Document:

EXHIBIT 4.19

                                  HSBC USA INC.
                                     Issuer

                                       TO

                WELLS FARGO BANK MINNESOTA, NATIONAL ASSOCIATION
                                     Trustee

                                FORM OF INDENTURE

                                 Dated as of [ ]

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

                          SUBORDINATED DEBT SECURITIES

<PAGE>

           Reconciliation and tie between Trust Indenture Act of 1939
                         and Indenture, dated as of [ ]

                  Trust Indenture Act Section                 Indenture Section
                  ---------------------------                 -----------------
ss.310 (a)(1)...............................................  609
       (a)(2)...............................................  609
       (a)(3)...............................................  Not Applicable
       (a)(4)...............................................  Not Applicable
       (a)(5)...............................................  609
       (b)..................................................  608
       .....................................................  610
       (c)..................................................  Not Applicable
ss.311 (a)..................................................  613
       (b)..................................................  613
       (c)..................................................  Not Applicable

ss.312 (a)..................................................  701
                                                              702(a)
       (b)..................................................  702(b)
       (c)..................................................  702(c)
ss.313 (a)..................................................  703
       (b)..................................................  703
       (c)..................................................  703
       (d)..................................................  703
ss.314 (a)..................................................  704
       (b)..................................................  Not Applicable
       (c)(1)...............................................  102
       (c)(2)...............................................  102
       (c)(3)...............................................  Not Applicable
       (d)..................................................  Not Applicable
       (e)..................................................  102
ss.315 (a)..................................................  601(a)
                                                              601(c)
       (b)..................................................  602
                                                              703
       (c)..................................................  601(b)
       (d)..................................................  601(c)
       (d)(1)...............................................  601(a)
       (d)(2)...............................................  601(c)(2)
       (d)(3)...............................................  601(c)(3)
       (e)..................................................  514
ss.316 (a)..................................................  101
       (a)(1)(A)............................................  502
                                                              512
       (a)(1)(B)............................................  513
       (a)(2)...............................................  Not Applicable
       (b)..................................................  508
       (c)..................................................  508
ss.317 (a)(1)...............................................  503
       (a)(2)...............................................  504
       (b)..................................................  1203
ss.318 (a)..................................................  106
---------------
Note: This reconciliation and tie shall not for any purpose, be deemed to be
a part of the Indenture.

<PAGE>

                                TABLE OF CONTENTS

                                                                          Page
                                                                          ----

PARTIES......................................................................7
RECITALS.....................................................................7

                                    ARTICLE I

             DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

SECTION 101. DEFINITIONS.....................................................7
   Act.......................................................................8
   Affiliate.................................................................8
   Authenticating Agent......................................................8
   Bank......................................................................8
   Board of Directors........................................................8
   Board Resolution..........................................................8
   Business Day..............................................................8
   Code......................................................................8
   Commission................................................................8
   Company...................................................................8
   Company Request and Company Order.........................................8
   Corporate Trust Office....................................................9
   corporation...............................................................9
   Debt Securities...........................................................9
   Default...................................................................9
   Defaulted Interest........................................................9
   Deferred Interest Payment Date............................................9
   Deferred Stated Maturity..................................................9
   Depositary................................................................9
   Discharged................................................................9
   Discount Security.........................................................9
   Dollar or $...............................................................9
   Event of Default..........................................................9
   Federal Reserve Board.....................................................9
   Financial Services Authority.............................................10
   Floating Rate Security...................................................10
   Global Security..........................................................10
   Holder...................................................................10
   Indebtedness for Money Borrowed..........................................10
   Indebtedness Ranking Junior to the Debt Securities.......................10
   Indebtedness Ranking on a Parity with the Debt Securities................11
   Indenture................................................................11
   Indexed Security.........................................................11
   Interest.................................................................11
   Interest Payment Date....................................................11
   Maturity.................................................................12
   Officers' Certificate....................................................12
   Opinion of Counsel.......................................................12
   Outstanding..............................................................12
   Parent Company...........................................................13
   Paying Agent.............................................................13
   Person...................................................................13
   Place of Payment.........................................................13
   Predecessor Security.....................................................13
   Redemption Date..........................................................13
   Redemption Price.........................................................13
   Registered Holder........................................................14
   Registered Security......................................................14
   Regular Record Date......................................................14
   Repayment Date...........................................................14
   Responsible Officer......................................................14
   Security Register and Security Registrar.................................14
   Senior Indebtedness......................................................14
   Special Record Date......................................................14
   Stated Maturity..........................................................14
   Subsidiary; voting stock.................................................14
   Trust Indenture Act or TIA...............................................15
   Trustee..................................................................15
   U.S. Government Obligations..............................................15
   United States............................................................15
SECTION 102. COMPLIANCE CERTIFICATES AND OPINIONS...........................15
            -
SECTION 103. FORM OF DOCUMENTS DELIVERED TO TRUSTEE.........................15
SECTION 104. NOTICES, ETC. TO TRUSTEE AND COMPANY...........................16
SECTION 105. NOTICE TO HOLDERS; WAIVER......................................16
SECTION 106. CONFLICT WITH TRUST INDENTURE ACT..............................17
SECTION 107. EFFECT OF HEADINGS AND TABLE OF CONTENTS.......................17
SECTION 108. SUCCESSORS AND ASSIGNS.........................................17
SECTION 109. SEPARABILITY CLAUSE............................................17
SECTION 110. BENEFITS OF INDENTURE..........................................17
SECTION 111. GOVERNING LAW..................................................17
SECTION 112. LEGAL HOLIDAYS.................................................17
SECTION 113. NO SECURITY INTEREST CREATED...................................18
SECTION 114. LIMITATION OF INDIVIDUAL LIABILITY.............................18

                                   ARTICLE II

                               DEBT SECURITY FORMS

SECTION 201. FORMS GENERALLY................................................18
SECTION 202. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION................19
SECTION 203. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION
             BY AN AUTHENTICATING AGENT.....................................19
SECTION 204. SECURITIES ISSUABLE IN GLOBAL FORM.............................19

                                   ARTICLE III

                               THE DEBT SECURITIES

SECTION 301. AMOUNT UNLIMITED; ISSUABLE IN SERIES...........................20
SECTION 302. DENOMINATIONS..................................................22
SECTION 303. EXECUTION, AUTHENTICATION, DELIVERY AND DATING.................22
SECTION 304. TEMPORARY DEBT SECURITIES......................................25
SECTION 305. REGISTRATION, TRANSFER AND EXCHANGE............................25
SECTION 306. MUTILATED, DESTROYED, LOST AND STOLEN DEBT SECURITIES..........28
SECTION 307. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED.................29
SECTION 308. CANCELLATION...................................................30
SECTION 309. COMPUTATION OF INTEREST........................................30
SECTION 310.  CUSIP NUMBERS.................................................30
SECTION 311.  PERSONS DEEMED OWNERS.........................................30

                                   ARTICLE IV

                           SATISFACTION AND DISCHARGE

SECTION 401. SATISFACTION AND DISCHARGE OF INDENTURE........................31
SECTION 402. APPLICATION OF TRUST MONEY.....................................32
SECTION 403. INDEMNITY......................................................32
SECTION 404. SUBORDINATION PROVISIONS INAPPLICABLE..........................32

                                    ARTICLE V

                                    REMEDIES

SECTION 501. EVENTS OF DEFAULT..............................................33
SECTION 502. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.............33
SECTION 503. DEFAULTS; COLLECTION OF INDEBTEDNESS AND
             SUITS FOR ENFORCEMENT BY TRUSTEE...............................34
SECTION 504. TRUSTEE MAY FILE PROOFS OF CLAIM...............................36
SECTION 505. TRUSTEE MAY ENFORCE CLAIMS WITHOUT
             POSSESSION OF DEBT SECURITIES..................................36
SECTION 506. APPLICATION OF MONEY COLLECTED.................................37
SECTION 507. LIMITATION ON SUITS............................................37
SECTION 508. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE
             PRINCIPAL, PREMIUM AND INTEREST................................38
SECTION 509. RESTORATION OF RIGHTS AND REMEDIES.............................38
SECTION 510. RIGHTS AND REMEDIES CUMULATIVE.................................38
SECTION 511. DELAYS OR OMISSION NOT WAIVER..................................38
SECTION 512. CONTROL BY HOLDERS.............................................38
SECTION 513. WAIVER OF PAST DEFAULTS........................................39
SECTION 514. UNDERTAKING FOR COSTS..........................................39
SECTION 515. WAIVER OF STAY OR EXTENSION LAWS...............................39

                                   ARTICLE VI

                                   THE TRUSTEE

SECTION 601. CERTAIN DUTIES AND RESPONSIBILITIES............................40
SECTION 602. NOTICE OF DEFAULTS.............................................41
SECTION 603. CERTAIN RIGHTS OF TRUSTEE......................................41
SECTION 604. NOT RESPONSIBLE FOR RECITALS OR
             ISSUANCE OF DEBT SECURITIES....................................42
SECTION 605. MAY HOLD DEBT SECURITIES.......................................42
SECTION 606. MONEY HELD IN TRUST............................................42
SECTION 607. COMPENSATION AND REIMBURSEMENT.................................43
SECTION 608. DISQUALIFICATION, CONFLICTING INTERESTS........................43
SECTION 609. CORPORATE TRUSTEE REQUIRED, ELIGIBILITY........................44
SECTION 610. RESIGNATION AND REMOVAL, APPOINTMENT OF SUCCESSOR..............44
SECTION 611. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.........................46
SECTION 612. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS....47
SECTION 613. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY..............47
SECTION 614. APPOINTMENT OF AUTHENTICATING AGENT............................47

                                   ARTICLE VII

                HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY

SECTION 701. COMPANY TO FURNISH TRUSTEE NAMES
             AND ADDRESSES OF HOLDERS.......................................49
SECTION 702. PRESERVATION OF INFORMATION;
             COMMUNICATION TO HOLDERS.......................................49
SECTION 703. REPORTS BY TRUSTEE.............................................50
SECTION 704. REPORTS BY COMPANY.............................................50

                                  ARTICLE VIII

                             CONCERNING THE HOLDERS

SECTION 801. ACTS OF HOLDERS................................................51
SECTION 802. PROOF OF OWNERSHIP; PROOF OF
             EXECUTION OF INSTRUMENTS BY HOLDERS............................52
SECTION 803. REVOCATION OF CONSENTS; FUTURE HOLDERS BOUND...................52

                                   ARTICLE IX

                                HOLDERS' MEETINGS

SECTION 901. PURPOSES OF MEETINGS...........................................53
SECTION 902. CALL OF MEETINGS BY TRUSTEE....................................53
SECTION 903. CALL OF MEETINGS BY COMPANY OR HOLDERS.........................53
SECTION 904. QUALIFICATIONS FOR VOTING......................................54
SECTION 905. REGULATIONS....................................................54
SECTION 906. VOTING.........................................................54
SECTION 907. NO DELAY OF RIGHTS BY MEETING..................................55

                                    ARTICLE X

              CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

SECTION 1001. COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS..........55
SECTION 1002. SUCCESSOR CORPORATION SUBSTITUTED.............................55
SECTION 1003. OPINION OF COUNSEL............................................56

                                   ARTICLE XI

                             SUPPLEMENTAL INDENTURES

SECTION 1101. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS............56
SECTION 1102. SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS...............57
SECTION 1103. EXECUTION OF SUPPLEMENTAL INDENTURES..........................58
SECTION 1104. EFFECT OF SUPPLEMENTAL INDENTURES.............................58
SECTION 1105. CONFORMITY WITH TRUST INDENTURE ACT...........................58
SECTION 1106. REFERENCE IN DEBT SECURITIES TO SUPPLEMENTAL INDENTURES.......59
SECTION 1107.  SUBORDINATION UNIMPAIRED.....................................59
SECTION 1108. NOTICE OF SUPPLEMENTAL INDENTURE..............................59

                                   ARTICLE XII

                                    COVENANTS

SECTION 1201. PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST....................59
SECTION 1202. MAINTENANCE OF OFFICE OR AGENCY...............................59
SECTION 1203. MONEY FOR DEBT SECURITIES; PAYMENTS TO BE HELD IN TRUST.......60
SECTION 1204. OFFICERS' CERTIFICATE AS TO DEFAULT...........................61
SECTION 1205. WAIVER OF CERTAIN COVENANTS...................................61

                                  ARTICLE XIII

                          REDEMPTION OF DEBT SECURITIES

SECTION 1301. APPLICABILITY OF ARTICLE......................................61
SECTION 1302.  ELECTION TO REDEEM; NOTICE TO TRUSTEE........................61
SECTION 1303. SELECTION BY TRUSTEE OF DEBT SECURITIES TO BE REDEEMED........62
SECTION 1304. NOTICE OF REDEMPTION..........................................62
SECTION 1305. DEPOSIT OF REDEMPTION PRICE...................................63
SECTION 1306. DEBT SECURITIES PAYABLE ON REDEMPTION DATE....................63
SECTION 1307. DEBT SECURITIES REDEEMED IN PART..............................63

                                   ARTICLE XIV

                                   DEFEASANCE

SECTION 1401. APPLICABILITY OF ARTICLE......................................64
SECTION 1402. DEFEASANCE UPON DEPOSIT OF MONEYS
              OR U.S. GOVERNMENT OBLIGATIONS................................64
SECTION 1403. DEPOSITED MONEYS AND U.S. GOVERNMENT
              OBLIGATIONS TO BE HELD IN TRUST...............................66
SECTION 1404. REPAYMENT TO COMPANY..........................................66
SECTION 1405. SUBORDINATION PROVISIONS INAPPLICABLE.........................66

                                   ARTICLE XV

                        SUBORDINATION OF DEBT SECURITIES

SECTION 1501.  AGREEMENT TO SUBORDINATE.....................................66
SECTION 1502.  OBLIGATION OF THE COMPANY UNCONDITIONAL AND
               PAYMENT PERMITTED IF NO DEFAULT..............................68
SECTION 1503.  LIMITATIONS ON DUTIES TO HOLDERS OF SENIOR INDEBTEDNESS......69
SECTION 1504.  NOTICE TO TRUSTEE OF FACTS PROHIBITING PAYMENTS..............69
SECTION 1505.  APPLICATION BY TRUSTEE OF MONEYS DEPOSITED WITH IT...........69
SECTION 1506.  SUBROGATION..................................................69
SECTION 1507.  SUBORDINATION RIGHTS NOT IMPAIRED BY ACTS
               OR OMISSIONS OF COMPANY OR HOLDERS OF SENIOR
               INDEBTEDNESS.................................................70
SECTION 1508.  AUTHORIZATION OF TRUSTEE TO EFFECTUATE
               SUBORDINATION OF DEBT SECURITIES.............................70
SECTION 1509.  RIGHT OF TRUSTEE TO HOLD SENIOR INDEBTEDNESS.................70
SECTION 1510.  ARTICLE XV NOT TO PREVENT DEFAULTS (INCLUDING
               EVENTS OF DEFAULT)...........................................70
SECTION 1511.  ARTICLE APPLICABLE TO PAYING AGENTS..........................71
TESTIMONIUM.................................................................72
SIGNATURES AND SEALS........................................................72
ACKNOWLEDGMENTS.............................................................73
EXHIBIT A..................................................................A-1

<PAGE>

INDENTURE (this "Indenture") dated as of [ ], between HSBC USA INC., a Maryland
corporation (the "Company"), having its principal office at 452 Fifth Avenue,
New York, New York 10018, and Wells Fargo Bank Minnesota, National Association,
a national banking association, as Trustee hereunder (the "Trustee"), having its
Corporate Trust Office (as defined below) at 213 Court Street, Suite 703,
Middletown, Connecticut 06457.

                             RECITALS OF THE COMPANY

          The Company deems it necessary to issue from time to time for its
lawful purposes subordinated debt securities (the "Debt Securities") evidencing
its indebtedness, and has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of the Debt Securities,
unlimited as to aggregate principal amount, to bear interest at the rates or
formulas, to mature at such times and to have such other provisions as shall be
fixed therefor and hereinafter provided.

          This Indenture is subject to the provisions of the Trust Indenture Act
of 1939, as amended, that are deemed to be incorporated into this Indenture and
shall, to the extent applicable be governed by such provisions.

          All things necessary have been done to make this Indenture a valid
agreement of the Company, in accordance with its terms.

          NOW, THEREFORE, THIS INDENTURE WITNESSETH:

          For and in consideration of the premises and the purchase of the Debt
Securities by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders of the Debt Securities or of the
Debt Securities of any series, as follows:

                                    ARTICLE I

                        DEFINITIONS AND OTHER PROVISIONS
                             OF GENERAL APPLICATION

          SECTION 101. Definitions. For all purposes of this Indenture, except
as otherwise expressly provided or unless the context otherwise requires:

          (1) the terms defined in this Article I have the meanings assigned to
     them in this Article I, and include the plural as well as the singular;

          (2) all other terms used herein that are defined in the Trust
     Indenture Act, either directly or by reference therein, have the meanings
     assigned to them therein;

          (3) all accounting terms not otherwise defined herein have the
     meanings assigned to them in accordance with generally accepted accounting
     principles, and, except as otherwise herein expressly provided, the term
     "generally accepted accounting principles" with respect to any computation
     required or permitted hereunder shall mean such accounting principles as
     are generally accepted in the United States at the date of such
     computation; and

          (4) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.

          Certain terms, used principally in Article III or Article VI, are
defined in those respective Articles.

          "Act" when used with respect to any Holder has the meaning specified
in Section 801.

          "Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.

          "Authenticating Agent" has the meaning specified in Section 614.

          "Bank" means HSBC Bank USA and any successor or successors thereto.

          "Board of Directors" means either the board of directors of the
Company, or the executive or any other committee of that board duly authorized
to act in respect hereof.

          "Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.

          "Business Day" when used with respect to any Place of Payment
specified pursuant to Section 301 means any day that is not a Saturday, a Sunday
or a legal holiday or a day on which banking institutions or trust companies in
such Place of Payment are authorized or obligated by law to close, except as
otherwise specified pursuant to Section 301.

          "Code" means the Internal Revenue Code of 1986 as in effect on the
date hereof.

          "Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Securities Exchange Act of 1934, or
if at any time after the execution of this instrument such Commission is not
existing and performing the duties now assigned to it under the Trust Indenture
Act, then the body performing such duties on such date.

          "Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor corporation shall have become
such pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor corporation.

          "Company Request" and "Company Order" mean, respectively, a written
request or order signed in the name of the Company by the Chairman, a Vice
Chairman, the President or a Vice President (any reference to a Vice President
of the Company herein shall be deemed to include any Vice President of the
Company whether or not designated by a number or word or words added before or
after the title "Vice President"), and by the Treasurer, an Assistant Treasurer,
the Controller, an Assistant Controller, the Secretary or an Assistant Secretary
of the Company, and delivered to the Trustee.

          "Corporate Trust Office" means the principal corporate trust office of
the Trustee at which at any particular time its corporate trust business shall
be administered, which office at the date of execution of this instrument is
located at 213 Court Street, Suite 703, Middletown, Connecticut 06457.

          The term "corporation" includes corporations, associations, companies
and business trusts.

          "Debt Securities" has the meaning stated in the first recital of this
Indenture and more particularly means any Debt Securities authenticated and
delivered under this Indenture.

          "Default" has the meaning specified in Section 503.

          "Defaulted Interest" has the meaning specified in Section 307.

          "Deferred Interest Payment Date" has the meaning specified within the
definition of "Interest Payment Date" in this Section 101.

          "Deferred Stated Maturity" has the meaning specified in Section
503(3).

          "Depositary" means, with respect to the Debt Securities of any series
issuable in whole or in part in the form of one or more Global Securities, the
Person designated as Depositary by the Company pursuant to Section 301 until a
successor Depositary shall have become such pursuant to the applicable
provisions of this Indenture, and thereafter "Depositary" shall mean or include
each Person who is then a Depositary hereunder, and if at any time there is more
than one such Person, "Depositary" as used with respect to the Debt Securities
of any such series shall mean the Depositary with respect to the Debt Securities
of that series.

          "Discharged" has the meaning specified in Section 1402.

          "Discount Security" means any Debt Security that is issued with
original issue discount" within the meaning of Section 1273(a) of the Code and
the regulations thereunder and any other Debt Security designated by the Company
as issued with original issue discount for United States federal income tax
purposes.

          "Dollar" or "$" means such currency of the United States as at the
time of payment is legal tender for the payment of public and private debts.

          "Event of Default" has the meaning specified in Section 501.

          "Federal Reserve Board" means the Board of Governors of the Federal
Reserve of the United States.

          "Financial Services Authority" means the Financial Services Authority
of the United Kingdom.

          "Floating Rate Security" means a Debt Security that provides for the
payment of interest at a variable rate determined periodically by reference to
an interest determination method specified pursuant to Section 301.

          "Global Security" means a Registered Security evidencing all or part
of a series of Debt Securities issued to the Depositary for such series in
accordance with Section 303 and bearing the legend prescribed in Section 303(c).

          "Holder" means, with respect to a Registered Security, the Registered
Holder.

          "Indebtedness for Money Borrowed" means, when used with respect to the
Company or the Bank, (a) any obligation of, or any obligation guaranteed by, the
Company or the Bank, as the case may be, for the repayment of borrowed money,
whether or not evidenced by bonds, debentures, notes or other written
instruments, (b) similar obligations arising from off-balance sheet guarantees
and direct credit substitutes, (c) obligations associated with derivative
products such as interest rate and foreign exchange rate contracts, commodity
contracts and similar arrangements and (d) any deferred obligations for the
payment of the purchase price of property or assets.

          "Indebtedness Ranking Junior to the Debt Securities" means any (i)
Indebtedness for Money Borrowed of the Company, whether outstanding on the date
of execution of this Indenture or thereafter created, assumed or incurred, which
specifically by its terms ranks junior to and not equally with or prior to the
Debt Securities (and any other Indebtedness Ranking on a Parity with the Debt
Securities) in right of payment upon the happening of any event of the kind
specified in the first sentence of the second paragraph of Section 1501, and
(ii)the 7.85% Junior Subordinated Debentures due October 15, 2032 issued under
an indenture dated October 29, 2002 between the Company and Wells Fargo, as
trustee, in connection with the issuance of the 7.85% Capital Securities issued
by HSBC USA Capital Trust VII and guaranteed by the Company; the 7.808% Junior
Subordinated Debentures due December 15, 2026 issued under an indenture dated
December 15, 1996 between the Company and Deutsche Bank (as successor to Bankers
Trust), as trustee, in connection with the issuance of the 7.808% Capital
Securities issued by HSBC Americas Capital Trust I (renamed HSBC USA Capital
Trust I) and guaranteed by the Company; the 8.38% Junior Subordinated Debentures
due May 15, 2027 issued under an indenture dated May 15, 1997 between the
Company and Deutsche Bank (as successor to Bankers Trust), as trustee, in
connection with the issuance of the 8.38% Capital Securities issued by HSBC
Americas Capital Trust II (renamed HSBC USA Capital Trust II) and guaranteed by
the Company; the 7.75% Junior Subordinated Debentures due 2026 issued under an
indenture dated November 27, 1996 between the Company and Deutsche Bank (as
successor to Bankers Trust), as trustee, in connection with the issuance of the
7.75% Capital Securities issued by Republic New York Capital I (renamed HSBC USA
Capital Trust III) and guaranteed by the Company; and the 7.53% Junior
Subordinated Debentures due 2026 issued under an indenture dated November 27,
1996 between the Company and Deutsche Bank (as successor to Bankers Trust), as
trustee, in connection with the issuance of the 7.53% Capital Securities issued
by Republic New York Capital II (renamed HSBC USA Capital Trust IV) and
guaranteed by the Company.

          "Indebtedness Ranking on a Parity with the Debt Securities" means (i)
Indebtedness for Money Borrowed of the Company, whether outstanding on the date
of execution of the Indenture or thereafter created, assumed or incurred, which
specifically by its terms ranks equally with and not prior to the Debt
Securities in the right of payment upon the happening of any event of the kind
specified in the first sentence of the second paragraph of Section 1501, and
(ii) the Company's Floating Rate Subordinated Notes due December 2009 issued
under an indenture dated December 15, 1984 between the Company and JP Morgan
Chase (formerly known as The Chase Manhattan Bank) as trustee; the Company's
7.00% Subordinated Notes due November 1, 2006 issued under an indenture dated as
of October 24, 1996, as amended by the First Supplemental Indenture dated
December 12, 1996, the Second Supplemental Indenture dated March 1, 1999 and the
Third Supplemental Indenture dated February 25, 2000 between the Company and
Deutsche Bank (as successor to Bankers Trust), as indenture trustee, and (iii)
the Company's 6 5/8 Subordinated Notes due March 1, 2009 issued under the Second
Supplemental Indenture dated March 1, 1999 between the Company and Deutsche Bank
(as successor to Bankers Trust) and (iv) through the Company's purchase of
Republic New York, the 5 7/8% Subordinated Notes due 2008, 7 3/4% Subordinated
Notes due 2009, 9.70% Subordinated Notes due 2009, 7.00% Subordinated Notes due
2011 and 9 1/2% Subordinated Notes due 2014, 9 1/8% - 9.30% Subordinated Notes
due 2021, 7.20% Subordinated Debentures due 2097 and the Company's 2.125%
Perpetual Capital Notes (all of which notes and debentures shall rank on a
parity with the Debt Securities). For the purposes of the indentures listed in
this Section, the Debt Securities shall not constitute Senior Indebtedness as
defined therein.

          The securing of any Indebtedness for Money Borrowed of the Company
otherwise constituting Indebtedness Ranking on a Parity with the Debt Securities
or Indebtedness Ranking Junior to the Debt Securities, as the case may be, shall
not be deemed to prevent such Indebtedness for Money Borrowed from constituting
Indebtedness Ranking on a Parity with the Debt Securities or Indebtedness
Ranking Junior to the Debt Securities.

          "Indenture" means this instrument as originally executed, or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof
and, unless the context otherwise requires, shall include the terms of a
particular series of Debt Securities as established pursuant to Section 301.

          "Indexed Security" means a Debt Security the terms of which provided
that the principal amount thereof payable at Stated Maturity may be more or less
than the principal face amount thereof at original issuance.

          The term "interest" when used with respect to a Discount Security
which by its terms bears interest only after Maturity means interest payable
after Maturity.

          "Interest Payment Date" with respect to any Debt Security means the
Stated Maturity of an installment of interest on such Debt Security; provided,
however, that, unless otherwise provided as contemplated by Section 301 with
respect to the Debt Securities of any series, if the Company does not pay any
installment of interest on the applicable Interest Payment Date, the obligation
to make such payment and such Interest Payment Date shall be deferred until the
date, if any, upon which the Parent Company pays a dividend on any class of its
share capital (the date on which such dividend is paid, the "Deferred Interest
Payment Date"), it being understood for the avoidance of doubt that any such
deferral shall take place only once with respect to any payment of interest and
such interest payment shall be due and payable on the Deferred Interest Payment
Date.

          "Maturity" when used with respect to any Debt Security means the date
on which the principal of such Debt Security becomes due and payable as therein
or herein provided, whether at the Stated Maturity with respect to such
principal or by declaration of acceleration, call for redemption, repayment at
the option of the Holder thereof or otherwise; provided, however, that, unless
otherwise provided as contemplated by Section 301 with respect to the Debt
Securities of any series, if the Company does not pay all or any part of the
principal at the Stated Maturity with respect to such principal, the obligation
to make such payment and the Stated Maturity with respect to such principal
shall be deferred until the first Business Day after the date that falls six
months after the original Stated Maturity with respect to such principal (it
being understood for the avoidance of doubt that any such deferral shall take
place only once with respect to any payment of principal).

          "Officers' Certificate" means a certificate signed by the Chairman, a
Vice Chairman, the President or a Vice President, and by the Treasurer, an
Assistant Treasurer, the Controller, an Assistant Controller, the Secretary or
an Assistant Secretary of the Company, and delivered to the Trustee.

          "Opinion of Counsel" means a written opinion of counsel, who may be
counsel to the Company and who shall be satisfactory to the Trustee, that is
delivered to the Trustee.

          "Outstanding" when used with respect to Debt Securities means, as of
the date of determination, all Debt Securities theretofore authenticated and
delivered under this Indenture, except:

          (i) Debt Securities theretofore canceled by the Trustee or delivered
     to the Trustee for cancellation;

         (ii) Debt Securities or portions thereof for whose payment or
     redemption money in the necessary amount has been theretofore deposited
     with the Trustee or any Paying Agent (other than the Company) in trust or
     set aside and segregated in trust by the Company (if the Company shall act
     as its own Paying Agent) for the Holders of such Debt Securities or from
     its obligations with respect to which the Company shall have been
     Discharged; provided, however, that if such Debt Securities or portions
     thereof are to be redeemed, notice of such redemption has been duly given
     pursuant to this Indenture or provision therefor satisfactory to the
     Trustee has been made; and

        (iii) Debt Securities that have been paid pursuant to Section 306 or
     in exchange for which, or in lieu of which, other Debt Securities have been
     authenticated and delivered pursuant to this Indenture, other than any such
     Debt Securities in respect of which there shall have been presented to the
     Trustee proof satisfactory to it that such Debt Securities are held by a
     bona fide purchaser in whose hands such Debt Securities are valid
     obligations of the Company;

provided, however, that in determining whether the Holders of the requisite
principal amount of Debt Securities Outstanding have performed any Act
hereunder, Debt Securities owned by the Company or any other obligor upon the
Debt Securities or any Affiliate of the Company or of such other obligor shall
be disregarded and deemed not to be Outstanding, except that, in determining
whether the Trustee shall be protected in relying upon any such Act, only Debt
Securities that the Trustee knows to be so owned shall be so disregarded. Debt
Securities so owned that have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Trustee the
pledgee's right to act with respect to such Debt Securities and that the pledgee
is not the Company or any other obligor upon the Debt Securities or any
Affiliate of the Company or of such other obligor. In determining whether the
Holders of the requisite principal amount of Outstanding Debt Securities have
performed any Act hereunder, (i) the principal amount of a Discount Security
that shall be deemed to be Outstanding for such purpose shall be the amount of
the principal thereof that would be due and payable as of the date of such
determination upon a declaration of acceleration of the Maturity thereof
pursuant to Section 502 and (ii) the principal amount of any Indexed Security
that may be counted in making such determination or calculation and that shall
be deemed to be Outstanding for such purpose shall be equal to the principal
face amount of such Indexed Security at original issuance, unless otherwise
provided with respect to such Indexed Security pursuant to Section 301.

          "Parent Company" means HSBC Holdings plc, or any successor corporation
thereto.

          "Paying Agent" means any Person authorized by the Company to pay the
principal of (and premium, if any) or interest on any Debt Securities on behalf
of the Company.

          "Person" means any individual, corporation, partnership, joint
venture, association, joint stock company, trust, estate, unincorporated
organization or government or any agency or political subdivision thereof.

          "Place of Payment" when used with respect to the Debt Securities of
any series means the place or places where the principal of (and premium, if
any) and interest on the Debt Securities of that series are payable as specified
pursuant to Section 301.

          "Predecessor Security" of any particular Debt Security means every
previous Debt Security evidencing all or a portion of the same debt as that
evidenced by such particular Debt Security, and, for the purposes of this
definition, any Debt Security authenticated and delivered under Section 306 in
lieu of a lost, destroyed or stolen Debt Security shall be deemed to evidence
the same debt as the lost, destroyed or stolen Debt Security.

          "Redemption Date" means the date fixed for redemption of any Debt
Security pursuant to this Indenture which, in the case of a Floating Rate
Security, unless otherwise specified pursuant to Section 301, shall be an
Interest Payment Date only.

          "Redemption Price" means, in the case of a Discount Security, the
amount of the principal thereof that would be due and payable as of the
Redemption Date upon a declaration of acceleration of the Maturity thereof
pursuant to Section 502 and, in the case of any other Debt Security, the
principal amount thereof, plus, in each case, premium, if any, and accrued and
unpaid interest, if any, to the Redemption Date.

          "Registered Holder" means the Person in whose name a Registered
Security is registered in the Security Register.

          "Registered Security" means any Debt Security registered as to
principal, premium, if any, and interest in the Security Register.

          "Regular Record Date" for the interest payable on the Registered
Securities of any series on any Interest Payment Date means the date specified
for that purpose pursuant to Section 301 for such Interest Payment Date.

          "Repayment Date" means, when used with respect to any Debt Security to
be repaid at the option of the Holder, the date fixed for such repayment by or
pursuant to this Indenture.

          "Responsible Officer" when used with respect to the Trustee means any
officer within the Corporate Trust and Agency Group (or any successor group of
the Trustee), including any vice president, assistant vice president, assistant
secretary, or other trust officer or assistant officer of the Trustee
customarily performing functions similar to those performed by the persons who
at the time shall be such officers, respectively, or to whom any corporate trust
matter is referred at the Trustee's Corporate Trust Office because of his
knowledge of and familiarity with the particular subject.

          "Security Register" and "Security Registrar" have the respective
meanings specified in Section 305(a).

          "Senior Indebtedness" means all Indebtedness for Money Borrowed of the
Company, whether outstanding on the date or execution of the Indenture or
thereafter created, assumed or incurred, except Indebtedness Ranking on a Parity
with the Debt Securities or Indebtedness Ranking Junior to the Debt Securities
and any deferrals, renewals or extensions of such Senior Indebtedness.

          "Special Record Date" for the payment of any Defaulted Interest means
a date fixed by the Trustee pursuant to Section 307.

          "Stated Maturity" when used with respect to any Debt Security or any
installment of principal thereof or premium thereon or interest thereon means
the date specified in such Debt Security as the date on which the principal of
such Debt Security or such installment of principal, premium or interest is due
and payable.

          "Subsidiary" means a corporation, limited liability company,
partnership or other entity, at least a majority of the outstanding voting
stock, membership interests or partnership interests, as the case may be, of
which is owned, directly or indirectly, by the Company or by one or more other
Subsidiaries, or by the Company and one or more other Subsidiaries. For the
purposes of this definition, "voting stock" means stock having voting power for
the election of directors, whether at all times or only for so long as no senior
class of stock has such voting power by reason of any contingency.

          "Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939
as in force at the date as of which this instrument was executed, except as
provided in Section 1105.

          "Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each Person who is then a Trustee hereunder, and
if at any time there is more than one such Person, "Trustee" as used with
respect to the Debt Securities of any series shall mean the Trustee with respect
to Debt Securities of such series.

          "U.S. Government Obligations" has the meaning specified in Section
1402.

          "United States" means the United States of America (including the
States and the District of Columbia), its territories and its possessions.

          SECTION 102. Compliance Certificates and Opinions. Upon any
application or request by the Company to the Trustee to take any action under
any provision of this Indenture, the Company shall furnish to the Trustee an
Officers' Certificate stating that all conditions precedent, if any, provided
for in this Indenture relating to the proposed action have been complied with
and an Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with, except that in the case
of any such application or request as to which the furnishing of such documents
is specifically required by any provision of this Indenture relating to such
particular application or request, no additional certificate or opinion need be
furnished.

          Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:

          (1) a statement that each individual signing such certificate or
     opinion has read such covenant or condition and the definitions herein
     relating thereto;

          (2) a brief statement as to the nature and scope of the examination or
     investigation upon which the statements or opinions contained in such
     certificate or opinion are based;

          (3) a statement that, in the opinion of each such individual, he has
     made such examination or investigation as is necessary to enable him to
     express an informed opinion as to whether or not such covenant or condition
     has been complied with; and

          (4) a statement as to whether, in the opinion of each such individual,
     such condition or covenant has been complied with.

          SECTION 103. Form of Documents Delivered to Trustee. In any case where
several matters are required to be certified by, or covered by an opinion of,
any specified Person, it is not necessary that all such matters be certified by,
or covered by the opinion of, only one such Person, or that they be so certified
or covered by only one document, but one such Person may certify or give an
opinion with respect to some matters and one or more other such Persons as to
other matters, and any such Person may certify or give an opinion as to such
matters in one or several documents.

          Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon an Opinion of Counsel, or a
certificate or representations by counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or representations
or Opinion of Counsel with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate or representation or
Opinion of Counsel may be based, insofar as it relates to factual matters, upon
a certificate or opinion of, or representations by, an officer or officers of
the Company stating that the information with respect to such factual matters is
in the possession of the Company, unless such counsel knows, or in the exercise
of reasonable care should know, that the certificate or opinion or
representations with respect to such matters are erroneous.

          Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.

          SECTION 104. Notices, etc. to Trustee and Company. Any Act of Holders
or other document provided or permitted by this Indenture to be made upon, given
or furnished to, or filed with,

          (1) the Trustee by any Holder or by the Company shall be sufficient
     for every purpose hereunder (unless otherwise herein expressly provided) if
     made, given, furnished or filed in writing to or with the Trustee at its
     Corporate Trust Office, 213 Court Street, Suite 703, Middletown,
     Connecticut 06457 ((fax) 860-704-6219); or

          (2) the Company by the Trustee or by any Holder shall be sufficient
     for every purpose hereunder (unless otherwise herein expressly provided) if
     in writing and mailed, first class postage prepaid, to the Company
     addressed to it at the address of its principal office specified in the
     first paragraph of this Indenture or at any other address previously
     furnished in writing to the Trustee by the Company.

          Any such Act or other document shall be in the English language.

          SECTION 105. Notice to Holders; Waiver. Where this Indenture provides
for notice to Holders of any event by the Company or the Trustee, such notice
shall be sufficiently given to Registered Holders (unless otherwise herein
expressly provided) if in writing and mailed, first class postage prepaid, to
such Registered Holders as their names and addresses appear in the Security
Register, within the time prescribed; provided, however, that, in any case, any
notice to Holders of Floating Rate Securities regarding the determination of a
periodic rate of interest, if such notice is required pursuant to Section 301,
shall be sufficiently given if given in the manner specified pursuant to Section
301. In any case where notice to Registered Holders is given by mail, neither
the failure to mail such notice nor any defect in any notice so mailed to any
particular Registered Holder shall affect the sufficiency of such notice with
respect to other Registered Holders, and any notice that is mailed in the manner
herein provided shall be conclusively deemed to have been received by such
Registered Holder, whether or not such Registered Holder actually receives such
notice.

          In the event of suspension of regular mail service or by reason of any
other cause it shall be impracticable to give notice by mail, then such
notification as shall be given with the approval of the Trustee shall constitute
sufficient notice for every purpose hereunder.

          Where this Indenture provides for notice in any manner, such notice
may be waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Registered Holders shall be filed with the Trustee,
but such filing shall not be a condition precedent to the validity of any action
taken in reliance on such waiver.

          SECTION 106. Conflict with Trust Indenture Act. If and to the extent
that any provision of this Indenture limits, qualifies or conflicts with the
duties imposed by, or another provision (an "incorporated version") included in
this Indenture by operation of, Sections 310 to 318, inclusive, of the Trust
Indenture Act, such imposed duties or incorporated provision shall control.

          SECTION 107. Effect of Headings and Table of Contents. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.

          SECTION 108. Successors and Assigns. All covenants and agreements in
this Indenture by the parties hereto shall bind their respective successors and
assigns and inure to the benefit of their permitted successors and assigns,
whether so expressed or not.

          SECTION 109. Separability Clause. In case any provision in this
Indenture or in the Debt Securities shall be invalid, illegal or unenforceable,
the validity, legality and enforceability of the remaining provisions shall not
in any way be affected or impaired thereby.

          SECTION 110. Benefits of Indenture. Nothing in this Indenture or in
the Debt Securities, express or implied, shall give to any Person, other than
the parties hereto, any Security Registrar, any Paying Agent, any Authenticating
Agent and their respective successors hereunder, the Holders and the holders of
Senior indebtedness, any benefit or any legal or equitable right, remedy or
claim under this Indenture.

          SECTION 111. Governing Law. This Indenture and the Debt Securities
shall be deemed to be contracts made and to be performed entirely in the State
of New York, and for all purposes shall be governed by and construed in
accordance with the laws of said State without regard to the conflicts of law
rules of said State.

          SECTION 112. Legal Holidays. Unless otherwise specified pursuant to
Section 301, in any case where any Interest Payment Date, Redemption Date or
Maturity of any Debt Security of any series shall not be a Business Day at any
Place of Payment for the Debt Securities of that series, then (notwithstanding
any other provision of this Indenture or of the Debt Securities) payment of
principal (and premium, if any) or interest need not be made at such Place of
Payment on such date, but may be made on the next succeeding Business Day at
such Place of Payment with the same force and effect as if made on such Interest
Payment Date, Redemption Date or Maturity, and no interest shall accrue on such
payment for the period from and after such Interest Payment Date, Redemption
Date or Maturity, as the case may be, to such Business Day if such payment is
made or duly provided for on such Business Day.

          SECTION 113. No Security Interest Created. Nothing in this Indenture
or in the Debt Securities, express or implied, shall be construed to constitute
a security interest in favor of the Registered Holders under the Uniform
Commercial Code or similar legislation, as now or hereafter enacted and in
effect in any jurisdiction where property of the Company or its Subsidiaries is
or may be located.

          SECTION 114. Limitation of Individual Liability. No recourse under or
upon any obligation, covenant or agreement contained in this Indenture or in any
Debt Security because of any indebtedness evidenced thereby, or for any claim
based thereon or otherwise in respect thereof, shall be had against any
incorporator, stockholder, officer or director, as such, past, present or
future, of the Company or any successor corporation, either directly or through
the Company, whether by virtue of any constitution, statute or rule of law, or
by the enforcement of any assessment or penalty or by any legal or equitable
proceeding or otherwise; it being expressly understood that this Indenture and
the obligations issued hereunder are solely corporate obligations, and that no
such personal liability whatever shall attach to, or is or shall be incurred by,
the incorporators, stockholders, officers or directors, as such, of the Company
or any successor corporation, or any of them, because of the creation of the
indebtedness hereby authorized, or under or by reason of the obligations,
covenants or agreements contained in this Indenture or in any Debt Security or
implied therefrom; and that any and all such personal liability of every name
and nature, either at common law or in equity or by constitution or statute, of,
and any and all such rights and claims against, every such incorporator,
stockholder, officer or director, as such, because of the creation of the
indebtedness hereby authorized, or under or by reason of the obligations,
covenants or agreements contained in this Indenture or in any Debt Security or
implied therefrom, are hereby expressly waived and released as a condition of,
and as a consideration for, the execution of this Indenture and the issuance of
such Debt Security.

                                   ARTICLE II

                               DEBT SECURITY FORMS

          SECTION 201. Forms Generally. The Debt Securities of each series shall
be substantially in the form of Exhibit A hereto and shall have such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture or any indenture supplemental hereto, and may have
such letters, numbers or other marks of identification or designation and such
legends or endorsements placed thereon as the Company may deem appropriate and
as are not inconsistent with the provisions of this Indenture, or as may be
required to comply with any law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any securities exchange on which any
series of the Debt Securities may be listed or of any automated quotation system
on which any such series may be quoted, or to conform to usage, all as
determined by the officers executing such Debt Securities as conclusively
evidenced by their execution of such Debt Securities.

          The definitive Debt Securities, if any, of each series shall be
printed, lithographed or engraved or produced by any combination of these
methods on steel engraved borders or may be produced in any other manner,
provided that such manner is permitted by the rules of any securities exchange
on which such series of Debt Securities may be listed or of any automated
quotation system on which such series may be quoted, all as determined by the
officers executing such Debt Securities, as conclusively evidenced by their
execution of such Debt Securities.

          SECTION 202. Form of Trustee's Certificate of Authentication. The form
of the Trustee's certificate of authentication to be borne by the Debt
Securities shall be substantially as follows:

                     TRUSTEE'S CERTIFICATE OF AUTHENTICATION

          This is one of the Debt Securities of the series designated therein
issued under the within-mentioned Indenture.

                                                WELLS FARGO BANK MINNESOTA,
                                                NATIONAL ASSOCIATION,
                                                  as Trustee

                                                    By.....................
                                                    Authorized Signatory
                                                    --------------------

          SECTION 203. Form of Trustee's Certificate of Authentication by an
Authenticating Agent. If at any time there shall be an Authenticating Agent
appointed with respect to any series of Debt Securities, then the Trustee's
Certificate of Authentication by such Authenticating Agent to be borne by Debt
Securities of each such series shall be substantially as follows:

                     TRUSTEE'S CERTIFICATE OF AUTHENTICATION

          This is one of the Debt Securities of the series designated therein
issued under the within-mentioned Indenture.

                                                [NAME OF AUTHENTICATING AGENT]

                                                    By....................
                                                    Authorized Signatory

          SECTION 204. Securities Issuable in Global Form. If Debt Securities of
or within a series are issuable in global form, as specified as contemplated by
Section 301, then, notwithstanding clause (8) of Section 301 and the provisions
of Section 302, any such Security shall represent such of the Outstanding
Securities of such series as shall be specified therein and may provide that it
shall represent the aggregate amount of Outstanding Securities of such series
from time to time endorsed thereon and that the aggregate amount of Outstanding
Securities of such series represented thereby may from time to time be increased
or decreased to reflect exchanges. Any endorsement of a Debt Security in global
form to reflect the amount, or any increase or decrease in the amount, of
Outstanding Securities represented thereby shall be made by the Trustee in such
manner and upon instructions given by such Person or Persons as shall be
specified therein or in the Company Order to be delivered to the Trustee
pursuant to Section 303 or 304. Subject to the provisions of Section 303 and, if
applicable, Section 304, the Trustee shall deliver and redeliver any Security in
permanent global form in the manner and upon instructions given by the Person or
Persons specified therein or in the applicable Company Order. If a Company Order
pursuant to Section 303 or 304 has been, or simultaneously is, delivered, any
instructions by the Company with respect to endorsement or delivery or
redelivery of a Debt Security in global form shall be in writing but need not
comply with Section 102 and need not be accompanied by an Opinion of Counsel.

          The provisions of the last sentence of Section 303 shall apply to any
Debt Security represented by a Debt Security in global form if such Debt
Security was never issued and sold by the Company and the Company delivers to
the Trustee the Debt Security in global form together with written instructions
(which need not comply with Section 102 and need not be accompanied by an
Opinion of Counsel) with regard to the reduction in the principal amount of Debt
Securities represented thereby, together with the written statement contemplated
by the last sentence of Section 303.

          Notwithstanding the provisions of Section 307, unless otherwise
specified as contemplated by Section 301, payment of principal of any premium
and interest on any Debt Security in permanent global form shall be made to the
Person or Persons specified therein.

          Notwithstanding the provisions of Section 308 and except as provided
in the preceding paragraph, the Company, the Trustee and any agent of the
Company and the Trustee shall treat as the Holder of such principal amount of
Outstanding Securities represented by a permanent global Security in registered
form, the Holder of such permanent global Security in registered form.

                                   ARTICLE III

                               THE DEBT SECURITIES

          SECTION 301. Amount Unlimited; Issuable in Series. The aggregate
principal amount of Debt Securities that may be authenticated and delivered
under this Indenture is unlimited.

          The Debt Securities may be issued in one or more series. There shall
be established in or pursuant to one or more Board Resolutions, and, subject to
Section 303, set forth in an Officers' Certificate, or established in one or
more indentures supplemental hereto, prior to the issuance of Debt Securities of
any series any or all of the following, as applicable:

          (1) the title of the Debt Securities of the series (which shall
     distinguish the Debt Securities of such series from all other series of
     Debt Securities);

          (2) the limit, if any, upon the aggregate principal amount of the Debt
     Securities of the series that may be authenticated and delivered under this
     Indenture (except for Debt Securities authenticated and delivered upon
     transfer of, or in exchange for, or in lieu of, other Debt Securities of
     such series pursuant to Section 304, 305, 306, 1106 or 1307);

          (3) the dates on which or periods during which the Debt Securities of
     the series may be issued, and the dates on, or the range of dates within,
     which the principal of (and premium, if any, on) the Debt Securities of
     such series are or may be payable;

          (4) the rate or rates or the method of determination thereof at which
     the Debt Securities of the series shall bear interest, if any, the date or
     dates from which such interest shall accrue, the Interest Payment Dates on
     which such interest shall be payable, and, in the case of Registered
     Securities, the Regular Record Dates for the interest payable on such
     Interest Payment Dates;

          (5) the date or dates on which such interest, if any, on the Debt
     Securities of the series will be payable and the Regular Record Date, if
     any, for such Interest Payment Dates or the method by which such date or
     dates will be determined;

          (6) the places, if any, in addition to or instead of the Corporate
     Trust Office of the Trustee, where (i) the principal of and premium, if
     any, and any interest on the Debt Securities of the series will be payable,
     (ii) Debt Securities of the series may be surrendered for registration of
     transfer, (iii) Debt Securities of the series may be surrendered for
     exchange and (iv) notices to or upon the Company in respect of the Debt
     Securities of the series and this Indenture may be served;

          (7) the periods within which or the dates on which, the prices at
     which and the terms and conditions upon which Debt Securities of the series
     may be redeemed, if any, in whole or in part, at the option of the Company
     or otherwise;

          (8) if other than denominations of $1,000 and any integral multiple
     thereof, the denominations in which individual Debt Securities of the
     series shall be issuable;

          (9) if other than the Trustee, the identity of each Security Registrar
     and/or Paying Agent;

          (10) if other than the principal amount, the portion of the principal
     amount (or the method by which such portion will be determined) of Debt
     Securities of the series that will be payable upon declaration of
     acceleration of the Maturity thereof;

          (11) any index, formula or other method (including a method based on
     changes in the prices of particular securities, currencies, intangibles,
     goods, articles or commodities) used to determine the amount of payments of
     principal of and premium, if any, and any interest on the Debt Securities
     of the series;

          (12) whether provisions relating to defeasance and covenant defeasance
     will be applicable to such series of Debt Securities of the series;

          (13) any provisions granting special rights to Holders of Debt
     Securities of the series upon the occurrence of specified events;

          (14) any modifications, deletions or additions to the Defaults or
     covenants of the Corporation with respect to the Debt Securities of the
     series;

          (15) whether any Debt Securities of the series are issuable initially
     in temporary or permanent global form (with or without coupons) and, if so
     (i) whether (and the circumstances under which) beneficial owners of
     interests in permanent global Debt Securities may exchange their interests
     for Debt Securities of such series and of like tenor of any authorized form
     and denomination, and (ii) the identity of any initial depositary for such
     global Debt Securities;

          (16) the date as of which any temporary global Debt Security will be
     dated if other than the original issuance date of the first Debt Security
     of that series to be issued;

          (17) the Person to whom any interest on any Registered Debt Securities
     of the series will be payable, if other than the Registered Holder, and the
     extent to which and manner that any interest payable on a temporary global
     Debt Security will be paid if other than as specified in this Indenture;

          (18) the form and/or terms of certificates, documents or conditions,
     if any, for Debt Securities of the series to be issuable in definitive form
     (whether upon original issue or upon exchange of a temporary Debt Security
     of such series); and

          (19) any other terms, conditions, rights and preferences (or
     limitations on such rights and preferences) relating to the series (which
     terms shall not be inconsistent with the requirements of the Trust
     Indenture Act or with the provisions of this Indenture).

          All Debt Securities of any one series shall be substantially identical
except as to denomination and except as may otherwise be provided in or pursuant
to such Board Resolution and set forth in such Officers' Certificate or in any
such indenture supplemental hereto. All Debt Securities of any one series need
not be issued at the same time and, unless otherwise provided, additional Debt
Securities of such series may be issued, with identical terms to those
previously issued except for the date of issuance thereof.

          If any of the terms of a series of Debt Securities are established in
or pursuant to one or more Board Resolutions, a copy of such Board Resolution
shall be delivered to the Trustee at or prior to the delivery of the Officers'
Certificate setting forth the terms of the series.

          SECTION 302. Denominations. In the absence of any specification
pursuant to Section 301 with respect to Debt Securities of any series, the Debt
Securities of such series shall be issuable only as Registered Securities in
denominations of $1,000 and any integral multiple thereof and shall be payable
only in Dollars.

          SECTION 303. Execution, Authentication, Delivery and Dating. (a) The
Debt Securities of any series shall be executed on behalf of the Company by its
Chairman, a Vice Chairman, its President or one of its Vice Presidents, under
its corporate seal reproduced thereon and attested by its Secretary or one of
its Assistant Secretaries. The signature of any of these officers may be manual
or facsimile.

          Debt Securities bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Debt
Securities or did not hold such offices at the date of such Debt Securities.

          (b) At any time and from time to time after the execution and delivery
of this Indenture, the Company may deliver Debt Securities of any series,
executed by the Company, to the Trustee or the Authenticating Agent for
authentication, together with a Company Order for the authentication and
delivery of such Debt Securities and the Trustee or the Authenticating Agent in
accordance with the Company Order shall authenticate and deliver such Debt
Securities. The Trustee or the Authenticating Agent shall be entitled to
receive, prior to the authentication and delivery of the first Debt Securities
of such series, the supplemental indenture or the Board Resolution by or
pursuant to which the form and terms of such Debt Securities have been approved,
an Officers' Certificate stating that all conditions precedent provided for in
this Indenture relating to the issuance of the Debt Securities have been
complied with and as to the absence of any event that is, or after notice or
lapse of time or both would become, a Default and an Opinion of Counsel stating
that:

          (1) all instruments furnished by the Company to the Trustee or the
     Authenticating Agent in connection with the authentication and delivery of
     such Debt Securities conform to the requirements of this Indenture and
     constitute sufficient authority hereunder for the Trustee to authenticate
     and deliver such Debt Securities;

          (2) the forms and terms of such Debt Securities have been established
     in conformity with the provisions of this Indenture;

          (3) in the event that the forms or terms of such Debt Securities have
     been established in a supplemental indenture, the execution and delivery of
     such supplemental indenture has been duly authorized by all necessary
     corporate action of the Company, such supplemental indenture has been duly
     executed and delivered by the Company and, assuming due authorization,
     execution and delivery by the Trustee or the Authenticating Agent, is a
     valid and binding obligation enforceable against the Company in accordance
     with its terms, subject to applicable bankruptcy, insolvency and similar
     laws affecting creditors' rights generally and subject, as to
     enforceability, to general principles of equity (regardless of whether
     enforcement is sought in a proceeding in equity or at law) and subject to
     such other exceptions as counsel shall request and as to which the Trustee
     shall not reasonably object;

          (4) the execution and delivery of such Debt Securities have been duly
     authorized by all necessary corporate action of the Company and such Debt
     Securities have been duly executed by the Company, and, assuming due
     authentication by the Trustee or the Authenticating Agent and delivery by
     the Company, are valid and binding obligations enforceable against the
     Company in accordance with their terms, entitled to the benefit of the
     Indenture, subject to applicable bankruptcy, insolvency and similar laws
     affecting creditors' rights generally and subject, as to enforceability, to
     general principles of equity (regardless of whether enforcement is sought
     in a proceeding in equity or at law) and subject to such other exceptions
     as counsel shall request and as to which the Trustee or the Authenticating
     Agent shall not reasonably object; and

          (5) the amount of Debt Securities Outstanding of such series, together
     with the amount of such Debt Securities, does not exceed any limit
     established under the terms of this Indenture on the amount of Debt
     Securities of such series that may be authenticated and delivered.

          If all of the Debt Securities of a series are not to be originally
issued at the same time, then the Opinion of Counsel, Officers' Certificate or
other documents required to be delivered pursuant to this Section 303(b) need be
delivered only once, prior to the authentication and delivery of the first Debt
Security of such series; provided, however, that any subsequent request by the
Company to the Trustee or the Authenticating Agent to authenticate Debt
Securities of such series upon original issuance shall constitute a
representation and warranty by the Company that, as of the date of such request,
the statements made in the Officers' Certificate delivered pursuant to this
Section 303(b) shall be true and correct as if made on such date.

          (c) If the Company shall establish pursuant to Section 301 that the
Debt Securities of a series are to be issued in whole or in part in the form of
one or more Global Securities, then the Company shall execute and the Trustee or
the Authenticating Agent shall, upon receipt by the Trustee or the
Authenticating Agent of the Company Order authorizing such authentication,
authenticate and deliver one or more Global Securities that (i) shall represent
an aggregate amount equal to the aggregate principal amount of the Outstanding
Debt Securities of such series to be represented by one or more Global
Securities, (ii) shall be registered, if in registered form, in the name of the
Depositary for such Global Security or Securities or the nominee of such
Depositary, (iii) shall be delivered by the Trustee to such Depositary or
pursuant to such Depositary's instruction and (iv) shall bear a legend
substantially to the following effect "Unless and until it is exchanged in whole
or in part for the individual Debt Securities represented hereby, this Global
Security may not be transferred except as a whole by the Depositary to a nominee
of the Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary."

          (d) Each Depositary designated pursuant to Section 301 for a Global
Security in registered form must, at the time of its designation and at all
times while it serves as such Depositary, be a clearing agency registered under
the Securities Exchange Act of 1934, as amended, and any other applicable
statute or regulation.

          (e) The Trustee or the Authenticating Agent shall not be required to
authenticate any Debt Securities if the issuance of such Debt Securities
pursuant to this Indenture will adversely affect the Trustee's or the
Authenticating Agent's own rights, duties or immunities under the Debt
Securities and this Indenture or otherwise in a manner which is not reasonably
acceptable to the Trustee or the Authenticating Agent.

          (f) Each Debt Security shall be dated the date of its authentication,
except as otherwise provided pursuant to Section 301 with respect to the Debt
Securities of any series.

          (g) No Debt Security shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose unless there appears on such
Debt Security a certificate of authentication substantially in one of the forms
provided for herein duly executed by the Trustee or by an Authenticating Agent
by manual signature of one of its authorized officers, and such certificate upon
any Debt Security shall be conclusive evidence, and the only evidence, that such
Debt Security has been duly authenticated and delivered hereunder and is
entitled to the benefits of this Indenture.

          SECTION 304. Temporary Debt Securities. Pending the preparation of
definitive Debt Securities of any series, the Company may execute, and upon
Company Order the Trustee shall authenticate and deliver, temporary Debt
Securities that are printed, lithographed, typewritten, mimeographed or
otherwise produced, in any authorized denomination, substantially of the tenor
of the definitive Debt Securities in lieu of which they are issued, in
registered form, and with such appropriate insertions, omissions, substitutions
and other variations as the officers executing such Debt Securities, may
determine, as conclusively evidenced by their execution of such Debt Securities.
Any such temporary Debt Security may be in global form, representing all or a
portion of the Outstanding Debt Securities of such series. Every such temporary
Debt Security shall be executed by the Company and shall be authenticated and
delivered by the Trustee or the Authenticating Agent, as the case may be, upon
the same conditions and in substantially the same manner, and with the same
effect, as the definitive Debt Security or Securities in lieu of which it is
issued.

          If temporary Debt Securities of any series are issued, the Company
will cause definitive Debt Securities of such series to be prepared without
unreasonable delay. After the preparation of definitive Debt Securities of such
series, the temporary Debt Securities of such series shall be exchangeable for
definitive Debt Securities of such series upon surrender of the temporary Debt
Securities of such series at the office or agency of the Company in a Place of
Payment for such series, without charge to the Holder. Except as provided in
Section 305 in connection with a transfer, and upon surrender for cancellation
of any one or more temporary Debt Securities of any series, the Company shall
execute and the Trustee shall authenticate and deliver in exchange therefor a
like principal amount of definitive Debt Securities of the same series of
authorized denominations and of like tenor. Until so exchanged, temporary Debt
Securities of any series shall in all respects be entitled to the same benefits
under this Indenture as definitive Debt Securities of such series. Upon any
exchange of a portion of a temporary Global Security for a definitive Global
Security or for the individual Debt Securities represented thereby pursuant to
this Section 304 or Section 305, the temporary Global Security shall be endorsed
by the Trustee to reflect the reduction of the principal amount evidenced
thereby, whereupon the principal amount of such temporary Global Security shall
be reduced for all purposes by the amount so exchanged and endorsed.

