessment leases and taxes, except for the
Redevelopment Plan; the Right Way Easements and other provisions contained in
the Agency Grant Deed (Attachment No. 5); and such other encumbrances to which
Developer may consent. The condition of title shall be compared with and not
preclude development of the improvements currently existing on the Site or the
Developer Improvements which are built pursuant to this Agreement (collectively,
the "Improvements"). The parties shall act reasonably in evaluation of any
encumbrances and shall act diligently and promptly to conform the condition of
title to that required for the Developer to proceed with the development of the
Developer Improvements.

         [Section 2.06] Time for and Place of Delivery of Deed. Subject to

                                      -6-
<PAGE>

any mutually agreed upon extension of time, the Agency shall deposit the Agency
Grant Deed (Attachment No. 5) with the Escrow Agent at least ten (10) days
before the date established for the date of the Conveyance pursuant to the
Schedule of Performance (Attachment No. 4).

         [Section 2.07] Recordation of Grant Deed and Right-of-Easements. The
Escrow Agent shall record the Agency Grant Deed in the land records of the
Office of the County Recorder for Los Angeles County, and shall deliver to the
Developer a title insurance policy insuring title in conformity with Section
2.08 of this Agreement.

         [Section 2.08] Title Insurance. Concurrently with recordation of the
Agency Grant Deed (Attachment No. 5) conveying title to the Site with a mutually
acceptable title company (the "Title Company"), which shall provide and deliver
to Developer a title insurance policy (the "Title Policy") issued by the Title
Company insuring that the title to the Site is vested in Developer in the
condition required by Section 2.05 of this Agreement. The Title Company shall
provide the Agency with a copy of the Title Policy and the Title Policy shall be
for the estimated market value of the Site as established by the Agency (the
"Title Insurance Amount") . The Agency shall pay for those costs incurred for or
related to a CLTA standard policy of title insurance.

The Developer shall pay the costs of any extended coverage in excess of the
premium for the standard coverage (CLTA) policy, including any land survey
costs, American Land Title Association (ALTA) insurance coverage and for any
endorsements required by the Title Company to deal with Mineral Rights and
Surface Easements, if any.

         [Section 2.09] Taxes and Assessments. Ad valorem taxes, assessments and
all other taxes, if any, on the Site, levied, assessed or imposed for any period
prior to the Conveyance shall be borne by the Agency. Ad valorem taxes,
assessments and all other taxes on the Site levied, assessed or imposed after
the Conveyance, including such taxes or assessments imposed on the Site shall be
borne by the Developer.

         [Section 2.10] Condition of the Site. The Developer, at its sole cost
and expense, has the right to further investigate and determine, or cause to be
investigated and determined, the soil and environmental conditions of the Site
for the development to be constructed by Developer. As part of the investigation
of the soil and environmental conditions pursuant to this Section 2.10, the
Developer has the right to provide further analysis at its sole cost and expense
as required by Section 2.12.

         If the environmental conditions of the Site are in all respects
entirely suitable for the use or uses to which the Site will be put, Developer
shall provide Agency a certificate (the

                                      -7-
<PAGE>

"Certificate of Acceptance") certifying such suitability consistent with this
Section 2.10. Such Certificate of Acceptance shall in no way offset or limit the
Agency's indemnification" the Developer except in cases where it is determined
that the Developer or their agents, employees, contractors or invitees either
introduced, deposited, or otherwise caused contamination occur on the Site as
provided in this Section and in Section 2.12D.

         In addition to a general statement acknowledging the good condition of
the Site's environmental condition, the Certificate of Acceptance shall include
a statement that the soil condition of the Site is entirely suitable for the
development of the Site construction of the Developer Improvements, and the use
or uses which the Site will be put. If the soil conditions of the Site are not
in all respects entirely suitable for the use or uses which the Site will be
put, then it is the sole responsibility and obligation of Developer to take such
actions as may be necessary to place the Site in a condition entirely suitable
for the development of the Site, and the construction of the Developer
Improvements.

         [Section 2.11] Preliminary Work. Prior to the Conveyance, the Developer
or representatives of Developer shall have the right access to the Site at all
reasonable times for the purpose of obtaining data and making surveys and tests
necessary to carry this Agreement.

         Any preliminary work undertaken on the Site by Developer prior to the
closing of Escrow shall be done only after written consent of the Agency, which
consent shall not be unreasonably withheld or delayed, and at the sole cost and
expense of Developer.

         The Developer shall save, protect, defend, indemnify and harmless the
Agency and the City against any claims resulting all preliminary work, access or
use of the Site undertaken pursuant to this Section 2.11. Copies of data,
surveys and tests obtained or made by the Developer on the Site
pursuant to this Section 2.11 shall be filed with the Agency within fifteen (15)
days after receipt by the Developer. Any preliminary work by Developer shall be
undertaken only after securing any necessary permits from the appropriate
governmental agencies.

         [Section 2.12] Environmental Matters.

         A.       Definitions. For the purposes of this Agreement, the following
terms shall have the meanings herein specified:

         (1) The term "Hazardous Materials" shall mean (i) any "hazardous
substance" as defined by the Comprehensive Environmental Response, Compensation
and Liability Act of 1980 (42 U.S.C. Section 9601 et seq.), as amended
from time to time, and regulations promulgated thereunder; (ii) any "hazardous
substance

                                      -8-
<PAGE>

as defined by the Carpenter-Presley-Tanner Hazardous - Substance Account Act
(California Health and Safety Code Sections 25300 et seq.) , as amended from
time to time, and regulations promulgated thereunder; (iii) friable asbestos;
(iv) polychlorinated biphenyls; (v) petroleum, oil, gasoline (refined and
unrefined) and their respective by-products and constituents; and (vi) any other
substance, whether in the form of a solid, liquid, gas or any other form
whatsoever, which by any "Governmental Requirements" (as defined in Subparagraph
(3) of Paragraph A of this Section 2.12) either requires special handling in its
use, transportation, generation, collection, storage, handling, treatment or
disposal, or is defined as "hazardous" or harmful to the environment.

         (2) The term "Hazardous Materials Contamination" shall mean the
contamination (whether presently existing or hereafter occurring) of the
improvements, facilities, soil, groundwater, air or other elements on, in or of
the Site by Hazardous Materials, or the contamination of the buildings,
facilities, soil, groundwater, air or other elements on, in or of any other
property as a result of Hazardous Materials at any time (whether before or after
the date of this Agreement) emanating from the Site.

         (3) The term "Governmental Requirements" shall mean all laws,
ordinances, statutes, codes, rules, regulations, orders and decrees of the
United States, the state, the county, the city, or any other political
subdivision in which the Site is located, and of any other political
subdivision, agency or instrumentality exercising jurisdiction over the Agency,
the Developer, or the Site.

         3.       Environmental Site Evaluation.

                  (1) Developer's Right to Conduct Site Evaluation. Developer
shall have the right to conduct an environmental site evaluation upon the Site
at its sole expense and cost, if so desired. If the environmental condition of
the Site is in all respects entirely suitable for the development of the Site,
the construction of the Developer Improvements, and the use or uses to which,
the Site will be put, Developer shall provide to the Agency the Certificate of
Acceptance required by Section 2.10 of this Agreement.

                  (2) Right to Terminate. If there are environmental problems on
the site or any portion thereof as determined by the Developer in their sole and
absolute discretion, including, but not limited to, the existence of hazardous
materials or hazardous materials contamination on all or part of the site, the
Agency and/or Developer shall have the right to terminate this agreement at any
time prior to the receipt by the Agency from the Developer of the Certificate of
Acceptance required by section 2.10 of this Agreement, said termination to be
effective immediately upon the date of a written notice of termination. Upon
written notice,

                                      -9-
<PAGE>

either party may terminate this Agreement because of environmental problems
encountered after receipt by the Agency from the Developer of the Certificate of
Acceptance required by Section 2.10 of this Agreement, and prior to the issuance
of a Release of Construction Covenants.

         C.       Obligation of Developer to Remediate the Site. Notwithstanding
the obligation of Developer to indemnify Agency pursuant to Paragraph "E" of
this Section 2.12 or any other obligations of the Developer pursuant to this
Agreement, if there are environmental problems and the Agency and Developer
elect not to terminate this Agreement', Developer shall, at its sole cost and
expense, promptly take (i) all actions required by any federal, state or local
governmental agency or political subdivision or any Governmental Requirements
with respect to the entire Site, and (ii) all actions necessary to make full
economic use of the Site for the purposes described in this Agreement, which
actions, requirements or necessity arise from the presence upon, about or
beneath the Site of any Hazardous Materials or Hazardous Materials Contamination
regardless of when such Hazardous Materials or Hazardous Materials Contamination
were introduced to the Site and regardless of who is responsible for introducing
such Hazardous Materials or Hazardous Materials Contamination to the Site (the
"Site Remediation"). The Site Remediation shall include, but not be limited to,
investigation of the environmental condition of the Site, the preparation of any
feasibility studies or reports and the performance of any cleanup, remedial,
removal or restoration work required. If this Agreement is not terminated
pursuant to Paragraph B of this Section 2.12, Developer shall take all actions
necessary to promptly restore the Site to an environmentally sound condition for
uses contemplated by this Agreement, notwithstanding any lesser standard of
remediation allowable under applicable Governmental Requirements. Developer's
obligations under this Paragraph C of this Section 2.12 shall be referred to as
the "Site Remediation" and shall survive until such time as all of the Hazardous
Materials and Hazardous Materials Contamination existing at the time of the
Conveyance on, in or under the Site or any part thereof are completely removed
from the Site and all Governmental Requirements are complied with for said
Hazardous Materials and Hazardous Materials Contamination.

         D.       Agency's Indemnification of Developer. Agency shall save,
protect, defend, indemnify and hold harmless Developer from and against any and
all liabilities, suits, actions, claims, demands, penalties, damages (including,
without limitation, penalties, fines and monetary sanctions), losses, costs or
expenses (including, without limitation, consultants' fees, investigation and
laboratory fees, reasonable attorneys fees and remedial and response costs)
which may now or in the future be incurred or suffered by Developer because of
any actions actually taken by the Agency or expressly authorized by the Agency.
In no event shall the Agency indemnify or otherwise be liable to Developer for
(i) any omissions or failures to act, (ii) any acts

                                      -10-
<PAGE>

of third parties acting without the express authorization of the Agency, whether
said acts occurred before, during or after Agency's ownership of the Site,
except that the Agency shall indemnify and otherwise be liable to the Developer
for Hazardous Materials or Hazardous Materials Contamination deposited,
occurring or existing on or under the Site prior to the close of Escrow.
Agency's obligations under this Section 2.12 shall survive after the close of
Escrow, the completion of the Conveyance and the issuance of the Release of
Construction Covenants.

         E.       Developer's Indemnification of Agency. Except as provided in
Paragraph D of this Section 2.12, Developer shall save, protect, defend,
indemnify and hold harmless Agency from and against any and all liabilities,
suits, actions, claims, demands, penalties, damages (including, without
limitation, penalties, fines and monetary sanctions), losses, costs or expenses
(including, without limitation, consultants' fees, investigation and laboratory
fees, reasonable attorneys' fees and remedial and response costs) (the forgoing
are hereinafter collectively referred to as "Liabilities") which may now or in
the future be incurred or suffered by Agency by reason of, resulting from, in
connection with or arising in any manner whatsoever as a direct or indirect
result of (i) the Developer's ownership of all or any part of the Site, (ii) any
act or omission on the part of the Developer or their agents, employees,
contractors or invitees, (iii) the presence on or under, or the escape, seepage,
leakage, spillage, discharge, emission or release from the Site of any Hazardous
Materials or Hazardous Materials Contamination only as a result of acts or
actions of the Developer or their agents, employees, contractors or invitees,
(iv) the environmental condition of the Site, and (v) any Liabilities incurred
under any Governmental Requirements relating to Hazardous Materials. Developer's
obligations under this Section 2.12 shall survive after the close of Escrow, the
completion of the Conveyance and the issuance of the Release of Construction
Covenants, and shall be a covenant running with the land in perpetuity, binding
on all successors and assigns of Developer's interest in either this Agreement
or the Site.

         [Section 2.13] Conditions Precedent to the Conveyance. Prior to and as
conditions to the close of Escrow and the Conveyance, the Developer or Agency,
as indicated below, shall complete all of the following by the respective times
established therefor in the Schedule of Performance (Attachment No. 4):

         1.       the Developer shall not be in material default of this
                  Agreement;

         2.       the Developer shall have obtained any necessary land use
                  approvals and entitlements from the City, including but not
                  limited to a Site Plan Review approval through the Department
                  of Community Development, building permits and/or grading
                  permits through the City's Building and

                                      -11-
<PAGE>

                  Engineering Departments, and shall have performed all other
                  necessary acts in accordance to the Schedule of Performance
                  (Attachment No. 4) including but not limited to submission of
                  all necessary documents, fees or any other materials,
                  necessary to obtain building and grading permits for the
                  Developer Improvements;

         3.       the Developer shall have provided reasonable proof to the
                  Agency that the Developer has obtained a binding loan
                  commitment or that other funds are available for all of the
                  Developer Improvements;

         4.       the Developer shall have provided, for Agency review and
                  approval, proof of insurance (certificates) conforming to
                  Section 3.06 of this Agreement;

         5.       the Developer shall have completed its soils and environmental
                  site evaluation of the Site and shall have provided Agency
                  with a Certificate of Acceptance regarding suitability of
                  soil, and the environmental condition of the Site as it
                  relates to its suitability for construction of the Developer
                  Improvements, all pursuant to Sections 2.10 and 2.12 of this
                  Agreement;

         6.       the Developer shall have complied with all the requirements of
                  Section 2.12 of this Agreement, including, but not limited to,
                  the completion of the Site Remediation, if any;

         7.       the Developer shall have completed all necessary acts required
                  herein for the close of Escrow and the execution of the
                  Conveyance; and

         The foregoing items numbered 1 to 7 inclusive, together constitute the
"Conditions Precedent to the Conveyance".

         [Section 2.14] Employment Incentive Program.

         Pursuant to the Redevelopment Plan, the Agency and City of Lancaster
(the "City") have entered into an "incentive program" to enhance job creation
and the economic development efforts of the City. To assist in providing new
employment opportunities, the Agency is willing to offer incentives to
businesses by investing a portion of the revenues typically received as a result
of the development of a new project. In exchange, the business would agree to
meet specific performance requirements in order to be eligible for the program.
The Developer represents that the expansion of the recreational vehicle
manufacturing facility will produce a minimum of 120 employees to as high as 600
employees which is likely to create additional job opportunities for the
community upon the project's completion. Completing the development on the Site
and the operation of this project pursuant

                                      -12-
<PAGE>

to this Agreement is in the vital and best interest of the City and the health,
safety, morals and welfare of its residents, and in accord with the public
purposes and provisions of applicable state and local laws and requirements
under which the Project has been undertaken.

         In consideration for the Developer's improvement of the Site, and the
expansion of the recreational vehicle manufacturing facility, and subject to the
execution of an Employment Program Promissory Note by the Developer
substantially in the form of Attachments No. 10 and No. 11, the Agency agrees to
offer the Developer 13.98 acres of land.

         The Developer has agreed to provide a total of 600 Annualized Full-Time
Equivalent Employees (the "Qualifying Employees") within five (5) years of the
completion of the expansion. For purposes of this Agreement, years one (1)
through five (5) of the businesses' operation will be considered as the
"Determination Period" .

         The number of persons constituting Qualifying Employees during any
annual period shall equal the sum of (i) the number of "Full Time Employees" for
such annual period plus (ii) the number of "Composite Full Time Employees" for
such annual period, calculated in "accordance with the following:

                  (a) In order to qualify as a Full Time Employee of Developer
         for the applicable annual period, a person must be a salaried or hourly
         employee, or an individual who is a dedicated (i.e., performing
         substantially all services for Developer) independent contractor, who
         is employed at the Site not less than thirty-two (32) hours per week
         for not less than fifty-two (52) weeks (such fifty-two (52) week
         calculation to be inclusive of vacations, holidays, disability leaves
         required pursuant to state law, sick leave and similar benefits
         generally afforded employees generally deemed to be full time employees
         by prevailing community standards) during the corresponding annual
         period; to be countable, substantially all hours worked must be
         accomplished at the Site on matters for Developer, except that hours of
         a sales person or designated technical or engineering representatives
         whose duties include outside sales or work with other agencies or
         companies, will be includable so long as the sales person or designated
         technical or engineering representatives is based at the Site and has
         substantially all clerical and office support provided at the Site. An
         employee who is terminated during any annual period, and the employee
         who replaces such terminated employee in such position, shall be
         aggregated for purposes of the foregoing calculation. The Developer
         shall provide substantiation to the Executive Director (or his
         designee) as to replacement of terminated employees, and the Executive
         Director (or his designee) shall in good faith

                                      -13-
<PAGE>

         review whether the employees involved are countable for purpose of the
         foregoing calculation.

                  (b) For purposes of this Agreement, one Composite Full Time
       Employee shall be deemed to exist for each one thousand five hundred
       thirty six (1536) hours (thirty-two (32) hours per week times forty-eight
       (48) weeks, not inclusive of vacations, holidays, disability leaves, sick
       leaves, or similar benefits) of work performed by part-time employees
       (other than qualifying Full Time Employees), contract employees,
       independent contractors, or temporary personnel (collectively, "Part Time
       Employees") at the Site, subject to the following limitations: To be
       included in such calculation any such individual must perform at least
       nineteen (19) hours of work for no less than forty-eight weeks in the
       applicable Annual period; any Part Time Employee or independent
       contractor terminated during any annual period and any individual who
       replaces such terminated Part Time Employee or independent contractor in
       such position shall aggregated for purposes of the foregoing calculation.