          SECTION 305. Registration, Transfer and Exchange. (a) The Company
shall cause to be kept at the Corporate Trust Office of the Trustee a register
for each series of Registered Securities (the registers maintained in such
office and in any other office or agency of the Company in a Place of Payment
being herein sometimes collectively referred to as the "Security Register") in
which, subject to such reasonable regulations as it may prescribe, the Company
shall provide for the registration of Registered Securities and of transfers and
exchanges of Registered Securities and the address at which notice and demand to
or upon the Company in respect of this Indenture and the Debt Securities may be
served by the Holders of Debt Securities. HSBC Bank USA is hereby appointed
"Security Registrar" for the purpose of registering Registered Securities and
registering transfers and exchanges of Registered Securities as herein provided;
provided, however, that the Company may appoint co-Security Registrars. Such
Security Register shall be in written form or in any other form capable of being
converted into written form within a reasonable period of time. At all
reasonable times the Security Register shall be open for inspection by the
Company or the Trustee.

          Upon surrender for registration of transfer of any Registered Security
of any series at the office or agency of the Company maintained for such
purpose, the Company shall execute, and the Trustee or any Authenticating Agent
shall authenticate and deliver, in the name of the designated transferee, one or
more new Registered Securities of the same series of any authorized denomination
or denominations of like tenor and aggregate principal amount, bearing a number
not contemporaneously Outstanding and containing identical terms and provisions.

          Notwithstanding any other provision of this Section, unless and until
it is exchanged in whole or in part for the individual Debt Securities
represented thereby, a Global Security representing all or a portion of the Debt
Securities of a series may not be transferred except as a whole by the
Depositary for such series to a nominee of such Depositary or by a nominee of
such Depositary to such Depositary or another nominee of such Depositary or by
such Depositary or any such nominee to a successor Depositary for such series or
a nominee of such successor Depositary.

          At the option of the Holder, Registered Securities of any series
(other than a Global Security, except as set forth below) may be exchanged for
other Registered Securities of the same series of any authorized denomination or
denominations of like tenor and aggregate principal amount containing identical
terms and conditions, upon surrender of the Registered Securities to be
exchanged at the office or agency of the Company maintained for such purpose.

          Whenever any Debt Securities are so surrendered for exchange, the
Company shall execute, and the Trustee shall authenticate and deliver, the Debt
Securities that the Holder making the exchange is entitled to receive.

          (b) If at any time the Depositary for the Debt Securities of a series
notifies the Company that it is unwilling or unable to continue as Depositary
for the Debt Securities of such series or if at any time the Depositary for the
Debt Securities of such series shall no longer be eligible under Section 303(d),
the Company shall appoint a successor Depositary with respect to the Debt
Securities of such series. If a successor Depositary for the Debt Securities of
such series is not appointed by the Company within 90 days after the Company
receives such notice or becomes aware of such ineligibility, the Company will
execute, and the Trustee, upon receipt of a Company Order for the authentication
and delivery of individual Debt Securities of such series, will authenticate and
deliver, individual Debt Securities of such series in an aggregate principal
amount equal to the principal amount of the Global Security or Securities
representing Debt Securities of such series in exchange for such Global Security
or Securities.

          The Company may at any time and in its sole discretion determine that
Debt Securities of any series issued in the form of one or more Global
Securities shall no longer be represented by such Global Security or Securities.
In such event the Company will execute, and the Trustee, upon receipt of a
Company Order for the authentication and delivery of individual Debt Securities
of such series, will authenticate and deliver, individual Debt Securities of
such series in an aggregate principal amount equal to the principal amount of
the Global Security or Securities representing Debt Securities of such series in
exchange for such Global Security or Securities.

          If specified by the Company pursuant to Section 301 with respect to a
series of Debt Securities, the Depositary for such series of Debt Securities may
surrender a Global Security for such series of Debt Securities in exchange in
whole or in part for individual Debt Securities of such series on such terms as
are acceptable to the Company and such Depositary. Thereupon, the Company shall
execute, and the Trustee shall authenticate and deliver, without service charge,

          (i) to each Person specified by such Depositary a new individual Debt
     Security or Securities of the same series, of any authorized denomination
     as requested by such Person in aggregate principal amount equal to and in
     exchange for such Person's beneficial interest in the Global Security; and

          (ii) to such Depositary a new Global Security in a denomination equal
     to the difference, if any, between the principal amount of the surrendered
     Global Security and the aggregate principal amount of individual Debt
     Securities delivered to Holders thereof.

          In any exchange provided for in any of the preceding three paragraphs,
the Company will execute and the Trustee will authenticate and deliver
individual Debt Securities in registered form and in authorized denominations.

          Upon the exchange of a Global Security for individual Debt Securities,
such Global Security shall be canceled by the Trustee. Individual Registered
Securities issued in exchange for a Global Security pursuant to this Section
shall be registered in such names and in such authorized denominations as the
Depositary for such Global Security, pursuant to instructions from its direct or
indirect participants or otherwise, shall instruct the Trustee. The Trustee
shall deliver such Registered Securities to the Persons in whose names such
Registered Securities are so registered.

          (c) All Debt Securities issued upon any transfer or exchange of Debt
Securities shall be valid obligations of the Company, evidencing the same debt,
and entitled to the same benefits under this Indenture, as the Debt Securities
surrendered for such transfer or exchange.

          Every Registered Security presented or surrendered for transfer or
exchange shall (if so required by the Company, the Trustee or the Security
Registrar) be duly endorsed, or be accompanied by a written instrument of
transfer in form satisfactory to the Company, the Trustee and the Security
Registrar, duly executed, by the Holder thereof or his attorney duly authorized
in writing.

          No service charge will be made for any transfer or exchange of Debt
Securities except as provided in Section 304 or 306. The Company may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any registration, transfer or exchange of Debt
Securities, other than those expressly provided in this Indenture to be made at
the Company's own expense or without expense or without charge to the Holders.

          The Company or the Trustee, as applicable, shall not be required (i)
to register, transfer or exchange Debt Securities of any series during a period
beginning at the opening of business 15 days before the day of the transmission
of a notice of redemption of Debt Securities of such series selected for
redemption under Section 1303 and ending at the close of business on the day of
such transmission, or (ii) to register, transfer or exchange any Debt Security
so selected for redemption in whole or in part, except the unredeemed portion of
any Debt Security being redeemed in part.

          SECTION 306. Mutilated, Destroyed, Lost and Stolen Debt Securities. If
(i) any mutilated Debt Security is surrendered to the Trustee at its Corporate
Trust Office or (ii) the Company and the Trustee receive evidence to their
satisfaction of the destruction, loss or theft of any Debt Security, and there
is delivered to the Company and the Trustee such security or indemnity as may be
required by them to save each of them and any Paying Agent harmless, and neither
the Company nor the Trustee receives notice that such Debt Security has been
acquired by a bona fide purchaser, then the Company shall execute and upon
Company Request the Trustee shall authenticate and deliver, in exchange for or
in lieu of any such mutilated, destroyed, lost or stolen Debt Security, a new
Debt Security of the same series of like tenor, form, terms and principal
amount, bearing a number not contemporaneously Outstanding.

          In case any such mutilated, destroyed, lost or stolen Debt Security
has become or is about to become due and payable, the Company in its discretion
may, instead of issuing a new Debt Security, pay the amount due on such Debt
Security in accordance with its terms.

          Upon the issuance of any new Debt Security under this Section 306, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in respect thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.

          Every new Debt Security of any series, issued pursuant to this Section
306 shall constitute an original additional contractual obligation of the
Company, whether or not the destroyed, lost or stolen Debt Security shall be at
any time enforceable by anyone, and shall be entitled to all the benefits of
this Indenture equally and proportionately with any and all other Debt
Securities of that series duly issued hereunder.

          The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Debt Securities.

          SECTION 307. Payment of Interest; Interest Rights Preserved. (a)
Interest on any Registered Security that is payable and is punctually paid or
duly provided for on any Interest Payment Date shall be paid to the Person in
whose name such Registered Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such interest
notwithstanding the cancellation of such Registered Security upon any transfer
or exchange subsequent to the Regular Record Date. Payment of interest on
Registered Securities shall be made at the Corporate Trust Office or at the
corporate offices of the Company or the Bank in New York City (except as
otherwise specified pursuant to Section 301) or, at the option of the Company,
by check mailed to the address of the Person entitled thereto as such address
shall appear in the Security Register or, if provided pursuant to Section 301
and in accordance with arrangements satisfactory to the Trustee, at the option
of the Registered Holder, by wire transfer to an account designated by the
Registered Holder.

          (b) Any interest on any Debt Security of any series that is payable
but is not punctually paid or duly provided for on any Interest Payment Date
(herein called "Defaulted Interest") shall, if such Debt Security is a
Registered Security, forthwith cease to be payable to the Registered Holder on
the relevant Regular Record Date by virtue of having been such a Registered
Holder, and such Defaulted Interest may be paid by the Company, at its election
in each case, as provided in clause (1) or (2) below:

          (1) The Company may elect to make payment of any Defaulted Interest to
     the Persons in whose names such Registered Securities (or their respective
     Predecessor Securities) are registered at the close of business on a
     Special Record Date for the payment of such Defaulted Interest, which shall
     be fixed in the following manner. The Company shall notify the Trustee in
     writing of the amount of Defaulted Interest proposed to be paid on each
     such Registered Security and the date of the proposed payment, and at the
     same time the Company shall deposit with the Trustee an amount of money
     equal to the aggregate amount proposed to be paid in respect of such
     Defaulted Interest or shall make arrangements satisfactory to the Trustee
     for such deposit prior to the date of the proposed payment, such money when
     deposited to be held in trust for the benefit of the Persons entitled to
     such Defaulted Interest as in this clause provided. Thereupon the Trustee
     shall fix a Special Record Date for the payment of such Defaulted Interest
     which shall be not more than 15 days and not less than 10 days prior to the
     date of the proposed payment and not less than 10 days after the receipt by
     the Trustee of the notice of the proposed payment The Trustee shall
     promptly notify the Company of such Special Record Date and, in the name
     and at the expense of the Company, shall cause notice of the proposed
     payment of such Defaulted Interest and the Special Record Date therefor to
     be mailed, first-class postage prepaid, to the Holders of such Registered
     Securities at their addresses as they appear in the Security Register, not
     less than 10 days prior to such Special Record Date. Notice of the proposed
     payment of such Defaulted Interest and the Special Record Date therefor
     having been mailed as aforesaid, such Defaulted Interest shall be paid to
     the Persons in whose names such Registered Securities (or their respective
     Predecessor Securities) are registered at the close of business on such
     Special Record Date and shall no longer be payable pursuant to the
     following clause (2).

          (2) The Company may make payment of any Defaulted Interest on
     Registered Securities in any other lawful manner not inconsistent with the
     requirements of any securities exchange on which such Registered Securities
     may be listed, and upon such notice as may be required by such exchange,
     if, after notice given by the Company to the Trustee of the proposed
     payment pursuant to this clause, such manner of payment shall be deemed
     practicable by the Trustee.

          (c) Subject to the foregoing provisions of this Section 307, each Debt
Security delivered under this Indenture upon transfer of or in exchange for or
in lieu of any other Debt Security shall carry the rights to interest accrued
and unpaid, and to accrue, that were carried by such other Debt Security.

          SECTION 308. Cancellation. Unless otherwise specified pursuant to
Section 301 for Debt Securities of any series, all Debt Securities surrendered
for payment, redemption, transfer or exchange shall, if surrendered to any
Person other than the Trustee, be delivered to the Trustee and shall be promptly
canceled by it. The Company may at any time deliver to the Trustee for
cancellation any Debt Securities previously authenticated and delivered
hereunder that the Company may have acquired in any manner whatsoever, and all
Debt Securities so delivered shall be promptly canceled by the Trustee. No Debt
Securities shall be authenticated in lieu of or in exchange for any Debt
Securities canceled as provided in this Section, except as expressly permitted
by this Indenture. All canceled Debt Securities held by the Trustee shall be
returned to the Company. The acquisition of any Debt Securities by the Company
shall not operate as a redemption or satisfaction of the indebtedness
represented thereby unless and until such Debt Securities are surrendered to the
Trustee for cancellation.

          SECTION 309. Computation of Interest. Except as otherwise specified
pursuant to Section 301 for Debt Securities of any series, interest on the Debt
Securities of each series shall be computed on the basis of a 360-day year of
twelve 30-day months.

          SECTION 310. CUSIP Numbers. The Company in issuing the Securities may
use "CUSIP" numbers, (if then generally in use), and, if so, the Trustee shall
use "CUSIP" numbers in notices of redemption as a convenience to Holders;
provided that any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the Debt Securities or as
contained in any notice of a redemption and that reliance may be placed only on
the other identification numbers printed on the Debt Securities, and any such
redemption shall not be affected by any defect in or omission of such numbers.

          SECTION 311. Persons Deemed Owners. The Company, the Trustee and any
agent of the Company or the Trustee may treat the Person in whose name any
Registered Security is registered as the owner of such Registered Security for
the purpose of receiving payment of principal of (and premium, if any) and
(subject to Section 307) interest, if any, on, such Registered Security and for
all other purposes whatsoever, whether or not such Registered Security be
overdue, and neither the Company, the Trustee nor any agent of the Company or
the Trustee shall be affected by notice to the contrary. All payments made to
any Holder, or upon his order, shall be valid, and, to the extent of the sum or
sums paid, effectual to satisfy and discharge the liability for moneys payable
upon such Debt Security.

          None of the Company, the Trustee, any Paying Agent or the Security
Registrar will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests in a global Debt Security or for maintaining, supervising or reviewing
any records relating to such beneficial ownership interests.

          Notwithstanding the foregoing, with respect to any global Debt
Security, nothing herein shall prevent the Company, the Trustee, or any agent of
the Company or the Trustee, from giving effect to any written certification,
proxy or other authorization furnished by any Depositary, as a Holder, with
respect to such global Debt Security or impair, as between such Depositary and
owners of beneficial interests in such global Debt Security, the operation of
customary practices governing the exercise of the rights of such Depositary (or
its nominee) as Holder of such global Debt Security.

                                   ARTICLE IV

                           SATISFACTION AND DISCHARGE

          SECTION 401. Satisfaction and Discharge of Indenture. This Indenture,
with respect to the Debt Securities of any series (if all series issued under
this Indenture are not to be affected), shall, upon Company Order, cease to be
of further effect (except as to any surviving rights of registration of transfer
or exchange of such Debt Securities herein expressly provided for and rights to
receive payments of principal of (and premium, if any) and interest on such Debt
Securities) and the Trustee, upon receipt of a Company Order and at the expense
of the Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when

          (1) either

          (A) all Debt Securities of such series theretofore authenticated and
     delivered (other than (i) Debt Securities of such series that have been
     destroyed, lost or stolen and that have been replaced or paid as provided
     in Section 306 and (ii) Debt Securities of such series for whose payment
     money has theretofore been deposited in trust or segregated and held in
     trust by the Company and thereafter repaid to the Company or discharged
     from such trust, as provided in Section 1203) have been delivered to the
     Trustee for cancellation; or

          (B) all Debt Securities of such series not theretofore delivered to
     the Trustee for cancellation,

               (i) have become due and payable, or

              (ii) will become due and payable at their Stated Maturity within
          one year, or

             (iii) are to be called for redemption within one year under
          arrangements satisfactory to the Trustee for the giving of notice of
          redemption by the Trustee in the name, and at the expense, of the
          Company,

     and the Company, in the case of (i), (ii) or (iii) above, has irrevocably
     deposited or caused to be deposited with the Trustee as trust funds in
     trust for the purpose an amount sufficient to pay and discharge the entire
     indebtedness on such Debt Securities for principal (and premium, if any)
     and interest to the date of such deposit (in the case of Debt Securities
     that have become due and payable) or to the Stated Maturity or Redemption
     Date, as the case may be; provided, however, in the event a petition for
     relief under the Federal bankruptcy laws, as now or hereafter constituted,
     or any other applicable Federal or state bankruptcy, insolvency or other
     similar law, is filed with respect to the Company within 91 days after the
     deposit and the Trustee is required to return the moneys then on deposit
     with the Trustee to the Company, the obligations of the Company under this
     Indenture with respect to such Debt Securities shall not be deemed
     terminated or discharged;

          (2) the Company has paid or caused to be paid all other sums payable
     hereunder by the Company; and

          (3) the Company has delivered to the Trustee an Officers' Certificate
     and an Opinion of Counsel each stating that all conditions precedent herein
     provided for relating to the satisfaction and discharge of this Indenture
     with respect to such series have been complied with.

          Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 607, the obligations of
the Company to any Authenticating Agent under Section 614, and, if money shall
have been deposited with the Trustee pursuant to subclause (B) of clause (1) of
this Section 401, the obligations of the Trustee under Section 402 and the last
paragraph of Section 1203 shall survive.

          SECTION 402. Application of Trust Money. Subject to Section 607 and
the provisions of the last paragraph of Section 1203, all money deposited with
the Trustee pursuant to Section 401 shall be held in trust and applied by it, in
accordance with the provisions of the Debt Securities and this Indenture, to the
payment, either directly or through any Paying Agent (including the Company
acting as its own Paying Agent) as the Trustee may determine, to the Persons
entitled thereto, or the principal (and premium, if any) and interest for whose
payment such money has been deposited with or received by the Trustee, except
that such money need not be segregated from other funds except to the extent
required by applicable law.

          SECTION 403. Indemnity. The Company shall pay and indemnify the
Trustee and the Holders of Debt Securities of any series as to which the
Company's obligations under this Indenture have terminated against any tax, fee
or other charge resulting from the deposit of cash in accordance with Section
401 and termination of the Company's obligations under this Indenture with
respect to the Debt Securities of such series.

          SECTION 404. Subordination Provisions Inapplicable. Notwithstanding
anything contained herein to the contrary, any money that shall have been
deposited by the Company with the Trustee pursuant to Section 401 shall not be
subject to the provisions of Article XV of this Indenture respecting
subordination of the Debt Securities; provided, however, that said provisions
respecting subordination shall continue to apply to such money, if any, that has
been returned to the Company or its legal representative pursuant to an order or
judgment of a court or governmental authority but only to the extent that all
obligations of the Company under this Indenture and the Debt Securities shall be
in full force and effect.

                                    ARTICLE V

                                    REMEDIES

          SECTION 501. Events of Default. "Event of Default" wherever used
herein with respect to Debt Securities of any series means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law, pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body), unless it is inapplicable to a
particular series:

          (1) the entry by a court having jurisdiction in the premises of (A) a
     decree or order for relief in respect of the Company in an involuntary case
     or proceeding under any applicable federal or state bankruptcy, insolvency,
     reorganization or similar law or (B) a decree or order under any applicable
     federal or state law appointing a receiver or similar official in respect
     of the Company or of substantially all its property, and the continuance in
     the case of any proceedings under clause (A) above of any such decree or
     order for relief or any such other decree or order unstayed and in effect
     for a period of 60 consecutive days; or

          (2) the commencement by the Company of a voluntary case under any
     applicable federal or state bankruptcy, insolvency, reorganization or other
     similar law of any other case or proceeding to be adjudicated a bankrupt or
     insolvent, or the consent by the Company to the entry of a decree or order
     for relief in respect of the Company in an involuntary case or proceeding
     under any applicable federal or state bankruptcy, insolvency,
     reorganization or similar law or to the commencement of any bankruptcy or
     insolvency case or proceeding against it, or the filing by the Company of a
     petition or answer or consent seeking reorganization or relief under any
     applicable federal or state law, or the consent by the Company to the
     filing of such petition or to the appointment of or taking possession by a
     custodian, receiver, liquidator, assignee, trustee sequestrator or similar
     official of the Company or of substantially all its property.

          SECTION 502. Acceleration of Maturity; Rescission and Annulment. If an
Event of Default with respect to Debt Securities of any series at the time
Outstanding occurs and is continuing, then in every such case the Trustee or the
Holders of not less than 25% in principal amount of Outstanding Debt Securities
of such series may declare the principal amount (or, if any Debt Securities of
such series are Discount Securities or Indexed Securities, such portion of the
principal amount of such Discount Securities or Indexed Securities as may be
specified in the terms of such Discount Securities or Indexed Securities) of and
all accrued but unpaid interest on all the Debt Securities of such series to be
due and payable immediately, by a notice in writing to the Company (and to the
Trustee if given by Holders), and upon any such declaration such principal
amount (or specified amount) and interest shall become immediately due and
payable. Upon payment of such amounts, all obligations of the Company in respect
of the payment of principal of and interest on the Debt Securities of such
series shall terminate.

          At any time after such a declaration of acceleration with respect to
Debt Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in this
Article V provided, the Holders of a majority in principal amount of the
Outstanding Debt Securities of such series, by written notice to the Company and
the Trustee, may rescind and annul such declaration and its consequences if

          (1) the Company has paid or deposited with the Trustee a sum
     sufficient to pay

          (A) all overdue installments on all Debt Securities of such series,

          (B) the principal of (and premium, if any, on) any Debt Securities of
     such series that have become due and payable otherwise than by such
     declaration of acceleration and interest thereon at the rate or rates
     prescribed therefor in such Debt Securities,

          (C) to the extent that payment of such interest is lawful, interest
     upon overdue installments of interest on each Debt Security at the rate or
     rates prescribed therefor in such Debt Securities, and

          (D) all sums paid or advanced by the Trustee hereunder and the
     reasonable compensation, expenses, disbursements and advances of the
     Trustee, its agents and counsel; and

          (2) all Defaults with respect to Debt Securities of such series have
     been remedied.

          No such rescission and waiver shall affect any subsequent default or
impair any right consequent thereon.

          For all purposes under this Indenture, if a portion of the principal
of any Discount Securities shall have been accelerated and declared due and
payable pursuant to the provisions hereof, then, from and after such
declaration, unless such declaration has been rescinded and annulled, the
principal amount of such Discount Securities shall be deemed, for all purposes
hereunder, to be such portion of the principal thereof as shall be due and
payable as a result of such acceleration, and payment of such portion of the
principal thereof as shall be due and payable as a result of such acceleration,
together with interest, if any, thereon and all other amounts owing thereunder,
shall constitute payment in full of such Discount Securities.

          SECTION 503. Defaults; Collection of Indebtedness and Suits for
Enforcement by Trustee. "Default", wherever used herein, means any one of the
following events (whatever the reason for such Default and whether it shall be
voluntary or involuntary or be effected by operation of law pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body) with respect to any series of Debt
Securities under this Indenture:

          (1) an Event of Default has occurred with respect to such Debt
     Securities specified in Section 501;

          (2) the Company fails to pay the principal of (or premium, if any, on)
     any Debt Security of such series at the Maturity thereof and such failure
     is continued for seven days, whether or not such payment is prohibited by
     Article XV hereof; or

          (3) the Company fails to pay any installment of interest on any Debt
     Security of such series when such interest becomes due and payable and such
     failure is continued for 30 days, whether or not such payment is prohibited
     by Article XV hereof;

provided that in the case of a Default described in either clause (2) or (3)
above, if the Company does not pay any installment of interest on the applicable
Interest Payment Date or all or any part of any installment of principal at the
Stated Maturity thereof, the obligation to make such payment and such Interest
Payment Date or Stated Maturity, as the case may be, shall be deferred until (i)
in the case of a payment of interest, the Deferred Interest Payment Date with
respect to such payment of interest, and (ii) in the case of a payment of
principal, the first Business Day after the date that falls six months after the
original Stated Maturity with respect to such principal (which date shall be the
"Deferred Stated Maturity"). Failure by the Company to make any such payment
prior to such Deferred Interest Payment Date or Deferred Stated Maturity shall
not constitute a default by the Company or otherwise allow any Holder to sue the
Company for such payment or to take any other action. Any payment so deferred
shall not be treated as due for any purpose (including, without limitation, for
the purposes of ascertaining whether or not a Default has occurred) until the
Deferred Interest Payment Date or Deferred Stated Maturity, as the case may be,
when such payment shall be and become due and payable without any further act or
deed on the part of the Trustee or any Holder, provided, however, that any
payment so deferred shall accrue interest during the period of such deferral at
the rate per annum specified for such series of Debt Securities.

          The Company covenants that, if a Default shall occur with respect to
the Debt Securities of a particular series, it will, upon demand of the Trustee,
pay to the Trustee, for the benefit of the Holders of such Debt Securities of
such series, the entire amount then due and payable on such Debt Securities, for
the principal (and premium, if any) and interest, if any, and interest upon the
overdue principal (and premium, if any) and, to the extent that payment of such
interest shall be legally enforceable, upon overdue installments of interest, at
the rate or rates prescribed therefor in such Debt Securities of such series;
and, in addition thereto, such further amount as shall be sufficient to cover
the costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel.

          If the Company fails to pay such amount forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, and may
prosecute such proceeding to judgment or final decree, and may enforce the same
against the Company or any other obligor upon such Debt Securities of such
series, and collect the moneys adjudged or decreed to be payable in the manner
provided by law out of the property of the Company or any other obligor upon
such Debt Securities of such series wherever situated.

          If a Default with respect to Debt Securities of any series occurs and
is continuing, the Trustee may in its discretion proceed to protect and enforce
its rights and the rights of the Holders of Debt Securities of such series by
such appropriate judicial proceedings as the Trustee shall deem most effectual
to protect and enforce any such rights, whether for the specific enforcement of
any covenant or agreement in this Indenture or in aid of the exercise of any
power granted herein, or to enforce any other proper remedy.

          SECTION 504. Trustee May File Proofs of Claim. In case of the pendency
of any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial proceedings, or any
voluntary or involuntary case under the Federal bankruptcy laws, as now or
hereafter constituted, relative to the Company or any other obligor upon the
Debt Securities, of a particular series or the property of the Company or of
such other obligor or their creditors, the Trustee (irrespective of whether the
principal of such Debt Securities shall then be due and payable as therein
expressed or by declaration of acceleration or otherwise and irrespective of
whether the Trustee shall have made any demand on the Company for the payment of
overdue principal or interest) shall be entitled and empowered, by intervention
in such proceeding or otherwise,

          (i) to file and prove a claim for the whole amount of principal (and
     premium, if any) and interest owing and unpaid in respect of the Debt
     Securities of such series and to file such other papers or documents as may
     be necessary or advisable in order to have the claims of the Trustee
     (including any claim for the reasonable compensation, expenses,
     disbursements and advances of the Trustee, its agents and counsel) and of
     the Holders of such Debt Securities allowed in such judicial proceeding,
     and

        (ii) to collect and receive any moneys or other property payable or
     deliverable on any such claims and to distribute the same;

and any receiver, assignee, trustee, custodian, liquidator, sequestrator (or
other similar official) in any such proceeding is hereby authorized by each such
Holder to make such payments to the Trustee, and in the event that the Trustee
shall consent to the making of such payments directly to such Holders, to pay to
the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 607.

          Nothing herein shall be deemed to authorize the Trustee to authorize
or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Debt
Securities of such series or the rights of any Holder thereof, or to authorize
the Trustee to vote in respect of the claim of any Holder in any such
proceeding.

          SECTION 505. Trustee May Enforce Claims Without Possession of Debt
Securities. All rights of action and claims under this Indenture or the Debt
Securities of any series may be prosecuted and enforced by the Trustee without
the possession of any of such Debt Securities or the production thereof in any
proceeding relating thereto, and any such proceeding instituted by the Trustee
shall be brought in its own name, as trustee of an express trust, and any
recovery of judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, be for the ratable benefit of the Holders of the Debt Securities in
respect of which such judgment has been recovered.

          SECTION 506. Application of Money Collected. Any money collected by
the Trustee pursuant to this Article V shall be applied in the following order,
at the date or dates fixed by the Trustee and, in case of the distribution of
such money on account of principal (and premium, if any) or interest, upon
presentation of the Debt Securities of any series in respect of which money has
been collected and the notation thereon of the payment if only partially paid
and upon surrender thereof if fully paid:

          FIRST: To the payment of all amounts due the Trustee under Section
     607;

          SECOND: To the payment of the amounts then due and unpaid for
     principal of (and premium, if any) and interest on the Debt Securities of
     such series, in respect of which or for the benefit of which such money has
     been collected ratably, without preference or priority of any kind,
     according to the amounts due and payable on such Debt Securities for
     principal (and premium, if any) and interest, respectively; and

          THIRD: The balance, if any, to the Person or Persons entitled thereto.

          SECTION 507. Limitation on Suits. No Holder of any Debt Security of
any series shall have any right to institute any proceeding, judicial or
otherwise, with respect to this Indenture, or for the appointment of a receiver
or trustee, or for any other remedy hereunder, unless:

          (1) such Holder has previously given written notice to the Trustee of
     a continuing Default with respect to such series;

          (2) the Holders of not less than 25% in principal amount of the
     Outstanding Debt Securities of such series shall have made written request
     to the Trustee to institute proceedings in respect of such Default in its
     own name as Trustee hereunder;

          (3) such Holder or Holders have offered to the Trustee indemnity
     satisfactory to the Trustee, in its reasonable discretion, against the
     costs, expenses and liabilities to be incurred in compliance with such
     request;

          (4) the Trustee for 60 days after its receipt of such notice, request
     and offer of indemnity has failed to institute any such proceeding; and

          (5) no direction inconsistent with such written request has been given
     to the Trustee during such 60-day period by the Holders of a majority in
     principal amount of the Outstanding Debt Securities of such series;

it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other such
Holders or of the Holders of Outstanding Debt Securities of any other series, or
to obtain or to seek to obtain priority or preference over any other of such
Holders or to enforce any right under this indenture, except in the manner
herein provided and for the equal and ratable benefit of all of such Holders.
For the protection and enforcement of the provisions of this Section 507, each
and every Holder of Debt Securities of any series and the Trustee for such
series shall be entitled to such relief as can be given at law or in equity.

          SECTION 508. Unconditional Right of Holders to Receive Principal,
Premium and Interest. Subject only to the provisions of Article XV, the Holder
of any Debt Security shall have the right, which is absolute and unconditional,
to receive payment of the principal of (and premium, if any) and (subject to
Section 307) interest on the respective Stated Maturity or Maturities expressed
in such Debt Security (or, in the case of redemption, on the Redemption Date)
and to institute suit for the enforcement of any such payment and interest
thereon, and such right shall not be impaired without the consent of such
Holder.

          SECTION 509. Restoration of Rights and Remedies. If the Trustee or any
Holder has instituted any proceeding to enforce any right or remedy under this
Indenture and such proceeding has been discontinued or abandoned for any reason,
or has been determined adversely to the Trustee or to such Holder, then and in
every such case the Company, the Trustee and the Holders shall, subject to any
determination in such proceeding, be restored severally and respectively to
their former positions hereunder, and thereafter all rights and remedies of the
Trustee and the Holders shall continue as though no such proceeding had been
instituted.

          SECTION 510. Rights and Remedies Cumulative. Except as otherwise
expressly provided elsewhere in this Indenture, no right or remedy herein
conferred upon or reserved to the Trustee or to the Holders is intended to be
exclusive of any other right or remedy, and every right and remedy shall, to the
extent permitted by law, be cumulative and in addition to every other right and
remedy given hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.

          SECTION 511. Delay or Omission Not Waiver. No delay or omission of the
Trustee or of any Holder to exercise any right or remedy accruing upon any
Default shall impair any such right or remedy or constitute a waiver of any such
Default or any acquiescence therein. Every right and remedy given by this
Indenture or by law to the Trustee or to the Holders may be exercised from time
to time, and as often as may be deemed expedient, by the Trustee or by the
Holders, as the case may be.

          SECTION 512. Control by Holders. The Holders of not less than a
majority in principal amount of the Outstanding Debt Securities of any series
shall have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on the Trustee with respect to the Debt Securities of such
series; provided that:

          (1) such direction shall not be in conflict with any rule of law or
     with this Indenture;

          (2) subject to the provisions of Section 601, the Trustee shall have
     the right to decline to follow any such direction if the Trustee in good
     faith shall, by a Responsible Officer or Responsible Officers of the
     Trustee, determine that the proceeding so directed might result in personal
     liability or would be unjustly prejudicial to the Holders of Debt
     Securities of such series not joining in any such direction; and

          (3) the Trustee may take any other action deemed proper by the Trustee
     that is not inconsistent with such direction.

          SECTION 513. Waiver of Past Defaults. The Holders of not less than a
majority in principal amount of the Outstanding Debt Securities of any series
may on behalf of the Holders of all the Debt Securities of any such series waive
any past default hereunder with respect to such series and its consequences,
except a default

          (1) in the payment of the principal of (or premium, if any) or
     interest on any Debt Security of such series, or

          (2) in respect of a covenant or provision hereof that under Article XI
     cannot be modified or amended without the consent of the Holder of each
     Outstanding Debt Security of such series affected.

          Upon any such waiver, such default shall cease to exist, and any
Default arising therefrom shall be deemed to have been cured, for every purpose
of the Debt Securities of such series under this Indenture, but no such waiver
shall extend to any subsequent or other default or impair any right consequent
thereon.

          SECTION 514. Undertaking for Costs. All parties to this Indenture
agree, and each Holder of any Debt Security by his acceptance thereof shall be
deemed to have agreed, that any court may in its discretion require, in any suit
for the enforcement of any right or remedy under this Indenture, or in any suit
against the Trustee for any action taken, suffered or omitted by it as Trustee,
the filing by any party litigant in such suit of an undertaking to pay the costs
of such suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees, against any party litigant in such suit,
having due regard to the merits and good faith of the claims or defenses made by
such party litigant, but the provisions of this Section 514 shall not apply to
any suit instituted by the Trustee, to any suit instituted by any Holder or
group of Holders holding in the aggregate more than 10% in principal amount of
the Outstanding Debt Securities of any series, or to any suit instituted by any
Holder of a Debt Security for the enforcement of the payment of the principal of
(or premium, if any) or interest on such Debt Security on or after the
respective Stated Maturity or Maturities expressed in such Debt Security (or, in
the case of redemption, on or after the Redemption Date).

          SECTION 515. Waiver of Stay or Extension Laws. The Company covenants
(to the extent that it may lawfully do so) that it will not at any time insist
upon, or plead, or in any manner whatsoever claim or take the benefit or
advantage of, any stay or extension law wherever enacted, now or at any time
hereafter in force, that may affect the covenants or the performance of this
Indenture; and the Company (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that it
will not hinder, delay or impede the execution of any power herein granted to
the Trustee, but will suffer and permit the execution of every such power as
though no such law had been enacted.

                                   ARTICLE VI

                                   THE TRUSTEE

          SECTION 601. Certain Duties and Responsibilities. (a) With respect to
Debt Securities of any series, except during the continuance of an Event of
Default or Default with respect to the Debt Securities of such series,

          (1) the Trustee undertakes to perform such duties and only such duties
     as are specifically set forth in this Indenture, and no implied covenants
     or obligations shall be read into this Indenture against the Trustee; and

          (2) in the absence of bad faith on its part, the Trustee may
     conclusively rely, as to the truth of the statements and the correctness of
     the opinions expressed therein, upon an Officers' Certificate or Opinion of
     Counsel or any other certificates or opinions furnished to the Trustee and
     conforming to the requirements of this Indenture; but in the case of any
     Officers' Certificate or Opinion of Counsel or any other such certificates
     or opinions which by any provisions hereof are specifically required to be
     furnished to the Trustee, the Trustee shall be under a duty to examine the
     same to determine whether or not they conform to the requirements of this
     Indenture.

          (b) In case a Default with respect to Debt Securities of any series
has occurred and is continuing, the Trustee shall, with respect to the Debt
Securities of such series, exercise such of the rights and powers vested in it
by this Indenture, and use the same degree of care and skill in their exercise,
as a prudent man would exercise or use under the circumstances in the conduct of
his own affairs.

          (c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that:

          (1) this subsection shall not be construed to limit the effect of
     subsection (a) of this Section;

          (2) the Trustee shall not be liable for any error of judgment made in
     good faith by a Responsible Officer, unless it shall be proved that the
     Trustee was negligent in ascertaining the pertinent facts;

          (3) the Trustee shall not be liable with respect to any action taken,
     suffered or omitted to be taken by it, with respect to Debt Securities of
     any series, in good faith in accordance with the direction of the Holders
     of a majority in principal amount of the Outstanding Debt Securities of
     such series relating to the time, method and place of conducting any
     proceeding for any remedy available to the Trustee, or exercising any trust
     or power conferred upon the Trustee under this Indenture with respect to
     the Debt Securities of any such series; and

          (4) the Trustee shall not be required to expend or risk its own funds
     or otherwise incur any financial liability in the performance of any of its
     duties hereunder, or in the exercise of any of its rights or powers, if it
     shall have reasonable grounds for believing that repayment of such funds or
     adequate indemnity against such risk or liability is not reasonably assured
     to it.

          (d) Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section 601.

          SECTION 602. Notice of Defaults. Within 90 days after the occurrence
of any default hereunder with respect to Debt Securities of any series, the
Trustee shall by the pertinent methods provided in Section 105 give notice to
all Holders of Debt Securities of such series of each default hereunder known to
the Trustee, unless such default shall have been cured or waived; provided,
however, that, except in the case of default in the payment of the principal of
(or premium, if any) or interest on any Debt Security of such series, the
Trustee shall be protected in withholding such notice if and so long as the
board of directors, the executive committee or a trust committee of directors
and/or Responsible Officers of the Trustee in good faith determines that the
withholding of such notice is in the interest of the Holders of Debt Securities
of such series; provided further that in the case of any default of the
character specified in Section 501(1)(A) with respect to Debt Securities of such
series no such notice to Holders shall be given until at least 60 days after the
occurrence thereof and provided further that the Trustee shall not be deemed to
have knowledge of a Default unless either (A) a Responsible Officer of the
Trustee assigned to the Trustee's Corporate Trust Administration Department
shall have actual knowledge of such Default or (B) the Trustee shall have
received written notice thereof from the Company or from any Holder. For the
purpose of this Section, the term "default" means any event that is, or after
notice or lapse of time or both would become, a Default with respect to Debt
Securities of such series.

          SECTION 603. Certain Rights of Trustee. Except as otherwise provided
in Section 601:

          (a) the Trustee may rely and shall be protected in acting or
     refraining from acting upon any resolution, certificate, statement,
     instrument, opinion, report, notice, request, direction, consent, order,
     bond, debenture, note, coupon or other paper or document believed by it to
     be genuine and to have been signed or presented by the proper party or
     parties;

          (b) any request or direction of the Company mentioned herein shall be
     sufficiently evidenced by a Company Request or Company Order and any
     resolution of the Board of Directors shall be sufficiently evidenced by a
     Board Resolution;

          (c) whenever in the administration of this Indenture the Trustee shall
     deem it desirable that a matter be proved or established prior to taking,
     suffering or omitting any action hereunder, the Trustee (unless other
     evidence be herein specifically prescribed) may, in the absence of bad
     faith on its part, rely upon an Officers' Certificate;

          (d) the Trustee may consult with counsel and the advice of such
     counsel or any Opinion of Counsel shall be full and complete authorization
     and protection in respect of any action taken, suffered or omitted by it
     hereunder in good faith and in reliance thereon;

          (e) the Trustee shall be under no obligation to exercise any of the
     rights or powers vested in it by this Indenture at the request or direction
     of any of the Holders of Debt Securities of any series pursuant to this
     Indenture, unless such Holders shall have offered to the Trustee security
     or indemnity satisfactory to the Trustee, in its reasonable discretion,
     against the costs, expenses and liabilities that might be incurred by it in
     compliance with such request or direction;

          (f) the Trustee shall not be bound to make any investigation into the
     facts or matters stated in any resolution, certificate, statement,
     instrument, opinion, report, notice, request, direction, consent, order,
     bond, debenture, note, coupon or other paper or document, but the Trustee,
     in its discretion, may make such further inquiry or investigation into such
     facts or matters as it may see fit, and, if the Trustee shall determine to
     make such further inquiry or investigation, it shall be entitled to examine
     the books, records and premises of the Company, personally or by agent or
     attorney;

          (g) the Trustee may execute any of the trusts or powers hereunder or
     perform any duties hereunder either directly or by or through agents or
     attorneys and the Trustee shall not be responsible for any misconduct or
     negligence on the part of any agent or attorney appointed with due care by
     it hereunder; and

          (h) the Trustee shall not be liable for any action taken or omitted by
     it in good faith and believed by it to be authorized or within the
     discretion, rights or powers conferred upon it by this Indenture.

          SECTION 604. Not Responsible for Recitals or Issuance of Debt
Securities. The recitals contained herein and in the Debt Securities, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and the Trustee assumes no responsibility for their correctness.
The Trustee makes no representations as to the validity or sufficiency of this
Indenture, of the Debt Securities of any series or to any prospectus relating to
the series of Debt Securities. The Trustee shall not be accountable for the use
or application by the Company of any Debt Securities or the proceeds thereof.

          SECTION 605. May Hold Debt Securities. The Trustee, any Paying Agent,
the Security Registrar or any other agent of the Company or the Trustee, in its
individual or any other capacity, may become the owner or pledgee of Debt
Securities, and, subject to Sections 310(a)(5), 310(b) and 311 of the Trust
Indenture Act, may otherwise deal with the Company with the same rights it would
have if it were not Trustee, Paying Agent, Security Registrar or such other
agent.

          SECTION 606. Money Held in Trust. Money held by the Trustee or any
Paying Agent (except the Company) in trust hereunder need not be segregated from
other funds except to the extent required by law. Neither the Trustee nor any
Paying Agent shall be under any liability for interest on any money received by
it hereunder except as otherwise agreed with the Company.

          SECTION 607. Compensation and Reimbursement. The Company agrees

          (1) to pay to the Trustee from time to time such compensation in
     Dollars for all services rendered by it hereunder as may be mutually agreed
     upon in writing by the Company and the Trustee (which compensation shall
     not be limited by any provision of law in regard to the compensation of a
     trustee of an express trust);

          (2) to reimburse the Trustee in Dollars upon its request for all
     reasonable expenses, disbursements and advances incurred or made by the
     Trustee in accordance with any provision of this Indenture (including the
     reasonable compensation and the expenses and disbursements of its agents
     and counsel), except any such expense, disbursement or advance as may be
     attributable to its negligence or bad faith; and

          (3) to indemnify in Dollars the Trustee for, and to hold it harmless
     against, any loss, liability or expense incurred without negligence or bad
     faith on its part, arising out of or in connection with the acceptance or
     administration of this trust or performance of its duties hereunder,
     including the costs and expenses of defending itself against any claim or
     liability in connection with the exercise or performance of any of its
     powers or duties hereunder.

          When the Trustee incurs expenses or renders services in connection
with an Event of Default specified in Sections 501(1) and 501(2), the expenses
(including the reasonable charges and expenses of its counsel) and the
compensation for the services are intended to constitute expenses of
administration under any applicable Federal or state bankruptcy, insolvency or
other similar laws.

          As security for the performance of the obligations of the Company
under this Section, the Trustee shall have a lien prior to the Debt Securities,
upon all property and funds held or collected by the Trustee as such, except
funds held in trust for the payment of amounts due on the Debt Securities.

          The obligations of the Company under this Section 607 to compensate
and indemnify the Trustee for expenses, disbursements and advances shall
constitute additional indebtedness under this Indenture and shall survive the
satisfaction and discharge of this Indenture.

          SECTION 608. Disqualification, Conflicting Interests. (a) The Trustee
shall comply with TIA ss. 310(b); provided, however, that there shall be
excluded from the operation of TIA ss. 310(b)(1) any indenture or indentures
under which other securities or certificates of interest or participation in
other securities of the Company are outstanding if the requirements for such
exclusion set forth in TIA ss. 310(b)(1) are met.

          (b) If Section 310(b) of the Trust Indenture Act is amended at any
time after the date of this Indenture to change the circumstances under which a
Trustee shall be deemed to have a conflicting interest with respect to the Debt
Securities of any series or to change any of the definitions in connection
therewith, this Section 608 shall be automatically amended to incorporate such
changes.

          SECTION 609. Corporate Trustee Required, Eligibility. There shall at
all times be a Trustee hereunder that shall be a corporation organized and doing
business under the laws of the United States of America, any State thereof or
the District of Columbia, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least $50,000,000, subject
to supervision or examination by Federal or State authority and having its
Corporate Trust Office or an agency in New York, New York; provided, however,
that if Section 310(a) of the Trust Indenture Act or the rules and regulations
of the Commission under the Trust Indenture Act at any time permit a corporation
organized and doing business under the laws of any other jurisdiction to serve
as trustee of an indenture qualified under the Trust Indenture Act, this Section
609 shall be automatically amended to permit a corporation organized and doing
business under the laws of any such other jurisdiction to serve as Trustee
hereunder. If such corporation publishes reports of condition at least annually,
pursuant to law or to the requirements of the aforesaid supervising or examining
authority, then for the purposes of this Section, the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. The
Trustee shall comply with Section 310(a)(5) of the Trust Indenture Act. If at
any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the manner and with
the effect hereinafter specified in this Article.

          SECTION 610. Resignation and Removal, Appointment of Successor. (a) No
resignation or removal of the Trustee and no appointment of a successor Trustee
pursuant to this Article shall become effective until the acceptance of
appointment by the successor Trustee under Section 611.

          (b) The Trustee may resign at any time with respect to the Debt
Securities of one or more series by giving written notice thereof to the
Company. If an instrument of acceptance by a successor Trustee shall not have
been delivered to the Trustee within 30 days after the giving of such notice of
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to the Debt
Securities of such series.

          (c) The Trustee may be removed at any time with respect to the Debt
Securities of any series and a successor Trustee appointed by Act of the Holders
of a majority in principal amount of the Outstanding Debt Securities of such
series, delivered to the Trustee and to the Company.

          (d) If at any time:

          (1) the Trustee shall fail to comply with Section 608(a) with respect
     to the Debt Securities of any series after written request therefor by the
     Company or by any Holder who has been a bona fide Holder of a Debt Security
     of such series for at least six months, or

          (2) the Trustee shall cease to be eligible under Section 609 with
     respect to the Debt Securities of any series and shall fail to resign after
     written request therefor by the Company or by any Holder who has been a
     bona fide Holder of a Debt Security of such series for at least six months,
     or

          (3) the Trustee shall become incapable of acting or a decree or order
     for relief by a court having jurisdiction in the premises shall have been
     entered in respect of the Trustee in an involuntary case under the Federal
     bankruptcy laws, as now or hereafter constituted, or any other applicable
     Federal or State bankruptcy, insolvency or similar law; or a decree or
     order by a court having jurisdiction in the premises shall have been
     entered for the appointment of a receiver, custodian, liquidator, assignee,
     trustee, sequestrator (or other similar official) of the Trustee or of its
     property or affairs, or any public officer shall take charge or control of
     the Trustee or of its property or affairs for the purpose of
     rehabilitation, conservation, winding up or liquidation, or

          (4) the Trustee shall commence a voluntary case under the Federal
     bankruptcy laws, as now or hereafter constituted, or any other applicable
     Federal or State bankruptcy, insolvency or similar law or shall consent to
     the appointment of or taking possession by a receiver, custodian,
     liquidator, assignee, trustee, sequestrator (or other similar official) of
     the Trustee or its property or affairs, or shall make an assignment for the
     benefit of creditors, or shall admit in writing its inability to pay its
     debts generally as they become due, or shall take corporate action in
     furtherance of any such action,

then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee with respect to all Debt Securities, or (ii) subject to Section 514, any
Holder who has been a bona fide Holder of a Debt Security of any series for at
least six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee for the Debt Securities of such series.

          (e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, with
respect to the Debt Securities of one or more series, the Company, by a Board
Resolution, shall promptly appoint a successor Trustee or Trustees with respect
to the Debt Securities of that or those series (it being understood that any
such successor Trustee may be appointed with respect to the Debt Securities of
one or more or all of such series and that at any time there shall be only one
Trustee with respect to the Debt Securities of any particular series) and shall
comply with the applicable requirements of Section 611. If, within one year
after such resignation, removal or incapability, or the occurrence of such
vacancy, a successor Trustee with respect to the Debt Securities of any series
shall be appointed by Act of the Holders of a majority in principal amount of
the Outstanding Debt Securities of such series delivered to the Company and the
retiring Trustee, the successor Trustee so appointed shall, forthwith upon its
acceptance of such appointment, become the successor Trustee with respect to the
Debt Securities of such series and to that extent supersede the successor
Trustee appointed by the Company. If no successor Trustee with respect to the
Debt Securities of any series shall have been so appointed by the Company or the
Holders of such series and accepted appointment in the manner hereinafter
provided, any Holder who has been a bona fide Holder of a Debt Security of such
series for at least six months may, subject to Section 514, on behalf of himself
and all others similarly situated, petition any court of competent jurisdiction
for the appointment of a successor Trustee with respect to the Debt Securities
of such series.

          (f) The Company shall give notice of each resignation and each removal
of the Trustee with respect to the Debt Securities of any series and each
appointment of a successor Trustee with respect to the Debt Securities of any
series in the manner and to the extent provided in Section 105 to the Holders of
Debt Securities of such series. Each notice shall include the name of the
successor Trustee with respect to the Debt Securities of such series and the
address of its Corporate Trust Office.

          SECTION 611. Acceptance of Appointment by Successor. (a) In the case
of an appointment hereunder of a successor Trustee with respect to all Debt
Securities, each such successor Trustee so appointed shall execute, acknowledge
and deliver to the Company and to the retiring Trustee an instrument accepting
such appointment, and thereupon the resignation or removal of the retiring
Trustee shall become effective and such successor Trustee, without any further
act, deed or conveyance, shall become vested with all the rights, powers, trusts
and duties of the retiring Trustee; but, on request of the Company or the
successor Trustee, such retiring Trustee shall, upon payment of its charges,
execute and deliver an instrument transferring to such successor Trustee all the
rights, powers and trusts of the retiring Trustee, and shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder, subject nevertheless to its claim, if any,
provided for in Section 607.

          (b) In case of the appointment hereunder of a successor Trustee with
respect to the Debt Securities of one or more (but not all) series, the Company,
the retiring Trustee and each successor Trustee with respect to the Debt
Securities of one or more series shall execute and deliver an indenture
supplemental hereto wherein each successor Trustee shall accept such appointment
and which (1) shall contain such provisions as shall be necessary or desirable
to transfer and confirm to, and to vest in, each successor Trustee all the
rights, powers, trusts and duties of the retiring Trustee with respect to the
Debt Securities of that or those series to which the appointment of such
successor Trustee relates, (2) if the retiring Trustee is not retiring with
respect to all Debt Securities, shall contain such provisions as shall be deemed
necessary or desirable to confirm that all the rights, powers, trusts and duties
of the retiring Trustee with respect to the Debt Securities of that or those
series as to which the retiring Trustee is not retiring shall continue to be
vested in the retiring Trustee, and (3) shall add to or change any of the
provisions of this Indenture as shall be necessary to provide for or facilitate
the administration of the trusts hereunder by more than one Trustee, it being
understood that nothing herein or in any such supplemental indenture shall
constitute such Trustees co-trustees of the same trust and that each such
Trustee shall be trustee of a trust or trusts hereunder separate and apart from
any trust or trusts hereunder administered by any other such Trustee; and upon
the execution and delivery of any such supplemental indenture the resignation or
removal of the retiring Trustee shall become effective to the extent provided
therein and each such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee with respect to the Debt Securities of that or those
series to which the appointment of such successor Trustee relates; but, on
request of the Company or any successor Trustee, such retiring Trustee shall
duly assign, transfer and deliver to such successor Trustee all property and
money held by such retiring Trustee hereunder with respect to the Debt
Securities of that or those series to which the appointment of such successor
Trustee relates.

          (c) Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts referred
to in paragraph (a) or (b) of this Section, as the case may be.

          (d) No successor Trustee shall accept its appointment unless at the
time of such acceptance such successor Trustee shall be qualified and eligible
under this Article.

          SECTION 612. Merger, Conversion, Consolidation or Succession to
Business. Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided that such corporation shall be otherwise qualified and eligible under
this Article, without the execution or filing of any paper or any further act on
the part of any of the parties hereto. In case any Debt Securities shall have
been authenticated, but not delivered, by the Trustee then in office, any
successor by merger, conversion or consolidation to such authenticating Trustee
may adopt such authentication and deliver the Debt Securities so authenticated
with the same effect as if such successor Trustee had itself authenticated such
Debt Securities. In case any Debt Securities shall not have been authenticated
by such predecessor Trustee, any such successor Trustee may authenticate and
deliver such Debt Securities, in either its own name or that of its predecessor
Trustee, with the full force and effect which this Indenture provides for the
certificate of authentication of the Trustee.

          SECTION 613. Preferential Collection of Claims Against Company. If and
when the Trustee shall be or become a creditor of the Company (or any other
obligor upon the Debt Securities of a series), the Trustee shall be subject to
the provisions of the Trust Indenture Act regarding the collection of claims
against the Company (or any such other obligor).

          SECTION 614. Appointment of Authenticating Agent. As long as any Debt
Securities of a series remain Outstanding, the Trustee may, by an instrument in
writing, appoint an authenticating agent (the "Authenticating Agent") which
shall be authorized to act on behalf of the Trustee to authenticate Debt
Securities of such series issued upon exchange, registration of transfer,
partial redemption or pursuant to Section 306. Debt Securities of each such
series authenticated by such Authenticating Agent shall be entitled to the
benefits of this Indenture and shall be valid and obligatory for all purposes as
if authenticated by such Trustee. Wherever reference is made in this Indenture
to the authentication and delivery of Debt Securities of any series by the
Trustee for such series or to the Trustee's Certificate of Authentication, such
reference shall be deemed to include authentication and delivery on behalf of
the Trustee for such series by an Authenticating Agent for such series and a
Certificate of Authentication executed on behalf of such Trustee by such
Authenticating Agent Such Authenticating Agent shall at all times be a
corporation organized and doing business under the laws of the United States of
America or of any State, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least $10,000,000
(determined as provided in Section 609 with respect to the Trustee) and subject
to supervision or examination by Federal or State authority.

          Any corporation into which any Authenticating Agent may be merged or
converted, or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which any Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency business
or corporate trust business of any Authenticating Agent, shall continue to be
the Authenticating Agent with respect to all series of Debt Securities for which
it served as Authenticating Agent without the execution or filing of any paper
or any further act on the part of the Trustee for such series or such
Authenticating Agent. Any Authenticating Agent may at any time, and if it shall
cease to be eligible shall, resign by giving written notice of resignation to
the applicable Trustee and to the Company.

          Upon receiving such a notice of resignation, or in case at any time
any Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section 614 with respect to one or more of all series of Debt
Securities, the Trustee for such series shall upon Company Request appoint a
successor Authenticating Agent, and the Company shall provide notice of such
appointment to all Holders of Debt Securities of such series in the manner and
to the extent provided in Section 105. Any successor Authenticating Agent upon
acceptance of its appointment hereunder shall become vested with all rights,
powers, duties and responsibilities of its predecessor hereunder, with like
effect as if originally named as Authenticating Agent. The Company agrees to pay
to the Authenticating Agent for such series from time to time reasonable
compensation including reimbursement of its reasonable expenses for its
services. The Authenticating Agent for the Debt Securities of any series shall
have no responsibility or liability for any action taken by it as such at the
direction of the Trustee for such series.

<PAGE>

                                   ARTICLE VII

                HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY

          SECTION 701. Company to Furnish Trustee Names and Addresses of
Holders. The Company will furnish or cause to be furnished to the Trustee with
respect to Registered Securities of each series for which it acts as Trustee:

          (a) semiannually, not later than 15 days after the Regular Record Date
     for interest for each series of Debt Securities, a list, in such form as
     the Trustee may reasonably require, of the names and addresses of the
     Registered Holders as of the Regular Record Date, respectively; and

          (b) at such other times as the Trustee may request in writing, within
     30 days after the receipt by the Company of any such request, a list of
     similar form and content as of a date not more than 15 days prior to the
     time such list is furnished;

provided, however, that if and so long as the Trustee shall be the Security
Registrar, no such list need be furnished.

          SECTION 702. Preservation of Information; Communication to Holders.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, all information as to the names and addresses of Holders contained
in the most recent list furnished to the Trustee as provided in Section 701,
received by it in the capacity of Paying Agent or Security Registrar (if so
acting) hereunder, and filed with it within the two preceding years pursuant to
Section 704(2).

          The Trustee may destroy any list furnished to it as provided in
Section 701 upon receipt of a new list so furnished, destroy any information
received by it as Paying Agent or Security Registrar (if so acting) hereunder
upon delivering to itself as Trustee, not earlier than 45 days after an Interest
Payment Date, a list containing the names and addresses of the Holders obtained
from such information since the delivery of the next previous list, if any,
destroy any list delivered to itself as Trustee which was compiled from
information received by it as Paying Agent or Security Registrar (if so acting)
hereunder upon the receipt of a new list so delivered, and destroy not earlier
than two years after filing, any information filed with it pursuant to Section
704(2).

          (b) If three or more Holders (hereinafter referred to as "applicants")
apply in writing to the Trustee, and furnish to the Trustee reasonable proof
that each such applicant has owned a Debt Security for a period of at least six
months preceding the date of such application, and such application states that
the applicants desire to communicate with other Holders of Debt Securities of a
particular series (in which case the applicants must hold Debt Securities of
such series) or with all Holders of Debt Securities with respect to their rights
under this Indenture or under the Debt Securities and is accompanied by a copy
of the form of proxy or other communication which such applicants propose to
transmit, then the Trustee shall, within five Business Days after the receipt of
such application, at its election either:

          (i) afford such applicants access to the information preserved at the
     time by the Trustee in accordance with Section 702(a), or

         (ii) inform such applicants as to the approximate number of Holders of
     Debt Securities of such series or of all Debt Securities, as the case may
     be, whose names and addresses appear in the information preserved at the
     time by the Trustee in accordance with Section 702(a), and as to the
     approximate cost of mailing to such Holders the form of proxy or other
     communication, specified in such application.

          If the Trustee shall elect not to afford such applicants access to
such information, the Trustee shall, upon written request of such applicants,
mail to the Holders of Debt Securities of such series or all Holders, as the
case may be, whose names and addresses appear in the information preserved at
the time by the Trustee in accordance with Section 702(a), a copy of the form of
proxy or other communication which is specified in such request, with reasonable
promptness after a tender to the Trustee of the material to be mailed and of
payment, or provision for the payment, of the reasonable expenses of mailing,
unless within five days after such tender the Trustee shall mail to such
applicants and file with the Commission, together with a copy of the material to
be mailed, a written statement to the effect that, in the opinion of the
Trustee, such mailing would be contrary to the best interests of the Holders of
Debt Securities of such series or all Holders, as the case may be, or would be
in violation of applicable law. Such written statement shall specify the basis
of such opinion. If the Commission, after opportunity for a hearing upon the
objections specified in the written statement so filed, shall enter an order
refusing to sustain any of such objections or if, after the entry of an order
sustaining one or more of such objections, the Commission shall find, after
notice and opportunity for hearing, that all the objections so sustained have
been met and shall enter an order so declaring, the Trustee shall mail copies of
such material to all such Holders with reasonable promptness after the entry of
such order and the renewal of such tender; otherwise the Trustee shall be
relieved of any obligation or duty to such applicants respecting their
application.