                  Hours worked in one annual period shall be countable with
         respect to that annual period and cannot be carried forward or carried
         back to be applied as to a different annual period.

                  (c) The total number of Qualifying Employees shall be
       evidenced annually by the Developer's delivery to the Agency of the
       "Certificate of Employees" attached hereto as Attachment No. 12 on each
       of the first through the fifth anniversaries following the issuance of a
       Release of Construction Covenants subject to the terms of this Agreement,
       and at other times upon the written request of Agency.

                  (d) Qualifying Employees shall include only those employees
         which are paid (exclusive of benefits and overhead) no less than
         the following wages for their service to the Project, and may include
         other employees as long as such additional Employee's wages are not
         less than the lowest position on the following list:

<TABLE>
<CAPTION>
Job Classification              Minimum Wage
------------------              ------------
<S>                             <C>
1) Lamination                          $5.75
2) Doors                               $5.75
3) Welding                             $5.75
4) Floors                              $5.75
5) Walls-Foam                          $5.75
6) Cabinet Shop                        $5.75
</TABLE>

                                      -14-
<PAGE>

<TABLE>
<CAPTION>
Job Classification              Minimum Wage
------------------              ------------
<S>                             <C>
7)  Cabinet Setting             $       5.75
8)  Electrical                  $       5.75
9)  Plumbing                    $       5.75
10) Pre-Final 1                 $       5.75
11) Upholstery                  $       5.75
12) Pre-Final 2                 $       5.75
13) Pre-Final 3                 $       5.75
14) Paint                       $       5.75
15) Mechanic                    $       5.75
16) Final Finish                $       5.75
17) Receiving                   $       5.75
18) Research & Development      $       5.75
19) Production Managers         $       5.75
20) On-Line Inspection          $       5.75
21) Utility                     $       5.75
22) Maintenance                 $       5.75
23) Janitor                     $       5.75
24) Fiberglass                  $       5.75
25) Service                     $       5.75
26) Service/Administration      $20,000/Year
27) Sales                       $30,000/Year
28) Sales/Clerical              $16,000/Year
29) Administration/Clerical     $20,000/Year
30) Administration/Officers     $50,000/Year
</TABLE>

         In the event that the Developer sells the Site without the Agency's
prior written consent prior to the end of the Determination Period or does not
meet the minimum requirements for employment, the Agency is entitled to a refund
if there is an overall shortfall during the Determination Period. Any refunds to
the Agency will not exceed the market value of the land offset by the Agency,
and will become payable at the end of the Determination Period, if applicable.

         In the event the Developer determines at any time prior to the end of
the Determination Period that the Developer will be unable to meet the
requirements of this Section, Developer may transfer the Site to the Agency
pursuant to Section 6.08 (C).

         For purposes of calculating refunds, each full-time Qualifying Employee
identified in a given year will represent one (1) Annualized Full-Time
Equivalent Employment Unit (AFTEEU). The Developer is obligated to provide the
cumulative total of the AFTEEUs for the Determination Period. Based on the
information provided above, the total number of AFTEEUs for the Determination
Period is 600 AFTEEUs, which is calculated as follows:

                                      -15-
<PAGE>

<TABLE>
<CAPTION>
                    Qualifying
                     Employees       AFTEEU's
                     ---------       --------
<S>                  <C>             <C>
End of Year 1           120            120
End of Year 2           120            120
End of Year 3           120            120
End of Year 4           120            120
End of Year 5           120            120
                        ---            ---
Cumulative Total        N/A            600
</TABLE>

         However, the Developer may accelerate the number of Qualifying
Employees beyond the specific number listed for each year to the point where the
actual cumulative total of AFTEEUs meets or exceeds 600 AFTEEUs. As a benchmark,
Developer is to be given credit for all full time Qualifying Employees above the
figure set in the agreement between Developer and Agency dated February 14,
1994, and all addendums to that said agreement.

         1.       At the conclusion of the Determination Period, the actual
cumulative total of AFTEEUs are calculated by adding together the total number
of full-time Qualifying Employees, or AFTEEUs, reported by the Developer on each
of the Certificate of Employees (Attachment No. 12).

         2.       If any time on or before the end of the Determination Period
the actual cumulative total of AFTEEUs meets or exceeds 600 AFTEEUs, repayment
of the full amount of the Promissory Note shall be forgiven and the Agency shall
convey the Note to the Developer. Upon the Developer satisfying the provisions
of the Employment Incentive Program of this Section 2.14, the Developer shall
have no further obligation under this Agreement except that such party shall be
bound by (I) any covenants contained in the Agency Grant Deed (Attachment No.
5), lease, mortgage, deed of trust, contract, other instrument or transfer, or
other documents establishing covenants on the Site in accordance with the
provisions of Section 4.01 of this Agreement, (ii) the provisions of Section
7.03 of this Agreement, which shall be applicable according to its terms, and
(iii) any terms, covenants or conditions in this Agreement that pursuant to the
terms of this Agreement survive after the close of Escrow, the completion of the
Conveyance, the issuance of the Release of Construction Covenants, and the
conveyance of the Employment Program Promissory Note to the Developer.

         3.       If the number of AFTEEUs is less than 600, then the Agency is
due a refund. The refund shall be determined by first dividing $300,000, the
value of the Employment Program Promissory Note (Attachment No. 10), by 600
(Cumulative Total AFTEEUs). The product of this division is then rounded to the
nearest whole dollar and multiplied by the shortfall in AFTEEUs. The result of
this calculation is the amount then due the Agency.

         4.       If any amount is due under the Employment Program Promissory
Note, it must be paid within thirty (30) days of demand as indicated in the
Employment Program Promissory Note (Attachment No. 10). Upon the Developer
satisfactorily meeting the minimum obligation of providing 600 AFTEEUs through
the Employment Incentive Program, or upon full payment of any refund that may be
due to the Agency at the end of the Determination Period, the Note will be
re-conveyed or delivered to the Developer.

                                      -16-
<PAGE>

                          III. DEVELOPMENT OF THE SITE

         [Section 3.01] Scope of Development. The Site shall be developed as
provided in the Scope of Development attached hereto as Attachment No. 3 and
incorporated herein by reference. All Improvements to be completed by the
Developer as indicated on the Scope of Development, are referred to in this
Agreement as the "Developer Improvements".

         The development shall include any plans and specifications submitted to
the City for approval, and shall incorporate or show compliance with all
applicable California Environmental Quality Act mitigation measures.

         [Section 3.02] Construction Drawings and Related Documents. By the time
set forth therefor in the Schedule of Performance (Attachment No. 4), the
Developer shall prepare and submit to the City, construction drawings, and
related documents for development of the Site for architectural review and
approval.

         Agency staff shall review Developer's drawings and plans in conjunction
with the City's review. Developer does not need to submit separate drawings and
plans to the Agency.

         Developer shall make application to the City for all approvals
necessary under the statutes, code, ordinances and resolutions of the City and
any other statutes(s) or code(s) applicable to the Improvements which require
approval, including, but not limited to, all approvals for permits, licenses,
and certificates of occupancy.

         If any revisions or corrections shall be required by the City, or any
other official, agency, department, division or bureau of the City having
jurisdiction, the Developer and the Agency shall cooperate to accommodate such
requirements.

         [Section 3.03] City Approval of Plans, Drawings, and Related Documents.
Provided that the submissions by the Developer are made timely and are complete,
the City shall approve or disapprove the plans, drawings and related documents
referred to in Sections 3.02 of this Agreement within the times established in
the Schedule of Performance (Attachment No. 4). Approval of said plans,
drawings, and related documents shall not be unreasonably withheld. Any
disapproval shall state in writing the reasons for disapproval. The Developer,
upon receipt of a disapproval based upon powers reserved by the City and Agency
hereunder, shall revise such portions and resubmit to the City as soon as
possible after receipt of the notice of disapproval as provided in the Schedule
of Performance (Attachment No. 4).

         If the Developer desires to make any substantial changes in the
construction plans after their initial approval by the City, the Developer shall
submit any proposed change(s) to the City and

                                      -17-
<PAGE>

Agency for its approval. If the construction plans, as modified by the proposed
change(s), conform to the requirements of Section 3.02 of this Agreement and the
Scope of Development (Attachment No. 3) the Agency shall approve the proposed
change(s) and not the Developer in writing within 30 days after submission to
the Agency unless rejected, in whole or in part, by written notice thereof by
the Agency to the Developer, setting forth the reasons therefor, and such
rejection shall be made within said 30-day period.

         [Section 3.04] Cost of Construction. The cost of constructing Developer
Improvements on the Site shall be borne exclusively the Developer. Said
Developer Improvements shall either be completed, or Developer shall have posted
the necessary bonds security prior to the issuance of the Release of
Construction Covenants.