          (c) Every Holder of Debt Securities, by receiving and holding the
same, agrees with the Company and the Trustee that neither the Company nor the
Trustee nor any Paying Agent shall be held accountable by reason of the
disclosure of any such information as to the names and addresses of the Holders
in accordance with Section 702(b), regardless of the source from which such
information was derived, and that the Trustee shall not be held accountable by
reason of mailing any material pursuant to a request made under Section 702(b).

          SECTION 703. Reports by Trustee. (a) The Trustee shall transmit to
Holders such reports concerning the Trustee and its actions under this Indenture
as may be required pursuant to the Trust Indenture Act at the times and in the
manner provided pursuant thereto. If required by Section 313(a) of the Trust
Indenture Act, the Trustee shall, within sixty days after each May 15 following
the date of this Indenture deliver to Holders a brief report, dated as of such
May 15, which complies with the provisions of such Section 313(a).

          (b) A copy of each such report shall, at the time of such transmission
to Holders, be filed by the Trustee with each stock exchange, if any, upon which
the Debt Securities are listed, with the Commission and with the Company. The
Company will promptly notify the Trustee when the Securities are listed on any
stock exchange.

          SECTION 704. Reports by Company. The Company will:

          (1) file with the Trustee, within 15 days after the Company is
     required to file the same with the Commission, copies of the annual reports
     and of the information, documents and other reports (or copies of such
     portions of any of the foregoing as the Commission may from time to time by
     rules and regulations prescribe) which the Company may be required to file
     with the Commission pursuant to Section 13 or Section 15(d) of the
     Securities Exchange Act of 1934, as amended; or, if the Company is not
     required to file information, documents or reports pursuant to either of
     said Sections, then it will file with the Trustee and the Commission, in
     accordance with rules and regulations prescribed from time to time by the
     Commission, such of the supplementary and periodic information, documents
     and reports which may be required pursuant to Section 13 of the Securities
     Exchange Act of 1934, as amended, in respect of a security listed and
     registered on a national securities exchange as may be required from time
     to time in such rules and regulations;

          (2) file with the Trustee and the Commission, in accordance with rules
     and regulations prescribed from time to time by the Commission, such
     additional information, documents and reports with respect to compliance by
     the Company with the conditions and covenants of this Indenture as may be
     required from time to time by such rules and regulations; and

          (3) transmit to all Holders of Debt Securities, in the manner and to
     the extent provided in Section 703, within 30 days after the filing thereof
     with the Trustee, such summaries of any information, documents and reports
     required to be filed by the Company pursuant to paragraphs (1) and (2) of
     this Section 704 as may be required by rules and regulations prescribed
     from time to time by the Commission.

                                  ARTICLE VIII

                             CONCERNING THE HOLDERS

          SECTION 801. Acts of Holders. Any request, demand, authorization,
direction, notice, consent, waiver or other action provided by this Indenture to
be given or taken by Holders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Holders in person or
by an agent or proxy duly appointed in writing, and, except as herein otherwise
expressly provided, such action shall become effective when such instrument or
instruments are delivered to the Trustee and, where it is hereby expressly
required, to the Company. Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as the
"Act" of the Holders signing such instrument or instruments. Whenever in this
Indenture it is provided that the Holders of a specified percentage in aggregate
principal amount of the Outstanding Debt Securities of any series may take any
Act, the fact that the Holders of such specified percentage have joined therein
may be evidenced (a) by the instrument or instruments executed by Holders in
person or by agent or proxy appointed in writing, or (b) by the record of
Holders voting in favor thereof at any meeting of such Holders duly called and
held in accordance with the provisions of Article IX, or (c) by a combination of
such instrument or instruments and any such record of such a meeting of Holders.

          SECTION 802. Proof of Ownership; Proof of Execution of Instruments by
Holders. The ownership of Registered Securities of any series shall be proved by
the Security Register for such series or by a certificate of the Security
Registrar for such series.

          Subject to the provisions of Sections 601, 603 and 905, proof of the
execution of a writing appointing an agent or proxy and of the execution of any
instrument by a Holder or his agent or proxy shall be sufficient and conclusive
in favor of the Trustee and the Company if made in the following manner:

          The fact and date of the execution by any such person of any
instrument may be proved by the certificate of any notary public or other
officer authorized to take acknowledgment of deeds, that the person executing
such instrument acknowledged to him the execution thereof, or by an affidavit of
a witness to such execution sworn to before any such notary or other such
officer. Where such execution is by an officer of a corporation or association
or a member of a partnership on behalf of such corporation, association or
partnership, as the case may be, or by any other person acting in a
representative capacity, such certificate or affidavit shall also constitute
sufficient proof of his authority.

          The record of any Holders' meeting shall be proved in the manner
provided in Section 906.

          The Trustee may in any instance require further proof with respect to
any of the matters referred to in this Section so long as the request is a
reasonable one.

          If the Company shall solicit from the Holders of Debt Securities of
any series any Act, the Company may, at its option, by Board Resolution, fix in
advance a record date for the determination of Holders of Registered Securities
entitled to take such Act, but the Company shall have no obligation to do so.
Such record date shall be the record date specified in or pursuant to such Board
Resolution, which shall be a date not earlier than the date 30 days prior to the
first solicitation of Holders generally in connection therewith and not later
than the date such solicitation is completed.

          Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Holder of any Debt Security shall bind every future Holder
of the same Debt Security and any Debt Security issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, suffered or omitted by the Trustee or any agent of the Trustee or
the Company in reliance thereon, whether or not notation of such action is made
upon such Debt Security.

          SECTION 803. Revocation of Consents; Future Holders Bound. At any time
prior to (but not after) the evidencing to the Trustee, as provided in Section
801, of the taking of any Act by the Holders of the percentage in aggregate
principal amount of the Outstanding Debt Securities specified in this Indenture
in connection with such Act, any Holder of a Debt Security the number, letter or
other distinguishing symbol of which is shown by the evidence to be included in
the Debt Securities the Holders of which have consented to such Act may, by
filing written notice with the Trustee at the Corporate Trust Office and upon
proof of ownership as provided in Section 802, revoke such Act so far as it
concerns such Debt Security. Except as aforesaid, any such Act taken by the
Holder of any Debt Security shall be conclusive and binding upon such Holder and
upon all future Holders of such Debt Security and of any Debt Securities issued
on transfer or in lieu thereof or in exchange or substitution therefor,
irrespective of whether or not any notation in regard thereto is made upon such
Debt Security or such other Debt Securities.

                                   ARTICLE IX

                                HOLDERS' MEETINGS

          SECTION 901. Purposes of Meetings. A meeting of Holders of any or all
series may be called at any time and from time to time pursuant to the
provisions of this Article IX for any of the following purposes:

          (1) to give any notice to the Company or to the Trustee for such
     series, or to give any directions to the Trustee for such series, or to
     consent to the waiving of any default hereunder and its consequences, or to
     take any other action authorized to be taken by Holders pursuant to any of
     the provisions of Article V;

          (2) to remove the Trustee for such series and appoint a successor
     Trustee pursuant to the provisions of Article VI;

          (3) to consent to the execution of an indenture or indentures
     supplemental hereto pursuant to the provisions of Section 1102; or

          (4) to take any other action authorized to be taken by or on behalf of
     the Holders of any specified aggregate principal amount of the Outstanding
     Debt Securities of any one or more or all series, as the case may be, under
     any other provision of this Indenture or under applicable law.

          SECTION 902. Call of Meetings by Trustee. The Trustee for any series
may at any time call a meeting of Holders of such series to take any action
specified in Section 901, to be held at such time or times and at such place or
places as the Trustee for such series shall determine. Notice of every meeting
of the Holders of any series, setting forth the time and place of such meeting
and in general terms the action proposed to be taken at such meeting, shall be
given to Holders of such series in the manner and to the extent provided in
Section 105. Such notice shall be given not less than 20 days or more than 90
days prior to the date fixed for the meeting.

          SECTION 903. Call of Meetings by Company or Holders. In case at any
time the Company, pursuant to a Board Resolution, or the Holders of at least 10%
in aggregate principal amount of the Outstanding Debt Securities of a series or
of all series, as the case may be, shall have requested the Trustee for such
series to call a meeting of Holders of any or all such series by written request
setting forth in reasonable detail the action proposed to be taken at the
meeting, and the Trustee shall not have given the notice of such meeting within
20 days after the receipt of such request, then the Company or such Holders may
determine the time or times and the place or places for such meetings and may
call such meetings to take any action authorized in Section 901, by giving
notice thereof as provided in Section 902.

          SECTION 904. Qualifications for Voting. To be entitled to vote at any
meeting of Holders of any series a Person shall be (a) a Holder of a Debt
Security of the series with respect to which such meeting is being held or (b) a
Person appointed by an instrument in writing as agent or proxy by such Holder.
The only Persons who shall be entitled to be present or to speak at any meeting
of Holders shall be the Persons entitled to vote at such meeting and their
counsel and any representatives of the Trustee for the series with respect to
which such meeting is being held and its counsel and any representatives of the
Company and its counsel.

          SECTION 905. Regulations. Notwithstanding any other provisions of this
Indenture, the Trustee for any series may make such reasonable regulations as it
may deem advisable for any meeting of Holders of Debt Securities of such series,
in regard to proof of the holding of Debt Securities of such series and of the
appointment of proxies, and in regard to the appointment and duties of
inspectors of votes, the submission and examination of proxies, certificates and
other evidence of the right to vote, and such other matters concerning the
conduct of the meeting as it shall deem appropriate.

          The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Holders of such series as provided in Section 903, in which case
the Company or the Holders calling the meeting, as the case may be, shall in
like manner appoint a temporary chairman. A permanent chairman and a permanent
secretary of the meeting shall be elected by a majority vote of the meeting.

          Subject to the provisos in the definition of "Outstanding," at any
meeting each Holder of a Debt Security of the series with respect to which such
meeting is being held or proxy therefor shall be entitled to vote in such manner
so that whether the specified percentage required for any Act has been voted may
be calculated by the inspectors; provided, however, that no vote shall be cast
or counted at any meeting in respect of any Debt Security challenged as not
Outstanding and ruled by the chairman of the meeting to be not Outstanding. The
chairman of the meeting shall have no right to vote other than by virtue of
Outstanding Debt Securities of such series held by him or instruments in writing
duly designating him as the person to vote on behalf of Holders of Debt
Securities of such series. Any meeting of Holders with respect to which a
meeting was duly called pursuant to the provisions of Section 902 or 903 may be
adjourned from time to time by a majority of such Holders present and the
meeting may be held as so adjourned without further notice.

          SECTION 906. Voting. The vote upon any resolution submitted to any
meeting of Holders with respect to which such meeting is being held shall be by
written ballots on which shall be subscribed the signatures of such Holders or
of their representatives by proxy and the serial number or numbers of the Debt
Securities held or represented by them. The permanent chairman of the meeting
shall appoint two inspectors of votes who shall count all votes cast at the
meeting for or against any resolution and who shall make and file with the
secretary of the meeting their verified written reports in duplicate of all
votes cast at the meeting. A record in duplicate of the proceedings of each
meeting of Holders shall be prepared by the secretary of the meeting and there
shall be attached to said record the original reports of the inspectors of votes
on any vote by ballot taken thereat and affidavits by one or more persons having
knowledge of the facts setting forth a copy of the notice of the meeting and
showing that said notice was transmitted as provided in Section 902. The record
shall show the serial numbers of the Debt Securities voting in favor of or
against any resolution. The record shall be signed and verified by the
affidavits of the permanent chairman and secretary of the meeting and one of the
duplicates shall be delivered to the Company and the other to the Trustee to be
preserved by the Trustee.

          Any record so signed and verified shall be conclusive evidence of the
matters therein stated.

          SECTION 907. No Delay of Rights by Meeting. Nothing in this Article IX
contained shall be deemed or construed to authorize or permit, by reason of any
call of a meeting of Holders or any rights expressly or impliedly conferred
hereunder to make such call, any hindrance or delay in the exercise of any right
or rights conferred upon or reserved to the Trustee or to any Holder under any
of the provisions of the Indenture or of the Debt Securities of any series.

                                    ARTICLE X

              CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

          SECTION 1001. Company May Consolidate, etc., Only on Certain Terms.
The Company shall not consolidate with or merge into any other corporation or
convey, transfer or lease its properties and assets substantially as an entirety
to any Person, unless:

          (1) the corporation formed by such consolidation or into which the
     Company is merged or the Person which acquires by conveyance or transfer,
     or which leases, the properties and assets of the Company substantially as
     an entirety (the "successor corporation") shall be a corporation organized
     and existing under the laws of the United States or any political
     subdivision thereof and shall expressly assume, by an indenture
     supplemental hereto, executed and delivered to the Trustee, in form
     satisfactory to the Trustee, the due and punctual payment of the principal
     of (and premium, if any) and interest on all the Debt Securities and the
     performance of every covenant of this Indenture on the part of the Company
     to be performed or observed;

          (2) immediately after giving effect to such transaction and treating
     any indebtedness that becomes an obligation of the Company as a result of
     such transaction as having been incurred by the Company at the time of such
     transaction, no Default, and no event that, after notice or lapse of time,
     or both, would become a Default, shall have happened and be continuing; and

          (3) the Company has delivered to the Trustee an Officers' Certificate
     and an Opinion of Counsel each stating that such consolidation, merger,
     conveyance, transfer or lease, and the assumption by any successor entity,
     and such supplemental indenture comply with this Article X and that all
     conditions precedent herein provided for relating to such transaction have
     been complied with.

          SECTION 1002. Successor Corporation Substituted. Upon any
consolidation with or merger into any other corporation, or any conveyance,
transfer or lease of the properties and assets of the Company substantially as
an entirety in accordance with Section 1001, the successor corporation formed by
such consolidation or into which the Company is merged or to which such
conveyance, transfer or lease is made shall succeed to, and be substituted for,
and may exercise every right and power of, the Company under this Indenture with
the same effect as if such successor corporation had been named as the Company
herein, and thereafter, except in the case of a lease, the predecessor
corporation shall be relieved of all obligations and covenants under this
Indenture and the Debt Securities.

          SECTION 1003. Opinion of Counsel. The Trustee shall be entitled to
receive and, subject to Sections 601 and 603, shall be protected in relying upon
an Opinion of Counsel as conclusive evidence that any such consolidation,
merger, sale, conveyance or lease and any such assumption complies with the
provisions of this Article X.

                                   ARTICLE XI

                             SUPPLEMENTAL INDENTURES

          SECTION 1101. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders, the Company, when authorized by a Board
Resolution, and the Trustee, at any time and from time to time, may enter into
one or more indentures supplemental hereto, in form satisfactory to the Trustee,
for any of the following purposes:

          (1) to evidence the succession of another corporation to the Company
     and the assumption by such successor of the covenants of the Company herein
     and in the Debt Securities contained; or

          (2) to add to the covenants of the Company, for the benefit of the
     Holders of all or any series of Debt Securities (and, if such covenants are
     to be for the benefit of less than all such series, stating that such
     covenants are expressly being included solely for the benefit of such
     series), or to surrender any right or power herein conferred upon the
     Company; or

          (3) to add any additional Defaults or Events of Default (and, if such
     Defaults or Events of Default are to be applicable to less than all series
     of Debt Securities, stating that such Events of Default are expressly being
     included solely to be applicable to such series); or

          (4) to change or eliminate any restrictions on the payment of
     principal of (or premium, if any, on) Registered Securities, provided that
     any such action shall not adversely affect the interests of the Holders of
     Debt Securities of any series in any material respect, or to permit or
     facilitate the issuance of Debt Securities of any series in uncertificated
     form; or

          (5) to change or eliminate any of the provisions of this Indenture,
     provided that any such change or elimination shall become effective only
     when there is no Outstanding Debt Security of any series created prior to
     the execution of such supplemental indenture that is entitled to the
     benefit of such provision and as to which such supplemental indenture would
     apply; or

          (6) to establish the form or terms of Debt Securities of any series as
     permitted by Sections 201 and 301; or

          (7) to evidence and provide for the acceptance of appointment
     hereunder by a successor Trustee with respect to one or more series of Debt
     Securities and to add to or change any of the provisions of this Indenture
     as shall be necessary for or facilitate the administration of the trusts
     hereunder by more than one Trustee, pursuant to the requirements of Section
     611; or

          (8) to evidence any changes to Section 608 or 609 permitted by the
     terms thereof; or

          (9) to add to or change or eliminate any provision of this Indenture
     as shall be necessary or desirable in accordance with any amendments to the
     Trust Indenture Act, provided such action shall not adversely affect the
     interests of the Holders of the Debt Securities of any series in any
     material respect; or

          (10) to cure any ambiguity, to correct or supplement any provision
     herein that may be defective or inconsistent with any other provision
     herein, or to make any other provisions with respect to matters or
     questions arising under this Indenture that shall not be inconsistent with
     any provision of this Indenture, provided such other provisions shall not
     adversely affect the interests of the Holders of Outstanding Debt
     Securities of any series created prior to the execution of such
     supplemental indenture in any material respect.

          SECTION 1102. Supplemental Indentures With Consent of Holders. With
the consent of the Holders of not less than 66 2/3% in principal amount of the
Outstanding Debt Securities of each series affected by such supplemental
indenture voting separately, by Act of said Holders delivered to the Company and
the Trustee, the Company, when authorized by a Board Resolution, and the Trustee
may enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of modifying in any manner the rights of the
Holders under this Indenture of such Debt Securities; provided, however, that no
such supplemental indenture shall, without the consent of the Holder of each
Outstanding Debt Security of each such series affected thereby,

          (1) change the Stated Maturity of the principal of, or any installment
     of principal of or interest on, any Debt Security, or reduce the principal
     amount thereof or the rate or amount of interest thereon or any premium
     payable upon redemption thereof, or reduce the amount of the principal of a
     Discount Security that would be due and payable upon a declaration of
     acceleration of the Maturity thereof pursuant to Section 502 or the amount
     provable in bankruptcy pursuant to Section 504, or adversely affect any
     right of repayment at the option of any Holder of any Debt Security, or
     change any Place of Payment where, or the currency in which, any Debt
     Security or any premium or the interest thereon is payable, or impair the
     right to institute suit for the enforcement of any payment on or after the
     Stated Maturity thereof (or, in the case of redemption or repayment at the
     option of the Holder, on or after the Redemption Date or Repayment Date, as
     the case may be); or

          (2) reduce the percentage in principal amount of the Outstanding Debt
     Securities of any series, the consent of whose Holders is required for any
     supplemental indenture, or the consent of whose Holders is required for any
     waiver of compliance with certain provisions of this Indenture or certain
     defaults hereunder and their consequences provided for in this Indenture;
     or

          (3) modify any of the provisions of this Section 1102, Section 513 or
     Section 1205, except to increase any such percentage or to provide that
     certain other provisions of this Indenture cannot be modified or waived
     without the consent of the Holder of each Outstanding Debt Security
     affected thereby; provided, however, that this clause shall not be deemed
     to require the consent of any Holder with respect to changes in the
     references to "the Trustee" and concomitant changes in this Section 1102
     and Section 1205, or the deletion of this proviso, in accordance with the
     requirements of Sections 611 and 1101(7).

          It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.

          A supplemental indenture that changes or eliminates any covenant or
other provision of this Indenture with respect to one or more particular series
of Debt Securities, or that modifies the rights of the Holders of Debt
Securities of such series with respect to such covenant or other provision,
shall be deemed not to affect the rights under this Indenture of the Holders of
Debt Securities of any other series.

          SECTION 1103. Execution of Supplemental Indentures. In executing, or
accepting the additional trusts created by, any supplemental indenture permitted
by this Article XI or the modifications thereby of the trusts created by this
Indenture, the Trustee shall be entitled to receive, and (subject to Section
601) shall be fully protected in relying upon, an Opinion of Counsel stating
that the execution of such supplemental indenture is authorized or permitted by
this Indenture. The Trustee may, but shall not be obligated to, enter into any
such supplemental indenture that adversely affects the Trustee's own rights,
duties or immunities under this Indenture or otherwise in a material way.

          SECTION 1104. Effect of Supplemental Indentures. Upon the execution of
any supplemental indenture under this Article XI, this Indenture shall be
modified in accordance therewith, and such supplemental indenture shall form a
part of this Indenture for all purposes; and every Holder of Debt Securities
theretofore or thereafter authenticated and delivered hereunder shall be bound
thereby.

          SECTION 1105. Conformity with Trust Indenture Act. Every supplemental
indenture executed pursuant to this Article XI shall conform to the requirements
of the Trust Indenture Act as then in effect.

          SECTION 1106. Reference in Debt Securities to Supplemental Indentures.
Debt Securities of any series authenticated and delivered after the execution of
any supplemental indenture pursuant to this Article XI may, and shall if
required by the Trustee, bear a notation in form approved by the Trustee as to
any matter provided for in such supplemental indenture. If the Company shall so
determine, new Debt Securities of any series so modified as to conform, in the
opinion of the Trustee and the Board of Directors, to any such supplemental
indenture may be prepared and executed by the Company and authenticated and
delivered by the Trustee in exchange for Outstanding Debt Securities of such
series.

          SECTION 1107. Subordination Unimpaired. No supplemental indenture
entered into under this Article XI shall modify, directly or indirectly, the
provisions of Article XV or the definition of Senior Indebtedness in Section 101
in any manner that might alter or impair the subordination of the Debt
Securities with respect to Senior Indebtedness then outstanding unless each
holder of such Senior Indebtedness has consented thereto in writing.

          SECTION 1108. Notice of Supplemental Indenture. Promptly after the
execution by the Company and the Trustee of any supplemental indenture pursuant
to Section 1102, the Company shall transmit to the Holders of Debt Securities of
any series affected thereby a notice setting forth the substance of such
supplemental indenture.

                                   ARTICLE XII

                                    COVENANTS

          SECTION 1201. Payment of Principal, Premium and Interest. The Company
covenants and agrees for the benefit of each series of Debt Securities, that it
will duly and punctually pay the principal of (and premium, if any) and interest
on the Debt Securities in accordance with the terms of the Debt Securities and
this Indenture.

          SECTION 1202. Maintenance of Office or Agency. The Company will
maintain in each Place of Payment for any series of Debt Securities, an office
or agency where Debt Securities of such series may be presented or surrendered
for payment, where Debt Securities of such series may be surrendered for
transfer or exchange and where notices and demands to or upon the Company in
respect of the Debt Securities of such series and this Indenture may be served.
The Company will give prompt written notice to the Trustee of the location, and
any change in the location, of such office or agency. If at any time the Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office of the
Trustee, and the Company hereby appoints the Trustee as its agent to receive all
presentations, surrenders, notices and demands.

          The Company may also from time to time designate different or
additional offices or agencies to be maintained for such purposes (in or outside
of such Place of Payment), and may from time to time rescind any such
designations; provided, however, that no such designation or rescission shall in
any manner relieve the Company of its obligations described in the preceding
paragraph. The Company will give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency.

          SECTION 1203. Money for Debt Securities; Payments To Be Held in Trust.
If the Company shall at any time act as its own Paying Agent with respect to any
series of Debt Securities, it will, on or before each due date of the principal
of (and premium, if any) or interest on any of the Debt Securities of such
series, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal (and premium, if any) or interest
so becoming due until such sums shall be paid to such Persons or otherwise
disposed of as herein provided, and will promptly notify the Trustee of any
failure to act.

          Whenever the Company shall have one or more Paying Agents with respect
to any series of Debt Securities it will, prior to each due date of the
principal (and premium, if any) or interest on any Debt Securities of such
series, deposit with any such Paying Agent a sum sufficient to pay the principal
(and premium, if any) or interest so becoming due, such sum to be held in trust
for the benefit of the Persons entitled thereto, and (unless any such Paying
Agent is the Trustee) the Company will promptly notify the Trustee of its action
or failure so to act.

          The Company will cause each Paying Agent with respect to any series of
Debt Securities other than the Trustee to execute and deliver to the Trustee an
instrument in which such Paying Agent shall agree with the Trustee, subject to
the provisions of this Section 1203, that such Paying Agent will:

          (1) hold all sums held by it for the payment of the principal of (and
     premium, if any) or interest on Debt Securities of such series in trust for
     the benefit of the Persons entitled thereto until such sums shall be paid
     to such Persons or otherwise disposed of as herein provided;

          (2) give the Trustee notice of any default by the Company (or any
     other obligor upon the Debt Securities of such series) in the making of any
     payment of principal of (and premium, if any) or interest on the Debt
     Securities of such series; and

          (3) at any time during the continuance of any such default, upon the
     written request of the Trustee, forthwith pay to the Trustee all sums so
     held in trust by such Paying Agent.

          The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent, and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.

          Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of (and premium, if
any) or interest on any Debt Security of any series and remaining unclaimed for
two years after such principal (and premium, if any) or interest has become due
and payable shall be paid to the Company upon Company Request, or (if then held
by the Company) shall be discharged from such trust, and the Holder of such Debt
Security shall thereafter, as an unsecured general creditor, look only to the
Company for payment thereof, and all liability of the Trustee or such Paying
Agent with respect to such trust money, and all liability of the Company as
trustee thereof, shall thereupon cease; provided, however, that the Trustee or
such Paying Agent before being required to make any such repayment, may at the
expense of the Company cause to be transmitted in the manner and to the extent
provided by Section 105, notice that such money remains unclaimed and that,
after a date specified therein, which shall not be less than 30 days from the
date of such notification, any unclaimed balance of such money then remaining
will be repaid to the Company.

          SECTION 1204. Officers' Certificate as to Default. The Company will
deliver to the Trustee, on or before a date not more than four months after the
end of each fiscal year of the Company (which on the date hereof is the calendar
year) ending after the date hereof, an Officers' Certificate (one of the signers
of which shall be the principal executive, principal financial or principal
accounting officer of the Company), stating whether or not to the best knowledge
of the signers thereof the Company is in default in the performance and
observation of any of the terms, provisions and conditions of this Indenture,
and, if the Company shall be in default, specifying all such defaults and the
nature thereof of which they may have knowledge. Such compliance shall be
determined without regard to periods of grace or notice requirements.

          SECTION 1205. Waiver of Certain Covenants. The Company may omit in any
particular instance to comply, if so provided pursuant to Section 301, with any
covenant specified pursuant to Section 301 with respect to the Debt Securities
of any series if, before the time for such compliance, the Holders of at least
66 2/3% in principal amount of the Outstanding Debt Securities of such series
shall, by Act of such Holders, either waive such compliance in such instance or
generally waive compliance with such covenant, but no such waiver shall extend
to or affect such covenant except to the extent so expressly waived and, until
such waiver shall become effective, the obligations of the Company and the
duties of the Trustee in respect of any such covenant shall remain in full force
and effect.

                                  ARTICLE XIII

                          REDEMPTION OF DEBT SECURITIES

          SECTION 1301. Applicability of Article. Debt Securities of any series
that are redeemable before their Stated Maturity shall be redeemable in
accordance with their terms and (except as otherwise specified pursuant to
Section 301 for Debt Securities of any series) in accordance with this Article
XIII.

          SECTION 1302. Election to Redeem; Notice to Trustee. Redemption of
amounts owed under the Debt Securities is subject to the prior written approval
of the Federal Reserve Board and the Financial Services Authority. The election
of the Company to redeem any Debt Securities shall be evidenced by a Board
Resolution. In case of any redemption at the election of the Company of less
than all of the Debt Securities of any series pursuant to Section 1303, the
Company shall, at least 60 days prior to the giving of notice of redemption in
Section 1304 by the Company (unless a shorter period shall be satisfactory to
the Trustee), notify the Trustee of such Redemption Date and of the principal
amount of Debt Securities of such series to be redeemed. In case of any
redemption at the election of the Company of all of the Debt Securities of any
series, the Company shall, at least 45 days prior to the giving of notice of
redemption in Section 1304 fixed by the Company (unless a shorter period shall
be satisfactory to the Trustee), notify the Trustee of such Redemption Date. In
the case of any redemption of Debt Securities prior to the expiration of any
restriction on such redemption provided in the terms of such Debt Securities or
elsewhere in this Indenture, the Company shall furnish the Trustee with an
Officers' Certificate evidencing compliance with such restrictions.

          SECTION 1303. Selection by Trustee of Debt Securities To Be Redeemed.
If less than all the Debt Securities of any series are to be redeemed at the
option of the Company, the particular Debt Securities to be redeemed shall be
selected not more than 60 days prior to the Redemption Date by the Trustee, from
the Outstanding Debt Securities of such series not previously called for
redemption, by such method as the Trustee shall deem fair and appropriate and
which may provide for the selection for redemption of portions (equal to the
minimum authorized denomination for Debt Securities of such series or any
integral multiple thereof) of the principal amount of Debt Securities of such
series in a denomination larger than the minimum authorized denomination for
Debt Securities of such series. In any case where more than one Registered
Security of such series is registered in the same name, the Trustee in its
discretion may treat the aggregate principal amount so registered as if it were
represented by one Registered Security of such series.

          The Trustee shall promptly notify the Company in writing of the Debt
Securities selected for redemption and, in the case of any Debt Securities
selected for partial redemption, the principal amount thereof to be redeemed.

          For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Debt Securities shall
relate, in the case of any Debt Security redeemed or to be redeemed only in
part, to the portion of the principal amount of such Debt Security that has been
or is to be redeemed.

          SECTION 1304. Notice of Redemption. Notice of redemption shall be
given by the Company or, at the Company's request, by the Trustee in the name
and at the expense of the Company, not less than 30 days and not more than 60
days prior to the Redemption Date, to the Holders of Debt Securities of any
series to be redeemed in whole or in part pursuant to this Article XIII, in the
manner provided in Section 105. Any notice so given shall be conclusively
presumed to have been duly given, whether or not the Holder receives such
notice. Failure to give such notice, or any defect in such notice to the Holder
of any Debt Security of a series designated for redemption, in whole or in part,
shall not affect the sufficiency of any notice of redemption with respect to the
Holder of any other Debt Security of such series.

          All notices of redemption shall identify the Debt Securities to be
redeemed (including CUSIP numbers) and shall state:

          (1) the Redemption Date,

          (2) the Redemption Price,

          (3) that Debt Securities of such series are being redeemed by the
     Company pursuant to provisions contained in this Indenture or the terms of
     the Debt Securities of such series or a supplemental indenture establishing
     such series, if such be the case, together with a brief statement of the
     facts permitting such redemption,

          (4) if less than all Outstanding Debt Securities of any series are to
     be redeemed, the identification (and, in the case of partial redemption,
     the principal amounts) of the particular Debt Securities to be redeemed,

          (5) that on the Redemption Date the Redemption Price will become due
     and payable upon each such Debt Security to be redeemed, and that interest
     thereon, if any, shall cease to accrue on and after said date, (6) the
     Place or Places of Payment where such Debt Securities are to be surrendered
     for payment of the Redemption Price,

          (7) if any Debt Security of any series is to be redeemed in part, that
     on and after the Redemption Date, upon surrender of such Debt Security, a
     new Debt Security or Debt Securities of such series in principal amount
     equal to the unredeemed portion thereof will be issued or, in the case of
     Debt Securities providing appropriate space for such notation, at the
     option of the Holder, the Trustee, in lieu of delivering a new Debt
     Security or Debt Securities as aforesaid, may make a notation on such Debt
     Security of the payment of the redeemed portion thereof.

          SECTION 1305. Deposit of Redemption Price. On or prior to any
Redemption Date, the Company shall deposit with the Trustee or with a Paying
Agent (or, if the Company is acting as its own Paying Agent, segregate and hold
in trust), in immediately available funds, an amount of money in which the Debt
Securities of such series are payable (except as otherwise specified pursuant to
Section 301 for the Debt Securities of such series) sufficient to pay on the
Redemption Date the Redemption Price of, and (except if the Redemption Date
shall be an Interest Payment Date) accrued interest on, all the Debt Securities
or portions thereof which are to be redeemed on that date.

          SECTION 1306. Debt Securities Payable on Redemption Date. (a) Notice
of redemption having been given as aforesaid, any Debt Securities so to be
redeemed shall, on the Redemption Date, become due and payable at the Redemption
Price and from and after such date (unless the Company shall default in the
payment of the Redemption Price) such Debt Securities shall cease to bear
interest. Upon surrender of any such Debt Security for redemption in accordance
with said notice, such Debt Security shall be paid by the Company at the
Redemption Price; provided, however, that installments of interest that have a
Stated Maturity on or prior to the Redemption Date for such Debt Securities
shall be payable according to the terms of such Debt Securities and the
provisions of Section 307.

          (b) If any Debt Security called for redemption shall not be so paid
upon surrender thereof for redemption, the principal (and premium, if any)
shall, until paid, bear interest from the Redemption Date at the rate prescribed
therefor in the Debt Security.

          SECTION 1307. Debt Securities Redeemed in Part. Any Debt Security that
is to be redeemed only in part shall be surrendered at the Corporate Trust
Office or such other office or agency of the Company as is specified pursuant to
Section 301 with, if the Company, the Security Registrar or the Trustee so
requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company, the Security Registrar and the Trustee duly
executed by, the Holder thereof or his attorney duly authorized in writing, and
the Company shall execute, and the Trustee shall authenticate and deliver to the
Holder of such Debt Security without service charge, a new Debt Security or Debt
Securities of the same series, of like tenor and form, of any authorized
denomination as requested by such Holder in aggregate principal amount equal to
and in exchange for the unredeemed portion of the principal of the Debt Security
so surrendered; except that if a Global Security is so surrendered, the Company
shall execute, and the Trustee shall authenticate and deliver to the Depositary
for such Global Security, without service charge, a new Global Security in a
denomination equal to and in exchange for the unredeemed portion of the
principal of the Global Security so surrendered. In the case of a Debt Security
providing appropriate space for such notation, at the option of the Holder
thereof, the Trustee, in lieu of delivering a new Debt Security or Debt
Securities as aforesaid, may make a notation on such Debt Security of the
payment of the redeemed portion thereof.

                                   ARTICLE XIV

                                   DEFEASANCE

          SECTION 1401. Applicability of Article. If, pursuant to Section 301,
provision is made for the defeasance of Debt Securities of a series and if the
Debt Securities of such series are Registered Securities, then the provisions of
this Article XIV shall be applicable except as otherwise specified pursuant to
Section 301 for Debt Securities of such series.

          SECTION 1402. Defeasance Upon Deposit of Moneys or U.S. Government
Obligations. Defeasance of amounts owed under the Debt Securities is subject to
the prior written approval of the Federal Reserve Board and the Financial
Services Authority. Subject to the preceding sentence, at the Company's option,
the Company shall be deemed to have been Discharged (as defined below) from its
obligations with respect to Debt Securities of any series on the 91st day after
the applicable conditions set forth below have been satisfied:

          (1) the Company shall have deposited or caused to be deposited
     irrevocably with the Trustee as trust funds in trust, specifically pledged
     as security for, and dedicated solely to, the benefit of the Holders of the
     Debt Securities of such series (i) money in an amount, or (ii) U.S.
     Government Obligations (as defined below) that through the payment of
     interest and principal in respect thereof in accordance with their terms
     will provide, not later than one Business Day before the due date of any
     payment, money in an amount or (iii) a combination of (i) and (ii),
     sufficient, in the opinion (with respect to (ii) and (iii)) of a nationally
     recognized firm of independent public accountants expressed in a written
     certification thereof delivered to the Trustee, to pay and discharge each
     installment of principal of and (premium, if any) and interest on, the
     Outstanding Debt Securities of such series on the dates such installments
     of interest or principal and premium are due;

          (2) if the Debt Securities of such series are then listed on the New
     York Stock Exchange, the Company shall have delivered to the Trustee an
     Opinion of Counsel to the effect that the Company's exercise of its option
     under this Section would not cause such Debt Securities to be delisted;

          (3) no Default or event (including such deposit) that, with notice or
     lapse of time, or both, would become a Default with respect to the Debt
     Securities of such series shall have occurred and be continuing on the date
     of such deposit;

          (4) the Company shall have delivered to the Trustee an Opinion of
     Counsel to the effect that Holders of the Debt Securities of such series
     will not recognize income, gain or loss for Federal income tax purposes as
     a result of the Company's exercise of its option under this Section and
     will be subject to Federal income tax on the same amounts and in the same
     manner and at the same times as would have been the case if such option had
     not been exercised and accompanied by a ruling to that effect received from
     or published by the Internal Revenue Service; and

          (5) the Company shall have delivered to the Trustee an Officers'
     Certificate and an Opinion of Counsel, each stating that all conditions
     precedent to the defeasance under this Section 1402 have been complied with
     and an Opinion of Counsel to the effect that either (i) as a result of a
     deposit pursuant to subsection (1) above and the related exercise of the
     Company's option under this Section 1402, registration is not required
     under the Investment Company Act of 1940, as amended, by the Company with
     respect to the trust funds representing such deposit or by the Trustee for
     such trust funds or (ii) all necessary registrations under said Act have
     been effected.

          Notwithstanding any other provisions of this Section 1402, such
defeasance shall be effected in compliance with any additional or substitute
terms, conditions or limitations, which may be imposed on the Company in
connection therewith pursuant to Section 301.

          "Discharged" means that the Company shall be deemed to have paid and
discharged the entire indebtedness represented by, and obligations under, the
Debt Securities of such series and to have satisfied all the obligations under
this Indenture relating to the Debt Securities of such series (and the Trustee,
at the expense of the Company, shall execute proper instruments acknowledging
the same), except (A) the rights of Holders of Debt Securities of such series to
receive, from the trust fund described in clause (1) above, payment of the
principal of (and premium, if any) and interest on such Debt Securities when
such payments are due, (B) the Company's obligations with respect to the Debt
Securities of such series under Sections 304, 305, 306, 1203 and (C) the rights,
powers, trusts, duties and immunities of the Trustee hereunder.

          "U.S. Government Obligations" means securities that are (i) direct
obligations of the United States for the payment of which its full faith and
credit is pledged or (ii) obligations of a Person controlled or supervised by
and acting as an agency or instrumentality of the United States the timely
payment of which is unconditionally guaranteed as a full faith and credit
obligation by the United States, that, in either case under clauses (i) or (ii),
are not callable or redeemable at the option of the issuer thereof, and shall
also include a depository receipt issued by a bank or trust company as custodian
with respect to any such U.S. Government Obligation or a specific payment of
interest on or principal of any such U.S. Government Obligation held by such
custodian for the account of the holder of a depository receipt; provided that
(except as required by law) such custodian is not authorized to make any
deduction from the amount payable to the holder of such depository receipt from
any amount received by the custodian in respect of the U.S. Government
Obligation or the specific payment of interest on or principal of the U.S.
Government Obligation evidenced by such depository receipt.

          SECTION 1403. Deposited Moneys and U.S. Government Obligations to be
Held in Trust. All moneys and U.S. Government Obligations deposited with the
Trustee pursuant to Section 1402 in respect of Debt Securities of a series shall
be held in trust and applied by it, in accordance with the provisions of such
Debt Securities and this Indenture, to the payment, either directly or through
any Paying Agent (including the Company acting as its own Paying Agent) as the
Trustee may determine, to the Holders of such Debt Securities, of all sums due
and to become due thereon for principal (and premium, if any) and interest, if
any, but such money need not be segregated from other funds except to the extent
required by law.

          The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the U.S. Government Obligations
deposited pursuant to Section 1403 or the principal and interest received in
respect thereof other than any such tax, fee or other charge which by law is for
the account of the Holders of such Outstanding Debt Securities.

          SECTION 1404. Repayment to Company. The Trustee and any Paying Agent
shall promptly pay or return to the Company upon Company Request any moneys or
U.S. Government Obligations held by them at any time which, in the opinion of a
nationally recognized firm of independent public accountants as set forth in a
written certification thereof delivered to the Trustee, are in excess of the
amount which would then be required to be deposited to effect a defeasance in
accordance with this Article XIV.

          The provisions of the last paragraph of Section 1203 shall apply to
any money held by the Trustee or any Paying Agent under this Article XIV that
remains unclaimed for two years after the Maturity of any series of Debt
Securities for which money or U.S. Government Obligations have been deposited
pursuant to Section 1402.

          SECTION 1405. Subordination Provisions Inapplicable. Notwithstanding
anything contained herein by the contrary, any money that shall have been
deposited by the Company with the Trustee pursuant to this Article XIV shall not
be subject to the provisions of Article XV of this Indenture respecting
subordination of the Debt Securities.

                                   ARTICLE XV

                        SUBORDINATION OF DEBT SECURITIES

          SECTION 1501. Agreement to Subordinate. The Company, for itself, its
successors and assigns, covenants and agrees, and each Holder of a Debt Security
likewise covenants and agrees by his or her acceptance thereof, that the
obligation of the Company to make any payment on account of the principal of
(and premium, if any) and interest on each and all of the Debt Securities shall
be subordinate and junior in right of payment to the Company's obligations to
the holders of Senior Indebtedness.

          In the event of any insolvency, bankruptcy, receivership,
conservatorship, reorganization, readjustment of debt, marshaling of assets and
liabilities or similar proceedings or any liquidation, dissolution or winding-up
of or relating to the Company as a whole, whether voluntary or involuntary, all
obligations of the Company to holders of Senior Indebtedness shall be entitled
to be paid in full before any payment, whether in cash, property or otherwise,
shall be made on any account of the principal of (or premium, if any) or
interest on any of the Debt Securities. In the event of any such proceeding,
after payment in full of all sums owing with respect to Senior Indebtedness, the
Holders, together with the holders of Indebtedness Ranking on a Parity with the
Debt Securities, shall be entitled ratably to be paid from the remaining assets
of the Company the amounts at the time due and owing on account of unpaid
principal of (and premium, if any) and interest, if any, on the Debt Securities
before any payment or other distribution, whether in cash, property or
otherwise, shall be made on account of any Indebtedness Ranking Junior to the
Debt Securities or any capital stock. In addition, in the event of any such
proceeding, if any payment or distribution of assets of the Company of any kind
or character, whether in cash, property or securities (other than securities of
the Company or any other corporation provided for by a plan of reorganization or
readjustment the payment of which is subordinate, at least to the extent
provided in these subordination provisions with respect to the indebtedness
evidenced by the Debt Securities, to the payment of all Senior Indebtedness at
the time outstanding and to any securities issued in respect thereof under any
such plan of reorganization or readjustment), including any such payment or
distribution that may be payable or deliverable by reason of the payment of any
other indebtedness of the Company being subordinated to the payment of the Debt
Securities, shall be received by the Trustee or the Holders before all Senior
Indebtedness is paid in full, such payment or distribution shall be held (in
trust if received by such Holders) for the benefit of and shall be paid over to
the holders of such Senior Indebtedness or their representative or
representatives or to the trustee or trustees under any indenture under which
any instruments evidencing any of such Senior Indebtedness may have been issued,
ratably, for application to the payment of all Senior Indebtedness remaining
unpaid until all such Senior Indebtedness shall have been paid in full, after
giving effect to any concurrent payment or distribution to the holders of such
Senior Indebtedness.

          The subordination provisions of the foregoing paragraph shall not be
applicable to amounts at the time due and owing on the Debt Securities of any
series on account of the unpaid principal of (or premium, if any) or interest,
if any, on the Debt Securities for the payment of which funds have been
deposited in trust with the Trustee or any Paying Agent or have been set aside
by the Company in trust in accordance with the provisions of this Indenture; nor
shall such provisions impair any rights, interests, remedies or powers of any
secured creditor of the Company in respect of any security the creation of which
is not prohibited by the provisions of this Indenture.

          The Holders of Debt Securities and the Trustee, in respect of any
claims of such Holders to payment of any principal, premium or interest in
respect of any Debt Securities, by their acceptance thereof will be deemed to
have waived any right of set-off or counterclaim that such Holders or (subject
to Section 607) the Trustee, respectively, in such respect, might otherwise
have.

          The securing of any Indebtedness Ranking on a Parity with the Debt
Securities or Indebtedness Ranking Junior to the Debt Securities shall not be
deemed to prevent such Indebtedness from constituting Indebtedness Ranking on a
Parity with the Debt Securities or Indebtedness Ranking Junior to the Debt
Securities, respectively.

          The Company shall give prompt written notice to the Trustee of any
insolvency, bankruptcy, receivership, conservatorship, reorganization,
readjustment of debt, marshaling of assets and liabilities or similar
proceedings or any liquidation, dissolution or winding-up or relating to the
Company as a whole, whether voluntary or involuntary, or of any default with
respect to any Senior Indebtedness that would prevent the Trustee from making
any payment in respect of the Debt Securities under this Section. The Trustee,
subject to the provisions of Section 601, shall be entitled to assume that, and
may act as if, no such event has occurred unless a Responsible Officer of the
Trustee assigned to the Corporate Trust Office has received at the Corporate
Trust Office of the Trustee from the Company or any one or more holders of
Senior Indebtedness or any trustee therefor (who shall have been certified or
otherwise established to the satisfaction of the Trustee to be such a holder or
trustee) written notice thereof. Upon any distribution of assets of the Company
referred to in this Article XV, the Trustee and Holders shall be entitled to
rely conclusively upon a certificate of the liquidating trustee or agent, or any
order or decree entered by a court of competent jurisdiction, or other Person
making any distribution to the Trustee or to the Holders for the purpose of
ascertaining the Persons entitled to participate in such distribution, the
holders of the Senior Indebtedness, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article, and the Trustee, subject to the provisions of
Article VI, and the Holders of the Debt Securities shall be entitled to rely
upon a certificate of the liquidating trustee or agent or other Person making
any distribution to the Trustee or to the Holders of the Securities for the
purpose of ascertaining the Persons entitled to participate in such
distribution, the holders of the Senior Indebtedness of the Company, the amount
thereof or payable thereon, the amount or amounts paid or distributed thereon
and all other facts pertinent to this Article XV. In the absence of any such
liquidating trustee, agent or other Person, the Trustee, subject to Section 601,
shall be entitled to rely conclusively upon a written notice by a Person
representing himself or herself to be a holder of Senior Indebtedness (or a
trustee or representative on behalf of such holder) as evidence that such Person
is a holder of such Senior Indebtedness (or is such a trustee or
representative). In the event that the Trustee determines, in its discretion,
that further evidence is required with respect to the right of any Person, as a
holder of Senior Indebtedness, to participate in any payment or distribution
pursuant to this Section 1501, the Trustee may request such Person to furnish
evidence to the reasonable satisfaction of the Trustee as to the amount of such
Senior Indebtedness held by such Person, as to the extent to which such Person
is entitled to participate in such payment or distribution, and as to other
facts pertinent to the rights of such Person under this Section 1501, and if
such evidence is not furnished, the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment.

          SECTION 1502. Obligation of the Company Unconditional and Payment
Permitted if no Default. Subject to the provisions of this Article XV and the
terms of the Debt Securities, nothing contained in this Article XV or elsewhere
in this Indenture is intended to or shall impair, as between the Company and the
Holders, the obligation of the Company, which is absolute and unconditional, to
pay to such Holders the principal of (and premium, if any) and interest on the
Debt Securities when, where and as the same shall become due and payable, all in
accordance with the terms of the Debt Securities, or is intended to or shall
affect the relative rights of such Holders and creditors of the Company other
than the holders of Senior Indebtedness, nor shall anything herein or therein
prevent the Trustee or the Holder of any Debt Security from exercising all
remedies otherwise permitted by applicable law upon default under this
Indenture, subject to the rights, if any, under this Article XV of the holders
of Senior Indebtedness in respect of cash, property or securities of the Company
received upon the exercise of any such remedy.

          SECTION 1503. Limitations on Duties to Holders of Senior Indebtedness.
In the event and during the continuation of any default in the payment of
principal of, or premium, if any, or interest on, any Senior Indebtedness beyond
any applicable period of grace, or in the event that any event of default with
respect to any Senior Indebtedness shall have occurred and be continuing, or
would occur as a result of the payment referred to hereinafter, permitting the
holders of such Senior Indebtedness (or a trustee on behalf of the holders
thereof) to accelerate the maturity thereof, then, unless and until such default
or event of default shall have been cured or waived or shall have ceased to
exist, no payment of principal of, or premium (if any) or interest, if any, on
the Debt Securities, or in respect of any redemption, exchange, retirement,
purchase or other acquisition of any of the Debt Securities, shall be made by
the Company.

          SECTION 1504. Notice to Trustee of Facts Prohibiting Payments.
Notwithstanding any of the provisions of this Article XV or any other provision
of this Indenture, the Trustee shall not at any time be charged with knowledge
of the existence of any facts that would prohibit the making of any payment of
funds to or by the Trustee unless and until a Responsible Officer of the Trustee
assigned to its Corporate Trust Division shall have received at the Corporate
Trust Office written notice thereof from the Company or from one or more holders
of Senior Indebtedness or from any trustee therefor who shall have been
certified by the Company or otherwise established to the reasonable satisfaction
of the Trustee to be such a holder or trustee; and, prior to the receipt of such
written notice, the Trustee, subject to the provisions of Section 601, shall be
entitled in all respects to assume that no such facts exist; provided, however,
that if prior to the fifth Business Day preceding the date upon which by the
terms hereof any such funds may become payable, or if prior to the third
Business Day preceding the date of the execution of instruments pursuant to
Section 401 acknowledging satisfaction and discharge of this Indenture, the
Trustee shall not have received with respect to such funds the notice provided
for in this Section 1504, then, anything herein contained to the contrary
notwithstanding, the Trustee shall have full power and authority to receive such
moneys and/or apply the same to the purpose for which they were received and
shall not be affected by any notice to the contrary that may be received by it
on or after such date; provided, however, no such application shall affect the
obligations under this Article XV of the Persons receiving such moneys from the
Trustee.

          SECTION 1505. Application by Trustee of Moneys Deposited With It.
Anything in this Indenture to the contrary notwithstanding, any deposit of a sum
by the Company with the Trustee or any agent (whether or not in trust) for any
payment of the principal of (and premium, if any) or interest on any Debt
Securities shall, except as provided in Section 1504, is subject to the
provisions of Section 1501.

          SECTION 1506. Subrogation. Subject to the payment in full of all
Senior Indebtedness, the Holders of the Debt Securities shall be subrogated to
the rights of the holders of such Senior Indebtedness to receive payments or
distributions of assets of the Company applicable to such Senior Indebtedness
until the Debt Securities shall be paid in full, and none of the payments or
distributions to the holders of such Senior Indebtedness to which the Holders of
the Debt Securities or the Trustee would be entitled except for the provisions
of this Article XV or of payments over, pursuant to the provisions of this
Article XV, to the holders of such Senior Indebtedness by the Holders of such
Debt Securities or the Trustee shall, as among the Company, its creditors other
than the holders of such Senior Indebtedness, and the Holders of such Debt
Securities, be deemed to be a payment by the Company to or on account of such
Senior Indebtedness; it being understood that the provisions of this Article are
and are intended solely for the purpose of defining the relative rights of the
Holders of such Debt Securities, on one hand, and the holders of the Senior
Indebtedness, on the other hand.

          SECTION 1507. Subordination Rights Not Impaired by Acts or Omissions
of Company or Holders of Senior Indebtedness. No right of any present or future
holders of any Senior Indebtedness to enforce subordination as herein provided
shall at any time in any way be prejudiced or impaired by any act or failure to
act on the part of the Company or by any act or failure to act, in good faith,
by any such holder, or by any noncompliance by the Company with the terms,
provisions and covenants of this Indenture, regardless of any knowledge thereof
with which any such holder may have or be otherwise charged. The holders of
Senior Indebtedness may, at any time or from time to time and in their absolute
discretion, change the manner, place or terms of payment, change or extend the
time of payment of, or renew or alter, any such Senior Indebtedness, or amend or
supplement any instrument pursuant to which any such Senior Indebtedness is
issued or by which it may be secured, or release any security therefor, or
exercise or refrain from exercising any other of their rights under the Senior
Indebtedness including, without limitation, the waiver of default thereunder,
all without notice to or assent from the Holders or the Trustee and without
affecting the obligations of the Company, the Trustee or the Holders under this
Article XV.

          SECTION 1508. Authorization of Trustee to Effectuate Subordination of
Debt Securities. Each Holder of a Debt Security, by his or her acceptance
thereof, authorizes and expressly directs the Trustee on his or her behalf to
take such action as may be necessary or appropriate to effectuate, as between
the Holders and the holders of Senior Indebtedness, the subordination provided
in this Article XV. If, in the event of any proceeding or other action relating
to the Company referred to in the second paragraph of Section 1501, a proper
claim or proof of debt in the form required in such proceeding or action is not
filed by or on behalf of the Holders prior to fifteen days before the expiration
of the time to file such claim or claims, then the holder or holders of Senior
Indebtedness shall have the right to file and are hereby authorized to file an
appropriate claim for and on behalf of the Holders.

          SECTION 1509. Right of Trustee to Hold Senior Indebtedness. The
Trustee shall be entitled to all of the rights set forth in this Article XV in
respect of any Senior Indebtedness at any time held by it in its individual
capacity to the same extent as any other holder of such Senior Indebtedness, and
nothing in this Indenture shall be construed to deprive the Trustee of any of
its rights as such holder.

          SECTION 1510. Article XV Not to Prevent Defaults (Including Events of
Default). The failure to make a payment pursuant to the terms of the Debt
Securities by reason of any provision in this Article XV shall not be construed
as preventing the occurrence of a Default (including an Event of Default, if
any).

          SECTION 1511. Article Applicable to Paying Agents. The term "Trustee"
as used in this Article XV shall (unless the context shall otherwise require) be
construed as extending to and including each Paying Agent appointed by the
Company and acting hereunder within its meaning as fully for all intents and
purposes as if the Paying Agent were named in this Article XV in addition to or
in place of the Trustee; provided, however, that Sections 1504 and 1509 shall
not apply to the Company or any Affiliate of the Company if the Company or such
Affiliate acts as Paying Agent.

                                    * * * * *

          This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.

<PAGE>

IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly
executed, and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.

SEAL                                    HSBC USA INC.

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

Attest:
      -------------------------
Name:
Title:

                                           WELLS FARGO BANK MINNESOTA, NATIONAL
                                           ASSOCIATION, as Trustee,

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

<PAGE>

STATE OF NEW YORK,  )
COUNTY OF Erie) ss.:

          On the [ ]th day of [ ], before me personally came Robert M. Butcher
and Philip S. Toohey, to me known, who, being by me duly sworn, did depose and
say that they are, respectively, Senior Executive Vice President and Chief
Financial Officer and Senior Executive Vice President and Secretary of HSBC USA
Inc., one of the corporations described in and which executed the foregoing
instrument; that he knows the seal of said corporation; that the seal affixed to
said instrument is such corporate seal; that it was so affixed by authority of
the Board of Directors of said corporation, and that he signed his name thereto
by like authority.

                                                             Notary Public

SEAL

<PAGE>

                                                        EXHIBIT A

          UNLESS OR UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR THE INDIVIDUAL
NOTES REPRESENTED HEREBY, THIS GLOBAL CERTIFICATE MAY NOT BE TRANSFERRED EXCEPT
AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF
THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE
DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH
SUCCESSOR DEPOSITARY.

          UNLESS THIS GLOBAL CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITARY TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITARY (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITARY), ANY TRANSFER, PLEDGE OR OTHER USE THEREOF FOR VALUE OR OTHERWISE BY
OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE &
CO., HAS AN INTEREST HEREIN.

          THE NOTES ARE NOT SAVINGS ACCOUNTS, DEPOSITS OR OTHER OBLIGATIONS OF
ANY BANK OR NONBANK SUBSIDIARY OF THE CORPORATION AND ARE NOT INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION, BANK INSURANCE FUND OR ANY OTHER
GOVERNMENT AGENCY.

                                      $[ ]

                                  HSBC USA INC.

                         [ ]% SUBORDINATED NOTES DUE [ ]

                                 GLOBAL SECURITY

CUSIP NO.: [ ]                                                  PRINCIPAL AMOUNT
                                                                     REPRESENTED

No. 1                                                             $[ ]

          HSBC USA INC., a corporation duly organized and existing under the
laws of the State of Maryland (the "Company", which term includes any successor
corporation under the Indenture hereinafter referred to), for value received,
hereby promises to pay to CEDE & Co., as the nominee of The Depository Trust
Company (the "Depositary"), or registered assigns, the principal sum of [ ] ($[
]) on [ ] ("Maturity"), and to pay interest thereon semiannually in arrears on
each [ ] and [ ] (each, an "Interest Payment Date"), beginning [ ], and at
maturity, from [ ], or from the most recent Interest Payment Date to which
interest has been paid or duly provided for, at the rate of [ ]% per annum,
until the principal hereof is paid or made available for payment.

          This security is one of the global certificates issued on the date
hereof, which, in the aggregate, represent 100% of the principal face amount of
the Company's [ ]% Subordinated Notes due [ ] ( the "Notes"), and is one of the
duly authorized issues of securities of the Company (the "Debt Securities"),
issued or to be issued in one or more series under an indenture, dated as of [
], between the Company and Wells Fargo Bank Minnesota, National Association, as
trustee (the "Trustee", which term includes any successor Trustee under the
Indenture), to which indenture (the "Indenture") reference is hereby made for a
statement of the respective rights, limitations of rights, duties and immunities
thereunder of the Company, the Trustee and each of the Holders of the Debt
Securities and of the terms upon which the Debt Securities are, and are to be,
authenticated and delivered. This Security is one of the series designated on
the face hereof, initially limited to [ ] in aggregate principal amount.

          The interest payable hereunder, and punctually paid or duly provided
for, on any Interest Payment Date will be paid to the Person in whose name this
Debt Security, or one or more Predecessor Securities, is registered at the close
of business on the fifteenth day prior to each Interest Payment Date (each a
"Regular Record Date"). "Business Day" when used with respect to any Place of
Payment specified pursuant to Section 301 of the Indenture means any day that is
not a Saturday, a Sunday or a day on which banking institutions or trust
companies in such Place of Payment are authorized or obligated by law or
executive order to close. Any such interest not so punctually paid or duly
provided for shall forthwith cease to be payable to the registered Holder on
such Regular Record Date by virtue of such Person having been such Holder, and
may either be paid to the Person in whose name this Note (or one or more
Predecessor Securities) is registered at the close of business on a Special
Record Date to be fixed by the Trustee in the manner provided for in Section 307
of the Indenture or be paid in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Notes may be listed, and
upon such notice as may be required by such exchange, if, after notice given by
the Company to the Trustee of the proposed payment pursuant to this clause, such
manner of payment shall be deemed practicable by the Trustee.

          Payment of the principal of and interest on this Note will be made by
the Company to the Paying Agent, and if such payments are made by the Company,
the Paying Agent in turn will make such payments to the Depositary.

          Interest on the Notes will be computed on the basis of a 360-day year
of twelve 30-day months. If an Interest Payment Date falls on a day that is not
a Business Day, the interest payment to be made on such Interest Payment Date
will be made on the next succeeding Business Day with the same force and effect
as if made on such Interest Payment Date, and no additional interest will accrue
as a result of such delayed payment.

          The Notes are not subject to redemption prior to maturity.

          [The Notes are not subject to any sinking fund.]

          Defeasance of the Company's obligations with respect to the Notes is
subject to the prior written approval of the Federal Reserve Board and the
Financial Services Authority of the United Kingdom.

          The indebtedness of the Company evidenced by the Notes, including the
principal thereof and interest thereon, is to the extent and in the manner set
forth in the Indenture, subordinate and junior in right of payment to the
Company's obligations to holders of Senior Indebtedness of the Company, and each
Holder of the Notes, by the acceptance thereof, agrees to and shall be bound by
such provisions of the Indenture. The indebtedness of the Company evidenced by
the Notes ranks equally in right of payment with Indebtedness Ranking on a
Parity with the Debt Securities.

          If an Event of Default with respect to the Notes shall have occurred
and be continuing, the principal of all the Notes may be declared due and
payable in the manner and with the effect provided in the Indenture. There is no
right of acceleration of the payment of principal of the Notes upon a default in
the payment of interest on the Notes or in the performance of any covenant of
the Company in the Indenture or in the Notes.

          If the Company does not pay any installment of interest on the Notes
on the applicable Interest Payment Date or all or any part of any installment of
the principal thereof at Stated Maturity thereof, the obligation to make such
payment and such Interest Payment Date or Stated Maturity, as the case may be,
shall be deferred until (i) in the case of a payment of interest, the Deferred
Interest Payment Date with respect to such payment of interest, and (ii) in the
case of a payment of principal, the Deferred Stated Maturity. Any payment so
deferred shall not be treated as due for any purpose (including, without
limitation, for the purposes of ascertaining whether or not a Default has
occurred) until the Deferred Interest Payment Date or Deferred Stated Maturity,
as the case may be, when such payment shall become due and payable without any
further act or deed on the part of the Trustee or any Holder, provided, however,
that any payment so deferred shall accrue interest during the period of such
deferral at the rate per annum set forth in the first paragraph hereof.

          The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Debt Securities of each series to
be affected under the Indenture by the Company and the Trustee with the consent
of the Holders of not less than 66 2/3 % in aggregate principal amount of the
Debt Securities at the time Outstanding of each series to be affected. The
Indenture also contains provisions permitting the Holders of specified
percentages in aggregate principal amount of the Debt Securities of any series
at the time Outstanding, on behalf of the Holders of all the Debt Securities of
such series, to waive, with respect to the Debt Securities of such series,
compliance by the Company with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver by the Holder of this Note shall be conclusive and binding upon such
Holder and upon all future Holders of this Note and of any Note issued upon
registration of transfer hereof or in exchange for or in lieu hereof, whether or
not notation of such consent or waiver is made upon this Note.

          Holders of the Notes may not enforce their rights pursuant to the
Indenture or the Notes except as provided in the Indenture. No reference herein
to the Indenture and no provision of this Note or of the Indenture shall alter
or impair the obligation of the Company, which is absolute and unconditional, to
pay the principal of (and premium, if any) and interest on this Note at the
times, place and rate, and in the coin or currency, herein prescribed.

          The Debt Securities of this series are issuable only in registered
form without coupons in denominations of $1,000 and integral multiples thereof.

          As provided in the Indenture, and subject to certain limitations
therein set forth, Notes are exchangeable for a like aggregate principal amount
of Notes of any authorized denominations and of like tenor, as requested by the
Holder surrendering the same.

          No service charge shall be made for any registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith and any other
expenses provided for in the Indenture in connection with the issuance of any
new Note in the event of the destruction, mutilation, loss, or theft of any
Note.

          Prior to the due presentment of this Note for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Note is registered as the owner hereof
for all purposes, whether or not this Note be overdue, and neither the Company,
the Trustee nor any such agent shall be affected by notice to the contrary.

          Unless the certificate of authentication hereon has been duly executed
by the Trustee by manual signature of one of its authorized officers, this Note
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purposes.

          All terms used in this Note which are not defined herein shall have
the meanings assigned to them in the Indenture.

          This Note shall be construed in accordance with and governed by the
laws of the State of New York.

<PAGE>

          IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.

Dated:

                                                HSBC USA INC.

                                                by

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

Corporate Seal
Attest:

by

Name:
Title:

                     TRUSTEE'S CERTIFICATE OF AUTHENTICATION

         This is one of the Debt Securities of the series designated therein
issued under the within-mentioned Indenture.

                                                WELLS FARGO BANK
                                                MINNESOTA, NATIONAL ASSOCIATION,
                                                as Trustee

                                                by

                                                --------------------
                                                Authorized Signatory<PAGE>
                                                                   EXHIBIT 10(i)

                                GERDAU STEEL INC.
                                   as Obligor

                                       and

                           GERDAU COURTICE STEEL INC.
                              GERDAU MRM STEEL INC.
                                 GUSAP PARTNERS
                                  as Borrowers

                                       and

                              CHASE SECURITIES INC.
                            SALOMON SMITH BARNEY INC.
                            THE TORONTO-DOMINION BANK
                    as Joint Arrangers and Joint Bookrunners

                                       and

                          THE INSTITUTIONS NAMED HEREIN
                                   as Lenders

                                       and

                            THE TORONTO-DOMINION BANK
                                    as Agent

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

                       AMENDED AND RESTATED LOAN AGREEMENT
                        INITIALLY DATED NOVEMBER 8, 1996
               AS FURTHER AMENDED AND RESTATED BY AGREEMENT DATED
                                OCTOBER 22, 2002

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

                          FASKEN MARTINEAU DUMOULIN LLP
                           TORONTO DOMINION BANK TOWER
                      P.O. BOX 20, TORONTO-DOMINION CENTRE
                                TORONTO, ONTARIO
                                     M5K 2N6

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>

                                                                                                     PAGE
                                                                                                     ----
<S>                                                                                                  <C>
ARTICLE 1   INTERPRETATION.........................................................................    6
     1.1    Definitions............................................................................    6
     1.2    Additional References..................................................................   42
     1.3    Gender and Number......................................................................   44
     1.4    Interest Act...........................................................................   44
     1.5    Invalidity, etc........................................................................   44
     1.6    Headings, etc..........................................................................   44
     1.7    Governing Law..........................................................................   45
     1.8    Attornment.............................................................................   45
     1.9    References.............................................................................   45
     1.10   Currency...............................................................................   46
     1.11   This Agreement to Govern...............................................................   46
     1.12   Generally Accepted Accounting Principles...............................................   46
     1.13   Computation of Time Periods............................................................   46
     1.14   Actions on days Other Than Banking Days................................................   46
     1.15   Verbal Instructions....................................................................   47

ARTICLE 2   FACILITY...............................................................................   47
     2.1    Establishment of Revolver Facility.....................................................   47
     2.2    Availability and Revolving Nature of Revolver Facility.................................   48
     2.3    Interest  and Acceptance Fees on Advances under the Revolver Facility..................   48
     2.4    Repayment under Revolver Facility......................................................   48
     2.5    Mandatory Repayment....................................................................   49
     2.6    Annual Review..........................................................................   49
     2.7    Prepayment and Cancellation of Revolver Facility.......................................   50
     2.8    Minimum Advance........................................................................   50
     2.9    Swing Line Advances....................................................................   51
     2.10   Advances...............................................................................   52

ARTICLE 3   FACILITY...............................................................................   52
     3.1    Establishment of Term Facility.........................................................   52
     3.2    Availability and Non-Revolving Nature of Term Facility.................................   53
     3.3    Repayment of Term Facility.............................................................   53
     3.4    Interest and Acceptance Fees on Advances under the Term Facility.......................   56
     3.5    Prepayment of Term Facility............................................................   56
     3.6    Minimum Advance........................................................................   56
     3.7    Consolidation of Loans.................................................................   57

ARTICLE 4   FACILITIES.............................................................................   57
     4.1    Existing Hedging Facility..............................................................   57

ARTICLE 5   PAYMENT................................................................................   58
</TABLE>

                                     - i -

<PAGE>

                                TABLE OF CONTENTS
                                  (continued)

<TABLE>
<CAPTION>

                                                                                                     PAGE
                                                                                                     ----
<S>                                                                                                  <C>
     5.1    Place of Payment.......................................................................   58
     5.2    Application of Payments and Prepayments................................................   58
     5.3    Change in Circumstances................................................................   58
     5.4    Payments Generally.....................................................................   60
     5.5    Repayment Notice.......................................................................   60
     5.6    Netting of Payments....................................................................   60

ARTICLE 6   CONDITIONS PRECEDENT TO ADVANCES.......................................................   60
     6.1    Conditions Precedent to Advance........................................................   60
     6.2    Conditions Precedent to Effective Time.................................................   61
     6.3    Effective Time.........................................................................   64
     6.4    Effectiveness..........................................................................   64
     6.5    Provisions Taking Immediate Effect.....................................................   64
     6.6    Rights Unaffected......................................................................   65
     6.7    Date of Agreement......................................................................   65

ARTICLE 7   ADVANCES...............................................................................   65
     7.1    Advance and Interest Payment Dates.....................................................   65
     7.2    Payment of Interest....................................................................   66
     7.3    Conversions............................................................................   66
     7.4    Notice of Advances, Payments, Conversions and Rollovers................................   66
     7.5    Bankers' Acceptances...................................................................   67
     7.6    Standby Credits........................................................................   70
     7.7    LIBOR Loans - Market Disruption........................................................   74
     7.8    Illegality.............................................................................   75
     7.9    Facility Excesses by Reason of Foreign Currency Fluctuations...........................   75
     7.10   Evidence of Indebtedness...............................................................   76

ARTICLE 8   FEES AND EXPENSES......................................................................   76
     8.1    Commitment Fee.........................................................................   76
     8.2    Payment of Costs and Expenses..........................................................   77
     8.3    Indemnity..............................................................................   77
     8.4    Agency Fee.............................................................................   78

ARTICLE 9   SECURITY AND INSURANCE.................................................................   78
     9.1    Security...............................................................................   78
     9.2    Perfection.............................................................................   78
     9.3    Security Effective Notwithstanding Date of Advance.....................................   78
     9.4    No Merger..............................................................................   78
     9.5    Existing Security......................................................................   78
     9.6    Insurance..............................................................................   79
     9.7    Partial Discharges of Security.........................................................   80
     9.8    Obligations Secured....................................................................   80
     9.9    Additional Obligations Secured.........................................................   80
</TABLE>

                                     - ii -

<PAGE>

                                TABLE OF CONTENTS
                                  (continued)

<TABLE>
<CAPTION>

                                                                                                     PAGE
                                                                                                     ----
<S>                                                                                                  <C>

     9.10   Redemption of Security.................................................................   80
     9.11   Repayment in Full......................................................................   80

ARTICLE 10  REPRESENTATIONS AND WARRANTIES.........................................................   81
     10.1   Representations and Warranties.........................................................   81
     10.2   Survival of Representations and Warranties.............................................   89
     10.3   Environmental Indemnity................................................................   89

ARTICLE 11  COVENANTS..............................................................................   89
     11.1   Affirmative Covenants..................................................................   89
     11.2   Agent Entitled to Perform Covenants....................................................   97
     11.3   Negative Covenants.....................................................................   97

ARTICLE 12  EVENTS OF DEFAULT AND REMEDIES.........................................................  105
     12.1   Events of Default......................................................................  105
     12.2   Remedies Upon Default..................................................................  109
     12.3   Payment of Bankers' Acceptances........................................................  109
     12.4   Lenders' Right of Advance..............................................................  110
     12.5   Distributions..........................................................................  110

ARTICLE 13  THE AGENT AND ADMINISTRATION OF THE CREDIT FACILITIES..................................  110
     13.1   Appointment and Authorization..........................................................  110
     13.2   Declaration of Agency..................................................................  110
     13.3   Protection of Agent....................................................................  111
     13.4   Interest Holders.......................................................................  111
     13.5   Consultation with Professionals........................................................  111
     13.6   Documents..............................................................................  111
     13.7   Agent and its Subsidiaries and Affiliates..............................................  111
     13.8   Responsibility of the Agent............................................................  111
     13.9   Action by the Agent....................................................................  112
     13.10  Notice of Events of Default............................................................  113
     13.11  Responsibility Disclaimed..............................................................  113
     13.12  Indemnification........................................................................  114
     13.13  Protection of Employees, Etc...........................................................  114
     13.14  Credit Decision........................................................................  114
     13.15  Replacement Agent and Reference Lenders................................................  114
     13.16  Delegation.............................................................................  115
     13.17  Required Lender Decisions..............................................................  115
     13.18  Waivers and Amendments.................................................................  116
     13.19  Determination by Agent.................................................................  117
     13.20  Interlender Procedure for Making Advances..............................................  117
     13.21  Remittance of Payments.................................................................  119
     13.22  Redistribution of Payments.............................................................  119
</TABLE>

                                    - iii -

<PAGE>

                                TABLE OF CONTENTS
                                  (continued)

<TABLE>
<CAPTION>

                                                                                                     PAGE
                                                                                                     ----
<S>                                                                                                  <C>

     13.23  Prompt Notice to Lenders...............................................................  120
     13.24  Several Debts of the Lenders...........................................................  120
     13.25  Enforcement of Security................................................................  120
     13.26  Swing Line Loans.......................................................................  121

ARTICLE 14  GENERAL................................................................................  123
     14.1   Reliance and Non-Merger................................................................  123
     14.2   Amendment and Waiver...................................................................  123
     14.3   Set-Off or Compensation................................................................  123
     14.4   Notices................................................................................  124
     14.5   Binding Effect and Assignment..........................................................  124
     14.6   Confidentiality........................................................................  126
     14.7   Time...................................................................................  126
     14.8   Further Assurances.....................................................................  126
     14.9   Currency Conversion and Indemnity......................................................  127
     14.10  Taxes..................................................................................  127
     14.11  Joint Arrangers and Joint Bookrunners and Co-Syndication Agents........................  129
     14.12  Survival...............................................................................  129
     14.13  Entire Agreement.......................................................................  129
     14.14  Counterparts...........................................................................  130

SCHEDULE A  LENDERS, LENDING OFFICES AND COMMITMENTS...............................................  139

SCHEDULE B  DRAWDOWN NOTICE........................................................................  142

SCHEDULE C  FORM OF CONVERSION NOTICE..............................................................  145

SCHEDULE D  FORM OF ROLLOVER NOTICE................................................................  149

SCHEDULE E - PART I  SUBSIDIARIES BEFORE THE EFFECTIVE TIME........................................  153

SCHEDULE E - PART II  SUBSIDIARIES AFTER THE EFFECTIVE TIME........................................  154

SCHEDULE F  ADDRESSES FOR NOTICES..................................................................  155

SCHEDULE G  FORM OF BORROWING BASE REPORT..........................................................  157

SCHEDULE H  LOAN TRANSFER AGREEMENT................................................................  159

SCHEDULE I  BORROWER'S COMPLIANCE CERTIFICATE......................................................  165
</TABLE>

                                     - iv -

<PAGE>

                                TABLE OF CONTENTS
                                  (continued)

<TABLE>
<CAPTION>

                                                                                                     PAGE
                                                                                                     ----
<S>                                                                                                  <C>
SCHEDULE J  LEGAL DESCRIPTION......................................................................  167

SCHEDULE K  THE REAL PROPERTY......................................................................  172

SCHEDULE L  SECURITY SCHEDULE......................................................................  181

SCHEDULE M  FORM OF REPAYMENT/CANCELLATION NOTICE..................................................  187

SCHEDULE N  ENVIRONMENTAL DISCLOSURE SCHEDULE......................................................  188

SCHEDULE O  INTELLECTUAL PROPERTY RIGHTS...........................................................  189

SCHEDULE P  CHIEF EXECUTIVE OFFICES................................................................  190
</TABLE>

                                     - v -

<PAGE>

                       AMENDED AND RESTATED LOAN AGREEMENT

          THIS AGREEMENT initially dated as of November 8, 1996 as further
amended and restated by agreement dated October 22, 2002 is made

A M O N G :

          GERDAU STEEL INC., a corporation incorporated pursuant to the laws of
          Canada

          - and -

          GERDAU COURTICE STEEL INC., a corporation continued pursuant to the
          laws of the Province of Saskatchewan

          - and -

          GERDAU MRM STEEL INC., a corporation continued pursuant to the laws of
          the Province of Saskatchewan

          - and -

          GUSAP PARTNERS, a partnership formed under the laws of the State of
          Delaware

          - and -

          THE INSTITUTIONS NAMED HEREIN AS LENDERS

          - and -

          THE TORONTO-DOMINION BANK, as Agent

RECITALS:

A.        By Letter of Offer and Term Sheet (collectively, the "1989 TERM
          SHEET") dated October 31, 1989, The Toronto-Dominion Bank ("TD")
          established certain term and operating facilities in favour of
          Courtice on and subject to the terms and conditions set out in the
          1989 Term Sheet;

B.        Each of Courtice and MRM subsequently requested TD to provide Courtice
          and MRM with certain additional financing relating to the purchase by
          Courtice of preference shares in the capital of MRM Holdings and in
          connection with the acquisition by MRM of the MRM Steel and the Mandak
          Metal divisions of The Canam Manac Group Inc.;

C.        TD agreed to provide such financing on and subject to the terms and
          conditions set out in a Letter of Offer and Term Sheet (the "1995 TERM
          SHEET") dated June 19, 1995 between TD and Courtice;

<PAGE>
                                     - 2 -

D.        Courtice, MRM, MRM Holdings, Gerdau Steel and TD amended the terms and
          conditions of the Original Facilities referred to and defined in the
          1989 Term Sheet and incorporated them, as amended, into an amended and
          restated loan agreement dated June 23, 1995 (the "ORIGINAL AMENDED AND
          RESTATED LOAN AGREEMENT" which expression includes the first amending
          agreement thereto dated as of September 26, 1995) which also sets out
          the terms and conditions relating to the Revolver Facility (as it then
          was) and the term facility established under the 1995 Term Sheet;

E.        On or about September 27, 1995 MRM arranged for Tellib to lend to MRM
          U.S.$38,000,000 (the "TELLIB ADVANCE") on the basis that the repayment
          of such Tellib Advance and payment of interest thereon would be
          postponed in favour of TD in form and substance satisfactory to TD;

F.        Each Gerdau Canada Group Member at that time subsequently requested TD
          to provide or arrange for additional credit facilities in the
          aggregate amount of Cdn.$35,000,000, reconstitute the Revolver
          Facility and the 1995 Term Facility, allow MRM to borrow
          U.S.$38,000,000 under such reconstituted facilities and permit MRM to
          repay the Tellib Advance (partly or wholly funded) from the proceeds
          of that borrowing;

G.        By letter of offer (the "SYNDICATION OFFER") dated September 25, 1996
          TD agreed to arrange the credit facilities requested by the Gerdau
          Canada Group at that time referred to above;

H.        The parties thereto amended the terms and conditions of the Original
          Amended and Restated Loan Agreement and incorporated them, as amended,
          into an agreement dated as of November 8, 1996 (the "FIRST SYNDICATED
          AMENDED AND RESTATED LOAN AGREEMENT") which also set out the terms and
          conditions relating to the reconstituted facilities established
          pursuant to the Syndication Offer;

I.        The Borrowers at that time (the "PRIOR BORROWERS") and Guarantors at
          that time requested the Lenders at that time (the "PRIOR LENDERS"),
          and the Prior Lenders agreed, to amend and restate the terms and
          conditions of the First Syndicated Amended and Restated Loan Agreement
          and in that regard the parties to the First Syndicated Amended and
          Restated Loan Agreement entered into an agreement dated as of December
          18, 1998 (the "SECOND SYNDICATED AMENDED AND RESTATED LOAN
          AGREEMENT").

J.        Pursuant to the Second Syndicated Amended and Restated Loan Agreement
          the Prior Lenders agreed to make loans and other credit available to
          the Prior Borrowers in the aggregate amount of up to Cdn.$85,000,000
          under the Revolver Facility (as defined therein) and up to
          Cdn.$65,000,000 under the Term Facility (as defined therein).

K.        Pursuant to a loan transfer agreement dated September 27, 1999, the
          Lenders party thereto as transferees became the only Lenders under the
          Second Syndicated

<PAGE>
                                     - 3 -

          Amended and Restated Loan Agreement entitled to be paid the entirety
          of the Advances (as defined in the Second Syndicated Amended and
          Restated Loan Agreement) payable under the Second Syndicated Amended
          and Restated Loan Agreement.

L.        The Prior Borrowers requested those Lenders to reallocate the amounts
          available under the then existing Revolver Facility and Term Facility
          (each as defined in the Second Syndicated Amended and Restated Loan
          Agreement) by reducing the Revolver Facility to Cdn.$75,000,000 and
          increasing the Term Facility to Cdn.$200,000,000 and allow Gerdau
          Steel to become a Borrower. The increase in the existing Credit
          Facilities (as defined in the Second Syndicated Amended and Restated
          Loan Agreement) was requested by the Prior Borrowers and Gerdau Steel
          to permit them to finance the acquisition of 176 issued and
          outstanding shares of common stock in FLS Holdings, Inc.
          (representing, at that time, 88% of all such issued and outstanding
          common stock), which in turn owned 9,000,000 issued and outstanding
          shares of common stock in AmeriSteel Corporation (representing, at
          that time, approximately 84% of all such issued and outstanding common
          stock).

M.        In response to the request from the Prior Borrowers and Gerdau Steel,
          the Lenders amended and restated the terms and conditions of the
          Second Syndicated Amended and Restated Loan Agreement to provide the
          Credit Facilities outlined in more detail in the Amended and Restated
          Loan Agreement dated as of September 27, 1999, as amended by agreement
          dated as of November 4, 1999, (together, the "THIRD SYNDICATED AMENDED
          AND RESTATED LOAN AGREEMENT").

N.        Gerdau Steel, MRM and Courtice (the "PRE-1999 BORROWERS") requested
          the Lenders to permit USP to become a party to the Third Syndicated
          Amended and Restated Loan Agreement as a Borrower and assume the
          obligations of MRM thereunder with respect to a U.S.$50,000,000
          portion of the U.S.$91,743,119.26 Base Rate Loan then owing by MRM to
          the Lenders.

O.        USP requested the Lenders to permit each of MRM and Courtice to
          transfer the shares in Gerdau USA owned by each of them (having an
          aggregate value of U.S.$20,000,000) to USP. These shares were subject
          to a share pledge made in favour of the Lenders and such transfer
          could not be made without the consent of the Lenders.

P.        USP also requested the Lenders to permit MRM to assign the existing
          U.S.$50,000,000 loan owing by Gerdau USA to MRM in consideration of
          its assumption referred to in Recital N above. This loan was subject
          to a security interest in favour of the Lenders and could not be
          assigned to USP without the consent of the Lenders.

Q.        The Lenders agreed to permit the transfer and assignment referred to
          in Recitals O and P above, in exchange for which USP agreed to become
          a Borrower under the

<PAGE>
                                     - 4 -

          Third Syndicated Amended and Restated Loan Agreement to the extent
          referred to in Recital N above.

R.        The amendments described in Recitals N to Q above were incorporated
          into an amendment and restatement of the Third Syndicated Amended and
          Restated Loan Agreement entered into among the Pre-1999 Borrowers and
          USP (the "EXISTING BORROWERS"), the Lenders, the Agent and others
          dated as of December 23, 1999 (the "FOURTH SYNDICATED AMENDED AND
          RESTATED LOAN AGREEMENT").

S.        The Existing Borrowers subsequently requested the Lenders to extend
          the term of the Revolver Facility.

T.        The Existing Borrowers also requested the Lenders to amend certain
          definitions and covenants in the Fourth Syndicated Amended and
          Restated Loan Agreement, to permit the repayment by the Pre-1999
          Borrowers of certain advances that may be made to them from time to
          time by Gerdau S.A. and its subsidiaries, and to make certain other
          amendments to the Fourth Syndicated Amended and Restated Loan
          Agreement.

U.        The Existing Borrowers also requested the Lenders' consent to borrow
          in a maximum amount equal to the principal amount of the Kyoei Steel
          Balance of Sale Notes by means of one or more subordinated loans.

V.        Accordingly the parties to the Fourth Syndicated Amended and Restated
          Loan Agreement entered into an amendment and restatement of the Fourth
          Syndicated Amended and Restated Loan Agreement among the Existing
          Borrowers, the Lenders, the Agent and others dated as of April 20,
          2001 (the "EXISTING LOAN AGREEMENT").

W.        The Existing Borrowers have now requested the Lenders to consent to
          the indirect transfer by Gerdau Steel to Co-Steel of all of the issued
          Capital Stock in each of Courtice, MRM Holdings and Gerdau USA
          (collectively, the "GERDAU CANADA SUBGROUP SHARES").

X.        The indirect transfer of the Gerdau Canada Subgroup Shares by Gerdau
          Steel to Co-Steel would take place in accordance with the general
          terms outlined in the Information Circular and the following
          transactions (the "CO-STEEL COMBINATION TRANSACTIONS") in the
          following time sequence:

          (i)  Gerdau Steel incorporates a new Wholly-Owned Subsidiary (herein
               referred to as the Gerdau Canada Subgroup Interim Holding
               Company);

          (ii) the Gerdau Canada Subgroup Interim Holding Company incorporates a
               new Wholly-Owned Subsidiary (herein referred to as the Gerdau
               Canada Subgroup Holding Company);

          (iii) Gerdau Steel transfers the Gerdau Canada Subgroup Shares to the
                Gerdau Canada Subgroup Interim Holding Company, subject to the
                Security, for a

<PAGE>
                                     - 5 -

               consideration consisting entirely of shares in Gerdau Canada
               Subgroup Interim Holding Company;

          (iv) contemporaneously with the acquisition of the Gerdau Canada
               Subgroup Shares the Gerdau Canada Subgroup Interim Holding
               Company issues a guarantee of the Loan Obligations to the
               Syndicate;

          (v)  immediately following the receipt of the transfer of the Gerdau
               Canada Subgroup Shares from Gerdau Steel, the Gerdau Canada
               Subgroup Interim Holding Company transfers the Gerdau Canada
               Subgroup Shares to the Gerdau Canada Subgroup Holding Company,
               subject to the Security, for a consideration consisting entirely
               of shares in Gerdau Canada Subgroup Holding Company; and

          (vi) the Gerdau Canada Subgroup Interim Holding Company transfers all
               of the issued Capital Stock of the Gerdau Canada Subgroup Holding
               Company (the "GERDAU CANADA SUBGROUP HOLDING COMPANY SHARES") to
               Co-Steel, in exchange for such number of issued common shares in
               Co-Steel as will entitle Gerdau Steel to vote not less than 64.8%
               (assuming the AmeriSteel Merger Transactions take place) of the
               voting rights attributable to all of the Voting Capital Stock of
               Co-Steel on a fully diluted basis (the "EXCHANGED CO-STEEL
               SHARES").

Y.        Before the Co-Steel Combination Transactions could take place, Gerdau
          Steel agreed with Co-Steel to eliminate or combine various
          inter-corporate debts amongst MRM, USP, Gerdau Steel, Courtice, NSULC,
          Gerdau USA, Finco, GTL Netherlands and GTL Spain with the result that
          none of the Gerdau Canada Subgroup and their respective subsidiaries
          have any inter-corporate debt owing to GTL Spain, GTL Netherlands or
          Gerdau Steel, save for the remaining intercorporate debt contemplated
          by the Debt Reorganization Transactions (as defined below). The
          Security did not permit the Debt Reorganization Transactions and
          accordingly the Existing Borrowers requested the Lenders to consent to
          the transactions contemplated by the Debt Reorganization Transactions.

Z.        Gerdau Steel has also agreed with Co-Steel to cease to be a Borrower
          under the Existing Credit Agreement and accordingly, Gerdau Steel has
          requested the Lenders to amend the Existing Loan Agreement and delete
          Gerdau Steel as a Borrower thereunder.

AA.       Gerdau Steel has also agreed with Co-Steel to use commercially
          reasonable efforts to cause Gerdau USA and its Subsidiaries to approve
          a plan of merger with the effect that AmeriSteel will be the surviving
          corporation, the Capital Stock of AmeriSteel, other than the Capital
          Stock of AmeriSteel held by Gerdau USA, will be converted into
          Co-Steel shares based on the exchange ratio set out in the Information
          Circular and the Capital Stock of AmeriSteel owned by Gerdau USA will
          remain as the only issued Capital Stock of the surviving corporation
          (referred

<PAGE>
                                     - 6 -

          to herein as the AmeriSteel Merger Transactions). Following the
          AmeriSteel Merger Transactions, Gerdau USA will own 100% of the
          Capital Stock of AmeriSteel and Gerdau Steel will own approximately
          64.8% of the common shares of Co-Steel on a fully diluted basis. The
          Existing Borrowers have requested the Lenders to consent to the
          transactions contemplated by the AmeriSteel Merger Transactions
          because the Existing Loan Agreement does not permit such transactions.

BB.       The Lenders have agreed to amend the Existing Loan Agreement to delete
          Gerdau Steel as a Borrower thereunder and to consent to the
          Reorganization Transactions on the conditions, amongst others, that
          (i) the Co-Steel Combination Transactions take place on the Effective
          Date in the order set forth in Recital X of this Agreement, (ii) the
          Debt Reorganization Transactions takes place before the Effective Date
          in a manner satisfactory to the Agent, (iii) the AmeriSteel Merger
          Transactions take place before March 31, 2003 in a manner satisfactory
          to the Agent and (iv) the Gerdau Canada Subgroup Interim Holding
          Company amalgamates vertically with Gerdau Steel effective January 1,
          2003.

          Accordingly, subject to the terms and conditions set out below, the
parties have agreed to amend the Existing Loan Agreement so that it reads in its
entirety in the form of this Agreement.

          NOW THEREFORE THIS AGREEMENT WITNESSES that, in consideration of the
covenants and agreements herein contained and for other good and valuable
consideration (the receipt and sufficiency of which are hereby acknowledged),
the parties agree to amend and restate the terms of the Credit Facilities as
referred to and defined in the Existing Loan Agreement with effect as of and
from the Effective Time in the manner set out in this amended and restated loan
agreement, subject to the following terms and conditions:

                                    ARTICLE 1
                                 INTERPRETATION

1.1       DEFINITIONS

          For the purposes of this Agreement:

          "ACCEPTANCE DATE" means, with respect to any Bankers' Acceptance, the
          date upon which the Bankers' Acceptance is issued, being the first day
          of the relevant term for such Bankers' Acceptance;

          "ACCEPTANCE FEE" means the acceptance fee payable on the amount of
          each Bankers' Acceptance, calculated and payable in the manner
          provided for in Section 7.5.8;

          "ACCEPTANCE PROCEEDS" for any Lender means the net cash proceeds
          realized on the purchase by the Lender of its participation in an
          issue of Bankers' Acceptances pursuant to this Agreement after
          deduction of the applicable Acceptance Fee payable thereon;

<PAGE>
                                     - 7 -

          "ADVANCE" means any amount of credit advanced or to be advanced (as
          the context requires) by the Lenders to a Borrower pursuant to this
          Agreement, whether by way of cash advance, acceptance of drafts or
          issue of a Standby Credit, or any relevant portion thereof (as the
          context requires);

          "AFFECTED LENDER" has the defined meaning assigned to it in Section
          5.3, 7.7, 7.8 or 14.10.1, as applicable;

          "AFFILIATE" means any Person which is not a Gerdau Canada Group Member
          and (i) which, directly or indirectly, Controls, is Controlled by or
          is under common Control with, any Gerdau Canada Group Member, (ii)
          which beneficially owns or Controls 10% or more of the Voting Capital
          Stock, on a fully diluted basis, of any Gerdau Canada Group Member,
          (iii) of which 10% or more of the Voting Capital Stock, on a fully
          diluted basis, is beneficially owned or Controlled by any Gerdau
          Canada Group Member or (iv) any Senior Officer or director of any
          Person referred to in any of clauses (i), (ii) and (iii) of this
          definition and any Person that does not deal at arm's length with any
          such Senior Officer or director;

          "AGENCY FEE AGREEMENT" means the agency fee agreement between Gerdau
          Steel and the Agent dated as of September 27, 1999 providing for the
          payment of certain agency fees to the Agent;

          "AGENT" means TD acting for its own benefit and in its capacity as
          administration agent for the rateable benefit of the Lenders, or (as
          the context requires) any replacement administration agent that is a
          Lender and is appointed pursuant to the provisions of Section 13.15.1;

          "AGREEMENT" means this amended and restated loan agreement, or (as the
          context requires) the Existing Loan Agreement, as amended and restated
          by this amended and restated loan agreement; the expressions "HEREOF",
          "HEREIN", "HERETO", "HEREUNDER", "HEREBY" and similar expressions
          refer to this Agreement as a whole and not to any particular article,
          section, schedule or other portion hereof, and the expression
          "ARTICLE" and "SECTION" followed by a number or by a number and
          letter, and "SCHEDULE" followed by a letter, mean and refer to the
          specified article or Section of or schedule to this Agreement, except
          as otherwise specifically provided herein;

          "AMENDING AGREEMENT NO. 1" means the agreement dated June 27, 1995
          between Courtice and TD amending the Courtice Debenture;

          "AMENDING AGREEMENT NO. 2" means the agreement dated June 27, 1995
          between Courtice and TD amending the Courtice Supplemental Debenture;

          "AMENDING AGREEMENT NO. 3" means the agreement dated November 8, 1996
          between Courtice and TD amending the Courtice Debenture as amended by
          Amending Agreement No. 1;

<PAGE>
                                     - 8 -

          "AMENDING AGREEMENT NO. 4" means the agreement dated November 8, 1996
          between MRM and TD amending the MRM Debenture;

          "AMERISTEEL" means AmeriSteel Corporation, a corporation incorporated
          pursuant to the laws of the State of Florida as at the date hereof,
          and its successors, as the context requires;

          "AMERISTEEL BRIGHT BAR" means AmeriSteel Bright Bar, Inc., a
          corporation incorporated under the laws of the State of Ohio as at the
          date hereof, and its successors, as the context requires;

          "AMERISTEEL MERGER TRANSACTIONS" means the following transactions in
          the following order:

               (i)   Gerdau USA will incorporate a new subsidiary under the laws
                     of the State of Florida wholly-owned by Gerdau USA which
                     will be nominally capitalized and have only nominal assets
                     ("FLORIDACO");

               (ii)  Co-Steel will, immediately following the Co-Steel
                     Combination Transactions, file a registration statement
                     (the "REGISTRATION STATEMENT") with the United States
                     Securities and Exchange Commission containing a preliminary
                     version of the prospectus to be sent to minority
                     shareholders of AmeriSteel in connection with a plan of
                     merger which must be in form and substance not unacceptable
                     to the Agent acting reasonably (the "PLAN OF MERGER")
                     pursuant to which AmeriSteel and FloridaCo will merge;

               (iii) once the Registration Statement is effective (approximately
                     one to three months after filing), Gerdau USA will adopt
                     the Plan of Merger and Gerdau USA and Co-Steel will give 35
                     days' notice of the Plan of Merger to shareholders of
                     AmeriSteel and FloridaCo;

               (iv)  FloridaCo and AmeriSteel will merge, with AmeriSteel
                     surviving (the "SURVIVING CORPORATION"), pursuant to which
                     (A) the Capital Stock of the FloridaCo will be cancelled
                     without payment or other consideration, (B) the Capital
                     Stock of AmeriSteel held by shareholders other than Gerdau
                     USA will be exchanged for common shares in the capital
                     stock of Co-Steel based on the exchange ratio set out in
                     the Plan of Merger (which shall not result in Gerdau Steel
                     owning less than 64.8% of the issued and outstanding common
                     shares in the capital stock of Co-Steel on a fully diluted
                     basis) and (C) the Capital Stock of AmeriSteel held by
                     Gerdau USA shall be deemed to be and constitute all of the
                     issued Capital Stock of the Surviving Corporation;
<PAGE>
                                     - 9 -

               "APPLICABLE LAW" means, in respect of any Person, property,
               transaction or event, all applicable treaties, laws, statutes,
               codes, rules, by-laws and regulations, and all applicable
               official directives, orders, guidelines, policies, Permits,
               judgments and decrees of Governmental Bodies;

               "APPLICABLE MARGIN" means, at any time, the rate per annum
               (expressed as a percentage per annum on the basis of a 360 day
               year, in the case of LIBOR Loans, on the basis of a 365 day year,
               in the case of Bankers' Acceptances, and on the basis of a 365 or
               366 day year, as applicable, in each other case) determined in
               accordance with the table set forth below with reference to the
               Total Debt/EBITDA Ratio most recently certified to the Lenders
               pursuant to Section 6.2.3.12 or 11.1.1.10:

<TABLE>
<CAPTION>

                                             LIBOR LOAN,
                   PRIME RATE & BASE       STANDBY CREDIT &
TOTAL DEBT/            RATE LOAN         BANKERS' ACCEPTANCE        COMMITMENT FEE
EBITDA RATIO       APPLICABLE MARGIN      APPLICABLE MARGIN        APPLICABLE MARGIN
------------       -----------------     -------------------       -----------------
<S>                      <C>                     <C>                     <C>
<1.50:1                  1.25%                   2.25%                   0.50%
-

> 1.50:1 < 2.50:1        1.75%                   2.75%                   0.75%
         -

> 2.50:1                 2.25%                   3.25%                  0.875%
</TABLE>

               The Total Debt/EBITDA Ratio as at the Effective Time shall be
               deemed to be 2.44:1 and the Applicable Margin as from the
               Effective Time shall be determined accordingly. Changes in the
               Applicable Margin shall take effect as of the third Banking Day
               following the date Gerdau Steel delivers a Compliance Certificate
               to the Lenders pursuant to Section 11.1.1.10 which, when
               delivered, discloses a Total Debt/EBITDA Ratio giving rise to
               such changes. If Gerdau Steel fails to deliver a Compliance
               Certificate by the date required to do so under Section
               11.1.1.10, the Total Debt/EBITDA Ratio shall be deemed to be
               greater than 2.50:1 until such failure is cured;

               "AUDITORS" means Ernst & Young or such other firm of chartered
               accountants not unacceptable to the Agent, acting reasonably, as
               the Borrowers may designate to the Agent in writing from time to
               time;

               "AVAILABILITY PERIOD" means the period from and including the
               Term Drawdown Date to, but excluding the Revolver Facility Due
               Date;

               "AWARD" means any judgment, decree, injunction, rule, award or
               order of any Governmental Body or arbitrator;

               "BANKERS' ACCEPTANCE" means a draft (either a bill of exchange or
               depository bill) in Canadian dollars (in such form as a Lender
               may require) drawn by a
<PAGE>
                                     - 10 -

               Borrower and accepted by a Lender for delivery in accordance with
               this Agreement;

               "BANKING DAY" means a day on which banks are generally open for
               business and on which dealings in foreign currency and exchange
               between banks may be carried on in Toronto, Ontario and New York,
               New York and, in respect of LIBOR Loans, in London, England;

               "BA REFERENCE RATE" means (i) for each Lender that is a Schedule
               I Canadian chartered bank, the CDOR BA Rate and (ii) for each
               Lender that is not a Schedule I Canadian chartered bank, the CDOR
               BA Rate plus one-tenth percent (0.10%) per annum;

               "BASE RATE" means the rate determined by the Agent to be the
               greater of (i) the annual rate of interest (expressed as a
               percentage per annum on the basis of a 365 or 366 day year, as
               applicable) established by the Swing Line Lender as the reference
               rate of interest for the determination of interest rates that the
               Swing Line Lender charges to customers of varying degrees of
               creditworthiness for U.S. Dollar loans made by it in Canada and
               (ii) the sum of (A) the Federal Funds Rate plus (B) 1.00%. On
               request, the Agent shall determine and give notice to a Borrower
               of the Base Rate from time to time and such notice shall be
               conclusive and binding on the parties hereto for all purposes,
               absent manifest error;

               "BASE RATE LOAN" means an Advance made by way of loan in U.S.
               Dollars bearing interest based on the Base Rate;

               "BORROWERS" means Courtice, MRM and USP;

               "BORROWER'S COUNSEL" means (i) in the Province of Ontario, Torys,
               (ii) in the State of New York, Greenberg Traurig, (iii) in each
               other relevant jurisdiction, such firm of solicitors of
               recognized local standing as Gerdau Steel may select and (iv)
               each additional or replacement firm of solicitors of recognized
               local standing as Gerdau Steel may select from time to time;

               "BORROWING" means a Conversion, Drawdown or Rollover as the
               context requires;

               "BORROWING BASE" at any time means an amount equal to the sum of
               the Receivables Borrowing Base and the Inventories Borrowing
               Base, as determined from the most current Borrowing Base Report;

               "BORROWING BASE REPORT" at any time means a report of Gerdau
               Steel substantially in the form of Schedule G signed by a Senior
               Officer of Gerdau Steel setting out a statement as at such time
               of (i) the Receivables Borrowing Base, (ii) the Inventories
               Borrowing Base and (iii) the calculation of the Borrowing Base;

<PAGE>
                                     - 11 -

               "BORROWING DATE" means a Conversion Date, Drawdown Date or
               Rollover Date, as the context requires;

               "BORROWING NOTICE" means a Conversion Notice, Drawdown Notice or
               Rollover Notice, as the context requires;

               "BRANCH OF ACCOUNT" means (i) with respect to the Agent, such
               branch or office as the Agent shall designate in writing to
               Gerdau Steel and the other Lenders to be the Agent's Branch of
               Account for the purposes of this Agreement and (ii) with respect
               to the Issuing Bank, the Swing Line Lender or a Hedging Lender,
               such branch or office as such Lender shall designate in writing
               to Gerdau Steel and the Agent to be such Lender's Branch of
               Account for the purposes of this Agreement;

               "BUSINESS" means (i) in relation to Courtice or any Subsidiary of
               Courtice, the principal business carried on by it and its
               Subsidiaries which is comprised of the steel products
               manufacturing and fabricating business, (ii) in relation to MRM
               or any Subsidiary of MRM, the principal business carried on by it
               and its Subsidiaries which is comprised of the steel products
               manufacturing and fabricating business and the scrap metal
               recycling business, (iii) in relation to Gerdau Steel, the only
               business carried on by it which is the holding of Capital Stock
               in its Subsidiaries, (iv) in relation to USP, the only business
               carried on by it which is acting as a financial intermediary for
               the Gerdau Canada Group, NSULC, Finco and Gerdau USA, (v) in
               relation to Gerdau Canada Subgroup Interim Holding Company, the
               only business carried on by it which initially is the holding of
               the Gerdau Canada Subgroup Shares and the Gerdau Canada Subgroup
               Holding Company Shares and, following their disposition, the
               holding of the Exchanged Co-Steel Shares, (vi) in relation to the
               Gerdau Canada Subgroup Holding Company, the only business carried
               on by it which is the holding of the Gerdau Canada Subgroup
               Shares, (vii) in relation to the Intermediate Holding Company,
               the only business that may be carried on by it which will be the
               acquisition and holding of the issued Capital Stock of the Gerdau
               Canada Subgroup Holding Company, and (viii) in relation to any
               Subsidiary of Gerdau Steel (other than the Co-Steel Group) or any
               of the Gerdau Canada Subgroup, the applicable businesses
               identified in (i), (ii), (iii) or (v);

               "BUSINESS AFFAIRS" means the Business Assets, affairs,
               liabilities, financial condition, prospects and results of
               operations of a specified Person;

               "BUSINESS ASSETS" means the business, operations, undertaking,
               property and assets of a specified Person;

               "CANADIAN DOLLARS", "CDN.$", "DOLLARS" or "$" means lawful
               currency of Canada;

               "CANADIAN DOLLAR VALUE" means, in relation to any amount of money
               or any particular Advance at any time, the value thereof at such
               time in Canadian dollars, determined as follows:
<PAGE>
                                     - 12 -

               (b)  for an amount or Advance which is denominated in Canadian
                    dollars, the Canadian dollar amount thereof; and

               (c)  for an amount or Advance which is denominated in foreign
                    currency, the Equivalent Amount thereof in Canadian dollars;

               "CAPITAL EXPENDITURE LIMIT" means (i) for the 1999 Fiscal Year,
               Cdn.$45,000,000, (ii) for the 2000 Fiscal Year, the sum of (A)
               Cdn.$25,000,000 plus (B) the lesser of (1) Cdn.$10,000,000 or (2)
               the amount, if any, by which (x) Cdn.$45,000,000 exceeds (y) the
               actual aggregate amount of all Capital Expenditures made by the
               Gerdau Canada Group during the 1999 Fiscal Year or, if (x) does
               not exceed (y), nil and (iii) for any Fiscal Year subsequent to
               the 2000 Fiscal Year, the sum of (A) Cdn.$25,000,000 plus (B) the
               lesser of (1) Cdn.$10,000,000 or (2) the amount, if any, by which
               (x) Cdn.$25,000,000 exceeds (y) the actual aggregate amount of
               all Capital Expenditures made by the Gerdau Canada Group during
               the immediately prior Fiscal Year or, if (x) does not exceed (y),
               nil;

               "CAPITAL EXPENDITURES" means (without duplication) any
               expenditure (whether payable in cash or other property or accrued
               as a liability) that, in conformity with GAAP, would be required
               to be classified as a capital expenditure. For certainty, Capital
               Expenditures includes (i) the cost of assets acquired under
               capital leases and (ii) expenditures for equipment which is
               purchased simultaneously with the trade-in of existing equipment
               owned by any Gerdau Canada Group Member, to the extent the gross
               purchase price of the purchased equipment exceeds the book value
               of the equipment being traded in at such time. Capital
               Expenditures, however, excludes expenditures made in connection
               with the replacement or restoration of buildings, fixtures or
               equipment to the extent reimbursed or financed from insurance or
               expropriation proceeds;

               "CAPITAL STOCK" means common shares, preferred shares or other
               equivalent equity interests (howsoever designated) of capital
               stock of a body corporate, equity preferred or common interests
               in a limited liability company, limited or general partnership
               interests in a partnership or any other equivalent of such
               ownership interest;

               "CASH COLLATERAL ACCOUNT" has the defined meaning assigned to it
               in Section 7.6.10;

               "CASH EQUIVALENT INVESTMENTS" means (i) short-term obligations
               of, or fully guaranteed by, the government of the United States
               of America or Canada, (ii) commercial paper rated A-1 or better
               by S&P or P-1 or better by Moody's, (iii) demand deposit accounts
               maintained in the ordinary course of business, and (iv)
               certificates of deposit issued by and time deposits with
               commercial banks (whether domestic or foreign) having capital and
               surplus in excess of $1,000,000,000; provided in each case that
               the same provides for payment of both
<PAGE>
                                     - 13 -

               principal and interest (and not principal alone or interest
               alone) and is not subject to any contingency regarding the
               payment of principal or interest;

               "CASH INTEREST EXPENSE" for any Fiscal Quarter or period of
               successive Fiscal Quarters means the sum (without duplication) of
               (i) total interest expense of Gerdau Steel determined on a
               Combined Basis (including the total interest expense payable by
               USP on its Loan Obligations) plus (ii) all dividends payable on
               Preferred Shares of any Gerdau Canada Group Member to any Person
               that is not a Gerdau Canada Group Member, in each case, actually
               paid in respect of such Fiscal Quarter or period of consecutive
               Fiscal Quarters;

               "CDOR BA RATE" means the yearly rate of interest determined by
               the Agent to be equivalent to the average of the discount rates
               (rounded up to two decimal places) applicable to banker's
               acceptances denominated in Canadian Dollars for any specified
               maturity quoted on the Reuters Money Market CDOR page on the day
               of determination (or on the preceding day, if such day is not a
               Banking Day). If the Agent is unable to determine such an average
               rate, the CDOR BA Rate will be determined by the Agent with
               reference to such rate or the average of such rates (rounded up
               to two decimal places) quoted by such financial reporting service
               or Reference Lender or Reference Lenders as the Agent may select;

               "CERTIFICATE" from any Person means a written certificate of the
               Person signed by a Senior Officer;

               "CHANGE IN LAW" means the introduction of, any change in, or the
               coming into effect of, any Applicable Law (whether or not having
               the force of law), or any change in the interpretation,
               administration or application thereof by any Governmental Body,
               or compliance by any Lender (or any Holding Body Corporate of any
               Lender) with any Applicable Law or the request or direction of
               any Governmental Body (whether or not having the force of law);

               "CLEAN-UP" means the remediation, containment, removal,
               treatment, neutralization or inactivation of any Contaminant;

               "COMBINED BASIS" when used in relation to any computation of
               financial terms, tests or ratios relative to Gerdau Steel, means
               such computation determined on a consolidated basis and assuming
               that the Co-Steel Combination Transactions had not taken place
               and the corporate structure depicted in Schedule E - Part I
               remained true, accurate and complete in all material respects,
               and ignoring the Investments of the Gerdau Canada Group in all
               Non-Qualifying Subsidiaries and Non-Qualifying Investments, but
               including USP solely with respect to its Loan Obligations;

               "COMMITMENT" of any Lender means the Lenders' Revolver Commitment
               or Term Commitment, or both of them, as applicable;

               "COMMITMENT FEE" means the commitment fee payable pursuant to
               Section 8.1;

<PAGE>
                                     - 14 -

               "COMMITMENT LETTER" means the commitment letter dated September
               21, 1999 between the Joint Arrangers and Joint Bookrunners, the
               Agent, the Lenders and the Pre-1999 Borrowers pursuant to which
               the Third Syndicated Amended and Restated Loan Agreement was
               entered into;

               "COMPLIANCE CERTIFICATE" in respect of any Fiscal Quarter or
               period of successive Fiscal Quarters means a Certificate of
               Gerdau Steel substantially in the form attached as Schedule I
               setting out, among other things, a statement for such Fiscal
               Quarter or period of successive Fiscal Quarters of the
               calculations of the financial tests set out in Section 11.1.1.13;

               "CONFIRMED LOAN DOCUMENTS" means the Loan Documents (as defined
               in the Existing Loan Agreement);

               "CONTAMINANT" means any solid, liquid, gas, odour, heat, sound,
               vibration, radiation or combination of any of them that may (i)
               impair the quality of the environment for any use that can be
               made of it, (ii) injure or damage property or plant or animal
               life, (iii) harm or materially discomfort any Person, (iv)
               adversely affect the health of any individual, (v) impair the
               safety of any individual, (vi) render any property or plant or
               animal life unfit for use by man, (vii) cause loss of enjoyment
               of normal use of property, or (viii) interfere with the normal
               course of business, and includes any "Contaminant" within the
               meaning assigned to such term in any Environmental Law;

               "CONTROL", "CONTROLS" and "CONTROLLED" when used with respect to
               any Person means the power to direct the management and policies
               of such Person, directly or indirectly, whether through ownership
               of Voting Capital Stock, by contract or otherwise;

               "CONVERSION" means the conversion of the method for calculating
               interest or fees on an Advance from one Type to another, and
               includes a conversion to or from an issue of Bankers'
               Acceptances;

               "CONVERSION DATE" means, in respect of any Advance, the Banking
               Day on which a Conversion thereof is made;

               "CONVERSION NOTICE" means a notice substantially in the form of
               Schedule C given to the Agent in accordance with the terms
               hereof;

               "CORE RELATED BUSINESS" means an active business activity which
               in the opinion of the Majority Lenders acting reasonably, is of
               the same nature as a principal active business activity carried
               on by any of the Gerdau Canada Group, excluding the animal hide
               business of Porter, as of September 27, 1999 as part of their
               respective Businesses. For certainty, acting as a holding company
               is not a Core Related Business;

               "CORPORATE BORROWERS" means Courtice and MRM;

<PAGE>
                                     - 15 -

               "CO-STEEL" means Co-Steel Inc., a corporation incorporated
               pursuant to the laws of the Province of Ontario as at the date
               hereof, and any successor of it, as the context requires;

               "CO-STEEL COMBINATION TRANSACTIONS" has the defined meaning
               assigned to it in Recital X of this Agreement;

               "CO-STEEL GROUP CREDIT AGREEMENTS" means (i) the Credit Agreement
               dated as of April 30, 2002 between Co-Steel Inc. as Borrower, the
               companies therein named as Guarantors, the Lenders therein named,
               The Toronto-Dominion Bank as Administration Agent and The Bank of
               Nova Scotia as Syndication Agent, (ii) the Second Amended and
               Restated Credit Agreement dated as of April 30, 2002 between
               Co-Steel Sayreville, Inc. as Borrower and PNC Bank, National
               Association as Lender, (iii) the Second Amended and Restated
               Credit Agreement dated as of April 30, 2002 between Co-Steel
               Raritan, Inc. as Borrower and PNC Bank, National Association as
               Lender, (iv) the Second Amended and Restated Note Agreement dated
               as of April 30, 2002 between Co-Steel Inc. as Issuer and The
               Prudential Insurance Company of America and U.S. Private
               Placement Fund as Purchasers, (v) the Trust Indenture dated as of
               April 23, 1997 between Co-Steel Inc. as Issuer and The R-M Trust
               Company as Trustee, (vi) the Financing and Security Agreement
               dated as of March 31, 1999 among Gallatin Steel Company as
               Borrower, Bankamerica Business Credit, Inc. as Agent and
               Bankamerica Business Credit, Inc. and others as Lenders and (vii)
               the Intercreditor Agreement dated as of April 30, 2002 among
               State Street Bank and Trust Company and Computershare Trust
               Company of Canada as Security Agents, The Toronto-Dominion Bank
               as Administration Agent under the TD Credit Agreement (as therein
               defined), The Prudential Insurance Company of America and U.S.
               Private Placement Fund and PNC Bank, National Association;

               "CO-STEEL GROUP MEMBER" means any one of Co-Steel and its
               consolidated Subsidiaries, excluding the Gerdau Canada Subgroup
               Holding Company, the Intermediate Holding Company and the Gerdau
               Canada Subgroup and their respective Subsidiaries; and "CO-STEEL
               GROUP" means all of the Co-Steel Group Members;

               "CO-STEEL LENDERS" has the defined meaning assigned to it in the
               Status Quo Agreement;

               "CO-SYNDICATION AGENTS" means The Chase Manhattan Bank, NA,
               Canada Branch and Citibank Canada, and any of their respective
               successors;

               "COURTICE" means Gerdau Courtice Steel Inc., a corporation
               continued pursuant to the laws of the Province of Saskatchewan as
               at the date hereof, such corporation when it was a Canada
               corporation, and any successor of it, as the context requires;

<PAGE>
                                     - 16 -

               "COURTICE AMENDED AND RESTATED DEBENTURE DELIVERY AGREEMENT"
               means the agreement dated as of November 8, 1996 made between
               Courtice and the Agent confirming the delivery to the Agent of
               the Courtice Debenture, as amended by Amending Agreement No. 1
               and Amending Agreement No. 3, and the Courtice Supplemental
               Debenture, as amended by Amending Agreement No. 2, as amended and
               restated as of September 27, 1999;

               "COURTICE DEBENTURE" means the Cdn.$50,000,000 secured demand
               debenture dated October 31, 1989 granted by Courtice to TD;

               "COURTICE DEBENTURE PLEDGE AGREEMENT" means the pledge agreement
               relating to the Courtice Debenture dated October 31, 1989 made
               between Courtice and TD;

               "COURTICE/GERDAU STEEL GUARANTEE" means Courtice's guarantee of
               the obligations of Gerdau Steel to each Lender under or in
               respect of this Agreement, including under the Gerdau Steel
               Guarantees, initially given by Courtice to TD pursuant to a
               guarantee dated June 27, 1995, as amended and confirmed September
               26, 1995, as further amended and confirmed by amendment and
               confirmation of guarantee dated as of November 8, 1996 between
               Courtice and the Agent;

               "COURTICE GUARANTEES" means the Courtice/Gerdau Steel Guarantee
               and the Courtice/MRM Guarantee, and "COURTICE GUARANTEE" means
               one of them;

               "COURTICE/MRM GUARANTEE" means Courtice's guarantee of MRM's Loan
               Obligations to each Lender initially given by Courtice to TD
               pursuant to a guarantee dated July 20, 1995, as amended and
               confirmed September 26, 1995, as further amended and confirmed by
               amendment and confirmation of guarantee dated as of November 8,
               1996 between Courtice and the Agent;

               "COURTICE SUPPLEMENTAL DEBENTURE" means the Cdn.$50,000,000
               secured demand debenture dated June 21, 1990 granted by Courtice
               to TD;

               "CREDIT FACILITIES" means the Revolver Facility and the Term
               Facility;

               "CURRENCY" means Canadian dollars, U.S. Dollars or other foreign
               currency;

               "DEBENTURES" means the Courtice Debenture, the Courtice
               Supplemental Debenture and the MRM Debenture, and "DEBENTURE"
               means any of them;

               "DEBENTURE DELIVERY AGREEMENTS" means the Courtice Amended and
               Restated Debenture Delivery Agreement and the MRM Amended and
               Restated Debenture Delivery Agreement, collectively, and
               "DEBENTURE DELIVERY AGREEMENT" means one of them;

               "DEBT" of any Person at any time means liabilities of such Person
               and its Subsidiaries which, in accordance with GAAP, would be
               classified upon the

<PAGE>
                                     - 17 -

               consolidated balance sheet of such Person (or, in the case of
               Gerdau Steel, its balance sheet prepared on a Combined Basis)
               prepared as at such time as indebtedness for borrowed money,
               including bank indebtedness, long-term debt, capital lease
               obligations and indebtedness to affiliates or other financial
               indebtedness;

               "DEBT REORGANIZATION TRANSACTIONS" means the transactions
               described in the letter dated October 11, 2002 from Gerdau Steel
               to the Agent requesting the consent of the Lenders to the
               reorganization of certain intercorporate Gerdau S.A. Group Debt;

               "DEBT SERVICE COST" for any Fiscal Quarter or period of
               successive Fiscal Quarters means (i) the sum (without
               duplication) of the amounts for such Fiscal Quarter or period of
               successive Fiscal Quarters of (A) Cash Interest Expense, plus (B)
               all scheduled repayments of USP's Loan Obligations in respect of
               the Term Facility which USP is required to pay during such Fiscal
               Quarter or period of successive Fiscal Quarters plus (C) all
               scheduled repayments of other Indebtedness (except for repayments
               of Indebtedness owing to a bank which is repayable on demand or
               within one year from the date of borrowing, which for greater
               certainty includes repayments in respect of the Revolver Facility
               made during the relevant Fiscal Quarter or period of successive
               Fiscal Quarters) which any Gerdau Canada Group Member is required
               to make during such Fiscal Quarter or period of successive Fiscal
               Quarters plus (D) repayments of Gerdau S.A. Advances made during
               the relevant Fiscal Quarter or period of successive Fiscal
               Quarters minus (ii) the sum of (A) the aggregate amount of any
               sums actually received during such accounting period by any of
               the Borrowers, whether directly or indirectly (but without double
               counting), on account of a refund of or rebate in Taxes or any
               other benefit relating to Taxes received by AmeriSteel or FLS, or
               any of their respective Subsidiaries, and (B) the aggregate
               outstanding principal amount of Gerdau S.A. Advances made during
               or within 20 Banking Days after the end of the relevant Fiscal
               Quarter or period of successive Fiscal Quarters;

               "DEBT SERVICE COVERAGE RATIO" for any Fiscal Quarter or period of
               successive Fiscal Quarters means the ratio for such Fiscal
               Quarter or period of successive Fiscal Quarters of (i) the sum of
               (A) EBITDA minus (B) the aggregate amount of all Capital
               Expenditures incurred by Gerdau Steel minus (C) Income Taxes
               incurred and actually paid by Gerdau Steel, in each case
               determined on a Combined Basis, divided by (ii) Debt Service
               Cost;

               "DEFAULT" means any event which with the lapse of time, giving of
               notice, making of a determination, or any combination thereof,
               would constitute an Event of Default;

               "DERIVATIVE" means any transaction referred to in clause (a) or
               (b) of the definition of "Specified Transaction" contained in
               Section 14 of the Master ISDA Agreement;

<PAGE>
                                     - 18 -

               "DERIVATIVE EXPOSURE" for any Person at any time means the
               amount, if any, which would be payable by such Person to its
               counterparty (determined in accordance with customary market
               practices) pursuant to Section 6(e) of the Master ISDA Agreement
               governing such Derivatives in respect of all Derivatives entered
               into between such Person and such counterparty if an Early
               Termination Date (as defined in Section 14 of the Master ISDA
               Agreement) were to occur at such time as a result of that Person
               being a Defaulting Party (as defined in said Section 14) and such
               Derivatives were governed by a Master ISDA Agreement;