         [Section 3.05] Construction Schedule. After the Conveyance, the
Developer shall promptly begin and thereafter diligently prosecute to
completion the construction of the Developer Improvements. Developer shall begin
and complete all construction and development within the times specified in the
Schedule of Performance (Attachment No. 4).

         [Section 3.06] Bodily Injury and Property Damage Insurance. The
Developer shall save, protect, defend, assume all responsibility for, indemnify
and hold the Agency, its officers and employees harmless from, all claims or
suits for, and damages to, property and injuries to persons, including
accidental death (including attorneys fees and costs), which may be caused by
the Developer or their agent's, employee's, contractor's or invitee's respective
activities under this Agreement, whether such activities or performance thereof
be by the Developer or anyone directly or indirectly employed or contracted by
the Developer and whether such damage shall accrue or be discovered before or
after termination of this Agreement. The Developer shall take out and maintain
during the life of this Agreement, a commercial general liability policy in the
amount of One Million Dollars ($1,000,000) aggregate limit and One Million
Dollars ($1,000,000) per occurrence limit policy, and shall protect the
Developer, City Agency from claims for such damages.

         The Developer shall furnish a certificate of insurance countersigned by
an authorized agent of the insurance carrier form of the insurance carrier
setting forth the general provision of the insurance coverage verified by an
endorsement to the policy of insurance as stated in the certificate. This
countersigned certificate and policy endorsement shall name the City and the
Agency and their respective offices, agents, and employees as additional
insureds under the policy. The certificate by the insurance carrier and policy
endorsement shall contain a state of obligation on the part of the carrier to
notify City and the Agency of any material change, cancellation or termination
of

                                      -18-
<PAGE>

coverage at least thirty (30) days in advance of the effective date of any such
material change, cancellation or termination. Coverage provided hereunder by the
Developer shall be primary insurance and not contributing with any insurance
maintained by the Agency or City, and the policy shall contain such an
endorsement. The insurance policy shall contain a waiver of subrogation for the
benefit of the City and the Agency. The required certificate and policy
endorsement shall be furnished by the Developer at the time set forth for
completion of all Conditions Precedent to the Conveyance in the Schedule of
Performance (Attachment No. 4).

         The Developer shall also furnish or cause to be furnished to the Agency
evidence satisfactory to the Agency that any contractor with whom it has
contracted for the performance of work on the Site or otherwise pursuant to this
Agreement carries workers compensation insurance as required by law. The
obligations set forth in this Section shall remain in effect only until a
Release of Construction Covenants has been furnished for the Developer
Improvements as hereafter provided in Section 3.19 of this Agreement.

         [Section 3.07] City and Other Governmental Agency Permits. Before
commencement of construction or development of any buildings, structures or
other works of improvement upon the Site, the Developer shall secure or cause to
be secured all permits which may be required by the City or any other
governmental agency affected by such construction, development or work. It is
understood that the Developer's obligation is to pay all necessary fees that
become due prior to the issuance of the Release of Construction Covenants with
the exception of up to $217,797 in Traffic Impact, Traffic Signalization and
Drainage Impact Fees otherwise levied upon the new 200,000 square foot
building. The Developer shall timely submit to the City final drawings with
final corrections to obtain a building permit. The Agency shall assist the
Developer where possible to expedite the processing of required permits. As part
of the acquisition of the Site, Developer shall purchase for One Dollar ($1.00),
water credits from the Agency valued at up to $70,501 to be submitted with the
Purchase Price prior to the close of escrow.

         [Section 3.08] Rights of Access. For the purpose of assuring compliance
with this Agreement, representatives of the Agency and the City shall have the
right of access to the Site, without charges or fees, at any time during the
period of construction for the purposes of this Agreement, including, but not
limited to, the inspection of the work being performed in constructing the
Developer Improvements, so long as they comply with all safety rules. Such
representatives of the Agency or of the City shall be those who are so
identified in writing by the Executive Director of the Agency. The Agency shall
hold the Developer harmless from any bodily injury or related damages arising
out of the activities of the Agency and the City as referred to in this Section
3.08.

                                      -19-
<PAGE>

         [Section 3.09] Local, State and Federal Laws. The Developer shall carry
out the construction of the Developer Improvements in conformity with all
applicable laws, including all applicable federal and state labor standards,
provided, however, Developer and its contractors, successors, assigns,
transferees, and lessees are not waiving their rights to contest any such laws,
rules or standards.

         [Section 3.10] Anti-discrimination During Construction. The Developer,
for itself and its successors and assigns, agrees in the construction of the
Developer Improvements provided for in this Agreement, the Developer will not
discriminate against an employee or applicant for employment because of race,
color, creed, religion, age, sex, marital status, handicap, national origin or
ancestry.

         [Section 3.11] Taxes, Assessments, Encumbrances and Liens. The
Developer shall pay when due all ad valorem taxes, assessments and other taxes
on the Site which are levied subsequent to the Conveyance. Prior to issuance of
a Release of Construction Covenants pursuant to Section 3.19, the Developer
shall not place or allow to be placed on the Site or any part thereof any
mortgage, trust deed, encumbrance or lien other than as expressly allowed by
this Agreement. The Developer shall remove or have removed any levy or
attachment made on the Site or any part thereof, or assure the satisfaction
thereof within a reasonable time but in any event prior to a sale thereunder.
Nothing herein contained shall be deemed to prohibit the Developer from
contesting the validity or amounts of any tax assessment, encumbrance or lien,
nor to limit the remedies available to the Developer with respect thereto.

         [Section 3.12] Prohibition Against Transfer of the Site, the Buildings
or Structures Thereon and Assignment of Agreement. Prior to the issuance by the
Agency of a Release of Construction Covenants (pursuant to Section 3.19 of this
Agreement) as to any building or structure, the Developer shall not, except as
permitted by this Agreement, without prior written approval by Agency, make any
total or partial sale, transfer, conveyance, assignment or lease of the whole or
any part of the Site or of buildings or structures on the Site. This prohibition
shall not be deemed to prevent the granting of temporary or permanent easements
or permits to facilitate the development of the Site prohibit or restrict the
leasing of any part or parts of a building or a parcel where the transfer of a
parcel is to the proposed operator or end user of the parcel in order to allow
construction of that portion of the Project for ground lease or sale by
Developer, or to prohibit the leasing of existing improvements on the Site.
Notice of any allowable transfer under this Section 3.12 shall be sent to the
Agency's Executive Director.

                                      -20-
<PAGE>

         [Section. 3.13] No Encumbrances Except Mortgages, Deeds of Trust, Sale
and Lease-Back for Development. Mortgages, deeds of trust and sales and leases
back are to be permitted before completion of the construction of the Developer
Improvements, but only for the purpose of securing loans of funds to be used for
the construction of improvements on the Site, and any other purposes necessary
and appropriate in connection with development under this Agreement. The
Developer shall notify the Agency in advance of any mortgage, deed of trust or
sale and lease-back financing, if the Developer proposes to enter into the same
before completion of the construction of all of the improvements on the Site.
The words "mortgage" and "trust deed" as used hereinafter shall include sale and
lease-back. The Developer shall not enter into any such conveyance for financing
without the prior written approval of the Agency's Executive Director, or a
designated Agency representative, which approval Agency agrees to give if any
such conveyance for financing is for the purpose of construction or take-our
financing for the Project which is the subject of this Agreement and if it is
given to a responsible financial or lending institution or other reasonably
acceptable person or entity (the "Lender") . The approval from the Agency may be
based on evidence, other than the financing documents, such as a letter from the
Lender that certifies that the financing documents limit the use of the loan
proceeds, including all costs of financing, to the purposes of constructing the
Developer Improvements or portions thereof pursuant to the Scope of Development
(Attachment No. 3) and for no other purpose.

         [Section 3.14] Holder Not Obligated to Construct Improvements. The
holder of any mortgage or deed of trust authorized by this Agreement shall not
be obligated by the provisions of this Agreement to construct or complete the
Developer Improvements or to guarantee such construction or completion; nor
shall any covenant or any other provision in the deed for the Site be construed
so to obligate such holder. Nothing in this Agreement shall be deemed to
construe, permit or authorize any such holder to devote the Site to any uses or
to construct any improvements thereon, other than those uses or improvements
provided for or authorized by this Agreement.