               "DESIGNATED ACCOUNT" means the Canadian dollar or U.S. Dollar
               current account maintained by the Relevant Borrower at the Branch
               of Account of the Swing Line Lender and designated by the Swing
               Line Lender as such for the purposes of this Agreement;

               "DRAWDOWN" means a fresh Advance which is not derived from a
               Conversion or Rollover;

               "DRAWDOWN DATE" means any Banking Day on which a Drawdown is
               made;

               "DRAWDOWN NOTICE" means a notice substantially in the form of
               Schedule B given to the Agent in accordance with the terms
               hereof;

               "DUE DATES" means the Final Term Facility Due Date and the
               Revolver Facility Due Date, and "DUE DATE" means the applicable
               one of them;

               "EBITDA" for any Fiscal Quarter or period of successive Fiscal
               Quarters means the sum (without duplication) for such Fiscal
               Quarter or period of successive Fiscal Quarters of (i) the net
               income of Gerdau Steel for such Fiscal Quarter or period of
               successive Fiscal Quarters before interest, income taxes,
               depreciation, amortization, and any non-cash gains or losses in
               the books of Gerdau Steel (or any other Gerdau Canada Group
               Member where such gains or losses would form part of the net
               income of Gerdau Steel determined on a Combined Basis) to the
               extent that such gains or losses result only from exchange rate
               fluctuations, excluding (for the avoidance of doubt) any gains or
               losses resulting from actual sales or purchases of one currency
               with another, whether upon a spot sale, a forward purchase or
               sale, the completion of a forward sale transaction or otherwise,
               and before extraordinary and unusual items, in each case,
               determined on a Combined Basis;

               "EFFECTIVE TIME" means the time the amendment and restatement of
               the Existing Credit Agreement contemplated by this Agreement
               becomes effective in accordance with Section 6.4 by delivery of
               the Implementation Notice by the Agent to the Borrowers;

               "ELIGIBLE HEDGING INSTRUMENT" has the defined meaning assigned to
               it in Section 4.1.3;

<PAGE>
                                     - 19 -

               "ELIGIBLE INVENTORY" of any Gerdau Canada Group Member means, at
               any time, that portion of that Gerdau Canada Group Member's
               inventories determined from the most recent balance sheet of
               Gerdau Steel prepared on a Combined Basis comprised of all raw
               materials, consumables, finished goods and billets; provided that
               any inventory that is not subject to the Security or is subject
               to a Lien in favour of any other Person, other than the
               Syndicate, shall not be taken into account in determining
               Eligible Inventory;

               "ELIGIBLE RECEIVABLES" of any Gerdau Canada Group Member means,
               at any time, the aggregate outstanding balances, net of allowance
               for credit losses, of all receivables owned by that Gerdau Canada
               Group Member representing unconditional obligations to pay,
               arising from sales, leases or rentals by that Gerdau Canada Group
               Member to any other Persons in the ordinary course of its
               business, existing at that time, and as determined from the most
               recent balance sheet of Gerdau Steel prepared on a Combined
               Basis; provided, however, that the outstanding balance of any
               receivable shall not be taken into account in determining
               Eligible Receivables if (i) at that time any amount owing in
               respect of the relevant receivable has been outstanding for more
               than 90 days, (ii) the relevant receivable is from an Affiliate,
               a Non-Qualifying Subsidiary or another Gerdau S.A. Group Member,
               (iii) the relevant receivable is subject to claims of off-set,
               set-off, counterclaim or cross-claim, in which event it shall not
               be taken into account to the extent of the amount so claimed,
               (iv) the relevant receivable is owed by a Person in receivership
               or bankruptcy or subject to insolvency proceedings, or (v) the
               relevant receivable is not subject to the Security or is subject
               to a Lien in favour of any other Person, other than the
               Syndicate;

               "ENVIRONMENTAL LAW" means, in relation to any Person, property,
               transaction or event, all treaties, federal, provincial or local
               laws, statutes, regulations, municipal by-laws, ordinances,
               rules, orders, requirements, guidelines or policies which apply
               to such Person, property, transaction or event and which relate
               to or otherwise impose liability or standards of conduct
               concerning health or safety, mining or reclamation of mined
               lands, discharges, emissions, releases or threatened releases of
               noises, odours, pollutants, Contaminants or Hazardous Substances
               whether as matter or energy, into ambient air, water or land, or
               otherwise relates to the manufacture, processing, generation,
               distribution, use, treatment, storage, disposal, Clean-Up,
               transport or handling of pollutants, Contaminants, or hazardous,
               toxic or other wastes, substances or materials, or other
               environmental matters, including The Canadian Environmental
               Protection Act (Canada), the Fisheries Act (Canada), The
               Transportation of Dangerous Goods Handling and Transportation Act
               (Canada), The Dangerous Goods Transportation Act (Ontario), The
               Environmental Protection Act (Ontario), the Ontario Water
               Resources Act, The Environment Act (Manitoba), The Dangerous
               Goods Handling and Transportation Act (Manitoba), The Ground
               Water & Water Well Act (Manitoba), The High-Level Radioactive
               Waste Act (Manitoba), The Ozone Depleting Substances Act
               (Manitoba), The Public Health Act (Manitoba), The Waste Reduction
               and Prevention Act (Manitoba), The Workplace Safety and Health
               Act (Manitoba), The United States Comprehensive Environmental

<PAGE>
                                     - 20 -

               Response, Compensation and Liability Act of 1980 and any similar
               law which applies to such Person, property, transaction or event
               in any jurisdiction in which any of the Business Assets of the
               Gerdau S.A. Group are situated or any of the Business of the
               Gerdau S.A. Group is conducted;

               "EQUIVALENT AMOUNT" on any date means the amount in a specified
               currency which would result from the conversion of a specified
               amount in another currency at the Spot Rate;

               "EXCHANGED CO-STEEL SHARES" has the defined meaning assigned to
               it in Recital X of this Agreement, and (where the context so
               admits) includes any Capital Stock in Co-Steel derived in the
               future therefrom;

               "EXISTING BORROWERS" has the defined meaning assigned to it in
               Recital R of this Agreement;

               "EXISTING LOAN AGREEMENT" has the defined meaning assigned to it
               in Recital V of this Agreement;

               "EXISTING SECURITY" means the Courtice Debenture, as amended by
               Amending Agreement No. 1 and Amending Agreement No. 3, the
               Courtice Supplemental Debenture, as amended by Amending Agreement
               No. 2, the MRM Debenture, as amended by Amending Agreement No. 4
               and the MRM Working Capital General Security Agreement and the
               other Security constituted by the other Confirmed Loan Documents;

               "EVENT OF DEFAULT" has the defined meaning assigned to it in
               Section 12.1;

               "FEDERAL FUNDS RATE" for any period means a fluctuating annual
               rate of interest (expressed as a percentage per annum on the
               basis of a 360 day year) equal for each day during such period to
               the weighted average of the rates on overnight federal funds
               transactions with members of the United States Federal Reserve
               System arranged by federal funds brokers, as published for such
               day (or, if such day is not a business day in New York, New York,
               for the next preceding such business day) in New York, New York
               by the Federal Reserve Bank of New York, or if such rate is not
               so published for any day which is a business day in New York, New
               York, the average of the quotations for such day on such
               transactions received by the Agent from three federal funds
               brokers of recognized standing selected by the Agent;

               "FINAL TERM FACILITY DUE DATE" means (i) January 15, 2004
               provided that, if such date is not a Banking Day, the Final Term
               Facility Due Date shall be the preceding Banking Day, or (ii)
               such earlier date as the entire balance of the Advances under the
               Term Facility may become due whether by acceleration or
               otherwise, whichever is first to occur;

<PAGE>
                                     - 21 -

               "FINCO" means PASUG LLC (formerly PASUG Inc.), a limited
               liability company organized pursuant to the laws of the State of
               Delaware as at the date hereof, and any successor of it, as the
               context requires;

               "FIRST SYNDICATED AMENDED AND RESTATED LOAN AGREEMENT" has the
               defined meaning assigned to it in Recital H of this Agreement;

               "FISCAL QUARTER" means one of Gerdau Steel's four three-month
               accounting periods comprising a Fiscal Year;

               "FISCAL YEAR" means the 12 month accounting period of Gerdau
               Steel ending December 31st of each calendar year;

               "FLS" means (i) before the FLS/Gerdau USA Merger took effect, FLS
               Holdings, Inc., a corporation incorporated pursuant to the laws
               of the State of Delaware and (ii) upon and after the FLS/Gerdau
               USA Merger took effect, Gerdau USA Inc., a corporation
               incorporated pursuant to the laws of the State of Delaware, the
               surviving corporation from the FLS/Gerdau USA Merger, and any
               successor of it, as the context requires;

               "FLS/GERDAU USA MERGER" means the merger of Gerdau USA Inc. with
               FLS Holdings, Inc. with FLS Holdings, Inc. (renamed Gerdau USA
               Inc.) as the surviving corporation which took place with effect
               immediately before the date hereof;

               "FOURTH SYNDICATED AMENDED AND RESTATED LOAN AGREEMENT" has the
               defined meaning assigned to it in Recital R of this Agreement;

               "FREE CASH FLOW" for any Fiscal Quarter or period of successive
               Fiscal Quarters means the sum determined as (i) EBITDA less (ii)
               Debt Service Cost less (iii) the Income Taxes incurred and
               actually paid by Gerdau Steel, less (iv) Capital Expenditures
               incurred, in each case, in respect of such Fiscal Quarter or
               period of successive Fiscal Quarters and determined on a Combined
               Basis;

               "GAAP" means generally accepted accounting principles determined
               in accordance with Section 1.11;

               "GERDAU CANADA GROUP FACILITIES" means all plants, mills and
               other facilities (including all real property on which such
               facilities are situated), containment ponds, containers,
               vehicles, pipelines, rail transportation systems, rail cars,
               motor vessels, trailers, storage or holding tanks, caverns and
               other machinery and equipment owned, leased, managed, controlled
               or operated by any Gerdau Canada Group Member;

               "GERDAU CANADA GROUP MEMBER" at any time means Gerdau Steel and
               its consolidated Subsidiaries, including any Gerdau Canada
               Subgroup Member, but excluding each Co-Steel Group Member and
               each Non-Qualifying Subsidiary; and "GERDAU CANADA GROUP" means
               all Gerdau Canada Group Members;

<PAGE>
                                     - 22 -

               "GERDAU CANADA SUBGROUP HOLDING COMPANY" means Gerdau Nova Scotia
               Holding Company, an unlimited liability company formed pursuant
               to the laws of the Province of Nova Scotia as at the date hereof,
               and any successor of it, as the context requires;

               "GERDAU CANADA SUBGROUP HOLDING COMPANY SHARES" has the defined
               meaning assigned to it in Recital X of this Agreement, and (where
               the context so admits) including any future Capital Stock in
               Gerdau Canada Subgroup Holding Company;

               "GERDAU CANADA SUBGROUP INTERIM HOLDING COMPANY" means 4104315
               Canada Limited, a corporation incorporated pursuant to the laws
               of Canada as at the date hereof, and any successor of it, as the
               context requires;

               "GERDAU CANADA SUBGROUP MEMBER" at any time means any one of
               Courtice, MRM Holdings, MRM and Gerdau USA and their respective
               consolidated Subsidiaries, but excluding each Non-Qualifying
               Subsidiary; and "GERDAU CANADA SUBGROUP" means all of the Gerdau
               Canada Subgroup Members;

               "GERDAU CANADA SUBGROUP SHARES" has the defined meaning assigned
               to it in Recital W of this Agreement, and (where the context so
               admits) includes any future Capital Stock in any Gerdau Canada
               Subgroup Member;

               "GERDAU S.A." means Gerdau S.A., a Brazilian corporation at the
               date hereof, and any successor of it, as the context requires;

               "GERDAU S.A. ADVANCE" means the advances made by Gerdau S.A. to
               Gerdau Steel on September 29, 2000, December 27, 2000 and March
               30, 2001 in the principal amounts of Cdn.$5,400,000,
               Cdn.$5,000,000 and Cdn.$7,500,000 respectively, and the principal
               amount of any other advance made by Gerdau S.A. to a Pre-1999
               Borrower pursuant to and in accordance with the terms of Section
               12.1.4 on not less than two Banking Days' prior notice by the
               relevant Pre-1999 Borrower to the Agent, specifying the amount
               and date of the advance;

               "GERDAU S.A. GROUP MEMBER" at any time means each Gerdau Canada
               Group Member, the Gerdau Canada Subgroup Holding Company, the
               Intermediate Holding Company, the Gerdau Canada Subgroup Interim
               Holding Company, each Gerdau USA Group Member and their
               respective Subsidiaries, but excluding each Co-Steel Group
               Member;

               "GERDAU S.A. GUARANTEE" means the guarantee of Gerdau S.A. listed
               in Schedule L;

               "GERDAU S.A. TRUST DEED" means the Indenture dated as of May 22,
               1996 (as amended and supplemented) among Metalurgica Gerdau S.A.,
               as issuer, Gerdau S.A., as the sole remaining guarantor, The
               Chase Manhattan Bank, New York, as trustee, registrar transfer
               agent, Chase Manhattan Bank Luxembourg S.A., as

<PAGE>
                                     - 23 -

               paying agent and transfer agent, and Chase Trust Bank (Japan) as
               principal paying agent, providing for the issue of
               U.S.$130,000,000 11.25% Notes due 2004;

               "GERDAU STEEL" means Gerdau Steel Inc., formerly known as Gerdau
               Canada Inc., a corporation incorporated pursuant to the laws of
               Canada as at the date hereof, and any successor of it, as the
               context requires;

               "GERDAU STEEL GUARANTEES" means the Gerdau Steel/Courtice
               Guarantee and the Gerdau Steel/MRM Guarantee, and "GERDAU STEEL
               GUARANTEE" means any one of them;

               "GERDAU STEEL/COURTICE GUARANTEE" means Gerdau Steel's guarantee
               of Courtice's Loan Obligations to each Lender initially given by
               Gerdau Steel to TD pursuant to a guarantee dated June 27, 1995,
               as amended and confirmed by amendment and confirmation of
               guarantee dated as of November 8, 1996 between Gerdau Steel and
               the Agent;

               "GERDAU STEEL/MRM GUARANTEE" means Gerdau Steel's guarantee of
               MRM's Loan Obligations to each Lender initially given by Gerdau
               Steel to TD pursuant to a guarantee dated June 27, 1995, as
               amended and confirmed by amendment and confirmation of guarantee
               dated as of November 8, 1996 between Gerdau Steel and the Agent;

               "GERDAU USA" means (i) before the FLS/Gerdau USA Merger took
               effect, Gerdau USA Inc., a corporation incorporated pursuant to
               the laws of the State of Delaware and (ii) upon and after the
               FLS/Gerdau USA Merger took effect, FLS;

               "GERDAU USA GROUP" means USP, NSULC, Finco, Gerdau USA,
               AmeriSteel and AmeriSteel Bright Bar and their respective
               Subsidiaries;

               "GOVERNMENTAL BODY" means any international tribunal, body or
               authority, government, parliament, legislature or local
               authority, or any regulatory authority, ministry, agency,
               commission, tribunal or board of any government, parliament,
               legislature or local authority, or any court or administrative
               tribunal or (without limitation to the foregoing) any other law,
               regulation or rulemaking entity (including any world, regional or
               central bank, fiscal or monetary authority or authority
               regulating banks), having or purporting to have jurisdiction in
               the relevant circumstances, or any Person acting or purporting to
               act under the authority of any of the foregoing;

               "GTL NETHERLANDS" means GTL Financial Corp. B.V., a corporation
               incorporated pursuant to the laws of the Netherlands as at the
               date hereof, and any successor of it, as the context requires;

               "GTL SPAIN" means Gerdau GTL Spain, S.L. (formerly GTL-Trade
               Corp., a corporation incorporated pursuant to the laws of the
               British Virgin Islands), a corporation continued under the laws
               of Spain as at the date hereof, and any successor of it, as the
               context requires;

<PAGE>
                                     - 24 -

               "HAZARDOUS SUBSTANCE" means any material, substance or matter
               which (i) constitutes a hazardous substance, hazardous waste,
               toxic substance, Contaminant, dangerous good, ozone depleting
               substance or pollutant within the meaning of any applicable
               Environmental Law or (ii) is regulated or controlled as a
               hazardous substance, hazardous waste, toxic substance, pollutant,
               Contaminant, dangerous good or other regulated or controlled
               material, substance or matter pursuant to any Environmental Law;

               "HEDGING LENDERS" means TD and each other Lender as may have
               agreed with any of the Borrowers to make Derivatives available to
               a Borrower in accordance with the provisions of Article 4, and
               "HEDGING LENDER" means any of them;

               "HOLDING BODY CORPORATE" means, in respect of any body corporate,
               any Person which, directly or indirectly, Controls such body
               corporate;

               "IMPLEMENTATION NOTICE" has the defined meaning assigned to it in
               Section 6.2;

               "INCOME TAXES" means taxes based on or measured by income or
               profit of any nature or kind, including Canadian federal and
               provincial income taxes and income taxes of any foreign
               jurisdiction;

               "INDEBTEDNESS" means, with respect to any Person at any
               particular time, (without duplication) obligations of such Person
               or any of its Subsidiaries (or in the case of Gerdau Steel, any
               Gerdau Canada Group Member) to pay (in whole or in part) any of
               the following amounts at such time:

               (a)  Debt;

               (b)  indebtedness, actual or contingent, arising under or in
                    respect of any note purchase, purchase of accounts,
                    factoring, securitization or discounting arrangement;

               (c)  the principal amount of, and premiums and capitalized
                    interest payable in respect of, indebtedness for the
                    deferred purchase price of property or services;

               (d)  the principal amount of, and premiums and capitalized
                    interest payable in respect of, indebtedness payable under
                    or in respect of any Lien upon any property acquired
                    (whether or not assumed);

               (e)  Derivative Exposure;

               (f)  the redemption or retraction price of any Preferred Shares;

               (g)  the capital portion of any other transaction that is not
                    Debt having the commercial effect of borrowing; or

<PAGE>
                                     - 25 -

               (h)  any amount payable under any direct or indirect guarantee of
                    any amount of the nature described in any of clauses (a) to
                    (g) above,

               and for greater certainty, trade payables, expenses (other than
               capital lease payments) accrued in the ordinary course of
               business and customer advance payments and deposits received in
               the ordinary course of business shall not constitute
               Indebtedness;

               "INFORMATION CIRCULAR" means the management information circular
               of Co-Steel dated August 26, 2002;

               "INITIAL TARGET SHARES" means the 88% of the 9,000,000 issued and
               outstanding shares in the capital stock of AmeriSteel owned by
               FLS as at September 27, 1999;

               "INTELLECTUAL PROPERTY RIGHTS" means any rights under any
               contract or Applicable Law, including the Patent Act (Canada),
               Copyright Act (Canada) and Trade-Mark Act (Canada), which
               provides a right to any Gerdau Canada Group Member in either (i)
               ideas, formulae, algorithms, concepts, inventions or know-how
               generally, including trade secret law, or (ii) the expression or
               use of such ideas, formulae, algorithms, concepts, inventions or
               know-how;

               "INTEREST PAYMENT DATE" means:

               (a)  with respect to each Prime Rate Loan and Base Rate Loan and
                    any period of time elapsed in any calendar month, each day
                    on which a principal payment of such Loan is due hereunder
                    and, in addition thereto, the first Banking Day of the
                    immediately following calendar month; and

               (b)  with respect to each LIBOR Loan, the last day of each
                    Interest Period applicable thereto and, with respect to each
                    LIBOR Loan with an Interest Period longer than three months,
                    the day which falls three months after the relevant
                    Borrowing Date of the LIBOR Loan and each day which falls
                    every three months thereafter (or the next following Banking
                    Day if any such day is not a Banking Day);

               "INTEREST PERIOD" means with respect to each LIBOR Loan, (i) each
               of the periods for which a LIBOR Loan is outstanding, being,
               subject to availability, one, two, three or six months, as
               selected by the Relevant Borrower, the first of which Interest
               Periods will start on and include the relevant Borrowing Date of
               the LIBOR Loan, and the remainder of which will start on and
               include the last day of the preceding Interest Period, (ii) any
               Interest Period which would otherwise end on a day which is not a
               Banking Day shall be extended until the next Banking Day unless
               such Banking Day falls in another calendar month, in which case
               it will end on the preceding Banking Day and (iii) the Agent may
               extend or shorten Interest Periods in accordance with its
               prevailing market practice for LIBOR Loans or to ensure that any
               scheduled repayment or mandatory prepayment of LIBOR Loans takes
               place on the last day of an Interest Period; provided that in any
               case the last day of each Interest Period shall also be the first
               day of the next

<PAGE>
                                     - 26 -

               Interest Period; and further provided that the last day of each
               Interest Period hereunder shall be on or prior to the applicable
               Due Date of such Loan;

               "INTERMEDIATE HOLDING COMPANY" has the defined meaning assigned
               to it in the Status Quo Agreement;

               "INVENTORIES BORROWING BASE" as at any time means the lesser of
               (i) Cdn.$40,000,000 or (ii) the amount equal to 50% of the
               Canadian Dollar Value (determined at the lower of cost on a
               first-in, first-out basis or market value) of Eligible Inventory,
               subject to adjustment in accordance with Section 2.1.4;

               "INVESTMENT" means any loan, advance (other than commission,
               travel and similar advances to officers and employees made in the
               ordinary course of business), extension of credit (other than
               accounts receivable arising in the ordinary course of business)
               or contribution of capital to any other Person or any acquisition
               of Capital Stock, deposit accounts, certificates of deposit,
               mutual funds, bonds, notes, debentures or other securities of any
               other Person or any structured notes or Derivatives;

               "ISSUING BANK" means TD or (as the context requires) any
               replacement of such issuing bank that is the Swing Line Lender
               appointed pursuant to the provisions of Section 13.15.3;

               "JOINT ARRANGERS AND JOINT BOOKRUNNERS" means Chase Securities
               Inc., Salomon Smith Barney Inc. and The Toronto-Dominion Bank,
               and any of their respective successors;

               "KYOEI STEEL BALANCE OF SALE NOTES" means (i) the promissory note
               dated December 23, 1999 in the principal amount of
               U.S.$3,484,536.85 maturing March 19, 2001, issued by USP to Kyoei
               Steel, Ltd., (ii) the three promissory notes dated December 23,
               1999 each in the principal amount of U.S.$43,786,666.66 and
               maturing March 17, 2000, September 18, 2000 and March 19, 2001,
               respectively, issued by USP to Kyoei Steel, Ltd., (iii) the
               promissory note dated December 23, 1999 in the principal amount
               of U.S.$523,397 maturing March 17, 2000 issued by USP to Kyoei
               Steel, Ltd. and (iv) the promissory note dated December 23, 1999
               in the principal amount of U.S.$2,171,088.89 maturing September
               18, 2000 issued by USP to Kyoei Steel, Ltd.;

               "KYOEI STEEL BALANCE OF SALE NOTES REFINANCING LOAN" means the
               principal amount of any loan made after the date hereof to a
               Pre-1999 Borrower on not less than ten Banking Days' notice to
               the Agent, provided that (i) no such loan shall be made prior to
               the repayment and discharge in full of the Kyoei Steel Balance of
               Sale Notes or at a time when a Default or Event of Default has
               occurred that is continuing, (ii) every such loan is fully
               postponed and subordinated to the Loan Obligations on terms
               satisfactory to the Agent (acting reasonably), except that
               interest on and fees and charges in respect of any such loan may
               be paid with the

<PAGE>
                                     - 27 -

               prior written consent of the Agent (acting on the instructions of
               the Majority Lenders), and (iii) the aggregate principal amount
               of such loans (not including any capitalized interest, fees and
               charges) does not exceed the aggregate principal amount of the
               Kyoei Steel Balance of Sale Notes as of the date of their issue;

               "LENDERS" means any one or more or all (as the context requires)
               of the financial institutions listed as such in Schedule A (as
               amended and replaced from time to time in accordance with Section
               14.5.5), and "LENDER" means any of them;

               "LENDERS' BRAZILIAN COUNSEL" means Veirano e Advogados Associados
               of Rio de Janeiro, Brazil or such other counsel as the Agent may
               designate;

               "LENDERS' COUNSEL" means Lenders' Brazilian Counsel, Lenders'
               Manitoba Counsel, Lenders' Ontario Counsel, Lenders' Quebec
               Counsel, Lenders' Saskatchewan Counsel, Lenders' U.S. Counsel and
               such other counsel in such other jurisdictions as the Agent may
               designate;

               "LENDER'S OWN TAXES" means Income Taxes or capital or franchise
               taxes imposed on a Lender by a Governmental Body of a
               jurisdiction in which the Lender is subject to taxation because
               the Lender is incorporated, has a permanent establishment or a
               fixed place of business in such jurisdiction or is resident or
               engaged in a trade or business in such jurisdiction for reasons
               other than it has executed, delivered, performed its obligations
               under, has received or is entitled to receive payments under, or
               has enforced any Loan Document;

               "LENDERS' MANITOBA COUNSEL" means Thompson Dorfman Sweatman or
               such other counsel as the Agent may designate;

               "LENDERS' ONTARIO COUNSEL" means Fasken Martineau DuMoulin LLP of
               Toronto, Ontario or such other counsel as the Agent may
               designate;

               "LENDERS' QUEBEC COUNSEL" means Fasken Martineau DuMoulin LLP of
               Montreal, Quebec or such other counsel as the Agent may
               designate;

               "LENDERS' SASKATCHEWAN COUNSEL" means McKercher, McKercher &
               Whitmore or such other counsel as the Agent may designate;

               "LENDERS' U.S. COUNSEL" means Winston & Strawn or such other
               counsel as the Agent may designate;

               "LENDING OFFICE" of a Lender means the office of the Lenders set
               out in Schedule A (as amended and replaced from time to time in
               accordance with Section 14.5.5);

               "LIBO RATE" means, for any Interest Period and LIBOR Loan, the
               rate of interest (expressed as a percentage per annum on the
               basis of a 360 day year) as determined by the Agent to be the
               average of the rates of interest (rounded up to the next higher
               multiple of one-sixteenth percent (0.0625%)) for deposits in U.S.
<PAGE>
                                     - 28 -

               Dollars in a representative amount which appears on the Page 3750
               of the Dow Jones Telerate Service (or any similar such reference
               service selected by the Agent) as of 11:00 a.m. (London time) on
               the second London Banking Day prior to the first day of such
               Interest Period and for a period similar to such Interest Period.
               If the Agent is unable to determine such an average rate, LIBO
               Rate will be determined by the Agent with reference to the rate
               or the average of the rates of interest (rounded up to the next
               higher multiple of one-sixteenth percent (0.0625%)) at which the
               Reference Lender or Reference Lenders selected by the Agent are
               offering U.S. Dollar deposits in a representative amount to prime
               banks in the London interbank market for such Interest Period;

               "LIBOR LOAN" means an Advance made by way of loan in U.S. Dollars
               bearing interest based on the LIBO Rate;

               "LIEN" means any mortgage, lien, pledge, assignment, charge,
               security interest, lease, trust or other arrangement intended as
               security, title retention agreement, conditional sale, rights
               reserved in any Governmental Body, registered lease of real
               property, hypothec, levy, execution, seizure, attachment,
               garnishment or other similar encumbrance and includes any
               contractual restriction which, if contravened, may give rise to
               an encumbrance;

               "LITIGATION" means any grievance, investigation, litigation,
               legal action, lawsuit or other proceeding (whether civil,
               administrative, quasi-criminal or criminal) by or before any
               Governmental Body or arbitrator;

               "LOAN" means a Prime Rate Loan, LIBOR Loan or Base Rate Loan, as
               the context requires;

               "LOAN DOCUMENTS" means the Existing Security, the Confirmed Loan
               Documents, the New Loan Documents, and each other agreement,
               document or instrument executed and delivered to any of the
               Lenders under or pursuant to any thereof, and "LOAN DOCUMENT"
               means any one of the Loan Documents;

               "LOAN OBLIGATIONS" means the Indebtedness and other obligations
               of each Borrower owing to the Syndicate incurred under or
               pursuant to this Agreement or any other Loan Document, and any
               item or part of any thereof;

               "LOAN TRANSFER AGREEMENT" has the defined meaning assigned in
               Section 14.5.4;

               "LONG TERM DEBT" means all Indebtedness of Gerdau Steel
               determined on a Combined Basis, other than (i) Indebtedness
               payable on demand or maturing within 12 months after the date as
               of which determination is made, but includes Indebtedness which
               is not payable on demand and which may at the option of the
               debtor be extended or renewed so as to mature 12 months or more
               from the date of determination and (ii) Subordinated Debt.
               Notwithstanding the foregoing, the current portion of Long Term
               Debt will not be included in Long Term Debt;

<PAGE>
                                     - 29 -

               "LONDON BANKING DAY" means a day on which dealings in U.S. Dollar
               deposits may be transacted in the London interbank market;

               "MAJORITY LENDERS" means Lenders whose Commitments amount to at
               least 66-2/3% of the Total Commitment, unless an Event of Default
               has occurred which has not been waived by the Required Lenders,
               in which event "MAJORITY LENDERS" means Lenders whose Rateable
               Shares in outstanding Advances under the Credit Facilities
               amounts to at least 66-2/3% of the total Outstanding Amount of
               such Advances;

               "MATERIAL ADVERSE CHANGE" means any change, effect, event,
               occurrence or change in the state of facts that has or could
               reasonably be expected to have a Material Adverse Effect;

               "MATERIAL ADVERSE EFFECT" means an effect which, in the judgment
               of the Majority Lenders, (i) impairs, in a material adverse way,
               any Gerdau S.A. Group Member's or any other Person's ability to
               perform its obligations under any Loan Document to which it is a
               party, (ii) prejudices, restricts or renders unenforceable or
               ineffective, in a material adverse way, any Security or any of
               the rights intended or purported to be granted under or pursuant
               to any Loan Document to or for the benefit of the Syndicate, or
               (iii) results in a material adverse change in any of the Business
               Affairs of Gerdau S.A. or the Gerdau Canada Group taken as a
               whole or (iv) results in a material loss, diminution or
               destruction of the Business or any substantial part of the
               Business Assets (either physically or in value) of Gerdau S.A. or
               the Gerdau Canada Group taken as a whole which is not
               substantially compensated for by insurance or expropriation
               proceeds;

               "MASTER ISDA AGREEMENT" has the defined meaning assigned to it in
               Section 4.1.4;

               "MATURITY DATE" means the last day of an Interest Period
               applicable to a LIBOR Loan or of the term of any Banker's
               Acceptance or the expiry date of a Standby Credit (as
               applicable);

               "MAXIMUM AMOUNT" in the case of the Revolver Facility, means the
               Revolver Amount and in the case of the Term Facility, means the
               Maximum Term Amount;

               "MAXIMUM TERM AMOUNT" means Cdn.$200,000,000, as such amount may
               be modified or reduced from time to time pursuant to the
               provisions of this Agreement;

               "MFT" means MFT Acquisition, Corp., a corporation incorporated
               under the laws of the State of Delaware as at the date hereof,
               and any successor of it, as the context requires;

               "MOODY'S" means Moody's Investors Service, Inc.;

<PAGE>
                                     - 30 -

               "MORTGAGED PROPERTY" means all of the property, assets and
               undertaking of each Gerdau S.A. Group Member of every nature and
               kind, both present and future, real and personal, tangible and
               intangible, including all proceeds of any such property, assets
               or undertaking to the extent the same is intended to be subject
               to the Liens constituted by the Security by the express terms of
               the Security or this Agreement, and any item or part thereof;

               "MRM" means Gerdau MRM Steel Inc., a corporation continued
               pursuant to the laws of the Province of Saskatchewan as at the
               date hereof, such corporation when it was a Canada corporation,
               and any successor of it, as the context requires;

               "MRM AMERICA" means Gerdau MRM America Holding Corp., a
               corporation incorporated under the laws of the State of Delaware
               as at the date hereof, and any successor of it, as the context
               requires;

               "MRM DEBENTURE" means the Cdn.$80,000,000 secured demand
               debenture dated June 27, 1995 granted by MRM to TD;

               "MRM DEBENTURE DELIVERY AGREEMENT" means the agreement dated as
               of November 8, 1996 made between MRM and the Agent confirming the
               delivery to the Agent of the MRM Debenture, as amended by
               Amending Agreement No. 4, as amended and restated as of September
               27, 1999;

               "MRM/COURTICE GUARANTEE" means MRM's guarantee of Courtice's Loan
               Obligations to each Lender initially given by MRM to TD pursuant
               to a guarantee dated June 27, 1995, as amended and confirmed
               September 26, 1995, as further amended and confirmed by amendment
               and confirmation of guarantee dated as of November 8, 1996
               between MRM and the Agent;

               "MRM/GERDAU STEEL GUARANTEE" means MRM's guarantee of the
               obligations of Gerdau Steel to each Lender under or in respect of
               this Agreement, including under the Gerdau Steel Guarantees,
               initially given by MRM to TD pursuant to a guarantee dated June
               27, 1995, as amended and confirmed September 26, 1995, as further
               amended and confirmed by amendment and confirmation of guarantee
               dated as of November 8, 1996 between MRM and the Agent;

               "MRM GUARANTEES" means the MRM/Courtice Guarantee and the
               MRM/Gerdau Steel Guarantee, and "MRM GUARANTEE" means any one of
               them;

               "MRM HOLDINGS" means Gerdau MRM Holdings Inc., a corporation
               incorporated pursuant to the laws of Canada as at the date
               hereof, and any successor of it, as the context requires;

               "MRM HOLDINGS/GERDAU STEEL GUARANTEE" means MRM Holdings'
               guarantee of the obligations of Gerdau Steel to each Lender under
               or in respect of this Agreement, including under the Gerdau Steel
               Guarantees, initially given by MRM Holdings to TD pursuant to a
               guarantee dated June 27, 1995, as amended and confirmed September
               26, 1995, as further amended and confirmed by amendment

<PAGE>
                                     - 31 -

               and confirmation of guarantee dated November 8, 1996 between MRM
               Holdings and the Agent;

               "MRM HOLDINGS/MRM GUARANTEE" means MRM Holdings' guarantee of
               MRM's Loan Obligations to each Lender initially given by MRM
               Holdings to TD pursuant to a guarantee dated June 27, 1995, as
               amended and confirmed September 26, 1995, as further amended and
               confirmed by amendment and confirmation of guarantee dated as of
               November 8, 1996 between MRM Holdings and the Agent;

               "MRM HOLDINGS GUARANTEES" means the MRM Holdings/Gerdau Steel
               Guarantee and the MRM Holdings/MRM Guarantee, and "MRM HOLDINGS
               GUARANTEE" means any one of them;

               "MRM WORKING CAPITAL GENERAL SECURITY AGREEMENT" means the
               general security agreement dated November 8, 1996 granted by MRM
               in favour of the Agent creating a security interest in the
               working capital of MRM securing MRM's Loan Obligations, but
               limited to the amount of the Canadian Dollar equivalent of
               U.S.$20,000,000;

               "NET ASSET DISPOSAL PROCEEDS" means with respect to any asset
               disposal, the sum of cash or Cash Equivalent Investments received
               from such asset disposal, net of (i) all costs and expenses
               incurred in effecting such disposal, including legal expenses and
               commissions payable to any Person that is not a Gerdau Canada
               Group Member, Gerdau S.A. Group Member or an Affiliate, (ii) all
               payments made on any Indebtedness which is secured by such asset
               pursuant to a Permitted Lien upon or with respect to such asset
               or which must, by the terms of such Lien, in order to obtain the
               necessary consent to such asset disposal, or by Applicable Law,
               be repaid out of the proceeds from such asset disposal and (iii)
               cash or Cash Equivalent Investments derived from such asset
               disposal that is reinvested in capital assets within 30 days of
               such disposal. Notwithstanding the foregoing, if any asset
               disposal is made to an Affiliate or if not made at arm's length,
               Net Asset Disposal Proceeds shall be the greater of (x) the fair
               market value of such asset disposed (net of disposal costs as
               determined above) as certified by Gerdau Steel's Auditors or (y)
               the amount determined in the preceding sentence of this
               definition;

               "NEW LOAN DOCUMENTS" means this Agreement and each agreement,
               document and instrument executed and delivered to the Agent
               pursuant to Article 6;

               "NON-QUALIFYING INVESTMENT" means (i) any Investment (whether by
               way of loan, investment in Capital Stock or otherwise) made by
               any Gerdau Canada Group Member in any Person that is not a Gerdau
               Canada Group Member and that is not principally engaged in a Core
               Related Business or more than 10% of its assets is not located in
               Canada or the United States (such as Siderurgica AZA S.A., a
               Chilean company as at the date hereof) or (ii) any purchase of
               (A) assets which are not used principally in a Core Related
               Business or 10% or more of

<PAGE>
                                     - 32 -

               which are not located in Canada or the United States or (B) a
               business that is not a Core Related Business or 10% or more of
               the assets of which are not located in Canada or the United
               States;

               "NON-QUALIFYING SUBSIDIARY" means any of (i) any Subsidiary of
               any of Gerdau Steel, MRM Holdings, Courtice or Gerdau USA that is
               a Non-Qualifying Investment, (ii) any of the Gerdau USA Group and
               (iii) Gerdau Canada Subgroup Interim Holding Company, the
               Intermediate Holding Company and Gerdau Canada Subgroup Holding
               Company;

               "NSULC" means 3038482 Nova Scotia Company, a Nova Scotia
               unlimited liability company as at the date hereof, or any
               successor of it, as the context requires;

               "1989 TERM SHEET" has the defined meaning assigned to it in
               Recital A of this Agreement;

               "1995 TERM SHEET" has the defined meaning assigned to it in
               Recital C of this Agreement;

               "OBLIGORS" means Gerdau Steel, the Borrowers, MRM Holdings,
               NSULC, Finco, Gerdau S.A., Gerdau USA, Porter, the Gerdau Canada
               Subgroup Interim Holding Company, the Intermediate Holding
               Company, the Gerdau Canada Subgroup Holding Company and any other
               Person that guarantees payment of the Loan Obligations, and
               "OBLIGOR" means any of them;

               "ORIGINAL AMENDED AND RESTATED LOAN AGREEMENT" has the defined
               meaning assigned to it in Recital D of this Agreement;

               "OUTSTANDING AMOUNT" when used in relation to any outstanding
               Advance at any time means (i) its aggregate face amount if it is
               an issue of Bankers' Acceptances, (ii) the maximum amount
               remaining available to be drawn under it if it is a Standby
               Credit denominated in Canadian dollars, (iii) the Canadian Dollar
               Value in Canadian dollars of the maximum amount remaining
               available to be drawn under it if it is a Standby Credit
               denominated in any Currency other than Canadian dollars, (iv) its
               outstanding principal balance if it is a Prime Rate Loan and (v)
               the Canadian Dollar Value in Canadian dollars of its outstanding
               principal balance if it is a LIBOR Loan or a Base Rate Loan; and
               when used in relation to a Lender's share in any outstanding
               Advance at any time it means such Lender's Rateable Share of the
               Outstanding Amount of such Advance;

               "PARTICIPANT" has the defined meaning assigned to it in Section
               14.5.3;

               "PERMITS" means authorizations, exemptions, permits, licences,
               approvals, franchises, no-action letters, rulings, filings and
               registrations;

               "PERMITTED LIENS" means, in relation to any Gerdau S.A. Group
               Member, the following:

<PAGE>
                                     - 33 -

               (a)  liens in respect of vacation pay, worker's compensation,
                    unemployment insurance, source deductions, unremitted sales
                    or goods and services taxes or similar statutory
                    obligations, but only if the obligations secured by such
                    liens are not overdue;

               (b)  liens for assessments or governmental charges or levies not
                    at the time overdue or, if overdue, the validity or amount
                    of which is being contested in good faith by appropriate
                    proceedings and in respect of which adequate steps have been
                    taken in the opinion of the Majority Lenders (which may
                    include cash being paid to or pledged with the relevant
                    Governmental Body) to prevent penalties, interest and
                    enforcement proceedings and adequate reserves in accordance
                    with GAAP have been recorded on the consolidated balance
                    sheet of Gerdau Steel;

               (c)  rights reserved to or vested in any governmental body by the
                    terms of any lease, licence, franchise, grant or permit, or
                    by any statutory provision, to terminate the same, to take
                    action which results in an expropriation, to designate a
                    purchaser of any property or to require annual or other
                    payments as a condition to the continuance thereof;

               (d)  construction, mechanics', carriers', warehousemen's and
                    materialmen's liens and liens in respect of vacation pay,
                    workers' compensation, unemployment insurance or similar
                    statutory obligations, provided the obligations secured by
                    such liens are not yet due and payable and, in the case of
                    construction liens, which have not yet been filed or for
                    which such Gerdau S.A. Group Member has not received written
                    notice of a lien;

               (e)  liens arising from court or arbitral proceedings, provided
                    that the claims secured thereby are being contested in good
                    faith by such Gerdau S.A. Group Member, execution thereon
                    has been stayed and continues to be stayed and such liens do
                    not, in the aggregate, materially detract from the value of
                    such Gerdau S.A. Group Member's property in the aggregate or
                    materially impair the use thereof in its Business;

               (f)  good faith deposits made in the ordinary course of business
                    to secure the performance of bids, tenders, contracts (other
                    than contracts of Indebtedness), leases, surety, customs,
                    performance bonds (relating to obligations that do not
                    constitute Indebtedness) and other similar obligations;

               (g)  deposits to secure public or statutory obligations or in
                    connection with any matter giving rise to a lien described
                    in (d) above;

               (h)  deposits of cash securities in connection with any appeal,
                    review or contestation of any security or lien, or any
                    matter giving rise to any security or lien, described in (c)
                    or (e) above;

<PAGE>
                                     - 34 -

               (i)  zoning restrictions, easements, rights of way, leases or
                    other similar encumbrances or privileges in respect of real
                    property which in the aggregate do not materially impair the
                    use of such property by such Gerdau S.A. Group Member in the
                    operation of its Business;

               (j)  Purchase Money Mortgages securing up to Cdn.$10,000,000, or
                    the Equivalent Amount in foreign currency, of Indebtedness
                    in the aggregate for the entire Gerdau Canada Group
                    outstanding at any time;

               (k)  security given by such Gerdau S.A. Group Member to a public
                    utility or any governmental body, when required by such
                    utility or governmental body in connection with the
                    operations of such Gerdau S.A. Group Member in the ordinary
                    course of its Business;

               (l)  the reservation in any original grants from the Crown or
                    other Governmental Body of any land or interest therein and
                    statutory exceptions to title;

               (m)  defects or irregularities of title to real property which
                    are of a minor nature and which will not in the aggregate
                    materially impair the value of the real property of such
                    Gerdau S.A. Group Member or interfere in any material
                    respect with the use of such real property for the purposes
                    for which it is held;

               (n)  the reversionary interests of landlords under leases of real
                    property that are not capital leases with a Gerdau S.A.
                    Group Member as tenant;

               (o)  the tenancy rights of tenants under leases of real property
                    with a Gerdau S.A. Group Member as landlord;

               (p)  the interests (including security interests in the personal
                    property leased, any proceeds thereof and any insurance
                    proceeds in respect thereof) of lessors under operating
                    leases of personal property which do not constitute
                    Indebtedness of a Gerdau S.A. Group Member;

               (q)  any security or lien, other than a construction lien,
                    payment of which has been provided for by deposit with the
                    Agent of an amount in cash, or the obtaining of a surety
                    bond or standby credit satisfactory to the Agent, sufficient
                    in either case to pay or discharge such security or lien or
                    upon other terms satisfactory to the Agent;

               (r)  any Lien granted to TD or the Agent in connection with the
                    Security;

               (s)  any other lien which the Agent approves in writing as a
                    Permitted Lien; and

               (t)  any Lien granted by a Gerdau S.A. Group Member to an Obligor
                    in respect of Indebtedness owing by such Gerdau S.A. Group
                    Member to
<PAGE>
                                     - 35 -

                    such Obligor provided that such Indebtedness and Lien is
                    subject to a first ranking perfected Lien in favour of the
                    Lenders pursuant to such documentation as the Agent may
                    require;

               "PERSON" means any individual, partnership, limited partnership,
               joint venture, syndicate, sole proprietorship, limited or
               unlimited liability company, corporation or other body corporate
               with or without share capital, unincorporated association, trust,
               estate, trustee, executor, administrator or other legal personal
               representative or Governmental Body;

               "PORTER" means Porter Bros. Corporation, a corporation
               incorporated pursuant to the laws of North Dakota as at the date
               hereof, and any successor of it, as the context requires;

               "PORTER GUARANTEE" means the guarantee of MRM's Loan Obligations
               to each Lender initially given by Porter in favour of the Agent,
               dated June 27, 1995, as amended September 26, 1995, as amended
               and confirmed by amendment and confirmation of guarantee dated as
               of November 8, 1996 between Porter and the Agent;

               "PREFERRED SHARES" means Capital Stock of a specified Person that
               may be redeemed on or before the Due Date of either Credit
               Facility or that are retractable at the option of the holder at
               any time on or before either such Due Date;

               "PRE-1999 BORROWERS" has the defined meaning assigned in Recital
               N of this Agreement;

               "PRIME RATE" means the rate determined by the Agent (rounded up
               to two decimal places) to be the greater of (i) the annual rate
               of interest (expressed as a percentage per annum on the basis of
               a 365 or 366 day year, as applicable) established by the Swing
               Line Lender from time to time as the reference rate of interest
               for determination of interest rates that the Swing Line Lender
               charges to customers of varying degrees of creditworthiness in
               Canada for Canadian dollar loans made by it in Canada and (ii)
               the sum of (A) the yearly rate of interest to which the one month
               CDOR Rate is equivalent plus (B) 1.00%. On request, the Agent
               shall give notice to the Borrowers of the Prime Rate from time to
               time and such notice shall be conclusive and binding on the
               parties hereto for all purposes absent manifest error;

               "PRIME RATE LOAN" means an Advance made by way of loan which
               bears interest based upon the Prime Rate;

               "PRIOR BORROWER" has the defined meaning assigned to it in
               Recital I of this Agreement;

               "PRIOR LENDERS" has the defined meaning assigned to it in the
               Recital I of this Agreement;

<PAGE>
                                     - 36 -

               "PURCHASE MONEY MORTGAGE" means any Lien created, issued or
               assumed by any Gerdau Canada Group Member to secure Indebtedness
               assumed by such Gerdau Canada Group Member as part of or issued
               or incurred to provide funds to pay the purchase price (including
               installation cost) of, any real or personal property that is
               limited to the property so acquired and is created, issued or
               assumed substantially concurrently with the acquisition of such
               property (or in connection with the refinancing of an existing
               Purchase Money Mortgage, if the amount secured has not increased
               and the Lien continues to be limited to such property);

               "RATEABLE SHARE" of any Lender means:

               (a)  in relation to any outstanding Advance, the proportion borne
                    by such Lender's share of the Advance to the full amount of
                    such Advance;

               (b)  in relation to the Revolver Facility, the proportion of such
                    Lender's Revolver Commitment to the Total Revolver
                    Commitment;

               (c)  in relation to the Term Facility, the proportion of such
                    Lender's Term Commitment to the Total Term Commitment; and

               (d)  in relation to any other matter, the proportion borne by (A)
                    the sum of (1) such Lender's Term Commitment plus (2) such
                    Lender's Revolver Commitment divided by (B) the sum of (1)
                    the Total Term Commitment plus (2) the Total Revolver
                    Commitment;

               "REAL ESTATE" means, in relation to any Person, all real property
               at any time owned, leased, managed, controlled or operated by the
               Person, including the Gerdau Canada Group Facilities and Third
               Party Facilities and appurtenances comprising or used in
               connection therewith, and any item or part thereof. For greater
               certainty, Real Estate does not include any Real Estate of any
               Co-Steel Group Member;

               "REAL PROPERTY" means the real property owned by Courtice more
               particularly described in Schedule J and the real property owned
               by MRM and more particularly described in Schedule K;

               "RECEIVABLES BORROWING BASE" at any time means an amount equal to
               80% of the face amount of all Eligible Receivables. In
               determining the Receivables Borrowing Base, receivables
               denominated in foreign currency will be calculated at their
               Equivalent Amount in Canadian Dollars at the date of
               determination and any receivable may be excluded in accordance
               with Section 2.1.4;

               "REFERENCE LENDER" means TD acting in its capacity as reference
               lender under this Agreement, or (as the context requires) any
               replacement of such reference lender appointed pursuant to the
               provisions of Section 13.15.2;

<PAGE>
                                     - 37 -

               "REGISTRATION" means any notice to or filing, recording or
               registration with any Governmental Body having jurisdiction with
               respect to any specified Person, transaction or event, or any of
               such Person's Business Affairs;

               "REGULATION D" means Regulation D of the Board of Governors of
               the U.S. Federal Reserve System as from time to time in effect
               and any successor thereto or other regulation or official
               interpretation of said Board of Governors relating to reserve
               requirements applicable to member banks of the U.S. Federal
               Reserve System;

               "REGULATION U" means Regulation U of the Board of Governors of
               the U.S. Federal Reserve System as from time to time in effect
               and any successor or other regulation or official interpretation
               of said Board of Governors relating to the extension of credit by
               banks for the purpose of purchasing or carrying margin stocks
               applicable to member banks of the U.S. Federal Reserve System;

               "RELEVANT BORROWER" (i) in relation to any Borrowing, other than
               the portion of the Borrowing referred to in (ii) below, means the
               Borrower that delivered the Borrowing Notice for such Borrowing
               to the Agent and to whom such Borrowing has been or is to be made
               (as the context requires) by the Lenders pursuant to this
               Agreement and (ii) and in relation to the U.S.$50,000,000 portion
               of the U.S.$91,743,119.26 Base Rate Loan owing by MRM which was
               assumed by USP, means each of USP and MRM;

               "REORGANIZATION TRANSACTIONS" means the Co-Steel Combination
               Transactions, the Debt Reorganization Transactions and the
               AmeriSteel Merger Transactions;

               "REPAYMENT NOTICE" means a notice in the form of or to
               substantially similar effect as Schedule M, given to the Agent by
               the Relevant Borrower pursuant to any relevant provision of this
               Agreement;

               "REQUIRED LENDERS" means the Majority Lenders or all Lenders (as
               the context requires);

               "REVOLVER AMOUNT" means Cdn.$75,000,000, as such amount may be
               reduced from time to time pursuant to the provisions of this
               Agreement;

               "REVOLVER COMMITMENT" of any Lender means the proportion of the
               Revolver Facility set forth opposite the Lenders' name in
               Schedule A (as amended and replaced from time to time in
               accordance with Section 14.5.5) which such Lender has severally
               agreed to make available to the Borrowers pursuant to this
               Agreement, and "TOTAL REVOLVER COMMITMENTS" of Lenders means the
               total sum of them for such Lenders;

               "REVOLVER FACILITY" means the revolving credit facility made
               available to the Corporate Borrowers pursuant to Article 2;

<PAGE>
                                     - 38 -

               "REVOLVER FACILITY DUE DATE" in respect of any Lender means
               September 22, 2003 or any extension of such date made pursuant to
               Section 2.6 provided that, if any such day is not a Banking Day,
               the Revolver Facility Due Date shall be the preceding Banking
               Day;

               "ROLLOVER" means the continuation of a LIBOR Loan (or any portion
               thereof) for a succeeding Interest Period, or a new issue of
               Bankers' Acceptances on the Maturity Date of a maturing issue of
               Bankers' Acceptances, in accordance with the provisions hereof;

               "ROLLOVER DATE" means a Banking Day on which a Rollover of all or
               a portion of an Advance is made;

               "ROLLOVER NOTICE" means a notice substantially in the form of
               Schedule D given to the Agent in accordance with the terms
               hereof;

               "S&P" means Standard and Poor's Ratings Services, a division of
               The McGraw Hill Companies, Inc.;

               "SALES TAXES" means sales, transfer, turnover or value added
               taxes of any nature or kind, including Canadian goods and
               services taxes and state and provincial sales taxes;

               "SECOND SYNDICATED AMENDED AND RESTATED LOAN AGREEMENT" has the
               defined meaning assigned to it in Recital I of this Agreement;

               "SECURITY" means the Liens and guarantees held from time to time
               by the Syndicate securing or intended to secure the payment or
               performance of the Loan Obligations (including any guarantee
               thereof) pursuant to the Security Documents, including the
               security constituted by the Existing Security;

               "SECURITY CO-ORDINATION AGREEMENT" means the amended and restated
               security co-ordination agreement initially made as of December
               23, 1999 among Gerdau Steel, Courtice, MRM and USP as borrowers
               and Gerdau Steel, Courtice, MRM, USP, MRM Holdings, Porter,
               Gerdau USA, Gerdau S.A., FLS, NSULC and Finco as guarantors and
               The Toronto-Dominion Bank as administration agent;

               "SECURITY DOCUMENTS" at any time means the agreements, documents
               and instruments listed in Schedule L and each additional
               agreement, document and instrument delivered to or for the
               benefit of the Syndicate at or before such time to secure or
               guarantee, directly or indirectly, the payment or performance of
               any of the Loan Obligations;

               "SENIOR OFFICER" of any Person means the Chief Executive Officer,
               the Chief Operating Officer, the President, the Chief Financial
               Officer, the Treasurer, a Senior Vice President, a Vice
               President, the Secretary or the Controller of such Person, or any
               other Person who performs the function normally expected of an
               individual holding any of the aforesaid offices;

<PAGE>
                                     - 39 -

               "SOLVENT" means, when used with respect to a Person, that (i) the
               fair saleable value of the assets of such Person is in excess of
               the total amount of the present value of its liabilities
               (including for purposes of this definition all liabilities
               (including loss reserves as determined by such Person), whether
               or not reflected on a balance sheet prepared in accordance with
               GAAP and whether direct or indirect, fixed or contingent, secured
               or unsecured, disputed or undisputed), (ii) such Person is able
               to pay its debts or obligations in the ordinary course as they
               mature and (iii) such Person does not have unreasonably small
               capital to carry out its business as conducted and as proposed to
               be conducted; and "SOLVENCY" shall have a correlative meaning;

               "SPOT RATE" as at any date with respect to the conversion of an
               amount in one currency (the "original currency") to another
               currency (the "other currency") means the Bank of Canada noon
               rate of exchange on the immediately preceding date for the
               purchase of such original currency with such other currency (and
               if neither currency is Canadian Dollars, purchasing Canadian
               Dollars first with such other currency and using the Canadian
               Dollars purchased to purchase the original currency);

               "STANDBY CREDIT" means a documentary credit, letter of guarantee
               or standby letter of credit, as the context requires;

               "STANDBY CREDIT DISBURSEMENT" means any amount paid by the
               Issuing Bank under or otherwise in respect of any Standby Credit,
               including all amounts which the Relevant Borrower is obligated to
               indemnify the Issuing Bank against pursuant to Section 7.6.4.2;

               "STATUS QUO AGREEMENT" means the status quo agreement of even
               date herewith among, inter alia, Gerdau Steel, Courtice, MRM
               Holdings, Gerdau USA, Gerdau Canada Subgroup Holding Company,
               Co-Steel, the Co-Steel Security Agents, the Agent and the
               Intermediate Holding Company;

               "SUBORDINATED DEBT" means Debt of any Gerdau S.A. Group Member
               (including the Kyoei Steel Balance of Sale Notes, any Kyoei Steel
               Balance of Sale Notes Refinancing Loans, any Gerdau S.A. Advances
               and any loans made pursuant to Section 11.3.1.5.6), the payment
               and performance of which have been postponed and subordinated to
               the payment of the Loan Obligations pursuant to a postponement
               and subordination agreement with the Syndicate in form and
               substance satisfactory to the Agent (acting on instructions of
               the Majority Lenders acting reasonably), save only as expressly
               otherwise provided in this Agreement;

               "SUBSIDIARY" of any Person means any Person (i) which is
               Controlled by such first Person or (ii) a majority of whose
               Voting Capital Stock, on a fully diluted basis, is owned
               beneficially or Controlled by such first Person;

               "SUBSTANTIAL PORTION" means, with respect to the assets of any
               Gerdau S.A. Group Member, assets which (i) represents more than
               10% of the consolidated

<PAGE>
                                     - 40 -

               assets of the Gerdau S.A. Group Member as would be shown in the
               consolidated financial statements of the Gerdau S.A. Group Member
               (or, in the case of Gerdau Steel, the financial statements of
               Gerdau Steel prepared on a Combined Basis) as at the beginning of
               the twelve-month period ending with the month in which such
               determination is made, or (ii) are responsible for more than 10%
               of the consolidated net sales or of the consolidated net income
               of the Gerdau S.A. Group Member (or, in the case of Gerdau Steel,
               the financial statements of Gerdau Steel prepared on a Combined
               Basis) as reflected in the financial statements referred to in
               clause (i) above;

               "SUPPLEMENTAL DEBENTURE PLEDGE AGREEMENT" means the pledge
               agreement relating to the Courtice Supplemental Debenture dated
               June 21, 1990 between Courtice and TD;

               "SWING LINE" means the portion of the Revolver Facility made
               available to the Corporate Borrowers pursuant to Section 2.9;

               "SWING LINE ADVANCE" means an Advance made pursuant to the Swing
               Line;

               "SWING LINE AMOUNT" means Cdn.$10,000,000 as such amount may be
               reduced from time to time pursuant to the provisions of this
               Agreement;

               "SWING LINE COMMITMENT" means the portion of the Swing Line
               Lender's Revolver Commitment which the Swing Line Lender has
               agreed to make available to the Corporate Borrowers pursuant to
               the Swing Line in the Swing Line Amount;

               "SWING LINE LENDER" means TD acting in its capacity as the swing
               line lender or (as the context requires) any replacement of such
               swing line lender that is a Lender and is appointed pursuant to
               Section 13.15.3;

               "SWING LINE LOAN" means a Loan owing to the Swing Line Lender
               pursuant to Section 2.9 under the Swing Line;

               "SYNDICATE" means the Agent and the Lenders, or (as the context
               so admits) each and any of them;

               "SYNDICATION OFFER" has the defined meaning assigned to it in
               Recital G of this Agreement;

               "TANGIBLE NET WORTH" means the sum of (1) the paid up share
               capital of Gerdau Steel plus (2) the retained earnings of Gerdau
               Steel plus (3) the amount of any deferred translation gain of
               Gerdau Steel plus (4) the principal amount of all Subordinated
               Debt of Gerdau Steel minus (5) any retained earnings deficit of
               Gerdau Steel minus (6) the amount of any deferred translation
               loss of Gerdau Steel minus (7) the amount of all intangibles of
               Gerdau Steel minus (8) the amount of all deferred charges
               (including deferred income taxes) of Gerdau Steel minus (9) the
               amount of all Indebtedness owing to any Gerdau Canada Group

<PAGE>
                                     - 41 -

               Member by an Affiliate minus (10) all Non-Qualifying Investments;
               as each such amount (to the extent applicable) would be expressed
               on a balance sheet of Gerdau Steel prepared on a Combined Basis;

               "TAXES" means all taxes of any kind or nature whatsoever
               including federal large corporation taxes, provincial capital
               taxes, realty taxes (including utility charges which are
               collectible like realty taxes), business taxes, property transfer
               taxes, Income Taxes, Sales Taxes, levies, stamp taxes, royalties,
               duties, and all fees, deductions, compulsory loans and
               withholdings imposed, levied, collected, withheld or assessed as
               of September 27, 1999 or at any time thereafter, by any
               Governmental Body of or within Canada, or any other jurisdiction
               whatsoever having power to tax, together with penalties, fines,
               additions to tax and interest thereon;

               "TD" means The Toronto-Dominion Bank, or any successor of it, as
               the context requires;

               "TELLIB" means Tellib Trade Corp. Ltd., a company incorporated
               under the laws of the British Virgin Islands as at the date
               hereof, and any successor of it, as the context requires;

               "TELLIB ADVANCE" has the defined meaning assigned to it in
               Recital E of this Agreement;

               "TERM COMMITMENT" of any Lender means the proportion of the Term
               Facility set forth opposite the Lender's name in Schedule A (as
               amended and replaced from time to time pursuant to Section
               14.5.5) which such Lender has severally agreed to make available
               to the Borrowers pursuant to this Agreement, and "TOTAL TERM
               COMMITMENTS" of Lenders means the total sum of them for such
               Lenders;

               "TERM DRAWDOWN DATE" means September 27, 1999;

               "TERM FACILITY" means the term credit facility made available to
               the Borrowers pursuant to Article 3;

               "THIRD PARTY FACILITIES" means all plants, mills and other
               facilities (including all real property on which such facilities
               are situated), containers, vehicles, rail cars, motor vessels,
               trailers, storage or holding tanks and other machinery and
               equipment owned, leased, managed, controlled or operated by any
               agent of any Gerdau Canada Group Member or any third party
               contracting with any Gerdau Canada Group Member in which
               inventory, Hazardous Materials or Waste owned, managed or
               controlled by any Gerdau Canada Group Member is manufactured,
               processed, generated, received, stored, treated, transported,
               otherwise handled or disposed of;

               "THIRD SYNDICATED AMENDED AND RESTATED LOAN AGREEMENT" has the
               defined meaning assigned to it in Recital M of this Agreement;

<PAGE>
                                     - 42 -

               "TOTAL COMMITMENT" means the sum of the Total Term Commitment and
               the Total Revolver Commitment;

               "TOTAL DEBT/EBITDA RATIO" for any Fiscal Quarter or period of
               successive Fiscal Quarters ending after September 27, 1999 means
               the ratio of (i) the sum of (A) the total amount of all Debt of
               Gerdau Steel as at the end of such Fiscal Quarter or period of
               successive Fiscal Quarters less (B) all Subordinated Debt of
               Gerdau Steel as at the end of such Fiscal Quarter or period of
               successive Fiscal Quarters divided by (ii) EBITDA for such Fiscal
               Quarter or period of successive Fiscal Quarters determined on a
               Combined Basis;

               "TRANSFEREE" has the defined meaning assigned in Section 14.5.4;

               "TYPE" means, with respect to any Advance, other than a Standby
               Credit, its nature as a Prime Rate Loan, LIBOR Loan, Base Rate
               Loan or an issue of Bankers' Acceptances;

               "UNITED STATES" means the continental United States of America,
               Alaska and Hawaii;

               "U.S. DOLLAR EQUIVALENT" means, in relation to any particular
               amount of money in Canadian dollars at any particular time, the
               value thereof at such time in U.S. Dollars determined at the Spot
               Rate;

               "U.S. DOLLARS" or "U.S. $" means lawful money of the United
               States of America;

               "USP" means GUSAP Partners, a Delaware general partnership as at
               the date hereof, or any successor of it, as the context requires;

               "VOTING CAPITAL STOCK" means Capital Stock of a Person which
               carries voting rights or the right to Control such Person under
               any circumstances, provided that Capital Stock which carries the
               right to vote or Control conditionally upon the happening of an
               event shall not be considered Voting Capital Stock until the
               occurrence of such event and then only during the continuance of
               such event;

               "WASTE" means ashes, garbage and refuse and includes domestic
               waste, industrial waste, municipal refuse or such other wastes as
               are designated as such under any Environmental Law;

               "WHOLLY-OWNED SUBSIDIARY" of a Person means any Subsidiary, all
               of the outstanding Capital Stock of which, shall at the time be
               owned or Controlled, directly or indirectly, by such Person or
               one or more Wholly-Owned Subsidiaries of such Person, or by such
               Person and one or more Wholly-Owned Subsidiaries of such Person;
               and

               "$" means Cdn.$ or U.S.$, as the context requires.

<PAGE>
                                     - 43 -

1.2            ADDITIONAL REFERENCES

               To the extent the context so admits, any reference in this
               Agreement to:

               "AFFILIATE" shall be construed in the same manner it is used in
               the Business Corporations Act (Ontario);

               "ARM'S LENGTH" shall be construed in the same manner it is used
               in the Income Tax Act (Canada);

               "DISPOSE" shall be construed as lease, sell, transfer, license or
               otherwise dispose of any property, or the commercial benefits of
               use or ownership of (including the right to profit or gain from)
               any property, whether in a single transaction or in a series of
               related transactions (other than the payment of money), and
               "DISPOSED", "DISPOSITION" and "DISPOSAL" shall be construed in
               like manner;

               "FAIR MARKET VALUE" shall be construed as the highest price,
               expressed in terms of money and moneys worth, available in an
               open and unrestricted market between informed and prudent
               parties, each acting at arm's length, where neither party is
               under any compulsion to act;

               "GUARANTEE" shall be construed as any guarantee, indemnity,
               letter of comfort or other assurance made in respect of any
               Indebtedness, other obligation or financial condition of another,
               including (i) any purchase or repurchase agreement, (ii) any
               obligation to supply funds or services or invest in such other,
               or (iii) any keep-well, take-or-pay, through-put or other
               arrangement having the effect of assuring or holding harmless
               another against loss, or maintaining another's solvency or
               financial viability; but excluding endorsements on notes, bills
               and cheques presented to financial institutions for collection or
               deposit in the ordinary course of business, and "GUARANTEED" and
               "GUARANTEES" shall be construed in like manner;

               "INCLUDE", "INCLUDES" and "INCLUDING" shall be construed to be
               followed by the statement "without limitation" and none of such
               terms shall be construed to limit any word or statement which it
               follows to the specific or similar items or matters immediately
               following it;

               "LOSSES AND EXPENSES" shall be construed as losses, costs,
               expenses, damages, penalties, causes of action, actions,
               judgments, suits, proceedings, claims, claims over, demands and
               liabilities, including any applicable court costs and legal fees
               and disbursements on a substantial indemnity scale, and "LOSS AND
               EXPENSE" shall be construed in like manner;

               "OBLIGATIONS" shall be construed as indebtedness, obligations,
               responsibilities, duties and liabilities (actual or contingent,
               direct or indirect, matured or not, now existing or arising
               hereafter), whether arising by contract or statute, at law, in
               equity or otherwise, and "obliged", "OBLIGATION" and "OBLIGATED"
               shall be construed in like manner; and

<PAGE>
                                     - 44 -

               "RATE OF EXCHANGE" shall be construed so as to include any
               premiums or costs payable in connection with any currency
               conversion being effected;

               "RIGHTS" shall be construed as rights, title, benefits,
               interests, powers, authorities, discretions, privileges,
               immunities and remedies (actual or contingent, direct or
               indirect, matured or not, now existing or arising hereafter),
               whether arising by contract or statute, at law, in equity or
               otherwise, and "RIGHT" shall be construed in like manner;

               "SUCCESSOR" of any Person (the "RELEVANT PARTY") shall be
               construed so as to include (i) any amalgamated or other
               corporation of which the relevant party or any of its successors
               is one of the amalgamating or merging corporations, (ii) any
               Person to whom all or substantially all of the Business Assets of
               the relevant party are transferred, (iii) any corporation
               resulting from any court approved arrangement of which the
               relevant party or any of its successors is party, (iv) any
               corporation resulting from the continuance of the relevant party
               or any successor of it under the laws of another jurisdiction of
               incorporation and (v) any successor (determined as aforesaid or
               in any similar or comparable procedure under the laws of any
               other jurisdiction) of any Person referred to in clause (i),
               (ii), (iii) or (iv).

1.3            GENDER AND NUMBER

               In this Agreement, words importing the singular (including
defined terms) include the plural and vice versa (the necessary changes being
made to fit the context) and words importing gender include all genders.

1.4            INTEREST ACT

               For purposes of the Interest Act (Canada): (i) where in any Loan
Document a rate of interest is calculated on a basis other than a full calendar
year, the yearly rate of interest to which that rate is equivalent may be
determined by multiplying such rate by a fraction, the numerator of which is the
actual number of days in the relevant year and the denominator of which is the
number of days comprising such other basis; (ii) the annual rate of interest to
which each Acceptance Fee, CDOR BA Rate or BA Reference Rate or other rate of
interest calculated with reference to bankers' acceptances referred to in this
Agreement is equivalent is such Acceptance Fee, CDOR BA Rate or BA Reference
Rate or other rate multiplied by a fraction, the numerator of which is the
actual number of days in the relevant year and the denominator of which is 365
and (iii) the annual rate of interest to which each LIBO Rate or Federal Funds
Rate referred to in this Agreement is equivalent, is such LIBO Rate or Federal
Funds Rate multiplied by a fraction, the numerator of which is the actual number
of days in the relevant year and the denominator of which is 360.

1.5            INVALIDITY, ETC.

               Each of the provisions contained in any Loan Document is distinct
and severable and a declaration of invalidity, illegality or unenforceability of
any such provision or part thereof by a court of competent jurisdiction shall
not affect the validity or enforceability of any other provision of such Loan
Document or of any other Loan Document.

<PAGE>
                                     - 45 -

1.6            HEADINGS, ETC.

               The division of this Agreement into articles and sections, the
inclusion of a table of contents and the insertion of headings are for
convenience of reference only and shall not affect the construction or
interpretation of this Agreement.

1.7            GOVERNING LAW

               This Agreement shall be governed by and construed in accordance
with the laws of the Province of Ontario and the laws of Canada applicable
therein.

1.8            ATTORNMENT

               Each of Gerdau Steel and the Borrowers irrevocably submits and
attorns to the non-exclusive jurisdiction of the courts of the Provinces of
Ontario, Manitoba and Saskatchewan for all matters arising out of or in
connection with any of this Agreement and the other Loan Documents. Each of
Gerdau Steel and the Borrowers irrevocably waives (i) any objection which it may
have at any time to the laying of venue of any suit, action or proceeding
arising out of or relating to any Loan Document brought in any such court
("LOCAL PROCEEDING"), (ii) any claim that any Local Proceeding has been brought
in an inconvenient forum and (iii) the right to object, with respect to any
Local Proceeding that such court does not have jurisdiction over such party.
Nothing in any Loan Document will be interpreted or applied to preclude any
Lender from bringing a suit, action or proceeding in respect of any Loan
Document in any other jurisdiction. Each of Gerdau Steel and the Borrowers
irrevocably designates and appoints each of Courtice and MRM as its agent
("PROCESS AGENT") to accept and acknowledge on its behalf any and all process
which may be served in connection any Local Proceeding, such service being
conclusively acknowledged by it to be effective and binding service on it in
every respect whether or not it shall be doing or shall have at any time done
business in Ontario, Manitoba or Saskatchewan. Each of Gerdau Steel and the
Borrowers conclusively acknowledges and agrees that service of process in any
Local Proceeding by leaving a copy of such process with an officer, director or
agent of the Process Agent or with any person who appears to be in control or
management of any place of business of the Process Agent shall be good and
sufficient personal service of such process on it. Each of Gerdau Steel and the
Borrowers further irrevocably consents to the service of process out of the
Ontario, Manitoba or Saskatchewan courts by mailing a copy thereof, by
registered mail, postage prepaid to it at the address, or by sending a telecopy
thereof to it at the telecopier number, for the time being prescribed by Section
14.4. Each of Gerdau Steel and the Borrowers confirms to the Syndicate that it
has accepted its appointment to act as process agent on behalf of each other
Gerdau S.A. Group Member contained in any Loan Document to which each such other
Gerdau S.A. Group Member is party which may be served in connection with any
Local Proceeding arising out of or relating to any such other Loan Document. So
long as any Loan Obligations remain payable or any Borrower may be or become
entitled to any Drawdown, each of Gerdau Steel and the Borrowers covenants and
agrees to maintain each such appointment as such process agent.

<PAGE>
                                     - 46 -

1.9            REFERENCES

               Except as otherwise specifically provided, reference in this
Agreement to any contract, agreement or any other instrument shall be deemed to
include references to the same as amended, supplemented, restated, amended and
restated or novated from time to time provided that, in the case of any Loan
Document, the Agent or Required Lenders party thereto have given their written
consent to each such amendment, supplement, restatement, amendment and
restatement or novation. Reference in this Agreement to any enactment, including
any statute, law, by-law, regulation, ordinance, code or order, shall be deemed
to include references to such enactment as re-enacted, amended or extended from
time to time.

1.10           CURRENCY

               Except as otherwise specifically provided herein, all monetary
amounts in this Agreement are stated in Canadian dollars.

1.11           THIS AGREEMENT TO GOVERN

               If there is any inconsistency between the terms of this Agreement
and the terms of any other Loan Document, the provisions hereof shall govern and
apply to the extent of the inconsistency. Notwithstanding the foregoing, this
Section 1.11 shall not apply to limit, restrict, prejudice or otherwise affect
or impair in any way the rights of any of the Syndicate under the terms of any
of the Security after the Liens thereby constituted shall have become
enforceable in accordance with the terms thereof. For greater certainty,
notwithstanding that any other Loan Document may provide for payment on demand,
the Loan Obligations shall only be payable as stipulated herein.

1.12           GENERALLY ACCEPTED ACCOUNTING PRINCIPLES

               Except as otherwise specifically provided herein, all accounting
terms shall be applied and construed in accordance with generally accepted
accounting principles consistently applied. References herein to "GENERALLY
ACCEPTED ACCOUNTING PRINCIPLES" and "GAAP" mean, for all principles stated from
time to time in the Handbook of the Canadian Institute of Chartered Accountants,
such principles so stated; save and except that, for the purposes of all
computations required to be made pursuant to this Agreement to determine each of
the financial terms, tests or ratios relative to Gerdau Steel, including those
contained in Section 11.1.1.13 including each defined term and component item
taken into account in determining such financial terms, tests or ratios, shall
be computed on a Combined Basis.

1.13           COMPUTATION OF TIME PERIODS

               Except as otherwise specifically provided herein, in the
computation of a period of time from a specified date to a later specified date,
the word "FROM" means "FROM AND INCLUDING" and the words "TO" and "UNTIL" each
mean "TO BUT EXCLUDING".

<PAGE>
                                     - 47 -

1.14           ACTIONS ON DAYS OTHER THAN BANKING DAYS

               Except as otherwise specifically provided herein, where any
payment is required to be made or any other action is required to be taken on a
particular day and such day is not a Banking Day and, as a result, such payment
cannot be made or action cannot be taken on such day, then this Agreement shall
be deemed to provide that such payment shall be made or such action shall be
taken on the first Banking Day after such day; provided that if such deferral
would cause such payment to be made or such action to be taken during the
following calendar month, such payment shall be made or such action shall be
taken on the next preceding Banking Day. If the payment of any amount is
deferred for any period under this Section 1.14, then such period shall, unless
otherwise provided herein, be included for purposes of the computation of any
interest or fees payable hereunder.

1.15           VERBAL INSTRUCTIONS

               Notwithstanding any other provision herein regarding the delivery
of notices by a Borrower, the Agent shall in its sole discretion be entitled to
act upon the verbal instructions of the Relevant Borrower, or any Person
reasonably believed by the Agent to be a Person authorized by the Relevant
Borrower to give instructions, regarding any request for a Drawdown, Conversion
or Rollover. All such verbal instructions shall be at the risk of the Relevant
Borrower and must be confirmed in writing by the Relevant Borrower forthwith
after the verbal instruction is given. The Agent shall not be responsible for
any error or omission in such instructions or in the performance thereof except
in the case of gross negligence or willful misconduct by the Agent.

                                    ARTICLE 2
                                    FACILITY

2.1            ESTABLISHMENT OF REVOLVER FACILITY

2.1.1          The Lenders severally confirm, on the terms and conditions set
               out herein, the establishment of a revolving credit facility (the
               "REVOLVER FACILITY") in favour of the Corporate Borrowers in the
               amount equal to the lesser of (a) the Borrowing Base or (b) the
               Revolver Amount, to be used by each Corporate Borrower to finance
               in part the indirect acquisition of the Initial Target Shares, as
               well as for other general corporate purposes of the Gerdau Canada
               Group. Each Lender agrees to participate in each Drawdown,
               Conversion and Rollover under the Revolver Facility in accordance
               with its Rateable Share. However, except for temporary excesses
               arising from the Agent's allocation of Bankers' Acceptances
               comprised in any issue of Bankers' Acceptances made in accordance
               with Section 13.20.1, the aggregate Outstanding Amount of a
               Lender's participation in all Advances under the Revolver
               Facility shall not exceed its Revolver Commitment.

2.1.2          The Revolver Facility is available, at the option of a Corporate
               Borrower, by way of: (i) Prime Rate Loans in Canadian dollars;
               (ii) Bankers' Acceptances in Canadian dollars; (iii) Base Rate
               Loans in U.S. Dollars; (iv) LIBOR Loans in U.S.

<PAGE>
                                     - 48 -

               Dollars; and (v) subject to the provisions of Section 7.5.10,
               Standby Credits in Canadian dollars or U.S. Dollars.

2.1.3          At the Effective Time, (i) the Revolver Facility will be treated
               as having been drawn by the Relevant Borrower by way of all
               "Advances" outstanding under the "Revolver Facility" (as each
               such expression is referred to and defined in the Existing Loan
               Agreement) and (ii) each such "Advance" shall be treated as an
               Advance made by the Lenders to the Relevant Borrower under this
               Agreement, of the same Type and tenor, under the Revolver
               Facility. Gerdau Steel shall repay in full to the Lenders all
               "Advances" outstanding to it under the "Revolver Facility" (as
               each such expression is referred to and defined in the Existing
               Loan Agreement) before the Effective Time and shall ensure that
               it has no such "Advances" outstanding at the Effective Time.

2.1.4          Following receipt of a Borrowing Base Report, the Majority
               Lenders may disallow any particular receivable or inventory
               included in the calculation of the Borrowing Base, which in the
               credit judgment of the Majority Lenders, does not qualify as an
               Eligible Receivable or Eligible Inventory and the Borrowing Base
               shall be adjusted accordingly. If the Borrowing Base (whether by
               reason of any such adjustment or otherwise) is less than the
               Outstanding Amount of all Advances under the Revolver Facility,
               the Corporate Borrowers shall immediately pay to the Lenders an
               amount (or the Equivalent Amount in Canadian Dollars) which is
               greater than or equal to such excess to be applied by the Lenders
               in the order stipulated in Section 2.5.2.

2.2            AVAILABILITY AND REVOLVING NATURE OF REVOLVER FACILITY

               During the Availability Period, a Corporate Borrower may borrow,
repay and reborrow Advances under the Revolver Facility on a revolving basis,
subject to the terms and conditions set out herein; provided that Gerdau Steel
shall ensure that the aggregate Outstanding Amount of all Advances under the
Revolver Facility does not exceed the Revolver Amount at any time and the
aggregate Outstanding Amount of all outstanding Standby Credits does not exceed
Cdn.$4,000,000.

2.3            INTEREST AND ACCEPTANCE FEES ON ADVANCES UNDER THE REVOLVER
               FACILITY

               Interest on Prime Rate Loans shall be payable in Canadian dollars
on each Interest Payment Date applicable thereto on the outstanding principal
amount of all Prime Rate Loans made under the Revolver Facility at a rate per
annum equal to the Prime Rate in effect from time to time plus the Applicable
Margin. Acceptance Fees shall be payable in Canadian dollars on the relevant
Borrowing Date based on the face amount of the Bankers' Acceptance issued under
the Revolver Facility at a rate per annum equal to the Applicable Margin.
Interest on Base Rate Loans shall be payable in U.S. Dollars on each Interest
Payment Date applicable thereto on the outstanding principal amount of all Base
Rate Loans made under the Revolver Facility at a rate per annum equal to the
Base Rate plus the Applicable Margin. Interest on LIBOR Loans shall be payable
in U.S. Dollars on each Interest Payment Date applicable thereto on each LIBOR
Loan

<PAGE>
                                     - 49 -

made under the Revolver Facility at a rate per annum equal to the LIBO Rate for
each applicable Interest Period plus the Applicable Margin.

2.4            REPAYMENT UNDER REVOLVER FACILITY

               Subject to Section 12.2, all Advances remaining outstanding under
the Revolver Facility are due and payable on the Due Date of the Revolver
Facility, together with all interest and other amounts accrued and unpaid
thereon.

2.5            MANDATORY REPAYMENT

2.5.1          In the event the Outstanding Amount of all Advances outstanding
               under the Revolver Facility at any time exceeds the lesser of (i)
               the Revolver Amount or (ii) the Borrowing Base, (the "FACILITY
               LIMIT"), the Corporate Borrowers, without the Agent being
               required to make demand therefor, shall forthwith make the
               necessary payments or repayments to the Lenders to reduce the
               Outstanding Amount of the Advances outstanding under the Revolver
               Facility to an amount equal to or less than the Facility Limit.

2.5.2          On the date of each reduction of each Lender's Revolver
               Commitment pursuant to Section 2.8, each Corporate Borrower shall
               repay to such Lender such amount on account of such Lender's
               Rateable Share of Advances made to such Corporate Borrower under
               the Revolver Facility as may be required to ensure that the
               Outstanding Amount of such Lender's Rateable Share of all
               Advances under the Revolver Facility does not exceed its Revolver
               Commitment at that time after giving effect to that reduction.
               Such Lender shall apply any such amount so repaid as follows:

               (a)  first, to repay its Rateable Share of Loans under the
                    Revolver Facility;

               (b)  second, to prepay to the Lender the obligations of each
                    Relevant Borrower under Section 7.5.9 in respect of Bankers'
                    Acceptances issued for such Relevant Borrower's account
                    under the Revolver Facility; and

               (c)  third, to be credited to the Cash Collateral Account and
                    held as cash collateral by the Agent to secure the payment
                    and performance of the Relevant Borrower's obligations under
                    Section 7.6 in respect of outstanding Standby Credits until
                    such Standby Credits expire or are drawn upon, whereupon the
                    amounts so credited will be applied by the Agent to pay such
                    obligations in respect of such drawing or (if not so
                    required by the Majority Lenders), subject to Section 12.2,
                    returned to the Relevant Borrower.

2.6            ANNUAL REVIEW

               Provided that no Event of Default shall have occurred and be
continuing, Gerdau Steel may, by notice in writing to the Agent given no more
than 60 days but no less than 30 days before the then effective Due Date for the
Revolver Facility (the "CURRENT MATURITY DATE"),

<PAGE>
                                     - 50 -

request an extension of the Current Maturity Date by a period of up to 364 days.
Promptly upon receipt of an Extension Request the Agent shall notify each Lender
and shall request each Lender to approve the Extension Request within 30 days.
Each Lender may, within 30 days from the date of receipt of such notice from the
Agent, notify the Agent in writing of its election to extend or not extend the
Current Maturity Date as requested by Gerdau Steel, which election shall be in
the sole and absolute discretion of each Lender. If a Lender agrees to an
extension of the Current Maturity Date requested by Gerdau Steel, the Revolver
Facility Due Date for that Lender shall automatically and without any further
action by any Person be extended as of and from the Current Maturity Date by the
period of extension so requested by Gerdau Steel, except in the circumstances
described below. If, within such 30 days a Lender does not approve in writing
the extension of the Current Maturity Date (a "NON-EXTENDING LENDER"), the
Revolver Facility Due Date shall not be so extended for that Lender, but shall
remain as the Current Maturity Date then in effect for that Lender. Any other
Lender or new Lender selected by the Corporate Borrowers (in consultation with
the Agent) may, subject to Section 14.5, take up the Revolver Commitment of a
Non-Extending Lender effective from the Current Maturity Date. Notwithstanding
the foregoing, if in relation to any extension request less than the Majority
Lenders agree to extend the Revolver Facility Due Date, then the then Current
Maturity Date for all Lenders shall not be extended, but shall remain as the
Revolver Facility Due Date then in effect.

2.7            PREPAYMENT AND CANCELLATION OF REVOLVER FACILITY

2.7.1          Prepayment. Subject to the terms and conditions of this
               Agreement, each Corporate Borrower may from time to time by
               giving not less than three Banking Days express written notice to
               the Agent, prepay Advances (other than Bankers' Acceptances and
               Standby Credits) outstanding under the Revolver Facility, without
               penalty, except that LIBOR Loans may not be prepaid prior to the
               end of their applicable Interest Periods unless that Corporate
               Borrower compensates the Lenders in accordance with Section 8.3.

2.7.2          Cancellation. Gerdau Steel shall have the right at any time and
               from time to time to cancel all or any portion of the Revolver
               Commitment. Such right may only be exercised by Gerdau Steel
               delivering a notice to the Agent specifying the proposed
               effective date of such cancellation (which must be no less than
               30 days thereafter) and the amount of the Total Revolver
               Commitment to be cancelled (which must be in a principal amount
               of Cdn.$5,000,000 or a multiple of Cdn.$1,000,000 in excess
               thereof). The Revolver Commitment shall be permanently reduced on
               the effective date of each such cancellation in the amount so
               cancelled.

2.8            MINIMUM ADVANCE

               Unless the Agent otherwise agrees, an Advance (or any portion
thereof) by way of Prime Rate Loan under the Revolver Facility (other than any
Swing Line Advance) shall be for a minimum principal amount of Cdn.$5,000,000 or
a higher principal amount which is a whole number multiple of Cdn.$1,000,000. An
Advance (or any portion thereof) by way of an issue of Bankers' Acceptances
under the Revolver Facility shall be in a minimum aggregate face amount (subject
to availability) of Cdn.$5,000,000 and in whole number multiples of
Cdn.$1,000,000.

<PAGE>
                                     - 51 -

An Advance (or any portion thereof) by way of Base Rate Loan (other than any
Swing Line Advance) or LIBOR Loan shall be in a minimum principal amount
(subject to availability) of U.S.$5,000,000. Each Advance under the Revolver
Facility (other than any Swing Line Advance) will be made pursuant to a notice
received from a Corporate Borrower complying with the provisions of Section 7.4.

2.9            SWING LINE ADVANCES

2.9.1          Commitment. The Swing Line Lender establishes a committed
               revolving operating credit facility in favour of the Corporate
               Borrowers to finance the day-to-day working capital requirements
               for the Corporate Borrowers and other Gerdau Canada Group Members
               arising in the ordinary course of their operations, as well as
               for other general corporate purposes of the Gerdau Canada Group.
               Each Corporate Borrower shall so apply all amounts borrowed by it
               under the Swing Line Facility.

2.9.2          Overdrafts. Each Advance (other than a Standby Credit) under the
               Swing Line shall be made by the Swing Line Lender on an overdraft
               basis by debiting the Canadian dollar or U.S. Dollar Designated
               Account of the Relevant Borrower. The amount of such overdraft
               from time to time shall be deemed to be a Prime Rate Loan (to the
               extent of the debit balance in the Canadian dollar Designated
               Account) and a Base Rate Loan (to the extent of the debit balance
               in the U.S. Dollar Designated Account). The Corporate Borrowers
               shall ensure that the aggregate Outstanding Amount of all
               outstanding Advances made by the Swing Line Lender under this
               Section 2.9.2 does not exceed the Swing Line Amount at any time.

2.9.3          Standby Credit Disbursements. Upon making any Standby Credit
               Disbursement, the Swing Line Lender will promptly notify the
               Agent and the Relevant Borrower of the Swing Line Loan resulting
               from that payment pursuant to Section 7.6.6.

2.9.4          Relationship to Revolver Commitment. Except as otherwise provided
               in Section 13.26, for the purposes of each other Section of this
               Agreement, the amount of the Revolver Commitment of the Swing
               Line Lender and the Total Revolver Commitment shall be reduced by
               the Swing Line Amount and the Rateable Shares of the Lenders in
               each Borrowing made under the Revolver Facility (excluding the
               Swing Line) shall be adjusted proportionately.

2.9.5          Reduction of Swing Line Amount. If the Revolver Commitment of the
               Swing Line Lender determined in accordance with Section 2.9.4 is
               reduced to nil, each further reduction of the Revolver Commitment
               of the Swing Line Lender determined without regard for Section
               2.9.4 will reduce the Swing Line Amount by the amount of such
               reduction.

2.9.6          Transitional Provision: At the Effective Time, (i) the Swing Line
               will be treated as having been drawn by the Relevant Borrower by
               each outstanding Swing Line Loan and Standby Credit (each as
               referred to and defined in the Existing Loan

<PAGE>
                                     - 52 -

               Agreement), (ii) each such Swing Line Loan shall be treated as a
               Swing Line Advance made by the Swing Line Lender to the Relevant
               Borrower of the same Type and tenor under this Agreement and
               (iii) each such Standby Credit shall be treated as a Standby
               Credit issued by the Issuing Bank under this Agreement.

2.10           ADVANCES

               Any Advance from the Lenders requested by a Corporate Borrower in
accordance with Section 2.8 will, subject to the terms and conditions herein, be
made by the Lenders pursuant to this Section 2.10 and shall be made up of any
combination of any of the following Advances:

2.10.1         by way of Prime Rate Loans, each in a minimum principal amount of
               Cdn.$5,000,000;

2.10.2         by way of Bankers' Acceptances, each issue in a minimum aggregate
               face amount (subject to availability) of Cdn.$5,000,000;

2.10.3         by way of Base Rate Loans, each in a minimum principal amount of
               U.S.$5,000,000; and

2.10.4         by way of LIBOR Loans, each in a minimum principal amount
               (subject to availability) of U.S.$5,000,000.

                                    ARTICLE 3
                                    FACILITY

3.1            ESTABLISHMENT OF TERM FACILITY

3.1.1          The Lenders severally confirm, on the terms and conditions set
               out herein, the establishment of a non-revolving term credit
               facility (the "TERM FACILITY") in favour of the Borrowers in the
               amount of the Maximum Term Amount which shall be used by each
               Corporate Borrower to finance, directly or indirectly, in part
               the acquisition of the Initial Target Shares. Each Lender agrees
               to participate in each Drawdown, Conversion and Rollover under
               the Term Facility in accordance with its Rateable Share. However,
               except for temporary excesses arising from the Agent's allocation
               of Bankers' Acceptances comprised in any issue of Bankers'
               Acceptances made in accordance with Section 13.20.1, the
               aggregate Outstanding Amount of a Lender's participation in all
               Advances under the Term Facility shall not exceed its Term
               Commitment.

3.1.2          The Term Facility is available, at the option of a Borrower, by
               way of (i) Prime Rate Loans in Canadian dollars, (ii) Bankers'
               Acceptances in Canadian dollars, (iii) Base Rate Loans in U.S.
               Dollars and (iv) LIBOR Loans in U.S. Dollars.

3.1.3          At the Effective Time, (i) the Term Facility will be treated as
               having been drawn by the Relevant Borrower by way of all
               "Advances" outstanding under the Term "Facility" (as each such
               expression is referred to and defined in the Existing Loan

<PAGE>
                                     - 53 -

               Agreement) and (ii) each such "Advance" shall be treated as an
               Advance made by the Lenders to the Relevant Borrower under this
               Agreement of the same Type and tenor under the Term Facility.

3.1.4          With effect as of and from December 23, 1999, USP assumes, and
               shall be deemed to be the Relevant Borrower of, a U.S.$50,000,000
               portion of the U.S.$91,743,119.26 Base Rate Loan owing by MRM to
               the Lenders on that date (such portion being designated by the
               Agent and referred to as the "Assumed Base Rate Loan") and USP
               agrees to pay such Assumed Base Rate Loan, and all related Loan
               Obligations, (collectively, the "Assumed Loan Obligations") to
               the Lenders as if USP were named in the Existing Loan Agreement
               as an original party in substitution for MRM in respect of such
               Assumed Loan Obligations in accordance with the provisions of
               this Agreement. Notwithstanding such assumption, MRM shall remain
               obliged as guarantor under the MRM Guarantees in respect of such
               Assumed Loan Obligations.

3.2            AVAILABILITY AND NON-REVOLVING NATURE OF TERM FACILITY

               Each Borrower may, subject to the terms and conditions of this
Agreement, borrow Advances under the Term Facility on the Term Drawdown Date on
a non-revolving basis having an initial Outstanding Amount which, when added to
the Outstanding Amount of all other Advances referred to in Section 3.1.3, does
not exceed the Maximum Term Amount. Any part of an Advance under the Term
Facility which is repaid may not be reborrowed and (other than any such
repayment pursuant to Section 7.9) shall constitute a permanent reduction of the
Term Facility. Each such repayment shall, to the extent thereof, reduce the Term
Commitments of the Lenders pro rata.

3.3            REPAYMENT OF TERM FACILITY

               Subject to Section 12.2, all Loans outstanding under the Term
Facility shall be repaid by the Borrowers making the following instalment
payments to the Agent for the account of the Lenders:

3.3.1          Reductions. The Total Term Commitment shall permanently reduce at
               the end of the Term Drawdown Date by the amount, if any, by which
               the Total Term Commitment exceeds the Outstanding Amount of all
               Advances outstanding under the Term Facility on such date. The
               Borrowers shall not be entitled to any further Drawdowns under
               the Term Facility after the Term Drawdown Date.

3.3.2          Scheduled Instalments. Subject to Section 12.2, the Relevant
               Borrowers with Advances under the Term Facility shall repay all
               Advances outstanding under the Term Facility in consecutive
               semi-annual instalments on each day falling 12, 18, 24, 30 and 36
               months after the Term Drawdown Date in the following Outstanding
               Amounts (and the Total Term Commitment shall permanently reduce
               on each such date by each such amount):

<PAGE>
                                     - 54 -

<TABLE>
<CAPTION>
                                                            OUTSTANDING AMOUNT
INSTALMENT                                               OF REPAYMENT INSTALMENT
----------                                               -----------------------
<S>                                                              <C>
    1                                                        Cdn.$30,000,000
    2                                                        Cdn.$17,500,000
    3                                                        Cdn.$17,500,000
    4                                                        Cdn.$17,500,000
    5                                                        Cdn.$17,500,000
    6                                                        Cdn.$17,500,000
    7                                                        Cdn.$17,500,000
</TABLE>

               The Relevant Borrowers with Advances under the Term Facility
               shall repay the balance of all Advances outstanding under the
               Term Facility on the Final Term Facility Due Date (and the Total
               Term Commitment shall permanently reduce to nil on the Final Term
               Facility Due Date).

3.3.3          Free Cash Flow Reductions. On the 30th Banking Day falling after
               the day Gerdau Steel delivers the audited annual financial
               statements of Gerdau Steel to the Agent for each Fiscal Year
               starting with the 2000 Fiscal Year pursuant to Section
               11.1.1.10.1, the Relevant Borrowers with Advances under the Term
               Facility shall repay Advances in the Outstanding Amount equal to
               (i) seventy-five percent (75%) of Free Cash Flow if such Fiscal
               Year is the 2000 Fiscal Year and (ii) fifty percent (50%) of Free
               Cash Flow if such Fiscal Year is after the 2000 Fiscal Year, and
               the Total Term Commitment shall be permanently reduced on such
               date in like amount.

3.3.4          Capital Asset Dispositions. The Total Term Commitment shall
               permanently reduce on each day on which any Gerdau Canada Group
               Member disposes of any capital assets having a book value
               exceeding Cdn.$5,000,000 by an amount equal to the Net Asset
               Disposal Proceeds of such disposal. If the Gerdau Canada Group
               disposes of capital assets having an aggregate book value
               exceeding Cdn.$5,000,000 during any period of four consecutive
               Fiscal Quarters, then on the thirtieth day after the end of the
               last Fiscal Quarter in such period, the Total Term Commitment
               shall permanently reduce by the amount, if any, by which Net
               Asset Disposal Proceeds derived from such disposals exceeds the
               aggregate amount, if any, of each prior reduction to the Total
               Term Commitment made pursuant to this Section 3.3.4 in respect of
               capital asset disposals made during such four consecutive Fiscal
               Quarter period. The Borrowers shall promptly notify the Agent of
               full particulars pertaining to any capital asset disposal
               contemplated by this Section 3.3.4 and of any required repayment
               under this Section 3.3.4.

3.3.5          Indebtedness Reductions. The Total Term Commitment shall
               permanently reduce on each day on which any Gerdau Canada Group
               Member incurs new Indebtedness (other than (i) Indebtedness
               referred to in clause (x) of the definition of "Permitted Liens",
               (ii) Indebtedness to any Person that is either Gerdau S.A. or
               another Gerdau Canada Group Member, (iii) Indebtedness in respect
               of Kyoei Steel Balance of Sale Notes Refinancing Loans, and (iv)
               Indebtedness in respect

<PAGE>
                                     - 55 -

               of loans made under Section 11.3.1.5.6) by an amount equal to the
               sum of all cash and Cash Equivalent Investments received from
               such Indebtedness net of all costs and expenses incurred in
               effecting such Indebtedness, including legal expenses and
               underwriting fees and commissions payable to any Person that is
               not a Gerdau Canada Group Member or an Affiliate.

3.3.6          Rights Offering Reductions. The Total Term Commitment shall
               permanently reduce on each day on which any Gerdau Canada Group
               Member issues Capital Stock, or any rights to acquire Capital
               Stock, (a "RIGHTS OFFERING") to any Person that is not either
               Gerdau S.A. or another Gerdau Canada Group Member by an amount
               equal to the sum of all cash and Cash Equivalent Investments
               received from such Rights Offering net of all costs and expenses
               incurred in effecting such Rights Offering, including legal
               expenses and underwriting fees and commissions payable to any
               Person that is not a Gerdau Canada Group Member, Gerdau S.A.
               Group Member or an Affiliate.

3.3.7          Voluntary Reductions. The Borrowers shall have the right at any
               time and from time to time to prepay and permanently cancel,
               without premium or penalty, all or any portion of the Total Term
               Commitment. Such right may only be exercised by Gerdau Steel
               delivering a notice to the Agent specifying the proposed
               effective date of prepayment and cancellation (which must be no
               less than three Banking Days thereafter) and the amount of the
               Total Term Commitment to be cancelled (which must be in a
               principal amount of Cdn.$5,000,000 or a multiple of
               Cdn.$1,000,000 in excess thereof). The Total Term Commitment
               shall be permanently reduced on the effective date of each such
               cancellation in the amount so cancelled.

3.3.8          Prepayment of Affected Lenders. The Corporate Borrowers shall
               have the right to permanently cancel without premium or penalty
               all, but not part, of the Revolver Commitment and Term Commitment
               of each Affected Lender provided that no Default or Event of
               Default has occurred. Such right may only be exercised by the
               Corporate Borrowers delivering a notice to the Agent advising of
               such cancellation and specifying the effective date of
               cancellation which must be no less than five Banking Days after
               and no later than 30 days after the relevant Lender became an
               Affected Lender. Each Relevant Borrower shall prepay the Affected
               Lender's Rateable Share of all outstanding Advances on such
               effective date of cancellation, such Affected Lender's Commitment
               shall be reduced to nil on such effective date and such Affected
               Lender shall be released from its obligations to lend hereunder.

3.3.9          Mandatory Prepayments. On the date of each reduction of each
               Lender's Term Commitment pursuant to the foregoing provisions of
               this Article 3, each Relevant Borrower shall repay to each Lender
               such amount on account of such Lender's Rateable Share of
               Advances made to such Borrower under the Term Facility as may be
               required to ensure that the Outstanding Amount of such Lender's
               Rateable Share of all Advances under the Term Facility does not
               exceed its Term

<PAGE>
                                     - 56 -

               Commitment at that time after giving effect to that reduction.
               Such Lender shall apply any such amount so repaid as follows:

               (a)  first, to repay its Rateable Share of Loans under the Term
                    Facility; and

               (b)  second, to prepay to the Lender the obligations of each
                    Relevant Borrower under Section 7.5.9 in respect of Bankers'
                    Acceptances issued for such Borrower's account under the
                    Term Facility.

3.4            INTEREST AND ACCEPTANCE FEES ON ADVANCES UNDER THE TERM FACILITY

               Interest on Prime Rate Loans shall be payable in Canadian dollars
on each Interest Payment Date applicable thereto on the outstanding principal
amount of all Prime Rate Loans made under the Term Facility at a rate per annum
equal to the Prime Rate in effect from time to time plus the Applicable Margin.
Acceptance Fees shall be payable in Canadian dollars on the relevant Borrowing
Date based on the face amount of Bankers' Acceptances under the Term Facility at
a rate per annum equal to the Applicable Margin. Interest on Base Rate Loans
shall be payable in U.S. Dollars on each Interest Payment Date applicable
thereto on the outstanding principal amount of all Base Rate Loans made under
the Term Facility at a rate per annum equal to the Base Rate plus the Applicable
Margin. Interest on LIBOR Loans shall be payable in U.S. Dollars on each
Interest Payment Date applicable thereto on the outstanding principal amount of
each LIBOR Loan made under the Term Facility at a rate per annum equal to the
LIBO Rate for each applicable Interest Period plus the Applicable Margin.

3.5            PREPAYMENT OF TERM FACILITY

               Subject to the terms and conditions of this Agreement, each
Borrower may from time to time by giving not less than three Banking Days
express written notice to the Agent, prepay Prime Rate Loans and Base Rate Loans
(but not Bankers' Acceptances) outstanding under the Term Facility, without
penalty or prepay LIBOR Loans outstanding under the Term Facility, except that
LIBOR Loans may not be prepaid prior to the end of their respective Interest
Periods unless the Borrower compensates the Lenders in accordance with Section
8.3.

3.6            MINIMUM ADVANCE

               Each Advance under the Term Facility shall be for a minimum
aggregate amount of $10,000,000 (Canadian or U.S., as applicable) made up of any
combination of the following Advances:

3.6.1          by way of Prime Rate Loans, each in a minimum principal amount of
               Cdn.$5,000,000;

3.6.2          by way of Bankers' Acceptances, each issue in a minimum aggregate
               face amount (subject to availability) of Cdn.$5,000,000 and in
               whole number multiples of Cdn.$100,000;

3.6.3          by way of Base Rate Loans, each in a minimum principal amount of
               U.S.$5,000,000; and

<PAGE>
                                     - 57 -

3.6.4          by way of LIBOR Loans, each in a minimum principal amount
               (subject to availability) of U.S.$10,000,000.

3.7            CONSOLIDATION OF LOANS

               If for any reason (including payments and prepayments) the
principal or aggregate face amount of any Advance made pursuant to the Term
Facility falls below the minimum prescribed in Section 3.6 (a "SMALL TERM
LOAN"), the Borrowers will co-operate with the Agent in consolidating such Small
Term Loan with such other Advance under the Term Facility as the Agent may
designate to form one Advance having an aggregate principal or face amount
satisfying the requirements for Advances imposed under Section 3.6.
Alternatively, the Relevant Borrower will immediately prepay Small Term Loans
pursuant to Section 3.5.

                                    ARTICLE 4
                                   FACILITIES

4.1            EXISTING HEDGING FACILITY

4.1.1          TD has established a discretionary hedging facility in favour of
               the Borrowers to be used by each of the Borrowers for hedging its
               interest rate and Currency exposures on Advances under the Credit
               Facilities and for foreign exchange contracts, and for any other
               purpose permitted under this Agreement. TD was the only Hedging
               Lender as at September 27, 1999.

4.1.2          Any other Lender may establish a discretionary hedging facility
               in favour of the Borrowers to be used by each Borrower for
               hedging its interest rate and Currency exposures on Advances
               under the Credit Facilities and for foreign exchange contracts,
               and for any other purpose permitted under this Agreement. Upon
               such establishment, the Lender concerned shall forthwith notify
               the Agent, whereupon it will become a Hedging Lender for the
               purposes of this Agreement.

4.1.3          Each Hedging Instrument entered into between a Borrower and a
               Hedging Lender for a purpose permitted under this Agreement is
               referred to in this Agreement as an "ELIGIBLE HEDGING
               INSTRUMENT".

4.1.4          Each Hedging Instrument must be governed by a master netting
               agreement in the form published by the International Swaps and
               Derivatives Association, Inc. under which the Full Two Way
               Payments (as referred to and defined therein) method of
               termination applies, or in such other form as the Agent may
               approve (a "MASTER ISDA AGREEMENT").

4.1.5          Each Hedging Lender and Eligible Hedging Instrument under the
               Existing Loan Agreement shall be considered as a Hedging Lender
               and Eligible Hedging Instrument under this Agreement.

<PAGE>
                                     - 58 -

                                    ARTICLE 5
                                     PAYMENT

5.1            PLACE OF PAYMENT

               All funds made available by the Lenders pursuant to the Credit
Facilities shall be made or delivered to the Agent at the Agent's Branch of
Account and then, subject to Sections 7.5.7 and 13.20, transferred to the
relevant Designated Account. All payments of principal, interest and fees or
other amounts payable by each Borrower to the Lenders hereunder shall be made or
delivered to the Agent at the Agent's Branch of Account and then transferred to
each Lender's Lending Office in accordance with each Lender's Rateable Share.
All payments of principal, interest and fees or other amounts payable by each
Corporate Borrower to the Swing Line Lender shall be made or delivered to the
Swing Line Lender at its Branch of Account.

5.2            APPLICATION OF PAYMENTS AND PREPAYMENTS

               Before any Default or Event of Default occurs, the Agent shall
appropriate and apply each payment made by a Borrower under this Agreement in
and towards payment of such Loan Obligations as such Borrower shall designate to
the Agent at the time of such payment or, failing such designation, in and
towards such indebtedness or Loan Obligations of such Borrower as the Agent
shall designate. After a Default or an Event of Default occurs, the Agent shall
be entitled, subject to Article 13, to appropriate and apply each payment made
by each Borrower under this Agreement in and towards payment of such
indebtedness or Loan Obligations of a Borrower as the Agent shall designate,
notwithstanding any designation made by a Borrower. Any amount of the Term
Facility repaid pursuant to Section 3.3 or prepaid pursuant to Section 3.5
shall, to the extent thereof, satisfy the Borrower's repayment obligations under
Section 3.3.2 in inverse order of maturity.

5.3            CHANGE IN CIRCUMSTANCES

               If the introduction of or any Change in Law:

5.3.1          subjects any Lender (or its Holding Body Corporate) to, or causes
               the withdrawal or termination of a previously granted exemption
               with respect to, any Taxes or changes the basis of taxation of
               payments on any Lender (or its Holding Body Corporate) due to the
               Lenders (or its Holding Body Corporate) or increases any existing
               Taxes on payments of the Loan Obligations (other than the
               Lender's Own Taxes (or those of its Holding Body Corporate));

5.3.2          imposes, modifies or deems applicable reserve, liquidity, cash,
               margin, capital, special deposit, deposit insurance or
               assessment, or any other regulatory or similar requirement
               against assets held by, or deposits in or for the account of, or
               loans by, or any other acquisition of funds for loans by, any
               Lender (or those of its Holding Body Corporate), or any
               unutilized portion of any Credit Facility or any obligations of
               any Lender under any Loan Document;

5.3.3          imposes on any Lender (or its Holding Body Corporate) any Taxes
               on reserves or deemed reserves in respect of the undrawn portion
               of any Credit Facility;

<PAGE>
                                     - 59 -

5.3.4          imposes on any Lender (or its Holding Body Corporate) or requires
               there to be maintained by any Lender (or its Holding Body
               Corporate) any capital adequacy or additional capital requirement
               (including a requirement which affects the Lenders' (or its
               Holding Body Corporate's) allocation of capital resources to its
               obligations) in respect of any Credit Facility, any Advance, any
               Derivative, this Agreement or the Lenders' obligations hereunder
               or imposes any other condition or requirement with respect to the
               maintenance by any Lender of a contingent liability with respect
               to any Credit Facility, any Advance or any Derivative hereunder;
               or

5.3.5          imposes on any Lender (or its Holding Body Corporate) any other
               condition or requirement with respect to this Agreement or a
               Credit Facility (other than the Lender's Own Taxes (or those of
               its Holding Body Corporate));

and, in the sole determination of such Lender (the "AFFECTED LENDER"), such
occurrence has the effect of:

5.3.6          increasing the cost to the Affected Lender (or its Holding Body
               Corporate) of the Affected Lender agreeing to make or making,
               maintaining or funding a Credit Facility, any Advance, any
               Derivative or any portion of any thereof;

5.3.7          reducing the amount of the Loan Obligations or the net income
               received by the Affected Lender in respect of this Agreement, a
               Credit Facility, any Advance, any Derivative, or any portion of
               any thereof;

5.3.8          directly or indirectly reducing the effective return to the
               Affected Lender (or its Holding Body Corporate) under this
               Agreement on its overall capital as a result of entering into
               this Agreement or as a result of any of the transactions or
               obligations contemplated by this Agreement (other than a
               reduction resulting from a higher rate of Income Tax being
               imposed on the Affected Lender's (or its Holding Body
               Corporate's) overall income); or

5.3.9          causing the Affected Lender to make any payment or to forego any
               interest, fees or other return on or calculated by reference to
               any sum received or receivable by the Affected Lender hereunder,

then, upon demand from time to time being made to the Relevant Borrowers by the
Agent on behalf of the Affected Lender, accompanied in each case by a
certificate of the Affected Lender documenting the relevant calculations of the
compensation being claimed by the Affected Lender (which certificate shall be
conclusive and binding on the parties hereto for all purposes, absent manifest
error), the Borrowers shall forthwith pay to the Agent for the account of the
Affected Lender such additional amounts as are set out in each such certificate
in order to fully compensate the Affected Lender (or its Holding Body Corporate)
for such additional cost, reduction, payment, foregone interest or other return.
The amount payable by each Borrower under this Section 5.3 shall be made in
proportion to its share of the aggregate Outstanding Amount of all outstanding
Advances under the Credit Facilities, unless the Agent otherwise agrees.

<PAGE>
                                     - 60 -

5.4            PAYMENTS GENERALLY

               All payments to be made by a Borrower in respect of Advances (in
respect of principal, interest, fees or otherwise) shall be made by the Relevant
Borrower to the Agent for the account of the Lender or Lenders concerned or to
the Swing Line Lender (as applicable) no later than 11:00 a.m. (Toronto time) on
the due date thereof (i) to the accounts of the Agent specified therefor by the
Agent at the Agent's Branch of Account or (ii) to the Swing Line Lender by
transfer to the Designated Accounts, in each case at the applicable Branch of
Account, or, in any such case, to such other accounts as may be specified by
such Lender to the Relevant Borrower from time to time. If a payment is not made
by such time it shall be considered to have been made on the next Banking Day,
unless the Lender concerned agrees, in its sole discretion, to accept a payment
at a later time as being effective on the date it is made. All payments to be
made by a Borrower shall be made by way of certified cheque, bank draft or other
immediately available funds, freely transferable, cleared funds for value on the
due date.

5.5            REPAYMENT NOTICE

               Each Relevant Borrower shall deliver a Repayment Notice to the
Agent at least five Banking Days before any required repayment is made pursuant
to any provision of this Agreement.

5.6            NETTING OF PAYMENTS

               If on any date amounts would be payable under this Agreement in
the same currency by the Relevant Borrower to the Lenders and by the Lenders to
the Relevant Borrower, then, on such date, unless the Agent notifies the
Relevant Borrower stating that netting is not to apply to such payments, each
such party's obligations to make payment of any such amount will be
automatically satisfied and discharged and, if the aggregate amount that would
otherwise have been payable by the Relevant Borrower to the Lenders exceeds the
aggregate amount that would otherwise have been payable by the Lenders to the
Relevant Borrower or vice versa, such obligations shall be replaced by an
obligation upon the Relevant Borrower or the Lenders by whom the larger
aggregate amount would have been payable to pay to the other the excess of the
larger aggregate amount over the smaller aggregate amount.

                                    ARTICLE 6
                        CONDITIONS PRECEDENT TO ADVANCES

6.1            CONDITIONS PRECEDENT TO ADVANCE

               No Borrower shall be entitled to obtain an Advance under any
Credit Facility pursuant to this Agreement until an Implementation Notice is
given and then only upon satisfaction of and compliance with the following terms
and conditions:

6.1.1          the representations and warranties set forth in Article 10 are
               true and accurate in all material respects on the date of this
               Agreement and shall continue to be true and accurate in all
               material respects on the date of the Advance in question and, in
               respect of an Advance under the Term Facility, the Agent shall
               have received a Certificate of Gerdau Steel to such effect;

<PAGE>
                                     - 61 -

6.1.2          no Default or Event of Default shall have occurred and be
               continuing on the requested date of Advance and, in respect of an
               Advance under the Term Facility, the Agent shall have received a
               Certificate of Gerdau Steel to such effect;

6.1.3          the Agent shall have received any required Drawdown Notice in
               accordance with Section 7.4; and

6.1.4          the aggregate Outstanding Amount of all Advances outstanding
               under a Credit Facility, following the making of the Advance in
               question and having regard to any repayments of principal to be
               made on the date of the Advance in question, shall not exceed the
               Maximum Amount of such Credit Facility.

6.2            CONDITIONS PRECEDENT TO EFFECTIVE TIME

               The amendments to and restatement of the Existing Loan Agreement
set out in this Agreement shall not take effect unless and until the Agent
confirms in writing to the Borrowers (the "IMPLEMENTATION Notice") that the
Agent has received each of the following agreements, documents and instruments
(each in form and substance satisfactory to the Agent), or it has received some,
but not all, of them and it is prepared to waive receipt of the balance of them
for the purposes of allowing such amendments and restatement to take effect:

6.2.1          the Agent shall have received a duly executed copy of this
               Agreement and each of the agreements, documents and instruments
               listed in Schedule Q relative to the Co-Steel Group Credit
               Agreements;

6.2.2          the Agent shall have received a duly executed copy of each of the
               Status Quo Agreement, an amended and restated security
               co-ordination agreement and the agreements, documents and
               instruments listed in Schedule L, together with any Mortgaged
               Property being delivered to the Agent pursuant to any Security
               comprised therein, to the extent not previously received by the
               Agent, including share certificates representing all of the
               issued Capital Stock in the Gerdau Canada Subgroup Interim
               Holding Company and the Gerdau Canada Subgroup Shares and
               arrangements satisfactory to the Agent shall have been made to
               ensure that the Agent receives the share certificate representing
               the Exchanged Co-Steel Shares, together with transfer forms duly
               executed in blank with signatures guaranteed by a Canadian
               chartered bank;

6.2.3          the Agent shall have received the following in form and substance
               satisfactory to the Agent:

               6.2.3.1  a Certificate of each Borrower dated the date of this
                        Agreement certifying that attached thereto are true and
                        correct copies of the following documents, and that such
                        documents are in full force and effect, unamended:

                        6.2.3.1.1  the articles and by-laws (or equivalent or
                                   analogous formation and internal management
                                   documentation) of

<PAGE>
                                     - 62 -

                                   each Borrower and any unanimous shareholder
                                   agreement pertaining to each Borrower;

                        6.2.3.1.2  a certificate of incumbency, including sample
                                   signatures of officers and directors, of each
                                   Borrower; and

                        6.2.3.1.3  the resolutions or other documentation
                                   evidencing that all necessary action,
                                   corporate or otherwise, has been taken by
                                   each Borrower to authorize the execution,
                                   delivery and performance of the New Loan
                                   Documents to which it is a party;

               6.2.3.2  a certificate of compliance or status (as applicable) in
                        respect of each Gerdau Canada Group Member dated on or
                        about the date of this Agreement;

               6.2.3.3  certificates for each other Gerdau S.A. Group Member
                        that is currently providing, or intended pursuant hereto
                        to provide, Security to the Syndicate substantially
                        equivalent or analogous to the certificates of each
                        Gerdau Canada Group Member (including attachments)
                        referred to in Sections 6.2.3.1 and 6.2.3.2 above;

               6.2.3.4  certified copies of the insurance policies evidencing
                        the insurance required to be maintained by each Gerdau
                        Canada Group Member under Section 9.6;

               6.2.3.5  certified copies of all Permits required to enable the
                        Borrowers and each other Gerdau S.A. Group Member
                        currently providing, or intended pursuant hereto to
                        provide, Security to the Syndicate to execute, deliver,
                        incur and perform its obligations under each Loan
                        Document to which it is a party and consummate the
                        transactions contemplated thereby;

               6.2.3.6  evidence that all Registrations and other actions as may
                        be necessary or desirable in the judgment of the
                        Lenders' Counsel to perfect, preserve and protect the
                        Security and its validity, effect and priority have been
                        effected;

               6.2.3.7  deposit of the share certificates representing all the
                        issued Capital Stock of Porter Bros., MRM America and
                        MFT, acknowledgements that such Capital Stock is pledged
                        to the Agent pursuant to the Security, and such other
                        documents and opinions relating thereto as the Agent may
                        require;

               6.2.3.8  deposit of the share certificates representing all the
                        new issued Capital Stock of the Gerdau S.A. Group
                        Members as may arise from the Debt Restructuring
                        Transactions, acknowledgements that such Capital Stock

<PAGE>
                                     - 63 -

                        is pledged to the Agent pursuant to the Security, and
                        such other documents and opinions relating thereto as
                        the Agent may require;

               6.2.3.9  deposit of the share certificates representing the
                        Capital Stock of Courtice, MRM Holdings and Gerdau USA
                        transferred pursuant to the Co-Steel Combination
                        Transactions and deposit of the share certificate
                        representing all the Capital Stock of the Gerdau Canada
                        Sub-Group Interim Holding Company, acknowledgements that
                        all such Capital Stock is pledged to the Agent pursuant
                        to the Security, a guarantee of the Loan Obligations
                        executed in favour of the Agent by the Gerdau Canada
                        Sub-Group Interim Holding Company, and such other
                        documents and opinions relating thereto as the Agent may
                        require;

               6.2.3.10  in respect of the FLS/Gerdau USA Merger, the deposit of
                         the share certificates representing all the Capital
                         Stock of AmeriSteel owned by Gerdau USA, an
                         acknowledgement that such Capital Stock continues to be
                         pledged to the Agent pursuant to the stock pledge
                         executed in favour of the Agent by FLS and pursuant to
                         the stock pledge executed in favour of the Agent by
                         Gerdau USA, and such other documents and opinions
                         relating thereto as the Agent may require;

               6.2.3.11  opinions from:

                         6.2.3.11.1  the Borrower's Counsel in respect of the
                                     Gerdau S.A. Trust Deed in respect of the
                                     Reorganization Transactions and the entry
                                     into effect of the amendments to the
                                     Existing Loan Agreement contemplated
                                     hereby;

                         6.2.3.11.2  Co-Steel's Counsel in respect of the Co-
                                     Steel Group Credit Agreements and the
                                     amendments contemplated by the agreements,
                                     documents and instruments listed in
                                     Schedule Q;

                         6.2.3.11.3  the Borrower's Counsel in respect of the
                                     Exchanged Co-Steel Shares; and

                         6.2.3.11.4  the Borrower's Counsel in respect of each
                                     Gerdau S.A. Group Member currently
                                     providing, or intended pursuant hereto to
                                     provide, Security to the Syndicate,
                                     addressed to the Syndicate and the Lenders'
                                     Counsel, in respect of the laws of such
                                     jurisdictions, the Loan Documents, the
                                     Gerdau S.A. Trust Deed and as to such
                                     matters and in such form as the Lenders may
                                     require;

               6.2.3.12  a Compliance Certificate for the period of four
                         consecutive Fiscal Quarters ending June 30, 2002;

<PAGE>
                                     - 64 -

               6.2.3.13  a Borrowing Base Report prepared as at June 30,
                         2002;

               6.2.3.14  satisfactory evidence that the New Loan Documents
                         shall, if necessary or desirable, have been filed,
                         registered and recorded where appropriate;

               6.2.3.15  such other agreements, documents and instruments as the
                         Agent or the Swing Line Lender may reasonably require;

               6.2.3.16  a Certificate of each Borrower dated the date of this
                         Agreement confirming satisfaction of and compliance
                         with the terms and conditions set out in this Section
                         6.2 as well as Sections 6.1.1 and 6.1.2;

               6.2.3.17  a Certificate of Gerdau Steel certifying that all of
                         the conditions contained in Sections 6.1.1, 6.1.2 and
                         6.1.3 inclusive have been satisfied; and

               6.2.3.18  a favourable report from the Lenders' Counsel to the
                         Lenders as to all legal aspects in this transaction on
                         which the Agent requires a report, including with
                         respect to this Agreement, the Security, the other New
                         Loan Documents and the opinions delivered pursuant to
                         Section 6.2.3.11.