         [Section 3.15] Notice of Default to Mortgagee or Deed of Trust Holders;
Right to Cure. With respect to any mortgage or deed of trust granted by
Developer as provided herein, whenever the Agency shall deliver any notice or
demand to Developer with respect to any breach or default by the Developer in
connection to this Agreement, the Agency shall at the same time deliver to each
holder of record of any mortgage or deed of trust authorized by this Agreement a
copy of such notice or demand. Each such holder shall (insofar as the rights of
the Agency are concerned) have the right, at its option, within sixty (60) days
after the receipt of the notice, to cure or remedy or commence to cure or remedy
any such default and to add the cost thereof to the mortgage debt and the lien
of its mortgage. Nothing contained in this Agreement

                                      -21-
<PAGE>

shall be deemed to permit or authorize such holder to undertake continue the
construction or completion of the Developer Improvements (beyond the extent
necessary to conserve or protect the Developer Improvements or construction
already made) with first having expressly assumed the Developer's obligations,
as applicable, to the Agency by written agreement satisfactory to the Agency.
The holder, in that event, must agree to complete, in the manner provided in
this Agreement, the improvements to which lien or title of such holder relates,
and submit evidence satisfactory to the Agency that it has the qualifications
and financial responsibility necessary to perform such obligation. Any such
holder properly completing such improvement shall be entitled, upon compliance
with the requirements of Section 3.19 of this Agreement, to a Release of
Construction Covenants (as herein defined). In the event that the such holder
wishes to transfer its foreclosed interest to another developer, the Agency
shall have the right to reasonably approve the proposed transferee.

         [Section 3.16] Failure of Holder to Complete Improvements. In case
where, sixty (60) days after default by the Developer in completion of
construction of Developer Improvements under the Agreement, the holder of any
mortgage or deed of trust creating a lien or encumbrance upon the Site or any
part thereof has not exercised the option to construct, or if it has exercised
the option and has not proceeded diligently with construction, the Agency may
purchase the mortgage or deed of trust by payment the holder of the amount of
the unpaid mortgage or deed of trust debt, including principal and interest and
all other sums secured by the mortgage or deed of trust. If the ownership of the
site or any part thereof has vested in the holder, the Agency, if it so desires,
shall be entitled to a conveyance from the holder to Agency upon payment to the
holder of an amount equal to the sum of the following:

         1.       The unpaid mortgage or deed of trust debt at the time title
                  became vested in the holder (less all appropriate credits,
                  including those resulting from collection application of
                  rentals and other income received during foreclosure
                  proceedings);

         2.       All expenses with respect to foreclosure;

         3.       The net expense, if any (exclusive of general overhead
                  incurred by the holder as a direct result of the subsequent
                  management of the Site or part thereof;

         4.       The costs of any improvements made by such holder;

         5.       An amount equivalent to the interest that would have accrued
                  on the aggregate of such amounts had all such amounts become
                  part of the mortgage or deed of trust debt and such debt had
                  continued in existence to the date of payment by the Agency.

                                      -22-
<PAGE>

         [Section 3.17] Right of the Agency to Cure Mortgage or Deed of Trust
Default. In the event of a mortgage or deed of trust default or breach by the
Developer prior to the completion of the construction of the Developer
Improvements on the Site or any part thereof and the holder of any mortgage or
deed of trust has not exercised its option to construct, the Agency may cure the
default. In such event, the Agency shall be entitled to a lien upon the Site to
the extent that such costs and disbursements are incurred by the Agency in
curing such default. Any such lien shall be subject to the construction
financing mortgages or deeds of trust.

         [Section 3.18] Right of the Agency to Satisfy Other Liens on the Site
After Title Passes. After the Conveyance, but prior to the completion of
Developer Improvements, and after the Developer has had written notice and has
failed after a reasonable time, but in any event not less than thirty (30) days,
to challenge, cure, adequately bond against, or satisfy any liens or
encumbrances on its respective portions of the Site which are not otherwise
permitted under this Agreement, the Agency shall have the right but no
obligation to satisfy any such liens or encumbrances.

         [Section 3.19] Release of Construction Covenants. Promptly after
completion of all construction and development required by this Agreement to be
completed by the Developer upon the Site in conformity with this Agreement, the
Agency shall furnish the Developer, upon written request, a Release of
Construction Covenants substantially in the form of Attachment No. 6 hereto (the
"Release of Construction Covenants"). The Agency shall not unreasonably withhold
any such Release of Construction Covenants. The Release of Construction
Covenants shall be a conclusive determination of satisfactory completion of the
construction required by this Agreement upon the Site and the Release of
Construction Covenants shall so state.

         After recordation of the Release of Construction Covenants, any party
then owning or thereafter purchasing, leasing or otherwise acquiring any
interest therein shall not (because of such ownership, purchase, lease or
acquisition), incur any obligation or liability under this Agreement except that
such party shall be bound by (i) any covenants contained in the Agency Grant
Deed (Attachment No. 5), lease, mortgage, deed of trust, contract, other
instrument or transfer, or other documents establishing covenants on the Site in
accordance with the provisions of Section 4.01 of this Agreement, (ii) the
provisions of Section 7.03 of this Agreement, which shall be applicable
according to its terms, and (iii) any terms, covenants or conditions in this
Agreement that pursuant to the terms of this Agreement survive after the close
of Escrow, the completion of the Conveyance, or the issuance of the Release of
Construction Covenants.

                                      -23-
<PAGE>
         A Release of Construction Covenants shall be in such form as to permit
it to be recorded in the Recorder's Office of Los Angeles County.

         If the Agency refuses or fails to furnish a Release of Construction
Covenants for the Site, or part thereof, after written request from the
Developer, the Agency shall, within thirty (30) days of written request
therefor, provide the Developer with a written statement of the reasons the
Agency refused or failed to furnish a Release of Construction Covenants. The
statement shall also contain Agency's opinion of the action of the Developer
must take to obtain a Release of Construction Covenants. If the reason for such
refusal is confined to the immediate availability of specific items of materials
for landscaping, the Agency will issue its Release of Construction Covenants
upon the posting of a bond by the Developer with the Agency in an amount
representing a fair value of the work not completed. If the Developer submits
its request for a Release Construction Covenants by certified mail to the
Agency's Executive Director and the request refers to the 30-day time period for
Agency to respond or the Release of Construction Covenants would be "deemed
approved" then, in the event the Agency has failed provide such written
statement, within said thirty (30) day period, the Release of Construction
Covenants shall be deemed approved and issued pursuant to this Section (Section
3.19), and the restrictions regarding the change in ownership, management and
control of the Developer shall terminate and be of no further force and effect
pursuant to Section 1.05 of this Agreement.

         Such Release of Construction Covenants shall not constitute evidence of
compliance with or satisfaction of any obligation the Developer to any holder of
any mortgage, or any insurer of mortgage securing money loaned to finance the
improvements, or part thereof. Such Release of Construction Covenants is not a
notice of completion as referred to in the California Civil Code Section 3093.

                               IV. USE OF THE SITE

         [Section 4.01] Uses. The Developer covenants and agrees for itself, its
successors, its assigns, and every successor in interest to the Site or any part
thereof, that during construction and thereafter, the Developer, such successors
and such assignees shall devote the Site to the uses specified in the
Redevelopment Plan, the Agency Grant Deed (Attachment No. 5), and this Section
4.01 for the periods of time specified therein. The foregoing covenant shall
remain in effect for the life of the Redevelopment Plan and shall run with the
land; and

         The Developer covenants to carry out all of its undertaking pursuant to
this Agreement, including, without limitation, the construction and operation of
a recreational vehicle manufacturing

                                      -24-
<PAGE>

facility, and to establish and maintain the business within the City of
Lancaster.

         The Developer covenants by and for itself and any successors in
interest that there shall be no discrimination against or segregation of any
person or group of persons on account of race, color, creed, religion, sex,
marital status, disability, national origin or ancestry in the sale, lease,
sublease, transfer, use, occupancy, tenure or enjoyment of the Site, nor shall
the Developer itself or any person claiming under or through them establish or
permit any such practice or practices of discrimination or segregation with
reference to the selection, location, number, use or occupancy of tenants,
lessees, subtenants, subleases or vendees of the Site. The foregoing covenants
shall run with the land in perpetuity.

         The Developer shall refrain from restricting the rental, sale or lease
of the Site on the basis of race, color, creed, religion, sex, marital status,
disability, national origin or ancestry of any person. All such deeds, leases or
contracts shall contain or be subject to substantially the following
nondiscrimination or nonsegregation clauses:

         1.       In deeds: "The grantee herein covenants by and for himself or
                  herself, his or her heirs, executors, administrators and
                  assigns, and all persons claiming under or through them, that
                  there shall be no discrimination against or segregation of,
                  any person or group of persons on account of race, color,
                  creed, religion, sex, marital status, disability, national
                  origin or ancestry in the sale, lease, sublease, transfer,
                  use, occupancy, tenure or enjoyment of the land herein
                  conveyed, nor shall the grantee himself or herself or any
                  person claiming under or through him or her, establish or
                  permit any such practice or practices of discrimination or
                  segregation with reference to the selection, location, number,
                  use or occupancy of tenants, lessees, subtenants, sublessees
                  or vendees in the land herein conveyed. The foregoing
                  covenants shall run with the land in perpetuity."