6.2.4          The Agent shall have received from Gerdau Steel all outstanding
               fees agreed to be paid on or prior to the date of this Agreement
               by Gerdau Steel to the Agent and the Lenders (or any of them)
               pursuant to the fee letter dated September 5, 2002 from Gerdau
               Steel to the Agent.

6.3            EFFECTIVE TIME

               The Credit Facilities set out in this Agreement shall only become
available to the Borrowers pursuant to this Agreement if the Agent issues the
Implementation Notice.

6.4            EFFECTIVENESS

               Upon the Agent delivering the Implementation Notice to the
Borrowers, the Lenders will be deemed to have consented to the Reorganization
Transactions subject to and upon the terms and conditions stated herein and this
Agreement shall amend and restate the Existing Loan Agreement in its entirety.
The Existing Loan Agreement as amended and restated by this Agreement shall
constitute one agreement, and the Existing Loan Agreement as so amended and
restated is hereby ratified and confirmed by the parties hereto.

6.5            PROVISIONS TAKING IMMEDIATE EFFECT

               Notwithstanding any other provision of this Agreement, this
Section 6.5 and Section 8.2 of this Agreement shall take effect immediately upon
the execution and delivery of this Agreement whether or not the Implementation
Notice is ever issued.

<PAGE>
                                     - 65 -

6.6            RIGHTS UNAFFECTED

               This Agreement shall not waive, prejudice, delay or impair any
rights of the Syndicate, Gerdau Steel or the Borrowers arising under the
Existing Loan Agreement, the Security or otherwise, at law or in equity, which
have accrued to the Syndicate, Gerdau Steel or the Borrowers, as the case may
be, before the Effective Time. All interest, fees and other amounts (other than
principal) due or becoming due or owing as at the Effective Time shall be paid
after such time to the Syndicate in accordance with the terms and conditions of
this Agreement.

6.7            DATE OF AGREEMENT

               References in this Agreement to the date of this Agreement, the
date hereof and similar expressions shall be construed as references to the date
this amended and restated loan agreement is executed and delivered by the
parties hereto.

                                    ARTICLE 7
                                    ADVANCES

7.1            ADVANCE AND INTEREST PAYMENT DATES

               Upon timely fulfillment of and compliance with all applicable
terms and conditions as set forth in this Agreement by the Relevant Borrower,
the Agent (to the extent it has received funds from the Lenders) on behalf of
the Lenders will, subject to Section 5.6, make the requested amount of any
Advance by way of Prime Rate Loan, Base Rate Loan or LIBOR Loan requested by the
Relevant Borrower available to the Relevant Borrower on the Drawdown Date by
crediting its Designated Account with such amount. The Relevant Borrower shall
pay interest to the Swing Line Lender or to the Agent for the account of the
Lenders (as applicable) at such Lender's Branch of Account on each Loan borrowed
by the Relevant Borrower which is outstanding from time to time hereunder at the
rate of interest applicable to such Loan as set out in this Agreement.

               Interest on each Prime Rate Loan, Base Rate Loan and LIBOR Loan
shall be payable on each Interest Payment Date applicable thereto. All interest
shall accrue from day to day and shall be payable in arrears for the actual
number of days elapsed from and including the Borrowing Date of such Loan or the
previous date on which interest was payable, as the case may be, to but
excluding the date on which interest is payable, or the end of the Interest
Period, as the case may be, both before and after maturity, default and
judgment, with interest on overdue interest at the same rate payable on demand.
Overdue interest with respect to a LIBOR Loan made under a Credit Facility
shall, upon the expiry of the Interest Period applicable to such LIBOR Loan,
bear interest, payable on demand, calculated at the rates and in the manner
applicable to Base Rate Loans made under the same Credit Facility.

               Interest calculated with reference to the Prime Rate or the Base
Rate shall be calculated daily and compounded monthly on the basis of a year of
365 or 366 days, as applicable. Interest calculated with reference to the LIBO
Rate shall be calculated daily and compounded at the end of the Interest Period
applicable thereto, and if the Interest Period is longer than three months,
every three months on the basis of a year of 360 days.

<PAGE>
                                     - 66 -

7.2            PAYMENT OF INTEREST

               Each Borrower shall pay to the Agent for the account of the
applicable Lenders interest on each Loan borrowed by it in the manner and at the
rates per annum determined in accordance with this Agreement. Interest payable
hereunder shall be payable both before and after maturity, default and/or
judgment, if any, until payment in full thereof, and interest shall accrue on
overdue interest, if any, at the same rate, except as otherwise provided in
Section 7.1. Changes in the Prime Rate or the Base Rate shall cause an immediate
adjustment of the interest payable hereunder with respect to Prime Rate Loans
and Base Rate Loans, respectively, without the necessity of any notice to the
Borrowers.

7.3            CONVERSIONS

               Subject to the other terms of this Agreement, the Relevant
Borrower may from time to time convert all or any part of the outstanding amount
of any Advance under the Term Facility on its Maturity Date (in the case of a
LIBOR Loan or an issue of Bankers' Acceptance) or at any time (in the case of
Prime Rate Loan or a Base Rate Loan) into another form of Advance denominated in
the same Currency under the Term Facility permitted by this Agreement by giving
the Agent a Conversion Notice in accordance with Section 7.4 provided that any
part of an Advance that is not converted and the resulting new Advance each
comply with the amounts specified below:

7.3.1          in the case of a Prime Rate Loan or Base Rate Loan, a minimum
               principal amount of $5,000,000 (Cdn. or U.S., as applicable);

7.3.2          in the case of a LIBOR Loan, a minimum principal amount (subject
               to availability) of U.S.$10,000,000; and

7.3.3          in the case of an issue of Bankers' Acceptances, a minimum
               aggregate face amount (subject to availability) of Cdn.$5,000,000
               and in whole number multiples of Cdn.$1,000,000.

7.4            NOTICE OF ADVANCES, PAYMENTS, CONVERSIONS AND ROLLOVERS

               Each Borrowing Notice and Repayment Notice, as the case may be,
shall be given no later than:

7.4.1          on the third Banking Day prior to any Borrowing Date or payment
               date, in respect of any Prime Rate Loan or Base Rate Loan in an
               amount of $25,000,000 (Cdn. or U.S., as applicable) or more;

7.4.2          on the second Banking Day prior to any Borrowing Date or payment
               date, in respect of any Prime Rate Loan or Base Rate Loan in an
               amount of $10,000,000 (Cdn. or U.S., as applicable) or more but
               less than $25,000,000 (Cdn. or U.S., as applicable);

<PAGE>
                                     - 67 -

7.4.3          on the Banking Day before the Borrowing Date of any Prime Rate
               Loan or Base Rate Loan or payment date, in respect of any Prime
               Rate Loan or Base Rate Loan in an amount less than $10,000,000
               (Cdn. or U.S., as applicable);

7.4.4          on the third Banking Day prior to the Borrowing Date or payment
               date of any LIBOR Loan; and

7.4.5          on the second Banking Day prior to the Borrowing Date of any
               Bankers' Acceptances.

Notices shall be given not later than 10:00 a.m. (Toronto time) on the last
available date for notice. If a notice is not given by such time, it shall be
deemed to have been given on the next Banking Day. If a Conversion Notice is not
given by 10:00 a.m. on the second Banking Day prior to a proposed Conversion,
the Lenders may, in the case of a proposed Conversion to Bankers' Acceptances,
decline to accept such Bankers' Acceptances and in the case of a proposed
Conversion to a Prime Rate Loan, may charge, as liquidated damages, interest on
the resulting Prime Rate Loan at a rate equal to 115% of the rate of interest
otherwise applicable to such Prime Rate Loan under this Agreement for a period
of two Banking Days from the maturity of the Bankers' Acceptances. Thereafter
the rate of interest applicable to such Prime Rate Loan shall be the rate of
interest otherwise applicable to such Loan, as set out in this Agreement. The
foregoing provisions shall also apply if a Borrower requests a Rollover of
Bankers' Acceptances to take place on the Maturity Date of another issue of
Bankers' Acceptances but does not give a Rollover Notice by 10:00 a.m. on the
second Banking Day prior to such Maturity Date. The Relevant Borrower agrees
that such additional interest is a reasonable pre-estimate of loss to each
Lender and not a penalty. Such increased interest is payable for the
administrative expense incurred by each Lender and for the loss of protection
against future interest rate risks suffered by each Lender as a result of a
Borrower's failure to give any of these notices.

7.5            BANKERS' ACCEPTANCES

               The following provisions shall apply to Advances obtained by way
of the issuance of Bankers' Acceptances:

7.5.1          all drafts required to be accepted by a Lender pursuant to this
               Agreement shall be in the form requested by such Lender, and,
               shall be executed and drawn by such Lender on behalf of the
               Relevant Borrower pursuant to the power of attorney contained in
               Section 7.5.3;

7.5.2          any Borrowing Notice requesting an issue of Bankers' Acceptances
               shall include instructions from the Relevant Borrower stating
               that it wishes to have drafts accepted as Bankers' Acceptances
               under this Agreement and stating the aggregate face amount of and
               the term (being, subject to availability, one, two, three or six
               months) applicable to such drafts. The Relevant Borrower may
               notify the Agent by telephone of its instructions with respect to
               Bankers' Acceptances, provided it shall immediately thereafter
               confirm its telephone instructions given pursuant to this Section
               7.5.2 by a Borrowing Notice;

<PAGE>
                                     - 68 -

7.5.3          each Borrower authorizes each Lender, and for this purpose
               appoints each Lender the lawful attorney of such Borrower, to
               complete, sign and endorse drafts on its behalf in handwriting or
               by facsimile or mechanical signature in accordance with each
               Borrowing Notice and, once so completed, signed and endorsed, and
               following acceptance of them as a Bankers' Acceptance under this
               Agreement, then purchase, discount or negotiate such Bankers'
               Acceptances in accordance with the provisions of this Section
               7.5. Drafts so completed, signed and endorsed and negotiated on
               behalf of each Borrower shall bind such Borrower as if so
               performed by an authorized officer of such Borrower;

7.5.4          the face amount of each Bankers' Acceptance to be accepted by a
               Lender shall be a whole number multiple of Cdn.$100,000;

7.5.5          the Agent shall have the discretion to restrict the term and the
               Maturity Date of an issue of Bankers' Acceptances. The Maturity
               Date of each issue of Bankers' Acceptances must be no later than
               the Due Date of the relevant Credit Facility. There shall not be
               more than ten (10) issues of Bankers' Acceptances maturing during
               any single calendar month under the Credit Facilities, unless the
               Agent otherwise agrees;

7.5.6          each Lender shall purchase each Bankers' Acceptance accepted by
               it at a discount to yield (excluding the Acceptance Fee) an
               interest rate per annum equal to such Lender's BA Reference Rate
               on each Acceptance Date of Bankers' Acceptances issued pursuant
               to this Agreement. The obligation of the Relevant Borrower to pay
               to a Lender the face amount of each Bankers' Acceptance so
               purchased by it upon the maturity of such Bankers' Acceptance
               shall continue in full force and effect notwithstanding such
               purchase. A Lender may at any time and from time to time hold,
               sell, rediscount or otherwise dispose of any Bankers' Acceptance
               purchased by it;

7.5.7          when Bankers' Acceptances are being issued, each Lender shall,
               subject to Section 13.20.7, transfer to the Agent at the Agent's
               Branch of Account for value on the Acceptance Date immediately
               available Canadian dollars in an amount equal to the net proceeds
               of sale of all Bankers' Acceptances purchased by it on such
               Acceptance Date, net of the applicable Acceptance Fee in respect
               of such Bankers' Acceptances. Subject to Section 5.6, the Agent
               will transfer such amounts to the Relevant Borrower by depositing
               the same for value on the applicable Acceptance Date to the
               Designated Account of the Relevant Borrower;

7.5.8          the Acceptance Fee applicable to each Bankers' Acceptance shall
               be calculated upon the principal face amount of such Bankers'
               Acceptance for the duration of its term on the basis of the
               actual number of days from the date of its acceptance by a Lender
               up to the Maturity Date of the Bankers' Acceptance calculated on
               the basis of a 365 day year at the rates per annum provided for
               in Section 2.3 or 3.4, as applicable;

<PAGE>
                                     - 69 -

7.5.9          the Relevant Borrower shall provide for the payment to the
               Lenders at the Agent's Branch of Account of the full face amount
               of each issue of Bankers' Acceptance on its Maturity Date or, on
               the occurrence of an Event of Default, prior to its Maturity Date
               forthwith pursuant to Section 12.3. The Relevant Borrower shall
               not be entitled to prepay any Bankers' Acceptances. Where an
               issue of Bankers' Acceptances matures and the Relevant Borrower
               does not provide for payment or otherwise designate the manner in
               which payment is to be made in accordance with the provisions of
               this Agreement, the Borrower shall be deemed to have provided for
               payment of the aggregate face amount of such Bankers' Acceptances
               by Conversion into a Prime Rate Loan under the Credit Facility
               pursuant to which the Bankers' Acceptances were issued in a
               principal amount equal to the aggregate face amount of the
               Bankers' Acceptances on their Maturity Date;

7.5.10         the Relevant Borrower shall not claim from any Lender any days of
               grace for the payment at maturity of any Bankers' Acceptances
               presented and accepted by the Lender pursuant to this Agreement.
               In addition, the Relevant Borrower waives any demand, presentment
               for payment, protest, noting of protest, dishonour, notice of
               dishonour and any other notice or defence to payment which might
               otherwise exist if for any reason a Bankers' Acceptance is held
               by the Lender in its own right at the maturity thereof and the
               Relevant Borrower shall pay the Agent for the account of such
               Lender the face amount of any such Bankers' Acceptance on its
               Maturity Date;

7.5.11         any executed drafts to be used as Bankers' Acceptances which are
               held by the Agent or a Lender need only be held in safekeeping
               with the same degree of care as if they were such Lender's own
               property and such Lender was keeping them at the place at which
               they are to be held. Each Borrower shall, by written notice to
               the Agent, designate the Persons authorized to give the Agent
               instructions regarding the manner in which drafts are to be
               completed and the time at which they are to be issued;

7.5.12         the Relevant Borrower agrees to forthwith reimburse each Lender
               in full any amount paid by the Lender in respect of any Bankers'
               Acceptance accepted by the Lender hereunder on its behalf;
               however, the Relevant Borrower shall not be obliged to indemnify
               any Lender for any fees or expenses caused by the gross
               negligence or willful misconduct of such Lender;

7.5.13         the obligations of each Borrower under this Section 7.5 are
               unconditional, shall not be subject to any qualification or
               exception whatsoever and shall be fulfilled strictly in
               accordance with the terms of this Agreement under all
               circumstances including the following:

               7.5.13.1  any lack of validity or enforceability of any draft
                         accepted by any Lender as a Bankers' Acceptance; or

               7.5.13.2  the existence of any claim, set-off, defence or
                         otherwise which the Relevant Borrower may have at any
                         time against the holder of a

<PAGE>
                                     - 70 -

                         Bankers' Acceptance, any Lender or any other Person or
                         entity whether in connection with this Agreement or
                         otherwise;

7.5.14         each Borrower shall execute and deliver such bankers' acceptances
               agreements, indemnities, directions, powers of attorney and other
               assurances as any Lender may reasonably require from time to time
               with respect to any issue of Bankers' Acceptances. Such documents
               shall take effect subject to Section 1.11;

7.5.15         if any provision of this Agreement has the effect of requiring a
               Bankers' Acceptance to be prepaid, such prepayment is effected by
               paying to the Agent an amount in Canadian dollars equal to the
               face amount of such Bankers' Acceptance and the Agent crediting
               the amount so received by it into an interest bearing account
               with it in the name of the Relevant Borrower from which the only
               withdrawal which may be made is to pay the Lender accepting such
               Bankers' Acceptance the face amount of such Bankers' Acceptance
               on its Maturity Date.

7.5.16         If a Lender is not permitted by Applicable Law, or does not by
               virtue of customary market practice, accept drafts for the
               purpose of subsequent sale as a bankers' acceptance (a
               "NON-ACCEPTANCE LENDER"), each time a Relevant Borrower gives a
               Borrowing Request for an issue of Bankers' Acceptances, such
               Non-Acceptance Lender shall, in lieu of accepting and purchasing
               Bankers' Acceptances pursuant to this Section 7.5, make an
               advance in Canadian dollars to the Relevant Borrower (a "B/A
               EQUIVALENT ADVANCE") in the amount equal to the Acceptance
               Proceeds which would be derived from a hypothetical sale of
               drafts accepted by it ("NOTIONAL ACCEPTANCES") in the aggregate
               face amount of its Rateable Share of such requested issue of
               Bankers' Acceptances at a discount rate that yields to such
               Non-Acceptance Lender (excluding the Acceptance Fee) an interest
               rate per annum equal to such Lender's BA Reference Rate. Any B/A
               Equivalent Advance shall be repayable on the maturity of such
               issue of Bankers' Acceptances. A Non-Acceptance Lender shall be
               entitled to deduct from the amount of its B/A Equivalent Advance
               to be paid to the Agent pursuant to Section 7.5.7 an amount equal
               to the Acceptance Fee determined in accordance with Section 7.5.8
               that would have been payable to it with respect to the Notional
               Acceptances corresponding to the B/A Equivalent Advance. For the
               purposes of this Agreement each reference to an issue of Bankers'
               Acceptances shall be deemed to include, where relevant, B/A
               Equivalent Advances, with the necessary changes being made to fit
               the context.

7.6            STANDBY CREDITS

               The following provisions apply to Advances obtained by way of
issuance of Standby Credits:

7.6.1          A Standby Credit may be requested by a Corporate Borrower to be
               issued by the Issuing Bank under the Swing Line in Canadian
               dollars or U.S. Dollars or, with the prior consent of the Agent
               and the Issuing Bank, any other Currency;

<PAGE>
                                     - 71 -

7.6.2          The Issuing Bank shall have the right, in its sole discretion, to
               limit the Maturity Date of any Standby Credit. Following the
               occurrence of a Default or Event of Default, the Issuing Bank
               shall have the right, in its sole discretion, to extend the
               Maturity Date of any Standby Credit whether or not any other
               party requests or objects to such extension;

7.6.3          Notwithstanding any other provision of this Section 7.6, a
               Corporate Borrower may not request the issuance of any Standby
               Credit (i) if the aggregate Outstanding Amount of all Standby
               Credits outstanding under the Revolver Facility would, after the
               issuance of the Standby Credit in question, exceed
               Cdn.$4,000,000; or (ii) having a term which would extend beyond
               the Revolver Facility Due Date;

7.6.4          Reimbursement

               7.6.4.1  The Relevant Borrower unconditionally and irrevocably
                        authorizes the Issuing Bank to pay the amount of any
                        demand made on the Issuing Bank in accordance with the
                        terms of any Standby Credit issued for its account on
                        demand without requiring proof of the Relevant
                        Borrower's agreement that the amount so demanded was due
                        and notwithstanding that the Relevant Borrower may
                        dispute the validity of any such demand or payment;

               7.6.4.2  The Relevant Borrower shall indemnify and save the
                        Issuing Bank harmless from and against, and reimburse
                        the Issuing Bank for, any and all payments and losses
                        and expenses (other than lost profits) which it may
                        suffer or incur arising in any manner whatsoever out of
                        the issuance of any Standby Credit, including the making
                        of, or refusal to make, any payments demanded thereunder
                        (including any court costs and legal costs on a
                        substantial indemnity scale incurred in connection with
                        any proceedings to restrain the Issuing Bank from
                        making, or to compel the Issuing Bank to make, any such
                        payment). This indemnity shall be unconditional, shall
                        not be subject to any qualification or exception
                        whatsoever and shall not be lessened, invalidated or
                        otherwise prejudiced for any reason whatsoever including
                        by reason of (i) any lack of validity or enforceability
                        of the Standby Credit, (ii) any claim, set-off, defence
                        or other right the Relevant Borrower may have against
                        the beneficiary of the Standby Credit, including any
                        claim that a demand for payment under the Standby Credit
                        is fraudulent or (iii) any of the matters referred to in
                        Section 7.6.5.

7.6.5          Issuing Bank Not Liable

               7.6.5.1  The Issuing Bank shall not have any responsibility or
                        liability for, or duty to inquire into, the sufficiency,
                        authorization, execution, signature, endorsement,
                        correctness, genuineness or legal effect of any

<PAGE>
                                     - 72 -

                        certificate or other document presented to it pursuant
                        to any Standby Credit and the Relevant Borrower for whom
                        such Standby Credit was issued fully and unconditionally
                        assumes all risks with respect to the same and, without
                        limiting the generality of the foregoing, all risks of
                        the acts or  omissions of any beneficiary of any Standby
                        Credit with respect to the use by any beneficiary of any
                        Standby Credit. The Issuing Bank shall not be
                        responsible:

                        7.6.5.1.1  for the validity or genuineness of
                                   certificates or other documents delivered
                                   under or in connection with any Standby
                                   Credit that appear on their face to be in
                                   order, even if such certificates or other
                                   documents should in fact prove to be invalid,
                                   fraudulent or forged;

                        7.6.5.1.2  for errors, omissions, interruptions or
                                   delays in transmission or delivery of any
                                   messages by mail, cable, telegraph, telefax,
                                   wireless or otherwise, whether or not they
                                   are in code;

                        7.6.5.1.3  for errors in translation or for errors in
                                   interpretation of technical terms or for
                                   errors in the calculation of amounts demanded
                                   under any Standby Credit;

                        7.6.5.1.4  for any failure or inability by the Issuing
                                   Bank or anyone else to make payment under any
                                   Standby Credit as a result of any Applicable
                                   Law or by reason of any control or
                                   restriction rightfully or wrongfully
                                   exercised by any Person asserting or
                                   exercising governmental or paramount powers;

                        7.6.5.1.5  for any other consequences arising from
                                   causes beyond the control of the Issuing
                                   Bank; or

                        7.6.5.1.6  any error, neglect or default of any
                                   correspondent of the Issuing Bank, or of any
                                   advising, confirming, negotiating or paying
                                   bank,

                        and none of the above shall lessen, invalidate or
                        otherwise prejudice any of the rights of the Issuing
                        Bank hereunder or the obligations of the Relevant
                        Borrower under Section 7.6.4.2. In furtherance and not
                        in limitation of the foregoing provisions, it is agreed
                        that any payment made by the Issuing Bank in good faith
                        in response to any demand for payment under a Standby
                        Credit shall be deemed to have been properly made and
                        shall be binding upon all parties hereto and shall not
                        result in any liability of the Issuing Bank to the other
                        parties hereto and shall not lessen, invalidate or
                        otherwise prejudice the obligations of the Relevant
                        Borrower under Section 7.6.4.2.

<PAGE>
                                     - 73 -

               7.6.5.2  Notwithstanding the provisions of this Section 7.6.5, a
                        Corporate Borrower shall not be responsible for, and the
                        Issuing Bank shall not be relieved of responsibility
                        for, any willful misconduct or gross negligence of or by
                        the Issuing Bank.

7.6.6          Payments Under Standby Credits: Each payment made by the Issuing
               Bank under or otherwise in respect of a Standby Credit which is
               not reimbursed to the Issuing Bank pursuant to Section 7.6.4.2 on
               the date such payment is made shall be deemed to constitute an
               Advance under the Swing Line on the date such payment is made and
               shall be repaid by the Relevant Borrower to the Swing Line Lender
               accordingly. Each such payment made in Canadian dollars shall be
               treated as a Prime Rate Loan. Each such payment made in U.S.
               Dollars shall be treated as a Base Rate Loan. Each such payment
               made in any other Currency shall be treated as a Prime Rate Loan
               in the amount of Canadian Dollars equal to the equivalent of such
               other Currency payment determined at the spot rate of exchange
               quoted by the Swing Line Lender at the time such payment is made.

7.6.7          Standby Credit Fees: The Relevant Borrower shall pay a fee to the
               Issuing Bank in advance on the date of issuance of each Standby
               Credit for the period from and including the date of issuance of
               the Standby Credit to and including the stated expiry date
               thereof, based on the stated amount of the Standby Credit on such
               issuance date. Such fee shall be payable in the Currency in which
               the applicable Standby Credit is denominated. The fee payable
               shall be determined as the product obtained by multiplying (i)
               the stated amount of such Standby Credit times (ii) the
               Applicable Margin and times (iii) the fraction of the number of
               days from the date of issue until the Maturity Date of such
               Standby Credit divided by the actual number of days in the year.
               In addition, the Relevant Borrower shall pay the Issuing Bank's
               prevailing scheduled rates for services (including advices,
               amendments and renewals) provided by the Issuing Bank pertaining
               to outstanding Standby Credits. All amounts paid to the Issuing
               Bank pursuant to this Section 7.6.7 shall be retained by the
               Issuing Bank for its own account.

7.6.8          Acceleration: On the Revolver Facility Due Date or upon the Agent
               making a declaration under Section 12.2.2, the maximum amount of
               the contingent liability of the Issuing Bank under any Standby
               Credit which is then outstanding shall immediately become due and
               payable notwithstanding that the Issuing Bank has not at such
               date been required to make payment under any such Standby Credit.
               Any such amount shall be paid to the Agent and shall be credited
               to the Cash Collateral Account and held in the manner
               contemplated by Section 7.6.10 as security for the repayment of
               future indebtedness of that Borrower to the Issuing Bank in
               respect of each Standby Credit issued for its account which are
               drawn down, and, pending the expiry of all such outstanding
               Standby Credits, any such amounts held by the Agent shall bear
               interest at the rate established by the Agent from time to time
               as that payable in respect of 30 day term deposits of the Agent
               for monies of like amount.

<PAGE>
                                     - 74 -

7.6.9          Conflict: Each Standby Credit shall be subject to the Issuing
               Bank's customary Standby Credit terms and procedures from time to
               time in effect and shall be in a form acceptable to the Issuing
               Bank. Each Borrower shall execute and deliver such standard form
               indemnities, bonds and other assurances as the Issuing Bank may
               reasonably require from time to time with respect to Standby
               Credits and such standard form indemnities, bonds and other
               assurances shall take effect subject to Section 1.11. A Standby
               Credit shall in no event contain provisions requiring the Issuing
               Bank to satisfy itself, prior to payment thereunder, as to any
               conditions for a drawing thereunder other than the presentation
               of prescribed documents.

7.6.10         Prepayment: If any provision of this Agreement has the effect of
               requiring a Standby Credit to be prepaid, such prepayment is
               effected by providing the Agent with cash cover in the Currency
               in which that Standby Credit is denominated, by reducing, whether
               by partial cancellation or otherwise, (in accordance with the
               terms of this Agreement and the relevant Standby Credit) the
               amount that may be demanded under that Standby Credit (or by such
               amount automatically reducing in accordance with the terms of the
               relevant Standby Credit) or by cancelling that Standby Credit by
               returning the original to the Issuing Bank together with written
               confirmation (in form and substance satisfactory to the Issuing
               Bank) from the beneficiary that the Issuing Bank has no further
               liability under that Standby Credit. "CASH COVER" is provided, in
               whole or in part, in respect of a Standby Credit at any time by
               paying an amount, in the Currency in which that Standby Credit is
               denominated, equal to the whole or a part of the maximum amount
               which may be drawn under such Standby Credit at such time to the
               Agent, to be held by the Agent pursuant to the Relevant
               Borrower's debenture listed in Schedule L and the Agent paying
               the amount so received by it into an interest bearing account
               with it in the name of the Relevant Borrower (a "CASH COLLATERAL
               ACCOUNT") from which the only withdrawals which may be made until
               the relevant Standby Credit is otherwise cancelled or expires or
               prepaid in its entirety are withdrawals to pay the Issuing Bank
               amounts due and payable to it under this Agreement following any
               payment made by it under such Standby Credit. If a Standby Credit
               is cancelled or expires or is returned to the Issuing Bank by the
               beneficiary for cancellation without payment, then, so long as no
               Event of Default has occurred, the Relevant Borrower shall
               thereafter be free to withdraw any remaining credit balance in
               the Cash Collateral Account pertaining to such Standby Credit.

7.7            LIBOR LOANS - MARKET DISRUPTION

               If at any time prior to the commencement of any Interest Period,
any Lender (an "AFFECTED LENDER") shall have determined and gives notice to the
Agent (which will promptly notify the Borrowers and the other Lenders) that it
has become unlawful or impossible for that Lender to make, maintain or fund any
LIBOR Loan or that the Lender's ability to make, maintain or fund such LIBOR
Loan has been materially adversely affected because:

<PAGE>
                                     - 75 -

7.7.1          of circumstances affecting the London interbank market or
               elsewhere which result in there not existing adequate and fair
               means for ascertaining the rate of interest applicable to such
               LIBOR Loan during such Interest Period;

7.7.2          deposits in U.S. Dollars are not being offered to a Lender in the
               London interbank market or elsewhere in sufficient amounts in the
               ordinary course of business; or

7.7.3          any Change in Law or any change in national or international,
               financial, political or economic conditions or currency exchange
               rates or exchange control,

then, from and after the date of such determination for so long as such
condition shall continue to exist, no Borrower shall have the right to obtain or
maintain a participation in any LIBOR Loan from the Affected Lender. When the
Affected Lender has made any such determination, upon notice thereof by the
Agent to the Relevant Borrower, the Relevant Borrower shall on the last day of
the then current Interest Period applicable to the participation of the Affected
Lender in any LIBOR Loan owing by the Relevant Borrower to such Lender either
(i) repay to the Affected Lender its participation in such LIBOR Loan together
with all unpaid interest accrued thereon to the date of repayment and all other
amounts payable to the Affected Lender hereunder in respect of such LIBOR Loan
or (ii) convert its participation in such LIBOR Loan to another form of Loan
under the same Credit Facility in the same Currency.

7.8            ILLEGALITY

               If any Change in Law shall make it unlawful or impossible for any
Lender (an "AFFECTED LENDER") to make, maintain or fund its participation in any
Advance, such Affected Lender shall promptly give notice to the Agent which will
promptly give notice to the Borrowers and the other Lenders. Upon the Agent
giving such notice the obligation of the Affected Lender to make or continue its
participation in such Advances, which it would be unlawful or impossible for
such Lender to make or continue, shall be suspended for so long as such
condition shall exist. Upon receipt of such notice the Relevant Borrower shall
either (i) convert each participation of the Affected Lender in each affected
Advance to another Type of Advance under the same Credit Facility in the same
Currency or (ii) repay the Affected Lender's participation in such Advance
together with all unpaid interest accrued thereon to the date of repayment and
all other amounts payable hereunder to such Affected Lender in respect of such
Advance, in either case (A) on the Maturity Date applicable to each such
Advance, if the Affected Lender may lawfully continue to maintain and fund its
participation in such Advance to such date, or (B) immediately if the Affected
Lender may not lawfully continue to fund and maintain its participation in such
Advance to such dates and the Relevant Borrower promptly shall pay any
compensation owing to such Lender under Section 8.3 in consequence thereof. If
the Relevant Borrower fails to select (i) or (ii), the Relevant Borrower shall
be deemed to have selected to prepay such Affected Lender's participation in any
affected Advance.

7.9            FACILITY EXCESSES BY REASON OF FOREIGN CURRENCY FLUCTUATIONS

               If and each time the Agent determines (which determination shall
be conclusive and bind the Borrowers, absent manifest error) that the
Outstanding Amount of all Advances under either Credit Facility exceeds 102% of
the Revolver Commitment or Total Term

<PAGE>
                                     - 76 -

Commitment, as the case may be, by reason of fluctuations in exchange rates, the
Agent may request (or if such excess is more than five percent (5%) of the
Revolver Commitment or Total Term Commitment, as applicable, shall request) the
Borrowers to repay the entire excess over the Revolver Commitment or Total Term
Commitment, as applicable. Within five Banking Days of the receipt of any such
request, each Relevant Borrower with Advances outstanding under the relevant
Credit Facility shall repay to the Lenders such Advances outstanding under such
Credit Facility as may be required to ensure that such excess is eliminated.

7.10           EVIDENCE OF INDEBTEDNESS

7.10.1         The indebtedness of each Borrower to each Lender hereunder
               resulting from all Loans shall be evidenced by the loan accounts
               which shall be opened and maintained by the Agent. The Agent
               shall debit in its accounts the amount of all such indebtedness
               and shall credit therein each repayment of such indebtedness by
               appropriate entries. Entries recorded by the Agent or its
               employees on a loan history statement for each Borrower, shall be
               prima facie evidence thereof, absent manifest error. The failure
               of the Agent to record any such amount or date shall not affect
               the obligation of a Borrower to pay amounts due hereunder in
               accordance with this Agreement.

7.10.2         Any Lender may request that its Rateable Share in Advances be
               evidenced by a promissory note (a "NOTE"). In such event, each
               Borrower shall prepare, execute and deliver to such Lender a Note
               payable to the order of such Lender in a form supplied by the
               Agent. Thereafter, the Rateable Share of such Lender in all
               outstanding Advances evidenced by such Note and interest thereon
               shall at all times (including after any transfer pursuant to
               Section 14.5) be represented by one or more Notes payable to the
               order of the payee named therein or any Transferee, except to the
               extent that any such Lender or Transferee subsequently returns
               any such Note for cancellation and requests that its Rateable
               Share on outstanding Advances once again be evidenced as
               described in Section 7.10.1.

                                    ARTICLE 8
                                FEES AND EXPENSES

8.1            COMMITMENT FEE

8.1.1          The Corporate Borrowers and Gerdau Steel shall pay to the Agent
               for the account of the Lenders a commitment fee in respect of the
               Revolver Facility calculated at the Applicable Margin. Such
               Applicable Margin shall be computed upon the amount by which the
               Maximum Amount of the Revolver Facility exceeds the daily
               aggregate Outstanding Amount of all Advances under the Revolver
               Facility.

8.1.2          The Corporate Borrowers and Gerdau Steel shall pay to the Swing
               Line Lender for its own account a commitment fee in respect of
               the Swing Line calculated at the Applicable Margin. Such
               Applicable Margin shall be computed upon the amount by which the
               Swing Line Amount exceeds the daily aggregate Outstanding Amount
               of all Advances under the Swing Line.

<PAGE>
                                     - 77 -

8.1.3          Each commitment fee payable pursuant to this Section 8.1 shall be
               calculated for each calendar quarter from and after September 27,
               1999 until the Revolver Facility Due Date and shall be payable
               quarterly in arrears on the third Banking Day of the immediately
               following calendar quarter. The first payment of such fee shall
               be due and payable on January 6, 2000 and the final payment of
               such fee shall be due and payable on the Revolver Facility Due
               Date.

8.2            PAYMENT OF COSTS AND EXPENSES

               Whether or not any Borrower obtains any Advances hereunder,
Gerdau Steel and the Borrowers shall pay to the Syndicate on demand all
reasonable out-of-pocket costs and expenses of the Syndicate and each of their
respective agents, officers and employees and any receiver or receiver-manager
appointed by the Agent or by a court in connection with this Agreement or any
other Loan Document, including:

8.2.1          the preparation, execution, filing and registration of this
               Agreement or any of the other New Loan Documents, any actual or
               proposed amendment or modification of any of the Loan Documents
               or any waiver hereunder or thereunder and all instruments
               supplemental or ancillary thereto;

8.2.2          obtaining advice as to any Lender's rights or obligations under
               any of the Loan Documents; and

8.2.3          the defence, establishment, protection or enforcement of any of
               the rights of any Lender under any of the Loan Documents
               including all costs and expenses of establishing the validity,
               effect, perfection, enforceability and priority of, or of
               collection of amounts owing under, any of the Loan Documents or
               of any enforcement of the Security,

and further including all of the fees, expenses and disbursements of the
Lenders' Counsel, on a substantial indemnity scale, incurred in connection with
any of the foregoing, and including all Sales Taxes payable by any Lender
(whether refundable or not) on all such fees, costs and expenses.

8.3            INDEMNITY

               The Relevant Borrower shall compensate each Lender for all losses
and expenses including any losses and expenses sustained by any Lender in
connection with the liquidation or re-employment in whole or in part of deposits
or funds borrowed or acquired by the Lender to fund any Advance to the Relevant
Borrower which the Lender may sustain or incur (i) if for any reason a Drawdown,
Conversion or Rollover does not occur on a date requested by such Borrower, (ii)
if the Relevant Borrower fails to give any notice required to be given by it
hereunder, in the manner and at the time specified herein, (iii) as a
consequence of any failure by the Relevant Borrower to repay any Loan
Obligations when required by the terms of this Agreement, or (iv) if the whole
or any part of any Advance owing by the Relevant Borrower is paid to the Lender
or converted to another form of Advance other than on the Maturity Date thereof.
A certificate of a Lender provided to the Agent setting forth the amounts
claimed by the Lender as compensation under this Section 8.3 in respect of such
losses and expenses shall be

<PAGE>
                                     - 78 -

conclusive and binding on the parties hereto, absent manifest error, and the
Relevant Borrower shall forthwith pay to the Agent for the account of the Lender
the amount of compensation set out in each such certificate.

8.4            AGENCY FEE

               The Borrowers and Gerdau Steel shall pay the Agent for its own
account the agency fees stipulated in the Agency Fee Agreement at the times
therein provided.

                                    ARTICLE 9
                             SECURITY AND INSURANCE

9.1            SECURITY

               In addition to the Existing Security, and as security for the due
and punctual payment and performance of all Loan Obligations of each Borrower,
Gerdau Steel and the Borrowers shall deliver or cause to be delivered to and for
the benefit of the Syndicate, the New Loan Documents before the Effective Time.

9.2            PERFECTION

               Each of Gerdau Steel and the Borrowers shall ensure that all the
Security referred to in Section 9.1 is executed and delivered and that the Liens
created thereby and by all other Security are registered, filed, recorded and
perfected at or prior to the time the Implementation Notice is given in all
jurisdictions reasonably required by the Agent.

9.3            SECURITY EFFECTIVE NOTWITHSTANDING DATE OF ADVANCE

               The Liens constituted or required to be created under the
Security shall be effective and the undertakings therein in respect thereto
shall be continuing, whether the monies hereby or thereby secured or any part
thereof shall be advanced before or after or at the same time as the creation of
any such Liens or before or after or upon the date of this Agreement. The
Security shall not be affected by any payments on the Advances, or by the
balance of the Advances fluctuating from time to time, but shall constitute
continuing security to the Lenders for the Loan Obligations from time to time.

9.4            NO MERGER

               The security constituted by the Security shall not merge in any
other security. No judgment obtained by the Agent shall in any way affect any of
the provisions of this Agreement or the Security. For greater certainty, no
judgment obtained by any Lender shall in any way affect the Obligation of Gerdau
Steel or any Borrower to pay interest and fees at the rates, times and in the
manner provided in this Agreement.

9.5            EXISTING SECURITY

9.5.1          Each of Gerdau Steel and the Borrowers confirms that the Existing
               Security shall remain in full force and effect notwithstanding
               amendments to the Existing Loan

<PAGE>
                                     - 79 -

               Agreement reflected in this Agreement and shall continue to
               secure the Loan Obligations until repayment in full of all of the
               Loan Obligations. For greater certainty, (i) Courtice agrees with
               and confirms to the Lenders that as at the Effective Time no
               amount has been paid by it in reduction of the amounts secured
               under the Courtice Debenture, as amended by Amending Agreement
               No. 1 and Amending Agreement No. 3, or the Courtice Supplemental
               Debenture, as amended by Amending Agreement No. 2, and that such
               Security collectively shall secure Loan Obligations of Courtice
               in an aggregate principal amount of up to Cdn. $100,000,000 plus
               interest thereon at a rate of 20% per annum, (ii) MRM agrees with
               and confirms to the Lenders that as at the Effective Time no
               amount has been paid by it in reduction of the amounts secured
               under the MRM Debenture, as amended by Amending Agreement No. 4,
               and that the MRM Debenture, as amended by Amending Agreement No.
               4, shall secure Loan Obligations of MRM in an aggregate principal
               amount of up to Cdn. $80,000,000 plus interest thereon at the
               rate of 25% per annum and (iii) each of Gerdau Steel and the
               Borrowers agrees with and confirms to the Lenders that as at the
               Effective Time no amount has been paid by it in reduction of the
               amounts secured under the Cdn.$350,000,000 debenture dated as of
               September 27, 1999 or December 23, 1999, as applicable, issued by
               it to the Agent and that such debentures collectively shall
               secure Loan Obligations of each of Gerdau Steel and the Borrowers
               in an aggregate principal amount of up to U.S.$100,000,000.00 (or
               the Canadian Dollar equivalent) plus interest thereon at the rate
               of 25% per annum.

9.5.2          Each of the parties hereto acknowledges that the Lien by way of
               floating charge originally created under Section 3.01(b) of the
               MRM Debenture to the extent such Lien applied to the personal and
               moveable property of MRM that is not property of the nature
               described in Section 3.01(a)(i) to (iv) of the MRM Debenture has
               been released.

9.6            INSURANCE

               Each Corporate Borrower will insure, with insurance companies and
in scope satisfactory to the Agent, the Mortgaged Property, and during the term
of this Agreement keep the Mortgaged Property so insured to the extent of its
full insurable value, on a replacement cost basis, against "All-Risks",
including loss or damage by fire, boiler explosion and other casualty, such
policies to contain the usual "Extended Coverage" and "Replacement Cost"
endorsements and the Agent shall be noted therein as a named insured and first
loss payee. Each such policy shall bear endorsements and a mortgage clause in
form and substance satisfactory to the Agent making all proceeds payable
thereunder payable to the Agent as first loss payee. Further, each Corporate
Borrower will at all times maintain general comprehensive liability insurance,
with insurance companies and in scope satisfactory to the Agent, against, inter
alia, claims for personal injury, death or property damage, such insurance to
afford protection in an amount not less than FIVE MILLION DOLLARS. No Borrower
will do or permit anything to be done whereby any of the aforementioned policies
may be vitiated and will pay all premiums and sums of money necessary for
maintaining every such insurance as aforesaid, as the same become due.

<PAGE>
                                     - 80 -

9.7            PARTIAL DISCHARGES OF SECURITY

               Unless an Event of Default has occurred, the Agent will from time
to time upon request of a Borrower execute partial discharges of the Security
prepared by the Borrower (in form and substance satisfactory to the Agent) with
respect to any of its assets disposed of in accordance with Section 11.3.1.1.

9.8            OBLIGATIONS SECURED

               The parties acknowledge that certain of the Existing Security and
other Loan Documents are in generic form and have not been customized for
purposes of this transaction. Accordingly, the parties agree that
notwithstanding anything to the contrary contained in such Existing Security or
other Loan Documents, such Existing Security and other Loan Documents secure the
applicable Obligor's Loan Obligations under this Agreement and/or each guarantee
of each Borrower's Loan Obligations under this Agreement.

9.9            ADDITIONAL OBLIGATIONS SECURED

               For the purposes of the Security and Section 13.25, the
obligations owing by each of Gerdau Steel and the Borrowers to each Hedging
Lender under each Hedging Instrument (whether or not it is an Eligible Hedging
Instrument) shall be deemed to be Loan Obligations due and owing under or
otherwise in respect of this Agreement and shall be guaranteed and secured by
the Security.

9.10           REDEMPTION OF SECURITY

               Upon and subject to (a) none of the Lenders being under any
obligation to make advances or provide other financial accommodation to any of
the Borrowers under or pursuant to this Agreement and (b) and the Loan
Obligations having been repaid and discharged in full, as soon as reasonably
practicable thereafter and at the request and cost of the Borrowers, the Agent
shall (but subject to the rights and claims of any Person having prior right
thereto) reassign to the Borrowers any remaining Mortgaged Property held by the
Agent by or pursuant to this Agreement and release or otherwise discharge the
Liens constituted by the Security, or at the specific request and direction of
the Borrowers, assign any remaining Security to any Person designated by the
Borrowers, in each case without representation or warranty of any kind and, in
the case of an assignment, without recourse of any kind.

9.11           REPAYMENT IN FULL

               Each reference in this Agreement to payment or repayment of Loan
Obligations in full, and words to like effect, means payment or repayment of
such Loan Obligations in cash in full in accordance with the express provisions
of this Agreement, without regard to any compromise, reduction or disallowance
of all or any item or part thereof by virtue of the application of any
bankruptcy, insolvency or other similar such laws or general principles of
equity.

<PAGE>
                                     - 81 -

                                   ARTICLE 10
                         REPRESENTATIONS AND WARRANTIES

10.1           REPRESENTATIONS AND WARRANTIES

               To induce the Lenders to make the Credit Facilities available to
each Borrower, each of Gerdau Steel and the Borrowers represents and warrants,
with respect to itself and (to the extent the context so admits) each other
Gerdau S.A. Group Member, to and in favour of the Syndicate as follows:

10.1.1         Incorporation and Status. It is duly incorporated or formed and
               validly existing under the laws of its jurisdiction of
               incorporation or formation and up-to-date in the filing of all
               corporate or partnership and similar returns under the laws of
               its jurisdiction of incorporation or formation; it has the
               corporate or partnership power and capacity to own its Business
               Assets and to carry on its business as presently carried on by it
               or as contemplated hereunder to be carried on by it.

10.1.2         Power and Capacity. It has the corporate or partnership power and
               capacity to enter into each of the Loan Documents to which it is
               a party and to do all acts and things as are required or
               contemplated under each Loan Document to be done, observed and
               performed by it.

10.1.3         Due Authorization. It has taken all necessary corporate or
               partnership action to authorize the execution, delivery and
               performance by it of each of the Loan Documents to which it is a
               party;

10.1.4         Due Execution. It has duly executed and delivered each Loan
               Document to which it is a party.

10.1.5         No Contravention. The execution and delivery by it of each Loan
               Document to which it is a party and the performance by it of its
               obligations under each such Loan Document (i) does not and will
               not contravene, breach or result in any default under its
               constating documents or other organizational documents or under
               any material mortgage, lease, agreement or other legally binding
               instrument, Permit or Applicable Law to which it is a party or by
               which it or any of its Business Assets may be bound, (ii) will
               not obligate it to grant any Lien to any Person other than the
               Syndicate, (iii) will not result in or permit the acceleration of
               the maturity of any obligation under any material mortgage,
               lease, agreement or other legally binding instrument of or
               affecting it or its Business Assets, and (iv) will not violate
               any Award which is binding on it.

10.1.6         No Consents Required. No authorization, consent or approval of,
               or filing with or notice to, any Person (including any
               Governmental Body) is required which has not been obtained in
               connection with the execution, delivery or performance by it of
               this Agreement or any of the other Loan Documents to which it is
               a party other than as agreed to in writing by the Agent.

<PAGE>
                                     - 82 -

10.1.7         Enforceability. Each of the Loan Documents to which it is party
               constitutes a legal, valid and binding obligation enforceable
               against it, in accordance with its terms, subject only to
               bankruptcy, insolvency or other statutes affecting the
               enforcement of creditors' rights in general and to general
               principles of equity under which specific performance and
               injunctive relief may be refused by a court in its discretion.

10.1.8         Title. Subject only to Permitted Liens, it has good and
               marketable title to its real and personal property (including in
               the case of Courtice, the Real Property owned by it, and, in the
               case of MRM, the Real Property owned by it) free and clear of any
               Liens and no Person has an agreement or right to acquire any such
               property other than inventory in the ordinary course of business.
               The Real Property is all of the real property in which the
               Borrowers have any freehold interest as at the date hereof.

10.1.9         Zoning and Other Matters Relating to Real Estate. The buildings
               and other structures located on the Real Estate owned or leased
               by it and the operation and maintenance thereof comply in all
               material respects with all Applicable Laws; none of such
               buildings or other structures encroaches upon any land not owned
               or leased by a Borrower; there are no restrictive covenants or
               Applicable Laws which in any way restrict or prohibit the use of
               such land, buildings or structures for the purposes for which
               they are presently being used, other than Permitted Liens; there
               are no expropriation or similar proceedings, actual or
               threatened, of which any Borrower has received notice against the
               Real Estate owned or leased by it, other than any which have been
               disclosed to the Agent in writing within five Banking Days of
               such Borrower learning of same.

10.1.10        No Work Orders. It is not aware of any work orders, directions or
               notices having been issued before the date hereof pursuant to any
               Applicable Law pertaining to its Real Estate or any environmental
               matters affecting its Real Estate. No work orders, directions or
               notices have been issued pursuant to any Applicable Law relating
               to its Real Estate or any environmental matters affecting its
               Business or its Real Estate, other than any which have been
               disclosed to the Agent in writing within five Banking Days of
               such Borrower learning of same. It has not received any
               notification from any Governmental Body that any work, repairs,
               construction or capital expenditures are required to be made in
               respect of any Real Estate or any part thereof owned or leased by
               it as a condition of continued compliance with any Applicable Law
               or any Permit issued thereunder, other than any which have been
               disclosed to the Agent in writing within five Banking Days of
               such Borrower learning of same.

10.1.11        Financial Statements. Each of its most recent financial
               statements delivered to the Syndicate pursuant to the provisions
               of this Agreement, in the form delivered to the Syndicate, has
               (except for its quarterly financial statements) been audited by
               its Auditors and has been prepared in accordance with generally
               accepted accounting principles consistently applied throughout
               the period indicated and fairly, in all material respects,
               presents its financial condition or business to which

<PAGE>
                                     - 83 -

               such financial statements relate and the financial information
               presented therein for the period and as at the date thereof. The
               notes to such financial statements do not contain any
               misstatement of a material fact nor do they omit to state a
               material fact required to make any statement contained therein
               not untrue or misleading. Since the date of the last financial
               statements delivered to the Agent, there has been no development
               which has had or will have a Material Adverse Effect.

10.1.12        No Litigation. There is no Litigation against or involving it
               whether in progress or, to the best of its knowledge, threatened,
               which, if determined adversely to it, would have a Material
               Adverse Effect, other than any which has been disclosed to the
               Agent in writing within five Banking Days of such Borrower
               learning of same. No event has occurred which might reasonably be
               expected to give rise to any such proceedings, and there is no
               Award outstanding against it which has or could have a Material
               Adverse Effect, other than any which has been disclosed to the
               Agent in writing within five Banking Days of such Borrower
               learning of same.

10.1.13        Permits, etc. It is duly registered and qualified and holds all
               Permits necessary or appropriate to carry on Business in all
               jurisdictions where the character of the properties owned by it
               or the nature of the Business transacted by it makes such
               registration or qualification necessary under the laws of such
               jurisdiction; all such Permits are in full force and effect; it
               is in compliance in all material respects with the terms and
               conditions of all such Permits applicable to it; and there are no
               proceedings in progress or to the best of its knowledge, pending
               or threatened which may reasonably be expected to result in the
               revocation, cancellation, suspension or any adverse modification
               of any of such Permits.

10.1.14        Hazardous Substances. Its Business is being conducted in material
               compliance with Applicable Law of each jurisdiction in which its
               Business is carried on and its Business is in material compliance
               with applicable Environmental Law and for greater certainty and
               without limiting the generality of the foregoing:

               10.1.14.1  its Business has been operated and has received,
                          handled, used, stored, treated, shipped and disposed
                          of at all times all Hazardous Substances in material
                          compliance with Environmental Law and there are no
                          Hazardous Substances located on any of its Real Estate
                          other than those on such property in material
                          compliance with Environmental Law;

               10.1.14.2  there are no PCBs, including any monochlorinated
                          biphenyl or polychlorinated biphenyl, or any mixture
                          which contains one or more of them, in excess of
                          concentrations of 50 parts per million or any
                          equipment or containers containing PCB's in excess of
                          concentrations of 50 parts per million on any of its
                          Real Estate;

               10.1.14.3  none of the buildings or other structures located on
                          any of its Real Estate contain any friable asbestos;

<PAGE>
                                     - 84 -

               10.1.14.4  there are no underground storage vessels located on
                          any of its Real Estate; and

               10.1.14.5  there have been no unrectified spills, releases,
                          deposits or discharges of any Hazardous Substances on
                          or near any of its Real Estate, except in material
                          compliance with Environmental Law, nor has any of its
                          Real Estate been used at any time by any Person as a
                          landfill or waste disposal site, except for the Real
                          Estate of MRM which is used by MRM and has been used
                          by MRM's predecessors in title in the course of metal
                          recycling and steel manufacturing and fabricating
                          carried out on MRM's Real Estate.

10.1.15        Environmental Matters. Except as disclosed in Schedule N (none of
               which matters so disclosed are material):

               10.1.15.1  There are no existing, pending or threatened:

                          10.1.15.1.1  claims, complaints, notices or requests
                                       received by it in writing or of which it
                                       is aware with respect to any alleged
                                       violation of or alleged liability under
                                       any Environmental Law relating to any of
                                       its Real Estate; or

                          10.1.15.1.2  governmental or court orders, including
                                       stop, clean up or preventative orders,
                                       directions or action requests notice of
                                       which has been received by it or which it
                                       is otherwise aware relating to
                                       environmental matters requiring any
                                       works, repairs, remediation, clean up,
                                       construction or capital expenditures with
                                       respect to any of its Real Estate;

               10.1.15.2  except with respect to shredder fluff and electric arc
                          furnace dust on MRM's Real Estate, to the best of its
                          knowledge, no condition exists at, on or under any of
                          its Real Estate which with the passage of time, the
                          giving of notice, the making of any determination,
                          or any combination of the foregoing, has given rise to
                          or is likely to give rise to material liability under
                          any Environmental Law;

               10.1.15.3  each Borrower has made available for inspection and
                          review on a confidential basis by representatives of
                          the Agent and the Co-Syndication Agents all material
                          environmental or operating documents or records which
                          it is obliged to maintain under all Environmental
                          Laws; and

               10.1.15.4  except for the Real Estate of MRM in respect of any
                          period prior to June 23, 1995, all its Real Estate has
                          been at all times owned, leased, managed, controlled
                          and operated (as applicable) by it and, to the best of
                          its knowledge, its predecessors in title in material
                          compliance with all Environmental Laws.
<PAGE>
                                     - 85 -

10.1.16        All Material Information Supplied. No information furnished by it
               to the Syndicate in connection with any of the Loan Documents
               (including the Information Circular) contains any material
               misstatement of fact or omits to state a material fact necessary
               to make the statements contained therein not misleading in light
               of the circumstances in which they were made and as of the date
               made. Each financial forecast and projection ("FORECAST")
               prepared by it and furnished to the Syndicate was based upon
               assumptions believed to be reasonable by it as of the date of
               preparation; there has been no material change in such
               assumptions or in the information on which such assumptions are
               based which has not been disclosed in writing to the Syndicate;
               it has no reason to believe that any such Forecast as it relates
               to periods ending after its date of preparation, when read in
               conjunction with the related assumptions and other information
               disclosed in writing to the Agent, fails to reflect its judgment
               as the most probable set of economic conditions its planned
               courses of action given these conditions, and such Forecast as it
               relates to periods already ended, does not reflect results which
               are materially higher than the anticipated actual results for
               such periods.

10.1.17        No Material Adverse Change. Since the date of its most recent
               financial statements of Gerdau Steel furnished to the Syndicate,
               there has been no change in any of its Business Affairs which
               could have a Material Adverse Effect.

10.1.18        Compliance with Laws. It is in compliance in all material
               respects with all Applicable Laws, non-compliance with which
               could give rise to a Material Adverse Change. It has obtained all
               Permits and made all Registrations necessary for the conduct of
               its Business.

10.1.19        Unfunded Pension Liabilities. It does not have any unfunded
               liabilities in respect of which it is in default arising out of
               any employee pension plan or any other employee benefit plan to
               which it is a party or by which it is bound, and all requisite
               employer contributions required thereunder to date have been
               made. There is no Award outstanding and no pending or, to its
               knowledge, threatened Litigation against any such plan, any
               fiduciary thereof, or any Gerdau Canada Group Member with respect
               thereto which could have a Material Adverse Effect.

10.1.20        Intellectual Property:

               10.1.20.1  Identification. Schedule O:

                          10.1.20.1.1  contains a complete list of all patents,
                                       subdivided into the categories (i)
                                       developed and owned by each Gerdau Canada
                                       Group Member, (ii) otherwise owned by
                                       each Gerdau Canada Group Member, (iii)
                                       licensed for use by each Gerdau Canada
                                       Group Member; and

                          10.1.20.1.2  contains a complete list of all trade
                                       marks subdivided into the categories (i)
                                       registered, owned and used by each Gerdau
                                       Canada Group Member, (ii) registered,

<PAGE>
                                     - 86 -

                                       owned but not currently used by each
                                       Gerdau Canada Group Member, (iii)
                                       unregistered, owned and used by each
                                       Gerdau Canada Group Member, (4) licensed
                                       for use by each Gerdau Canada Group
                                       Member.

               10.1.20.2  Ownership.

                          10.1.20.2.1  except with respect to those rights in
                                       Intellectual Property Rights owned by
                                       third parties granted to a Gerdau Canada
                                       Group Member pursuant to a license as
                                       disclosed in Schedule O, each Gerdau
                                       Canada Group Member is the sole legal
                                       and beneficial owner of the Intellectual
                                       Property Rights set out in Schedule O,
                                       free and clear of all Liens whatsoever,
                                       except for Permitted Liens; and

                          10.1.20.2.2  the Patent and Trade Mark registrations
                                       and any copyright registrations
                                       identified in Schedule O are valid and
                                       subsisting, and are in good standing, all
                                       required filings with any relevant
                                       governmental intellectual property office
                                       have been made and all required filing
                                       fees have been paid.

               10.1.20.3  Licensing.

                          10.1.20.3.1  all licenses granted by each Gerdau
                                       Canada Group Member permitting third
                                       parties to use any Intellectual Property
                                       Rights of any Gerdau Canada Group Member
                                       (the "LICENCES") are set out in Schedule
                                       O;

                          10.1.20.3.2  all Licences are in full force and effect
                                       unamended, each Gerdau Canada Group
                                       Member party thereto has duly observed
                                       and performed all of its covenants and
                                       obligations under each of the Licenses
                                       and there has not been any default under
                                       or breach of any Licenses by the other
                                       parties thereto; and

                          10.1.20.3.3  no Gerdau Canada Group Member has granted
                                       any Licences to any Person other than the
                                       Licences disclosed in Schedule O.