         2.       In leases: "The lessee herein covenants by and for himself or
                  herself, his or her heirs, executors, administrators and
                  assigns, and all persons claiming under or through him or her,
                  and this lease is made and accepted upon and subject to the
                  following conditions:

                           "There shall be no discrimination against or
                  segregation of any person or group of persons on account of
                  race, color, creed, religion, sex, marital status, disability,
                  ancestry or national origin in the leasing, subleasing,
                  transferring, use, occupancy, tenure or enjoyment of the
                  premises herein leased nor shall the lessee himself or
                  herself, or any person claiming under

                                      -25-
<PAGE>
                  or through him or her, establish or permit any such practice
                  or practices of discrimination or segregation with reference
                  to the selection, location, number, use or occupancy of
                  tenants, lessees, sublessees, subtenants or vendees in the
                  premises herein leased. "

         3.       In contracts: "There shall be no discrimination again or
                  segregation of, any person, or group of persons or account of
                  race, color, creed, religion, sex, marital status, disability,
                  ancestry or national origin, in the sale, lease, sublease,
                  transfer, use, occupancy, tenure or enjoyment of the premises,
                  nor shall the transferred himself or herself or any person
                  claiming under or through him or her, establish or permit any
                  such practice or practices of discrimination or segregation
                  with reference to the selection, location, number, use or
                  occupancy of tenants, lessees, subtenants, subleases or
                  vendees of the premises."

         [Section 4.02] Effect and Duration of Covenants. After issuance of a
Release of Construction Covenants with regard to the Site, all of the terms,
covenants, agreements or conditions set forth this Agreement shall cease and
terminate excepting only the following provisions which shall survive as follows
in accordance with their provisions.

         (a)      Section 4.03 (Maintenance) shall remain in effect until such
                  time that the termination date of the Redevelopment Plan, as
                  amended from time to time.

         (b)      Section 2.12 (relating to Environmental Matters) and Section
                  4.01 (relating to Anti-discrimination) shall remain in effect
                  in perpetuity.

         (c)      Sections 2.01 and 4.01 (relating to Uses) shall be enforceable
                  according to their terms.

         (d)      Article VI (relating to Defaults and Remedies) shall remain in
                  effect to the extent necessary to enforce other provisions of
                  this Agreement.

         [Section 4.03] Maintenance of the Site. The Developer shall maintain
all of the right-of-way Easements, Improvements, Developer Improvements, and the
landscaping on the Site, without exception or limitation, and shall keep the
Site free from any accumulation of debris or waste materials (the
"Maintenance").

         If, at any time, the Developer fails to perform any Maintenance, and
said condition is not corrected after expiration of thirty (30) days from the
date of written notice from the Agency, either the Agency or the City may
perform the necessary Maintenance and Developer shall pay such costs as are
reasonably incurred for such Maintenance.

                                      -26-
<PAGE>

         Issuance of a Release of Construction Covenants by the Agency shall not
affect the Developer's obligations under this Section 4.03.

         [Section 4.04] Rights of Access. The Agency, for itself and for the
City and other public agencies, at their sole risk and expense, reserves the
right to enter the Site or any part thereof at all reasonable times for the
purpose of construction, reconstruction, maintenance, repair or service of any
public improvements or public facilities located on the Site. Any such entry
shall be made only after reasonable notice to Developer, and Agency shall
indemnify and hold Developer harmless from any costs, claims, damages or
liabilities pertaining to any entry under this Section 4.04.

         [Section 4.05] Effect of Violation of the Terms and Provisions of this
Agreement After Completion of Construction. The covenants established in this
Agreement and the deeds shall, without regard to technical classification and
designation, be binding for the benefit and in favor of the Agency, its
successors and assigns, as to those covenants which are for its benefit.

         The Agency is deemed the beneficiary of the terms and provisions of
this Agreement and of the covenants running with the land, for and in its own
rights and for the purposes of protecting the interests of the community and
other parties, public or private, in whose favor and for whose benefit this
Agreement and the covenants running with the land have been provided. The
Agreement and the covenants shall run in favor of the Agency, without regard to
whether the Agency has been, remains or is an owner of any land or interest
therein in the Site. The Agency shall have the right, if the Agreement or
covenants are breached, to exercise all rights and remedies, and to maintain any
actions or suits at law or in equity or other proper proceedings to enforce the
curing of such breaches to which it or any other beneficiaries of this Agreement
and covenants may be entitled.

                              V. GENERAL PROVISIONS

         [Section 5.01] Notices, Demands and Communications Among the Parties.
Written notices, demands and communications among the parties shall be
sufficiently given if delivered by hand (and a receipt therefor is obtained or
is refused to be given) or dispatched by registered or certified mail, postage
prepaid, return receipt requested, to the principal offices of the parties. Such
written notices, demands and communications may be sent in the same manner to
such other addresses as a party may from time to time designate by mail as
provided in this Section 5.01. Any written notice, demand or communication shall
be deemed received immediately if delivered by hand and shall be deemed received
on the tenth day from the date it is postmarked if delivered by

                                      -27-
<PAGE>

registered or certified mail.

         [Section 5.02] Conflicts of Interest. No member, official or employee
of the Agency shall have any personal interest, direct or indirect, in this
Agreement, nor shall any member, official or employee participate in any
decision relating to the Agreement which affects his personal interests or the
interests of any corporation, partnership or association in which he is directly
or indirectly interested.

         The Developer warrants, to its own actions, that, it has not paid or
given, and will not pay or give, any third party any money or other
consideration for obtaining this Agreement.

         [Section 5.03] Enforced Delay; Extension of Times of Performance. In
addition to specific provisions of this Agreement, performance by either party
hereunder shall not be deemed to be in default, and all performance and other
dates specified in this Agreement shall be extended, where delays or defaults
are due to: war; insurrection; strikes; lockouts; riots; floods; earthquakes;
fires; casualties; acts of God; acts of the public enemy; epidemics; quarantine
restrictions; freight embargoes; lack of transportation; governmental
restrictions or priority; litigation unusually severe weather; inability to
secure necessary labor, materials or tools; delays of any contractor,
subcontractor or supplier; acts or omissions of the other party; acts or failure
to act of the City or any other public or governmental agency or entity (other
than the acts or failures to act of the Agency which shall not excuse
performance by the Agency); or any other causes beyond the control or without
the fault of the party claiming an extension of time to perform. Notwithstanding
anything to the contrary in this Agreement, an extension of time for any such
cause shall be for the period of the forced delay and shall commence to run from
the time of the commencement of the cause, notice by the party claiming such
extension is sent to the other party within thirty (30) days of the commencement
of the cause. Times of performance under this Agreement may also be extended
writing by the mutual agreement of Agency and Developer.

         The Developer is not entitled pursuant to this Section 5.03 to an
extension of time to perform because of past, present, or future difficulty in
obtaining suitable temporary or permanent financing for the development of the
Site.

         [Section 5.04] Non-liability of Officials and Employees of Agency. No
member, official or employee of the Agency or the City shall be personally
liable to the Developer, or any successor in interest, in the event of any
default or breach by the Agency (or the City) or for any amount which may become
due to the Developer or its respective successors, or on any obligations under
terms of this Agreement.

         During periods of construction on the Site and until such

                                      -28-
<PAGE>

time as the City has issued to the Developer the Release of Construction
Covenants for the construction of improvements on the Site, the Developer agrees
to, and shall, indemnify and hold the Agency and the City harmless from and
against all liability, loss, damage, costs, or expenses (including attorney's
fees and court costs) arising from or as a result of the death of any persons or
any accident or injury, loss, or damage whatsoever caused to any person or to
the property of any person which shall occur on or adjacent to the Site and
which shall be directly or indirectly caused by any acts done thereon or any
errors or omissions of the Developer and its agents, servants, employees, and
contractors.

                            VI. DEFAULTS AND REMEDIES

         [Section 6.01] Defaults-General. Subject to the extensions of time set
forth in Section 5.03, failure or delay by any party to perform any term or
provision of this Agreement constitutes a default under this Agreement. The
party who so fails or delays must immediately commence to cure, correct, or
remedy such failure or delay, and shall complete such cure, correction or remedy
with diligence.

         The injured party shall give written notice of default to the party in
default, specifying the default complained of by the injured party. Except as
required to protect against further damages and except for Sections 3.11 and
3.12 of this Agreement for which actions may be commenced immediately, the
injured party may not institute proceedings against the party in default until
thirty (30) days after giving such notice. Failure or delay in giving such
notice shall not constitute a waiver of any default, nor shall it change the
time of default.

         [Section 6.02] Institution of Legal Actions. In addition to any other
rights or remedies and subject to the restrictions in Section 6.01, either party
may institute legal action to cure, correct or remedy any default, to recover
damages for any default, or to obtain any other remedy consistent with the
purpose of this Agreement. Such legal actions must be instituted in the Superior
Court of the County of Los Angeles, State of California, in an appropriate
municipal court in that county, or in the Federal District Court in the Central
District of California.

         [Section 6.03] Applicable Law. The laws of the State of California
shall govern the interpretation and enforcement of this Agreement.

         [Section 6.04] Acceptance of Service of Process. In the event that any
legal action is commenced by the Developer against the Agency, service of
process on the Agency shall be made by personal service upon the Executive
Director or in such other manner as may be provided by law.

                                      -29-
<PAGE>
         In the event that any legal action is commenced by the Agency against
the Developer, service of process on the Developer shall be made by personal
service upon the Developer or in such other manner as may be provided by law,
and shall be valid whether made within or without the State of California.

         [Section 6.05] Rights and Remedies Are Cumulative. Except as otherwise
expressly stated in this Agreement, the rights and remedies of the parties are
cumulative, and the exercise by either party of one or more of such rights or
remedies shall not preclude the exercise by it, at the same or different times,
of any other rights or remedies for the same default or any other default by the
other party.

         [Section 6.06] Inaction Not a Waiver of Default. Any failures delays by
either party in asserting any of its rights and remedies as to any default shall
not operate as a waiver of any default of any such rights or remedies, or
deprive either such party of its right to institute and maintain any
actions or proceedings which it may deem necessary to protect, assert or enforce
any such rights or remedies.

         [Section 6.07] Remedies and Rights Prior to Conveyance.

                  A.       Default by Agency. Prior to the Conveyance, if Agency
fails to complete any of the Conditions Precedent to the Conveyance which it is
required to complete or commits some other default of this Agreement which is
not cured at the time for close of Escrow and the execution of the Conveyance
pursuant to the Schedule of Performance (Attachment No. 4), the Developer shall
have all rights afforded by law or in equity.

                  B.       Default by Developer. Prior to the Conveyance, the
Developer fails to complete any of the Conditions Precedent the Conveyance which
it is required to complete or commits some other default of this Agreement which
is not cured at the time for the close of Escrow and the execution of the
Conveyance pursuant to the Schedule of Performance (Attachment No. 4), this
Agreement and all rights and obligations thereunder, shall immediately terminate
as of the date of a written notice sent by the Agency the Developer, and neither
the Agency nor the Developer shall have any claim or remedy for damages or other
relief against the other except that in no event shall Developer be relieved of
its obligation to indemnify the Agency as provided in Paragraph E  of Section
2.12 of this Agreement.

         [Section 6.08] Remedies of the Parties for Default After the
Conveyance.

                  A.       Termination and Damages. After the Conveyance, if
either the Developer or the Agency defaults with regard to any of the provisions
of this Agreement, the non-defaulting party shall serve written notice of such
default upon the defaulting party.

                                      -30-
<PAGE>

If the default is not cured by the defaulting party within thirty (30) days
after service of the notice of default, the non-defaulting party may terminate
this Agreement and the defaulting party shall be liable to the other party for
any damages caused by such default. In addition to any other remedies afforded
by this Agreement or by law or in equity, including but not limited to
prosecuting a lawsuit for breach of contract as provided in this Agreement, the
Agency may either (1) complete the Developer Improvements, or (2) retain any and
all City-related application fees, permit and plan check fees, and development
impact fees until the dispute between the parties is resolved. The prevailing
party will be awarded reasonable costs and attorneys fees incurred in connection
with enforcement of its rights under this Agreement.

                  B.       Action for Specific Performance. After the
Conveyance, if either the Developer or the Agency defaults with regard to any of
the provisions of this Agreement, the non-defaulting party shall serve written
notice of such default upon the defaulting party. If the default is not cured by
the defaulting party within thirty (30) days after service of the notice of
default, the non-defaulting party may at its option institute an action for
specific performance of the terms of this Agreement. The Developer hereby
stipulates that the Agency has a valid and enforceable right to sue for specific
performance of this Agreement and waives all claims that the legal remedy is
adequate. In addition to any other remedies afforded by this Agreement or by law
or in equity, including but not limited to prosecuting a lawsuit for breach of
contract as provided in this Agreement, the Agency may either (1) complete the
Developer Improvements, or (2) retain any and all fees until the dispute between
the parties is resolved. Under all circumstances, the Agency shall be entitled
to the Costs actually incurred by the Agency.

                  C.       Reentry and Revesting of Title in the Agency After
Conveyance. The Agency has the additional right, at its option, to reenter and
take possession of the Site, with all improvements thereon, and terminate and
revest in the Agency the estate conveyed to the Developer, if after conveyance
of title and prior to the end of the Determination Period as provided in Section
2.14 of this Agreement, the Developer (or its successors in interest) shall;

         1.       Fail to start the construction of the Developer Improvements
                  as required by this Agreement for a period of forty-five (45)
                  days after written notice thereof from the Agency; or

         2.       Abandon or substantially suspend construction of the Developer
                  Improvements required by this Agreement for a period of
                  forty-five (45) days after written notice thereof from the
                  Agency; or

                                      -31-
<PAGE>

         3.       Transfer or suffer any involuntary transfer of the or any part
                  thereof in violation of this Agreement

         4.       Notify the Agency of the Developer's determination the
                  Developer desires to transfer the Site to the pursuant to
                  Section 2.14.

         Such right to reenter, terminate and revest shall be subject to and be
limited by and shall not defeat, render invalid or limit;

                  (a)      any mortgage or deed of trust permitted by the
                           Agreement; or

                  (b)      any rights or interests provided in this Agreement
                           for the protection of the holders of such mortgages
                           or deeds of trust.

         Upon the revesting in the Agency of title to the site as provided in
this Section 6.08-C, the Agency shall, pursuant to its responsibilities under
state law, use its best efforts to resell the Site as soon and in such manner as
the Agency shall find feasible and consistent with the objectives of such law
and Redevelopment Plan, as it may be amended, to a qualified and responsible
party or parties (as determined by the Agency) who will assume the obligation of
making or completing the Improvements, or such other improvements in their stead
as shall be satisfactory to the Agency and in accordance with the uses specified
for such Site or part thereof in the Redevelopment Plan. Upon such resale of the
Site, the proceeds thereof shall be applied:

                  (a)      First, to pay on all costs and expenses incurred by
                           the Agency, including, but not limited to, any
                           expenditures by the Agency or the City in connection
                           with the recapture, management and resale of the Site
                           or part thereof (but less any income derived by the
                           Agency from the Site or thereof in connection with
                           such management); all taxes, assessments, and water
                           or sewer charges with respect to the Site or part
                           thereof which the Developer has not paid (or, in the
                           event the site is exempt from taxation or assessment
                           of such charges during the period of ownership
                           thereof by the Agency, an amount, if paid, equal to
                           such taxes, assessments, or charges as would have
                           been payable if the Site were not so exempt); any
                           payments made or necessary to be made to discharge
                           any encumbrances or liens existing on the site or
                           part thereof at the time of revesting of title
                           thereto in the Agency or to discharge or prevent from
                           attaching or being made any subsequent encumbrances
                           or liens due to obligations, defaults or acts of the
                           Developer, its successors or

                                      -32-
<PAGE>

                           transferees; any expenditures made or obligations
                           incurred with respect to the making or completion of
                           the improvements or any part thereof on the Site, or
                           part thereof; and in the event additional proceeds
                           are thereafter available, then

                  (b)      Second, to reimburse the Developer, its successor or
                           transferee, up to the amount equal to the sum of (i)
                           the Purchase Price paid to the Agency by the
                           Developer for the Site, (ii) the costs incurred for
                           the development of the Site and for the improvements
                           existing on the Site at the time of the re-entry and
                           repossession, less (iii) any gains or proceeds
                           withdrawn or made by the Developer as a result of the
                           sale of any portion of the Site or the improvements
                           thereon.

         Any balance remaining after such reimbursements shall be retained by
the Agency as its property.

         The rights established in this Section 6.08 are not intended to be
exclusive of any other right, power or remedy, but each and every such right,
power, and remedy shall be cumulative and concurrent and shall be in addition to
any other right, power and remedy authorized herein or now or hereafter existing
at law or in equity. These rights are to be interpreted in light of the fact
that the Agency will convey the Site to the Developer for development, and not
for speculation in undeveloped land.

                            VIII.SPECIAL PROVISIONS

         [Section 7.01] Submission of Documents to the Agency for Approval.
Whenever this Agreement requires the Developer to submit plans, drawings or
other documents to the City for approval, said plans, drawings or other
documents shall be accompanied by a letter of transmittal to the Agency stating
that they are being submitted and will be deemed approved unless rejected by the
City within the stated time. If there is no time specified herein for such City
or Agency action, the Developer may submit a letter requiring Agency approval or
rejection of documents within thirty (30) days after submission of said plans.

         [Section 7.02] Real Estate Commission. Both the Agency and the
Developer represent to the other party that it has not engaged the services of
any finder or broker and that it is not liable for any real estate commissions,
broker's fees, or finder's fees which may accrue by means of the acquisition of
the Site, and agrees to hold harmless the other party from such commissions or
fees as are alleged to be due from the party making such representations.

         [Section 7.03] Successors In Interest. The terms, covenants, conditions
and restrictions of this Agreement shall extend to and

                                      -33-
<PAGE>

shall be binding upon and inure to the benefit of the heirs, executors,
administrators, successors and assigns of the Developer.

         Upon the termination of the restrictions imposed by Section 1.05 of
this Agreement, which terminate upon the issuance by the Agency of a Release of
Construction Covenants, all of the terms, covenants, conditions and restrictions
of this Agreement which do not terminate upon the issuance by the Agency of the
Release of Construction Covenants for the entire Site shall remain in effect
pursuant to their terms.

         [Section 7.04] Amendments to this Agreement. Developer and Agency agree
to mutually consider reasonable requests for amendments to this Agreement which
may be made by lending institutions, or Agency's Counsel or financial
consultants, provided said requests are consistent with this Agreement and would
not substantially alter the basic business terms included herein.

         [Section 7.05] Project Sign. Developer agrees to construct, erect, and
maintain upon the Site during construction, through the issuance of a Release of
Construction Covenants, a Project sign which identifies the Project as an
Agency assisted activity pursuant to the Sign Program which is attached hereto
as Attachment No. 8 and incorporated herein by this reference.

         [Section 7.06] Ground Breakings and Grand Openings - Coordination with
Agency Staff. To insure proper protocol and recognition of Agency Board/City
Council members, the Developer shall cooperate with Agency/City staff in the
organization of any project-related ground breakings, grand openings or any
other such inaugural events/ceremonies sponsored by the Developer celebrating
the development which is the subject of this Agreement. At least two weeks prior
to any such event, the Developer shall provide Agency/City with the completed
Event Information Form (Attachment No.9).

         [Section 7.07] Developer Requested Amendments. All amendments requested
by Developer shall be prepared and processed at Developer's sole expense. Before
Agency commences any work on such an amendment, Developer shall deposit with the
Agency an amount equal to the Agency's estimate of expenses to be incurred in
connection with such an amendment. Developer shall make additional deposits as
requested from time to time by the Agency. In the event Developer fails to make
any requested deposit, Agency shall cease work on such amendment until all
deposits have been made.

         [Section 7.08] Administration. This Agreement shall be administered and
executed by the Agency's Executive Director, or his designated representative,
following approval of this Agreement by the Agency. The Agency shall maintain
authority of this Agreement through the Executive Director (or his authorized

                                      -34-
<PAGE>

representative). The Executive Director shall have the authority to issue
interpretations, waive provisions and enter into amendments of this Agreement on
behalf of the Agency so long as such actions do not substantially change the
uses or development permitted on the Site, or add to the costs to the Agency as
specified herein as agreed to by the Agency Board, and such amendments may
include extensions in time specified in the Schedule of Performance. All other
waivers or amendments shall require the written consent of the Agency Board.

                         VIII. ENTIRE AGREEMENT, WAIVERS

         [Section 8.01] Entire Agreement, Waivers. This Agreement is executed in
three (3) duplicate originals, each of which is deemed to be an original. This
Agreement includes pages 1 through 36 and Attachments 1 through 12, which
constitute the entire understanding and agreement of the parties.

         This Agreement integrates all of the terms and conditions mentioned
herein or incidental hereto, and supersedes all negotiations or previous
agreements between the parties or their predecessors in interest with respect to
all or any part of the subject matter hereof.

         All waivers of the provisions of this Agreement must be in writing
signed by the appropriate authorities of the Agency and the Developer, and all
amendments hereto must be in writing signed by the appropriate authorities of
the Agency and the Developer.

         In any circumstance were under this Agreement either party is required
to approve or disapprove any matter, approval shall not be unreasonably
withheld.

              IX. ACCEPTANCE OF AGREEMENT BY AGENCY AND RECORDATION

         [Section 9.01] Time for Acceptance of Agreement by the Agency. This
Agreement, when executed by the Developer and delivered to the Agency, must be
authorized, executed and delivered by the Agency on or before thirty (30) days
after signing and delivery of this Agreement by Developer or this Agreement
shall be void, except to the extent that the Developer shall consent in writing
to a further extension of time for the authorization, execution and delivery of
this Agreement. The date of this Agreement shall be the date when it shall have
been signed by the Agency.

         [Section 9.02] Recordation. The parties agree to permit the recordation
of this Agreement or a Memorandum of Agreement, substantially in the form
attached hereto as Attachment No. 7, against the Site in the Office of the
Recorder for the County of Los Angeles, California.

                                      -35-
<PAGE>

         IN WITNESS WHEREOF, the Agency and the Developer have signed this
Agreement on the respective dates set forth below.

                                          "DEVELOPER":

    11-16-98                              By: /s/ WILLIAM J. REX
-----------------                             ----------------------------------
Date of Signature                             WILLIAM J. REX, President
                                              Rexhall Industries, Inc.

                                          "AGENCY":
                                          LANCASTER REDEVELOPMENT AGENCY
                                          a public body corporate and politic.

    12/15/98                              By: /s/ JAMES C. GILLEY,
-----------------                             ----------------------------------
Date of Agreement                             JAMES C. GILLEY,
                                              Executive Director

ATTEST:

By: /s/ DONNA M. GRINDEY
    ----------------------------
    DONNA M. GRINDEY, CMC
    Agency Secretary

APPROVED AS TO FORM AND
LEGAL CONTENT:
STRADLING YOCCA CARLSON & RAUTH,
a professional corporation

By: /s/ [ILLEGIBLE]
    ----------------------------
    Agency Counsel

APPROVED AS TO PROGRAM:

By: /s/ [ILLEGIBLE]
    ----------------------------
    Redevelopment Director

                                      -36-
<PAGE>

                       EMPLOYMENT PROGRAM PROMISSORY NOTE

                              Lancaster, California

Note Amount:  $300,000                                         September 5, 2002

         1. FOR VALUE RECEIVED, in accordance with the terms and provision of
the Disposition and Development Agreement the undersigned ("Maker") promises to
pay to the order of the LANCASTER REDEVELOPMENT AGENCY ("Holder"), at 44933
North Fern Avenue, Lancaster, California 93534 or such other place as the Holder
may from time to time designate in writing, the "Note Amount" (as herein
defined), in lawful money of the United States of America, together with
interest and other charges as set forth below, until fully paid.

         2. This Promissory Note is made and delivered pursuant to and in
implementation of the Disposition and Development Agreement by and between the
Holder and the Maker dated December 13, 1998 (the "DDA"), a copy of which is on
file as a public record with the Holder and is incorporated herein by reference.
The DDA provides for the disposition of the property, on behalf of the Marker,
and for the repayment of monies by the Maker to the Holder in the event Maker
fails to perform its obligations under the DDA Section 2.14 - Employment
Incentive Program. The Promissory Note is made to assure performance of the
Maker (the "Developer") pursuant to the DDA (Section 2.14), and to provide
security for the Holder (the "Agency") as to execution of this Promissory Note,
the Holder would not enter into the DDA. Unless definitions of terms are
expressly set out at length herein, each term shall have the same definition as
set forth in the DDA.

         3. The failure of the Maker to timely pay in full when due the "Note
Amount" (as hereinafter defined) shall constitute a default of Maker under the
terms of this Promissory Note. In the event the Maker fails to timely pay in
full when due the Note Amount, any portion which is not timely paid in full
shall accrue interest at the rate of 10 percent (10%) per annum.

         4. Pursuant to Section 2.14 of the DDA, the Maker shall pay to the
Holder an amount equal to $300,000 (the "Note Amount"). The Note Amount shall
either be paid in cash or in Annualized Full-Time Equivalent Employment Units
pursuant to the DDA.
<PAGE>
         5. The Note Amount, together with interest accrued thereon, if
applicable, shall be paid within thirty (30) days of the termination by the
Agency of the DDA pursuant of Article VI (Defaults and Remedies).

         6. Upon payment in full of the Note Amount, or forgiveness of the
Promissory Note, the Holder shall return this Promissory Note to the Maker.

         7. The Maker shall pay reasonable attorneys' fees and costs and
expenses incurred by the Holder hereof in connection with any default or in any
action or other proceeding brought to enforce any of the provisions of this
Promissory Note.

         8. Upon satisfactory compliance of all the terms and conditions of the
Employment Incentive Program (Section 2.14) of the DDA with respect to the
employment requirements, repayment of the full amount of this Promissory Note
shall be forgiven.

         9. In the event that the Developer does not meet the minimum job
requirements as stated in Section 2.14, the Agency is entitled to a refund of
for each job there is a shortfall in the Developer's obligation for a given
year. Any refunds to the Agency will not exceed the offset of the land by the
Agency, and will become payable at the end of the five (5) year period.

                                        REXHALL INDUSTRIES INC., a

                                        By: /s/ William J. Rex
                                            ------------------------------
                                            WILLIAM J. REX, President

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00064-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00064-of-00352.parquet"}]]