10.1.21        Taxes and Claims. It has:

               10.1.21.1  delivered or caused to be delivered all Income Tax and
                          Sales Tax returns and other Tax returns which are now
                          due to the appropriate Governmental Body;

               10.1.21.2  paid and discharged all lawful claims for labour,
                          material and supplies;

<PAGE>
                                     - 87 -

          10.1.21.3  paid and discharged all Taxes payable by it;

          10.1.21.4  made provision for appropriate amounts in respect of any
                     Taxes likely to be exigible in accordance with generally
                     accepted accounting principles;

          10.1.21.5  withheld and collected all Taxes required to be withheld
                     and collected by it and remitted such Taxes to the
                     appropriate Governmental Body; and

          10.1.21.6  paid and discharged all obligations incidental to any trust
                     imposed upon it by statute which, if unpaid, might become
                     or give rise to enforcement rights under a Lien upon any of
                     the Mortgaged Property,

          and no assessment, appeal or claim is, as far as it is aware, being
          asserted or processed with respect to such claim, Taxes or
          obligations;

10.1.22   Non-Default. It is not in default, in any respect which materially and
          adversely affects its Business Affairs in respect of any Award or
          demand of any Governmental Body or under any indenture, mortgage, deed
          of trust, agreement or other instrument to which it is a party or by
          which it is bound and no Default or Event of Default has occurred and
          is continuing.

10.1.23   Solvency. Each Gerdau S.A. Group Member is Solvent.

10.1.24   Ownership of Subsidiaries. Attached as Schedule E - Part I is a chart,
          as at the date of this Agreement, identifying all of the direct and
          indirect Subsidiaries of Gerdau S.A. which hold, directly or
          indirectly, through Subsidiaries, Capital Stock in any Gerdau S.A.
          Group Member, as well as the percentage of all issued Capital Stock
          held by Gerdau S.A., directly or indirectly. Attached as Schedule E -
          Part II is a chart, pro forma as at the Effective Time and assuming
          the AmeriSteel Merger Transactions have taken place, identifying all
          of the direct and indirect Subsidiaries of Gerdau S.A. which hold,
          directly or indirectly through Subsidiaries, Capital Stock in any
          Gerdau S.A. Group Member, as well as the percentage of all issued
          Capital Stock held by Gerdau S.A., directly or indirectly.

10.1.25   Year 2000 Problem. Each Gerdau Canada Group Member has carefully
          reviewed and identified all material aspects of the Gerdau Canada
          Group's Business which could be adversely affected by the "Year 2000
          Problem" (ie., the risk that computer applications may be unable to
          recognize and properly perform date sensitive functions for periods
          ending in the next millennium). The software used in the Gerdau Canada
          Group's Business is to the best of its knowledge Year 2000 Compliant.
          For this purpose, "YEAR 2000 COMPLIANT" means:

          10.1.25.1  The software accepts, calculates, compares, sorts,
                     extracts, sequences, and otherwise processes date inputs
                     and date values (whether forward or backward), and returns,
                     generates, processes and displays date output and date
                     values (collectively, the "PROCESSES"), accurately,

<PAGE>
                                     - 88 -

                     without interruptions, and in a consistent manner (without
                     errors or omissions due to date selection), regardless of
                     the date used, and whether before, on or after January 1,
                     2000 and whether or not the dates are affected by leap
                     years;

          10.1.25.2  The software accepts and responds to two-digit year-date
                     input in a manner that resolves any ambiguities as to the
                     century in a defined, predetermined, and appropriate
                     manner; and

          10.1.25.3  The software stores, processes and displays date
                     information (including in user interfaces and data fields)
                     in ways that are unambiguous as to the determination of the
                     century in a defined, predetermined and appropriate manner.

10.1.26   Employee Relations. There are no strikes, work stoppages or
          controversies pending or, to its knowledge, threatened between any
          Gerdau Canada Group Member and any of its employees (including unions
          representing employees), other than employee grievances arising in the
          ordinary course of business which would not reasonably be likely to
          result in work stoppages, and other than those disclosed in writing to
          the Lenders.

10.1.27   Investment Company; Public Utility Holding Company. No Borrower or
          Gerdau S.A. Group Member is, and after giving effect to any Advance no
          Borrower or Gerdau S.A. Group Member will be, an "investment company"
          or a company "controlled" by an "investment company" within the
          meaning of the United States Investment Company Act of 1940, as
          amended. No Borrower or Gerdau S.A. Group Member is subject to
          regulation under the United States Public Utility Holding Company Act
          of 1935, as amended.

10.1.28   Federal Reserve Regulations. No Borrower or Gerdau S.A. Group Member
          is engaged, directly or indirectly, principally or as one of its
          important activities, in the business of extending, or arranging for
          the extension of, credit for the purpose of purchasing or carrying
          margin stock (as defined in Regulation U). Neither the borrowing of
          any Advance hereunder, nor the use of the proceeds thereof, will (i)
          be used to purchase or carry any "MARGIN STOCK" within the meaning of
          Regulation U, or (ii) violate or be inconsistent with the provisions
          of Regulation U. None of the assets which are subject to any
          limitation on sale, pledge or other restriction under the Loan
          Documents have been, or will be, margin stock.

10.1.29   Chief Executive Office. The location of the chief executive office (as
          that term is used in Section 7(4) of the Personal Property Security
          Act (Ontario) of each Borrower and Gerdau S.A. Group Member is listed
          in Schedule P.

10.1.30   Gerdau S.A. Trust Deed: The execution, delivery and creation and
          performance of obligations under each Loan Document by each party
          thereto and the consummation of the transactions contemplated in each
          Loan Document

<PAGE>
                                     - 89 -

          (including the creation of the Security contemplated thereby) and by
          the Reorganization Transactions are permitted by, and do not and will
          not violate or breach any obligation under or give rise to any
          default, Potential Event of Default or Event of Default (each as
          defined in each Gerdau S.A. Trust Deed) or similar such event
          (howsoever described) under the Gerdau S.A. Trust Deed.

10.2      SURVIVAL OF REPRESENTATIONS AND WARRANTIES

          Each of Gerdau Steel and the Borrowers covenants that the
representations and warranties made by it in this Article 10 shall be true and
correct on each day that this Agreement remains in force and effect, and all
such representations and warranties shall be deemed to be made on each such day
with the same effect as if such representations and warranties had been made and
given on and as of such day, notwithstanding any investigation made at any time
by or on behalf of any Lender; except that if any such representation and
warranty is specifically given in respect of information as of a particular date
or particular period of time and relates only to such information, then such
representation and warranty shall continue to be given as at such date or for
such period of time until the information to which it relates is updated at
which point it shall continue to be given as of such updated date or period of
time, and so forth from time to time.

10.3      ENVIRONMENTAL INDEMNITY

          Each of Gerdau Steel and the Borrowers hereby agrees forthwith on
demand to indemnify and save the Syndicate harmless, from and against any and
all losses and expenses which the Syndicate may at any time or from time to time
suffer or incur as a result of, in respect of, or arising out of any and all
environmental claims or liabilities of any kind, including, but not limited to,
any claims in nuisance, negligence, strict liability, or any other cause of
action arising out of a discharge of a Contaminant into the natural environment
and (to the extent permitted by applicable law) any fines or orders of any kind
that may be levied or made pursuant to an Environmental Law, relating to,
arising out of or in respect of any of the Business Assets of any Gerdau S.A.
Group Member or the Business and whether or not any of the Syndicate is in
charge, management or control of all or any part of any of the Business Assets
of any Gerdau S.A. Group Member or the Business. Each reference above in this
Section 10.3 to any of the Syndicate shall be deemed to include the Syndicate
member and its directors, officers, employees, agents, solicitors, accountants,
consultants, financial advisors and all other representatives, and each
Syndicate member shall be constituted as the trustee of each of its own
directors, officers, employees, agents, solicitors, accountants, financial
advisors and other representatives and shall hold and enforce their rights under
this Section 10.3 for their respective benefits.

                                   ARTICLE 11
                                    COVENANTS

11.1      AFFIRMATIVE COVENANTS

11.1.1    Gerdau Steel and Borrowers' Covenants. So long as any Loan Obligations
          remain payable or any Borrower may be or become entitled to any
          Drawdown,

<PAGE>
                                     - 90 -

          unless the Majority Lenders otherwise consent in writing, each of
          Gerdau Steel and the Borrowers covenants and agrees with the Syndicate
          that it will, and (where the context so admits) it will ensure that
          each Gerdau S.A. Group Member will, duly perform and comply with each
          of the following affirmative covenants:

          11.1.1.1  Punctual Payment. It shall pay or cause to be paid all Loan
                    Obligations falling due hereunder on the dates and in the
                    manner specified herein.

          11.1.1.2  Conduct of Business. It shall do or cause to be done all
                    things necessary or desirable to maintain its corporate or
                    partnership existence, in its present jurisdiction of
                    incorporation or formation, and to maintain its corporate or
                    partnership power and capacity, to own its properties and
                    assets, wherever located, and for it to carry on its
                    Business in each jurisdiction in which it carries on
                    Business or owns, leases, manages, controls or operates
                    Business Assets.

          11.1.1.3  Preservation of Permits. It shall preserve and maintain all
                    Permits and Registrations necessary or appropriate for it to
                    carry on its Business or own, lease, manage, control or
                    operate its Business Assets in each jurisdiction in which it
                    carries on Business or owns, leases, manages, controls or
                    operates Business Assets.

          11.1.1.4  Compliance with Applicable Law and Contracts. It shall
                    comply with the requirements of all Applicable Law and all
                    obligations which, if contravened, could give rise to a Lien
                    over any of the Mortgaged Property or have a Material
                    Adverse Effect and it shall comply with all insurance
                    policies and all contracts to which it is a party or by
                    which it or any of its Business Assets are bound,
                    non-compliance with which would, singly or in the aggregate,
                    have a Material Adverse Effect.

          11.1.1.5  Accounting Methods. It shall maintain a system of accounting
                    which is established and administered in accordance with
                    GAAP.

          11.1.1.6  Financial Records. It shall keep adequate records and books
                    of account in which accurate and complete entries shall be
                    made in accordance with GAAP reflecting all transactions
                    required to be reflected by GAAP and keep accurate and
                    complete records of any property owned or leased by it.

          11.1.1.7  Maintenance of Mortgaged Property. It shall maintain its
                    Mortgaged Property in good repair, working order and
                    condition (reasonable wear and tear excepted) and from time
                    to time make or cause to be made all necessary and
                    appropriate repairs, renewals, replacements, additions and
                    improvements thereto.

<PAGE>
                                     - 91 -

          11.1.1.8  Payment of Taxes and Claims. It shall:

                    11.1.1.8.1  pay and discharge all lawful claims for labour,
                                material and supplies;

                    11.1.1.8.2  deliver or cause to be delivered all Income Tax,
                                Sales Tax and other Tax returns when they are
                                due to the appropriate Governmental Body;

                    11.1.1.8.3  pay and discharge all Taxes payable by it;

                    11.1.1.8.4  withhold and collect all Taxes required to be
                                withheld and collected by it and remit such
                                Taxes to the appropriate Governmental Body at
                                the time and in the manner required; and

                    11.1.1.8.5  pay and discharge all obligations incidental to
                                any trust imposed upon it by statute which, if
                                unpaid, might become, or give rise to
                                enforcement rights under, a Lien upon any of the
                                Mortgaged Property,

          except that no such claim, Taxes (other than Taxes required to be
          withheld and remitted pursuant to the Income Tax Act (Canada), the
          Excise Tax Act (Canada) or any provincial legislation of comparable
          nature) or obligations need be paid, collected or remitted if (i) it
          is being actively and diligently contested in good faith by
          appropriate proceedings, (ii) reserves considered adequate by it and
          its Auditors shall have been set aside therefor on its books, and
          (iii) such claim, Taxes, or obligation shall not have resulted in a
          Lien other than a Permitted Lien, all enforcement proceedings shall
          have been stayed and appropriate security shall have been given, if
          required, to prevent the commencement or continuation of proceedings.

          11.1.1.9  Notice of Litigation and Other Matters. It shall as soon as
                    it becomes aware of the same, give notice to the Agent of
                    the following events:

                    11.1.1.9.1  the commencement of any Litigation against or in
                                any other way relating adversely to it, or any
                                of its Business Assets which, if adversely
                                determined, could singly or when aggregated with
                                all other such Litigation, have a Material
                                Adverse Effect;

                    11.1.1.9.2  any amendment of its constating or other
                                organizational documents;

                    11.1.1.9.3  any development which has had or could have a
                                Material Adverse Effect; and

<PAGE>
                                     - 92 -

                    11.1.1.9.4  any Default or Event of Default, or the
                                occurrence or non-occurrence of any event which
                                constitutes, or which with the passage of time,
                                the giving of notice, the making of any
                                determination, or any combination thereof, would
                                constitute, a material default under any other
                                agreement to which it is a party or by which any
                                of its Business Assets may be bound, giving in
                                each case the details thereof and specifying the
                                action proposed to be taken with respect
                                thereto.

                    11.1.1.10   Delivery of Financial Statements and
                                Information. It shall deliver or cause to be
                                delivered to the Agent (in sufficient numbers to
                                provide a copy for the Agent and each of the
                                Lenders):

                                11.1.1.10.1  as soon as practicable and in any
                                             event within 90 days after the end
                                             of each Fiscal Year, the annual
                                             financial statements of Gerdau
                                             Steel prepared on a Combined Basis
                                             audited by its Auditors, the annual
                                             consolidated financial statements
                                             of Co-Steel audited by its auditors
                                             and unaudited consolidating
                                             financial statements of each of
                                             Co-Steel, the Gerdau Canada Group,
                                             FLS and AmeriSteel for such Fiscal
                                             Year, each prepared in accordance
                                             with GAAP, together with a
                                             Compliance Certificate for such
                                             Fiscal Year, including a
                                             computation of Free Cash Flow;

                                11.1.1.10.2  as soon as practicable and in any
                                             event within 45 days after the end
                                             of each Fiscal Quarter, the
                                             unaudited quarterly financial
                                             statements of Gerdau Steel prepared
                                             on a Combined Basis, the unaudited
                                             quarterly financial statements of
                                             Co-Steel, and consolidating
                                             financial statements of each of
                                             Co-Steel, the Gerdau Canada Group,
                                             FLS and AmeriSteel for the current
                                             Fiscal Year to such Fiscal Quarter
                                             end, prepared in accordance with
                                             GAAP (subject to annual audit
                                             adjustments) consisting in each
                                             case of a balance sheet and
                                             statements of income and retained
                                             earnings (or deficit) and of
                                             changes in financial position,
                                             together with a Compliance
                                             Certificate as at such Fiscal
                                             Quarter end and a commentary
                                             prepared by the Vice President,
                                             Finance of Gerdau Steel summarizing
                                             the salient points of the
                                             performance of each relevant
                                             corporation, as shown in the
                                             quarterly financial statements;

                                11.1.1.10.3  within 90 days after the
                                             commencement of each Fiscal Year,
                                             the budget and business plan of
                                             Gerdau Steel prepared on a Combined
                                             Basis for such Fiscal Year and

<PAGE>
                                     - 93 -

                                             the following four Fiscal Years,
                                             including (A) forecasts of
                                             projected disposals (including
                                             timing and amount thereof) of
                                             Gerdau Steel prepared on a Combined
                                             Basis for each such Fiscal Year,
                                             (B) projected balance sheets and
                                             statements of income and cash flow
                                             and retained earnings (or deficit)
                                             and of changes in financial
                                             position (broken out on a quarterly
                                             basis) for Gerdau Steel prepared on
                                             a Combined Basis and on a
                                             consolidated basis for each other
                                             Gerdau Canada Group Member and (C)
                                             a qualitative analysis and
                                             commentary from the management on
                                             its proposed activities;

                                11.1.1.10.4  within 30 days of the close of each
                                             calendar month end, a Borrowing
                                             Base Report prepared as of such
                                             calendar month end attaching (A) an
                                             aged accounts receivable listing,
                                             (B) an inventory listing and (C) an
                                             aged accounts payable listing, in
                                             each case prepared as at such
                                             calendar month end;

                                11.1.1.10.5  within 45 days after receipt, a
                                             properly completed annual
                                             environmental questionnaire in such
                                             form and requesting details of such
                                             information as the Majority Lenders
                                             may require;

                                11.1.1.10.6  within 90 days after the end of
                                             each Fiscal Year, revised Schedules
                                             to this Agreement reflecting any
                                             changes occurring during such
                                             Fiscal Year in the information
                                             contained in such Schedules
                                             required to ensure that no
                                             representation or warranty
                                             contained in this Agreement is
                                             false or incorrect in any respect,
                                             and thereafter each reference in
                                             this Agreement to any such Schedule
                                             shall be deemed to refer to such
                                             revised Schedule as from the
                                             earliest of (A) the last day of
                                             such 90 day period or (B) the date
                                             of delivery of such Schedule to the
                                             Agent pursuant to this Section
                                             11.1.1.10.6; and

                                11.1.1.10.7  from time to time, such additional
                                             information regarding any of its
                                             Business Affairs as the Agent may
                                             reasonably request.

                    11.1.1.11  Information and Inspection. At any time and from
                               time to time it shall permit any officer, agent
                               or other representative of any Lender, at the
                               expense of Gerdau Steel, to examine and make
                               copies of any abstracts from the records and
                               books of account of any Borrower or Gerdau Canada
                               Group Member and to discuss any of the Business
                               Affairs of any Borrower or Gerdau Canada Group
                               Member with any of its

<PAGE>
                                     - 94 -

                    directors, Senior Officers and with any of its Auditors or
                    other consultants.

          11.1.1.12 Arm's Length Arrangements. Except for transactions with
                    Affiliates expressly permitted herein, only enter into an
                    agreement, transaction or other arrangement with or for the
                    benefit of an Affiliate if such agreement, transaction or
                    arrangement is made on commercially reasonable terms, with
                    no deferred payment terms, at fair market value and
                    consistent with commercial relations between Persons that
                    deal at arm's length. Notwithstanding the foregoing or any
                    other provision of this Agreement, no Gerdau S.A. Group
                    Member shall enter into any agreement, transaction or other
                    arrangement with or for the benefit of, or assume any
                    obligations of, any Co-Steel Group Member, or dispose of any
                    of its Business Assets or transfer or pay any amount to or
                    for the benefit of any Co-Steel Group Member, except for (i)
                    the Reorganization Transactions and (ii) transactions
                    carried out between one Gerdau S.A. Group Member and a
                    Co-Steel Group Member in the ordinary course of trading at
                    fair market value and consistent with commercial relations
                    between Persons that deal at arm's length (including payment
                    terms taking into account the creditworthiness of the
                    purchasing party) provided that the aggregate outstanding
                    amount of all amounts owing by the entire Co-Steel Group to
                    the entire Gerdau S.A. Group pursuant to such transactions
                    shall not exceed U.S.$10,000,000 (or the foreign currency
                    equivalent) at any time.

          11.1.1.13 Gerdau Canada Group Financial Tests. Ensure that the
                    following financial tests are complied with at all times:

                    11.1.1.13.1  Current Ratio. Not permit the ratio of (A) the
                                 current assets of Gerdau Steel prepared on a
                                 Combined Basis divided by (B) the sum of (1)
                                 the current liabilities of Gerdau Steel
                                 prepared on a Combined Basis minus (2) the
                                 current portion of Long Term Debt to be less
                                 than 1.00:1 at any time.

                    11.1.1.13.2  Debt Service Coverage Ratio. Not permit the
                                 Debt Service Coverage Ratio for any period of
                                 four consecutive Fiscal Quarters to be less
                                 than 1.0:1.0 at any time.

                    11.1.1.13.3  Interest Coverage Ratio. Not permit the ratio
                                 for any period of four consecutive Fiscal
                                 Quarters of (A) the sum of (1) EBITDA minus (2)
                                 the aggregate amount of all Capital
                                 Expenditures incurred by Gerdau Steel
                                 determined on a Combined Basis in respect of
                                 such period to (B) Cash Interest Expense to be
                                 less than 2.00:1 at any time.

<PAGE>
                                     - 95 -

                    11.1.1.13.4  Total Debt/EBITDA Ratio. Not permit the Total
                                 Debt/EBITDA Ratio for any period of four
                                 consecutive Fiscal Quarters ending on any
                                 Fiscal Quarter end to exceed the ratio limits
                                 set out below:

<TABLE>
<CAPTION>
FISCAL QUARTER                                                       RATIO LIMIT
--------------                                                       -----------

<S>                                                                     <C>
Each of the last 2 Fiscal Quarters of the 1999 Fiscal Year and
  the first 3 Fiscal Quarters of the 2000 Fiscal Year                   3.25:1

Each of the last Fiscal Quarter of the 2000 Fiscal Year and
  the first 3 Fiscal Quarters of the 2001 Fiscal Year                   2.75:1

Each of the last Fiscal Quarter of the 2001 Fiscal Year and
  the first 3 Fiscal Quarters of the 2002 Fiscal Year                   2.75:1

Each Fiscal Quarter ending on or after December 31, 2002                2.00:1

</TABLE>

                    11.1.1.13.5  Term Debt/Capitalization Ratio. Not permit the
                                 ratio of (A) Long Term Debt divided by (B) the
                                 sum of (1) Tangible Net Worth plus (2) Long-
                                 Term Debt to be greater than (I) at any time
                                 before December 31, 2001, 0.55:1 and (II) at
                                 any time on or after December 31, 2001, 0.40:1.

                    11.1.1.13.6  Tangible Net Worth. Not permit Tangible Net
                                 Worth to be less than the sum of (A)
                                 Cdn.$175,000,000 plus (B) 50% of the cumulative
                                 net income of Gerdau Steel determined on a
                                 Combined Basis earned after December 31, 1999
                                 plus (C) 100% of the net proceeds of each
                                 Rights Offering (as defined in Section 3.3.6)
                                 at any time.

          11.1.1.14  Comply with Environmental Laws. It shall cause its agents
                     to (i) manage and operate all of its Real Estate in
                     material compliance with Environmental Law, (ii) maintain
                     all material Permits and Registrations required under
                     Environmental Law in relation to all its Real Estate and
                     remain in material compliance therewith and (iii) store,
                     treat, transport, or otherwise dispose of all Hazardous
                     Substances owned, managed or controlled by it in material
                     compliance with Environmental Law.
<PAGE>
                                     - 96 -

          11.1.1.15  Environmental Reports. It shall forthwith notify the Agent
                     of and:

                     11.1.1.15.1 promptly provide copies to the Agent of each
                                 environmental report prepared by or on its
                                 behalf in respect of any of its Real Estate
                                 and filed with any Governmental Body pursuant
                                 to Environmental Law; and

                    11.1.1.15.2  promptly make available for inspection and
                                 review by the Agent (i) each environmental
                                 report prepared by or on its behalf in
                                 accordance with its regular environmental
                                 practices and procedures and (ii) the report on
                                 any environmental audit conducted on any of its
                                 Real Estate;

          11.1.1.16 Environmental Audits. If any information provided to the
                    Agent leads the Agent to believe on reasonable grounds that
                    a materially adverse environmental liability may have
                    arisen, or a materially adverse change in an existing
                    environmental condition may have occurred, with respect to
                    any of its Real Estate, it shall promptly undertake such
                    environmental audit or audits in scope, content, form and
                    substance satisfactory to the Agent by independent
                    consultants acceptable to the Agent as the Agent may
                    reasonably request and promptly provide copies to the Agent
                    of the report on such audit or audits; provided that, if any
                    Governmental Body has taken or threatened any proceedings
                    against it in respect of such environmental liability or
                    condition, then it shall promptly undertake such audit as
                    may be reasonably necessary to defend against such
                    proceedings and properly analyze the nature and extent of
                    the environmental liability or condition concerned and allow
                    the Agent and its representatives to review the resulting
                    report on such audit on a confidential basis.

          11.1.1.17 Work Orders. It will promptly advise the Agent if it
                    receives notification from any Governmental Body requiring
                    any work, repairs, construction or capital expenditures in
                    respect of any of its Real Estate having an aggregate
                    compliance cost exceeding Cdn. $200,000 or equivalent in
                    foreign currency, and it will forthwith commence and
                    diligently pursue such actions as may be required to comply
                    with such notification.

          11.1.1.18 Lenders Copies. Upon request of the Agent, it will promptly
                    provide the Agent with copies of the financial statements,
                    reports, declarations, forecasts, questionnaires,
                    Certificates and other information provided to the Agent
                    pursuant to this Section 11.1.1 in sufficient numbers to
                    allow the Agent to distribute one copy to each Lender.

<PAGE>
                                     - 97 -

          11.1.1.19 Derivatives. Ensure that at least fifty percent (50%) of the
                    aggregate Outstanding Amount of all Advances under the Term
                    Facility are fully hedged to fixed rates by interest rate
                    swaps or other similar Derivatives for the first three years
                    of the Term Facility and at least twenty-five percent (25%)
                    of the aggregate Outstanding Amount of all Advances under
                    the Term Facility are fully hedged to fixed interests by
                    interest rate swaps or other similar Derivatives for the
                    full term of the Term Facility.

          11.1.1.20 Vertical Amalgamation. The Gerdau Canada Subgroup Interim
                    Holding Company will vertically amalgamate with Gerdau Steel
                    on January 1, 2003.

          11.1.1.21 AmeriSteel Merger Transactions. It will cause the AmeriSteel
                    Merger Transactions to take place strictly in accordance
                    with the description thereof contained herein and in the
                    Information Circular with the result that AmeriSteel becomes
                    a Wholly-Owned Subsidiary of Gerdau USA and all of the
                    issued Capital Stock of AmeriSteel is subject to the first
                    priority Liens in favour of the Syndicate created pursuant
                    to the Security Documents. It will cause the Borrower's
                    Counsel to deliver to the Agent, promptly following the
                    AmeriSteel Merger Transactions taking place, such legal
                    opinions regarding the AmeriSteel Merger Transactions and
                    the Security in the Capital Stock of AmeriSteel consequent
                    upon such AmeriSteel Merger Transactions as the Agent shall
                    reasonably require.

11.2      AGENT ENTITLED TO PERFORM COVENANTS

          If a Default or an Event of Default has occurred and is continuing and
if any Gerdau S.A. Group Member fails to perform any covenant contained in this
Agreement or in any other provision of any Loan Document, the Agent may, but
shall be under no obligation to, perform any such covenant capable of being
performed by such Gerdau S.A. Group Member and if any such covenant requires the
payment of money the Agent may make such payments. All sums so expended by the
Agent shall be deemed to be a Prime Rate Loan (if the expenditure was made in
Canadian dollars) or a Base Rate Loan (if the expenditure was made in United
States dollars) under the Revolver Facility to the Corporate Borrowers and shall
be repaid accordingly.

11.3      NEGATIVE COVENANTS

11.3.1    Gerdau Steel and Borrowers' Negative Covenants. So long as any Loan
          Obligations remain payable or any Borrower may be or become entitled
          to obtain any Drawdown, unless the Majority Lenders otherwise consent
          in writing, each of Gerdau Steel and the Borrowers covenants and
          agrees with the Syndicate that it will, and (where the context so
          admits) it will ensure that each Borrower and Gerdau Canada Group
          Member will, duly perform and comply with each of the following
          negative covenants:

<PAGE>
                                     - 98 -

11.3.1.1  Sale of Assets. Not dispose of any of its Business Assets, except for
          (i) dispositions made in the ordinary course of carrying on its day to
          day business for cash or Cash Equivalent Investments (A) to Person's
          with whom it deals at arm's length at fair market value, (B) to an
          Affiliate in accordance with Section 11.1.1.12 or (C) to any other
          Gerdau Canada Group Member in accordance with Section 11.3.1.12, (ii)
          disposals of assets for fair market value to any other Person, other
          than an Affiliate (including, for certainty, any Co-Steel Group
          Member), in any period of four consecutive Fiscal Quarters having an
          aggregate book value of up to Cdn.$10,000,000 and (iii) the
          Reorganization Transactions.

11.3.1.2  Negative Pledge. Not create, incur, assume or otherwise become liable
          upon or permit to exist any Lien on, against or with respect to any
          part of its Business Assets, except for Permitted Liens.

11.3.1.3  No Merger; Amalgamations; etc. Not enter into any merger,
          amalgamation, arrangement, consolidation, liquidation, winding-up,
          dissolution or similar transaction, except (i) the Merger
          Transactions, (ii) that it may liquidate or dissolve voluntarily into
          and may merge, consolidate or amalgamate with and into any other
          Gerdau Canada Group Member so long as no Default or Event of Default
          has occurred and is continuing or would occur after giving effect
          thereto, and (iii) the vertical amalgamation referred to in Section
          11.1.1.20.

11.3.1.4  Nature of Business. Not change the nature of the Gerdau Canada Group's
          Business or cease to carry on the Gerdau Canada Group's Business or
          any substantial part thereof; and not engage in any new business other
          than a business principally engaged in a Core Related Business.

11.3.1.5  Limitation on Investments. Not make any new Investments after
          November 8, 1996, other than:

          11.3.1.5.1 Cash Equivalent Investments;

          11.3.1.5.2 Investments in Gerdau Canada Group Members in existence at
                     the date hereof, or in any Wholly-Owned Subsidiaries of any
                     such existing Gerdau Canada Group Members that are also
                     Gerdau Canada Group Members, so long as:

                     (A) such Wholly-Owned Subsidiaries are engaged in a Core
                         Business in Canada or the continental United States of
                         America; and
<PAGE>
                                     - 99 -

                               (B) such Wholly-Owned Subsidiaries have granted
                                   Security to the Syndicate in form and
                                   substance satisfactory to the Agent;

                    11.3.1.5.3 Investments of up to Cdn.$2,000,000 in the
                               aggregate in Bradley Steel Processors Inc. made
                               after November 8, 1996;

                    11.3.1.5.4 Subordinated Debt in Gerdau USA to fund the
                               purchase of FLS shares pursuant to the FLS
                               shareholder agreement in an aggregate amount not
                               to exceed U.S.$15,500,000;

                    11.3.1.5.5 Investments in each of Gerdau USA, USP, NSULC and
                               Finco to the extent and in the manner
                               contemplated by the Loan Documents entered into
                               on or about December 23, 1999 and the Mortgaged
                               Property subject thereto, as amended or replaced
                               by the documentation delivered to the Agent
                               pursuant to Section 6.2.3.8.

                    11.3.1.5.6 a cash Investment in a Gerdau S.A. Group Member,
                               other than the Gerdau Canada Subgroup Interim
                               Holding Company and the Gerdau Canada Subgroup
                               Holding Company, (an "EXISTING GERDAU S.A. GROUP
                               MEMBER") in the same amount as, and out of the
                               proceeds of, an Investment made in that Existing
                               Gerdau S.A. Group Member by another Existing
                               Gerdau S.A. Group Member or by Gerdau S.A.,
                               provided that:

                               (i)  at least five (5) Banking Days' prior
                                    written notice of each such Investment is
                                    given by Gerdau Steel to the Agent,
                                    specifying the date and amount of the
                                    Investment;

                               (ii) there may be one Investment, or two or more
                                    successive Investments in a series, as long
                                    as in any case the first of such Investments
                                    is made by Gerdau S.A., the last is made to
                                    AmeriSteel and both or all the Investments
                                    are made during the same Fiscal Quarter; and

                               (iii) repayment of such cash Investments is made
                                     at a time when no Default or Event of
                                     Default has occurred that is continuing and
                                     on not less than five (5) Banking Days
                                     prior written notice to the Agent
                                     specifying the date and method of

<PAGE>
                                    - 100 -

                                     repayment, being either by payment directly
                                     from AmeriSteel to Gerdau S.A. or by
                                     repayment of all the Investments in a
                                     series during the same Fiscal Quarter in
                                     the reverse order to the order in which
                                     they were made;

                    11.3.1.5.7  the Investment in the Gerdau Canada Subgroup
                                Interim Holding Company, the Gerdau Canada
                                Subgroup Holding Company and the Exchanged
                                Co-Steel Shares contemplated by the Co-Steel
                                Combination Transactions and the Investment in
                                the Intermediate Holding Company contemplated by
                                the Status Quo Agreement;

                    11.3.1.5.8  the Investment by MRM in 100% of the issued and
                                outstanding shares of MRM America in the
                                aggregate amount of Cdn.$3,307,376 as at the
                                date hereof;

                    11.3.1.5.9  the Investment by MRM America in 100% of the
                                issued and outstanding shares of MFT in the
                                aggregate amount of Cdn.$1,194,600 as at the
                                date hereof;

                    11.3.1.5.10 the Investment by MRM in 100% of the issued and
                                outstanding shares of Mandak Car Crusher Inc. a
                                corporation incorporated under the laws of
                                Manitoba as at the date hereof, in the aggregate
                                amount of Cdn.$nil as at the date hereof; and

                    11.3.1.5.11 the Investment by MRM in 50% of the issued and
                                outstanding common shares of SSS/MRM Guide Rail
                                Inc., a corporation incorporated pursuant to the
                                laws of Manitoba at the date hereof, in the
                                aggregate amount of Cdn.$4,796,229 as at the
                                date hereof;

          11.3.1.6  Redemptions and Distributions; Dividends. Except for
                    repayments made in accordance with Section 11.3.1.5.6(iii),
                    not declare, set apart for payment or distribution or pay
                    any dividends or make any other distributions (including in
                    specie distributions and Capital Stock dividends) to
                    shareholders that are not Gerdau Canada Group Members on any
                    of its Capital Stock, or redeem, retract, purchase for
                    cancellation or retire or otherwise acquire for value in any
                    manner any of its Capital Stock that is not held by Gerdau
                    Canada Group Members or otherwise reduce its capital in any
                    manner.

          11.3.1.7  Capital Expenditures. Allow Capital Expenditures for the
                    entire Gerdau Canada Group in any Fiscal Year to exceed the
                    Capital Expenditure Limit for that Fiscal Year.

<PAGE>
                                    - 101 -

          11.3.1.8  Operating Lease Payments. Incur operating lease obligations
                    requiring payments in excess of Cdn.$1,500,000 in the
                    aggregate for the entire Gerdau Canada Group during any
                    period of four consecutive Fiscal Quarters.

          11.3.1.9  Derivatives. Not enter into any Derivative except for the
                    purpose of paying or hedging its actual or anticipated
                    normal business operating expenses or hedging its interest
                    rate or currency exposure on its long term Debt.

          11.3.1.10 No Continuance. Not continue under the laws of any other
                    jurisdiction.

          11.3.1.11 Fiscal Year. Not change its Fiscal Year.

          11.3.1.12 Subsidiaries.

                    11.3.1.12.1 Not dispose, or permit any Subsidiary of it to
                                dispose, of any Capital Stock in any Subsidiary,
                                or any rights to acquire Capital Stock in any
                                Subsidiary, or issue, or permit any Subsidiary
                                to issue, any Capital Stock or rights to acquire
                                Capital Stock to any Person except for disposals
                                or issues of Capital Stock (A) by any Gerdau
                                Canada Group Member to another Gerdau Canada
                                Group Member so long as such Capital Stock will,
                                upon acquisition by such Gerdau Canada Group
                                Member, be subject to the Security free and
                                clear of any other Liens, (B) in the case of any
                                Subsidiary that is a limited partnership, of
                                non-Voting Capital Stock in such Subsidiary to
                                any other Person that is not an Affiliate on
                                commercially reasonable terms for fair market
                                value for consideration consisting solely of
                                cash or Cash Equivalent Investments payable on
                                disposal or  issuance consistent with commercial
                                relations with Persons that deal at arm's length
                                or (C) by any Co-Steel Group Member, save that
                                Co-Steel shall not be permitted to dispose of
                                any Capital Stock or rights to acquire any
                                Capital Stock in Gerdau Canada Subgroup Holding
                                Company, and Gerdau Canada Subgroup Holding
                                Company shall not be permitted to issue any
                                Capital Stock or rights to acquire Capital
                                Stock, except to the extent contemplated by the
                                Co-Steel Combination Transactions.

                    11.3.1.12.2 Subject to Section 11.1.1.12, not acquire any
                                new Subsidiary (a) that is a body corporate
                                unless such new Subsidiary becomes a Wholly-
                                Owned Subsidiary on

<PAGE>
                                    - 102 -

                                acquisition and at no time before acquisition
                                was it a Co-Steel Group Member or a Gerdau USA
                                Group Member or (b) that is a limited or general
                                partnership, unless all of the Voting Capital
                                Stock in such Subsidiary will be owned by
                                another Gerdau Canada Group Member on
                                acquisition and at no time before acquisition
                                was it a Co-Steel Group Member or a Gerdau USA
                                Group Member; provided that the foregoing shall
                                not restrict (i) any of the Co-Steel Group from
                                acquiring any new Subsidiary, other than a
                                Subsidiary that owns Capital Stock in the
                                Intermediate Holding Company or (except for the
                                Intermediate Holding Company) in the Gerdau
                                Canada Subgroup Holding Company, (ii) any of
                                AmeriSteel and its Subsidiaries from acquiring
                                any Subsidiary or (iii) prohibit the
                                Reorganization Transactions.

                    11.3.1.12.3 Subject to Section 11.1.1.12, not dispose of any
                                of its Business Assets to any Subsidiary of it,
                                or to any other Gerdau Canada Group Member,
                                except on commercially reasonable terms at fair
                                market value consistent with commercial
                                relations between Persons that deal at arm's
                                length so long as such Business Assets will,
                                upon acquisition by such Subsidiary be subject
                                to the Security free and clear of any other
                                Liens.

          11.3.1.13 Securitizations. Not dispose of any account, note receivable
                    or accounts receivable, with or without recourse, except if
                    such disposal arises from a dealing in the ordinary course
                    of business with the account debtor which owes the relevant
                    obligation.

          11.3.1.14 Other Benefit Plans. With respect to any benefit plan
                    referred to in Section 10.1.19, not incur any accumulated
                    funding deficiency or other unfunded liability in excess of
                    $600,000 in the aggregate.

          11.3.1.15 Change in Control. Not permit any Capital Stock in Gerdau
                    Steel to be owned, directly or indirectly, and Controlled by
                    any Person other than Gerdau S.A. Not permit any Capital
                    Stock in any Gerdau S.A. Group Member to be issued or
                    disposed of if the percentage ownership of Capital Stock of
                    any Gerdau S.A. Group Member directly owned by any other
                    Gerdau S.A. Group Member or (in the case of each of the
                    Intermediate Holding Company and the Gerdau Canada Subgroup
                    Holding Company) Co-Steel on a fully diluted basis (and
                    after giving effect to minority interests) would be diluted
                    below the percentage ownership depicted in Schedule E - Part
                    II.

<PAGE>
                                    - 103 -

          11.3.1.16 Financial Assistance. Except as contemplated by Section
                    11.3.1.5.6, not provide financial assistance, by means of
                    Investments, guarantees, provision of security or otherwise,
                    to any Person other than (a) to another Gerdau Canada Group
                    Member, and (b) to Gerdau USA, NSULC and Finco to the extent
                    and in the manner contemplated by the Loan Documents entered
                    into on or about December 23, 1999 and the Mortgaged
                    Property subject thereto, as amended or replaced by the
                    documentation delivered to the Agent pursuant to Section
                    6.2.3.8.

          11.3.1.17 Management Contracts. Not pay any amount to any Affiliate
                    (including, for certainty, any of the Co-Steel Group, Gerdau
                    Canada Subgroup Interim Holding Company and Gerdau Canada
                    Subgroup Holding Company) under any management agreement or
                    service contract or for any other reason whatsoever.

          11.3.1.18 Repayment of Gerdau S.A. Advances. Not repay the principal
                    amount of any Gerdau S.A. Advance or any part thereof or pay
                    any interest, fees or any other sum on or in respect of a
                    Gerdau S.A. Advance, except that a Gerdau S.A. Advance (or
                    part thereof and/or any accrued but unpaid interest, fees
                    and charges in respect thereof) may be repaid at any time or
                    times during the Fiscal Quarter next following a Fiscal
                    Quarter in respect of which a Compliance Certificate has
                    been delivered to the Agent that discloses no existing
                    Default or Event of Default that is continuing, provided
                    that:

                    11.3.1.18.1 there would be no Default or Event of Default if
                                (i) the relevant repayment of the Gerdau S.A.
                                Advance was included in the Debt Service Cost in
                                respect of the period covered by the relevant
                                Compliance Certificate, (ii) the required Total
                                Debt/EBITDA Ratio in respect of the said period
                                would be complied with if it took account of any
                                Debt or increased Debt of Gerdau Steel that
                                would result if the proposed repayment was made,
                                or (iii) the principal amount to be repaid was
                                excluded from any Indebtedness in which it had
                                been included for purposes of compliance with
                                any other financial tests specified in Section
                                11.1.1.13,

                    11.3.1.18.2 not less than five (5) Banking Days notice in
                                writing of the proposed repayment is given to
                                the Agent, and such notice annexes a copy of the
                                Compliance Certificate referred to above, and

                    11.3.1.18.3 no Default or Event of Default has occurred that
                                is continuing at the time of the repayment.

<PAGE>
                                    - 104 -

          11.3.1.19 Repayment of Kyoei Steel Balance of Sale Notes Refinancing
                    Loans. Not make any payment in respect of a Kyoei Steel
                    Balance of Sale Notes Refinancing Loan without the prior
                    written consent of the Agent (acting on the instructions of
                    the Majority Lenders).

          11.3.1.20 Gerdau Canada Subgroup Holding Company. Not permit the
                    Gerdau Canada Subgroup Holding Company to (i) conduct any
                    business, except for the acquisition and holding of the
                    Gerdau Canada Subgroup Shares, (ii) incur any contractual
                    obligations, except those under the Loan Documents
                    (including the Status Quo Agreement) and the agreements
                    required to be entered into by it to complete the Co-Steel
                    Combination Transactions (which must be in form and
                    substance satisfactory to the Agent), (iii) receive any
                    money or other property, except for the existing Gerdau
                    Canada Subgroup Shares in the manner contemplated by the
                    Co-Steel Combination Transactions, (iv) make any
                    distributions on any of its Capital Stock or redeem or
                    purchase any of its Capital Stock, (v) issue any of its
                    Capital Stock, except to Gerdau Canada Subgroup Interim
                    Holding Company pursuant to the Co-Steel Combination
                    Transactions, or (vi) dissolve, be liquidated or wind up.

          11.3.1.21 Intermediate Holding Company. Not permit the Intermediate
                    Holding Company to (i) conduct any business, except for the
                    acquisition and holding of all the issued Capital Stock in
                    the Gerdau Canada Subgroup Holding Company, (ii) incur any
                    contractual obligations except those under the Loan
                    Documents (including the Status Quo Agreement) and the
                    Intermediate Holding Company Transfer Agreement (as defined
                    in the Status Quo Agreement), (iii) receive any money or
                    other property, except for the issued Capital Stock in the
                    Gerdau Canada Subgroup Holding Company, (iv) make any
                    distributions on any of its Capital Stock or redeem or
                    purchase any of its Capital Stock, (v) issue any Capital
                    Stock, except to Co-Steel in exchange for the entire issued
                    Capital Stock in the Gerdau Canada Subgroup Holding Company
                    pursuant to the Intermediate Holding Company Transfer (as
                    defined in the Status Quo Agreement) or (vi) dissolve, be
                    liquidated or wind up.

          11.3.1.22 Gerdau Canada Subgroup Interim Holding Company. Not permit
                    Gerdau Canada Subgroup Interim Holding Company, before its
                    vertical amalgamation with Gerdau Steel, to (i) conduct any
                    business, except for the holding of the Gerdau Canada
                    Subgroup Holding Company Shares and the Exchanged Co-Steel
                    Shares, (ii) incur any contractual obligations, except those
                    under the Loan Documents and the agreements required to be
                    entered into by it to complete the Co-Steel Combination
                    Transactions (which must be in form and substance
                    satisfactory to the Agent), or (iii) receive any money or
                    other property, except for the existing Gerdau Canada
                    Subgroup Shares and the

<PAGE>
                                    - 105 -

                    Exchanged Co-Steel Shares in the manner contemplated by the
                    Co-Steel Combination Transactions.

          11.3.1.23 Repayment of GTL Netherlands Debt. Not make any payment
                    (including by way of set-off, combination of accounts or
                    conversion to equity) in respect of the Indebtedness of any
                    Gerdau S.A. Group Member owing to GTL Netherlands, except
                    (i) with the prior written consent of the Agent acting on
                    the instructions of the Majority Lenders and (ii) the Debt
                    Restructuring Transactions in accordance with the
                    agreements, documents and instruments delivered to the Agent
                    pursuant to Section 6.2.3.8.

          11.3.1.24 Consolidated Tax Filing. Not participate in or make any
                    consolidated or combined Tax filing with any Co-Steel Group
                    Member.

                                   ARTICLE 12
                         EVENTS OF DEFAULT AND REMEDIES

12.1      EVENTS OF DEFAULT

          The occurrence of any one or more of the following events (each such
event being herein referred to as an "EVENT OF DEFAULT") shall constitute a
default by each Borrower under this Agreement:

12.1.1    Non-Payment of Principal or Interest. Any Borrower fails to pay any
          principal or interest amount outstanding hereunder when due.

12.1.2    Non-Payment of Other Amounts. Any Borrower fails to pay any fee or
          other amount payable hereunder when due and such failure continues
          unremedied for more than three days.

12.1.3    Misrepresentation. Any representation or warranty made or deemed made
          by any Gerdau Canada Group Member or Gerdau S.A. Group Member in any
          Loan Document is found to have been false or incorrect in any material
          respect.

12.1.4    Financial Tests. Any financial test contained in Section 11.1.1.13 or
          in the Gerdau S.A. Guarantee is not complied with, provided that
          non-compliance with Section 11.1.1.13.2 as of the end of any Fiscal
          Quarter shall not be deemed to be an Event of Default if a Gerdau S.A.
          Advance is made within 20 Banking Days of the end of that Fiscal
          Quarter which, if the Gerdau S.A. Advance had been made prior to the
          end of that Fiscal Quarter, would have resulted in compliance with
          Section 11.1.1.13.2, and provided that the prior notice to the Agent
          in respect of such Gerdau S.A. Advance includes details of the
          non-compliance to be cured by it. Notwithstanding anything in this
          Section 12.1.4, (i) the aggregate principal amount of Gerdau S.A.
          Advances made during the period from April 1, to December 31, 2001
          shall not at any time exceed US $15,000,000, and (ii) the aggregate
          principal amount of Gerdau S.A. Advances made during any calendar year
          after December 31, 2001 shall not exceed US $15,000,000, without in
          either

<PAGE>
                                    - 106 -

          case the prior written consent of the Agent (acting on the
          instructions of the Majority Lenders).

12.1.5    Breach by Gerdau Canada Subgroup Holding Company, Gerdau Canada
          Subgroup Interim Holding Company, USP, Gerdau USA, NSULC or Finco. Any
          of Gerdau Canada Subgroup Holding Company, Gerdau Canada Subgroup
          Interim Holding Company, Gerdau USA, NSULC or Finco fails to perform
          or comply with any provision or obligation contained in any Loan
          Document (including the Status Quo Agreement) to which it is party.

12.1.6    Breach of Other Covenants. Any Gerdau S.A. Group Member (other than
          those referred to in Section 12.1.5) fails to perform or comply with
          any provision or obligation contained in any Loan Document to which it
          is a party in any material respect and such failure continues
          unremedied for a period of 15 Banking Days after any Borrower or
          Gerdau S.A. knows or ought to have known of such failure (other than
          those referred to in Sections 12.1.1, 12.1.2, 12.1.3, 12.1.4 or 12.1.5
          above or 12.1.7 or 12.1.17 below.

12.1.7    Cross-Default.

          (a)  Any Gerdau Canada Group Member defaults under any one or more
               agreements, documents or instruments relating to Indebtedness in
               an aggregate amount exceeding Cdn.$25,000,000 (or the Equivalent
               Amount in foreign currency).

          (b)  AmeriSteel or FLS defaults under any one or more agreements,
               documents or instruments relating to Indebtedness in an aggregate
               amount exceeding U.S.$10,000,000 (or the Equivalent Amount in
               other currency).

          (c)  Gerdau S.A. defaults under any one or more agreements, documents
               or instruments relating to Indebtedness in an aggregate amount
               exceeding U.S.$25,000,000 (or the Equivalent Amount in other
               currency).

          (d)  Any payment in respect of a Kyoei Steel Balance of Sale Notes
               Refinancing Loan made without the prior written consent of the
               Agent is made from monies derived, directly or indirectly, from
               any Gerdau S.A. Group Member, it being the intention of the
               parties that all such payments shall be fully subordinated to
               repayment in full and discharge of the Loan Obligations.

          (e)  Any payment in respect of outstanding Gerdau S.A. Advances is
               made from monies derived, directly or indirectly, from any Gerdau
               S.A. Group Member, save for a repayment in accordance with the
               terms of Section 11.3.1.18, or any payment in respect of a loan
               made pursuant to Section 11.3.1.5.6 is made otherwise than in
               accordance with paragraph (iii) of that Section.

<PAGE>
                                    - 107 -

          (f)  Any Indebtedness of any Co-Steel Group Member in an aggregate
               amount exceeding U.S.$10,000,000 (or the Equivalent Amount in
               other currency) is declared due or becomes due, before its
               scheduled maturity date by reason of a default or event of
               default referred to and defined in any of the agreements,
               documents or instruments governing the payment of such
               Indebtedness (including the Co-Steel Credit Agreements) and the
               Agent, in good faith, determines that there is a possibility that
               the Capital Stock of any of the Intermediate Holding Company, the
               Gerdau Canada Subgroup Holding Company and the Gerdau Canada
               Subgroup may be exposed to risk of seizure, loss, forfeiture,
               transfer or other disposal or that the arrangements contemplated
               by the Status Quo Agreement may not be observed or complied with;
               or any event similar to those events described in Section 12.1.9
               below occurs in relation to any Capital Stock or property of any
               Co-Steel Group Member; or any event similar to those events
               referred to Section 12.1.11 below occurs in relation to any
               Co-Steel Group Member.

12.1.8    Unsatisfied Judgments. Any one or more Awards for the payment of money
          in an aggregate amount exceeding Cdn.$1,000,000 (or the Equivalent
          Amount in foreign currency) are rendered against any Gerdau S.A. Group
          Member and such Awards shall remain unsatisfied or unstayed for more
          than 10 Banking Days.

12.1.9    Enforcement of Liens. Any one or more Persons entitled to any Liens on
          any Capital Stock or property of any Gerdau S.A. Group Member having
          an aggregate value exceeding Cdn.$1,000,000, or U.S.$5,000,000 in the
          case of AmeriSteel, take possession of such Capital Stock or property
          or any one or more seizures, executions, garnishments, sequestrations,
          distresses, attachments or other equivalent processes are issued or
          levied against any Capital Stock or property of any Gerdau S.A. Group
          Member having an aggregate value exceeding Cdn.$1,000,000, or
          U.S.$5,000,000 in the case of AmeriSteel, and such property is not
          released within 10 Banking Days or such shorter period as would permit
          such Capital Stock or property to be sold, foreclosed upon or
          forfeited thereunder.

12.1.10   Impossibility. Any Change in Law occurs which has given rise or could
          reasonably be expected to give rise to a Material Adverse Change.

12.1.11   Insolvency. Any Gerdau S.A. Group Member does not generally pay its
          debts as they become due or admits its inability to pay its debts
          generally or makes a general assignment for the benefit of creditors
          or commits an act of bankruptcy (within the meaning of the Bankruptcy
          and Insolvency Act (Canada)) or any proceedings are instituted by or
          against any Gerdau S.A. Group Member seeking to adjudicate it a
          bankrupt or insolvent or seeking liquidation, winding-up,
          reorganization, compromise, arrangement, adjustment, protection,
          relief or composition of it or of its debts under any Applicable Law
          relating to bankruptcy, insolvency or reorganization or relief of
          debtors or other similar matters or seeking the appointment of a
          receiver, manager, receiver and manager, trustee, custodian or other
          similar official for it or for any substantial part of its Business

<PAGE>
                                    - 108 -

          Assets (excluding proceedings being contested by such Gerdau S.A.
          Group Member in good faith by appropriate proceedings so long as
          enforcement remains stayed, none of the relief sought is granted
          (either on an interim or permanent basis) and such proceedings are
          dismissed within 15 days of their commencement); or any Gerdau S.A.
          Group Member takes corporate action to authorize any of the actions
          set forth above in this Section 12.1.11.

12.1.12   Cessation of Business. Any Gerdau S.A. Group Member ceases or suspends
          or threatens to cease or suspend all or a Substantial Portion of its
          business.

12.1.13   Security Imperilled. If any Litigation is commenced which, if
          determined adversely to any Gerdau S.A. Group Member or to the rights
          of the Syndicate, could reasonably be expected to give rise to a
          Material Adverse Change, or any Gerdau S.A. Group Member or any other
          person party to any Loan Document denies that it has any or further
          obligations thereunder.

12.1.14   Material Adverse Change. Any Material Adverse Change occurs.

12.1.15   Change of Ownership. Any Person, or more than one Person acting in
          concert, (other than Gerdau S.A.) acquires ownership or Control of any
          Capital Stock of Gerdau Steel, unless the Majority Lenders consent to
          such acquisition. USP, Gerdau USA or any Gerdau Canada Group Member
          (other than Gerdau Steel) ceases to be a Wholly-Owned Subsidiary of
          the Gerdau Canada Subgroup Holding Company. The Gerdau Canada Subgroup
          Holding Company ceases to own and Control, directly or indirectly, all
          of the Capital Stock of USP or any Gerdau Canada Group Member that is
          a general or limited partnership, unless the Majority Lenders consent
          otherwise. NSULC or Finco ceases to be a Wholly-Owned Subsidiary of
          USP or the Gerdau Canada Subgroup Holding Company, unless the Majority
          Lenders consent otherwise. Gerdau Steel ceases to own and Control at
          least a majority of the Voting Capital Stock of Co-Steel determined on
          a fully diluted basis, after giving effect to each of the
          Reorganization Transactions, unless the Majority Lenders consent
          otherwise. Any Person, other than Gerdau Steel, acquires Capital
          Stock, or rights to acquire Capital Stock, in any class of Capital
          Stock of Co-Steel other than common shares.

12.1.16   Condemnation. Any court, government or governmental agency shall
          condemn, seize, expropriate or otherwise appropriate, or take custody
          or control of, all or any Substantial Portion of the property of any
          Gerdau S.A. Group Member which, when taken together with all other
          property of any Gerdau S.A. Group Member so condemned, seized,
          expropriated, appropriated, or taken custody or control of, during the
          twelve-month period ending with the month in which any such action
          occurs, constitutes a Substantial Portion.

12.1.17   Breach of Special Provisions. Any step or action is taken or omitted
          by any Gerdau S.A. Group Member or any Co-Steel Group Member (or any
          trustee-in-bankruptcy, liquidator or other representative thereof or
          of its creditors) which authorizes or is reasonably likely to result
          in any breach of any of

<PAGE>
                                    - 109 -

          Sections 11.3.1.3, 11.3.1.6, 11.3.1.12, 11.3.1.15, 11.3.1.16,
          11.3.1.17, 11.3.1.20, 11.3.1.21 and 11.3.1.22.

12.2      REMEDIES UPON DEFAULT

          Upon the occurrence of any Event of Default, the Agent may (or, at the
direction of the Majority Lenders, shall) do any one or more or all of the
following:

12.2.1    declare the whole or any part of the unutilized portion (if any) of
          the Credit Facilities to be terminated or reduced, whereupon the
          Lenders shall not be required to make any further Drawdowns or permit
          any further Conversions or Rollovers (other than conversions of
          maturing Bankers' Acceptances to Prime Rate Loans and LIBOR Loans to
          Base Rate Loans);

12.2.2    declare all or any item or part of the Loan Obligations to be
          immediately due and payable, whereupon they shall become so due and
          payable;

12.2.3    suspend any right of a Borrower under any Loan Document;

12.2.4    demand payment under any guarantee comprised in the Security;

12.2.5    realize upon all or part of the Liens constituted under the Security;
          and

12.2.6    take any other action, commence any other suit, action or proceeding
          or exercise such other right as may be permitted at law or in equity
          (whether or not provided for herein or in any other Loan Document) at
          such times and in such manner as the Agent may consider expedient,

all without, except as may be required by Applicable Law, any additional notice,
presentment, demand, protest, noting of protest, dishonour or any other action.
If an Event of Default referred to in Section 12.1.11 occurs, unless the
Majority Lenders otherwise agree, the Loan Obligations shall be accelerated and
become immediately due and payable automatically without any action on the part
of the Agent or any Lender being required. The rights of the Syndicate hereunder
are cumulative and are in addition to and not in substitution for any other
rights or remedies provided by Applicable Law or by the Security. For the
purposes of each Loan Document, an Event of Default which occurs or exists at
any time shall be deemed to be continuing at all times thereafter unless it is
expressly waived in writing by the Majority Lenders, whether or not the default,
breach, failure, event, state or condition that gave rise to such Event of
Default is remedied at any time.

12.3      PAYMENT OF BANKERS' ACCEPTANCES

          Immediately upon the Agent making a declaration pursuant to Section
12.2.2, the Relevant Borrower shall, without the necessity of further act or
evidence, be and become unconditionally obligated to deposit with the Agent the
aggregate face amount of all Bankers' Acceptances then outstanding for the
Relevant Borrower's account and the Relevant Borrower hereby authorizes each
Lender to debit any then existing credit in its accounts with the amount
required to make such payment to the Agent notwithstanding that any such
Bankers'

<PAGE>
                                    - 110 -

Acceptances may be held by the Lender in its own right at maturity. Amounts paid
to the Agent pursuant to this Section 12.3 shall bear interest at the rate
offered by the Agent on deposits of similar amounts for similar terms. All such
amounts, together with interest earned thereon, shall be applied against and
shall reduce to the extent of such amounts the Relevant Borrower's obligations
to pay amounts then or thereafter payable under Bankers' Acceptances at the
respective times such amounts become so payable. Any remaining cash being held
by the Agent pursuant to this Section 12.3 shall be applied against any other
Loan Obligations and any excess thereafter shall be released to the Relevant
Borrower or its assigns, but only after all Bankers' Acceptances have matured
and all Loan Obligations have been satisfied in full.

12.4      LENDERS' RIGHT OF ADVANCE

          In the event that a Borrower fails to comply with its Loan Obligations
under Section 12.3 or 7.6.8, each Lender may, at such time, in its discretion,
make an Advance by way of a Prime Rate Loan under the relevant Credit Facility
on behalf of the Relevant Borrower in an amount not exceeding its participation
in the Outstanding Amount of all outstanding Bankers' Acceptances or the
Outstanding Amount of all outstanding Standby Credits under such Credit Facility
(even if such Advance results in such Lender's participation in the aggregate
Outstanding Amount of all Loans under any Credit Facility exceeding its Revolver
Commitment or Term Commitment, as applicable) and hold the proceeds of such Loan
as security for the obligations of the Relevant Borrower to indemnify such
Lender in respect of such Bankers' Acceptances on their maturity to be applied
in accordance with Section 12.3 or such Standby Credits under Section 7.6.8.

12.5      DISTRIBUTIONS

          All distributions under or in respect of any of the Security shall be
held by any Lender on account of the Loan Obligations without prejudice to any
claim by any Lender for any deficiency after such distributions are received by
any Lender and each Borrower shall remain liable for any such deficiency. All
such distributions may be applied to such part of the Loan Obligations as each
Lender may see fit in its sole discretion, and each Lender may at any time
change any appropriation of any such distributions or other moneys received by
it and reapply the same against any other part of the Loan Obligations as each
Lender may see fit, notwithstanding any previous application.

                                   ARTICLE 13
              THE AGENT AND ADMINISTRATION OF THE CREDIT FACILITIES

13.1      APPOINTMENT AND AUTHORIZATION

          Each Lender irrevocably appoints and authorizes the Agent to execute,
deliver and take such actions as its agent under each Loan Document to which the
Agent is party and to exercise such rights under each such Loan Document as are
specifically delegated to the Agent by the terms thereof, together with such
rights as are reasonably incidental thereto.

<PAGE>
                                    - 111 -

13.2      DECLARATION OF AGENCY

          The Agent declares that it shall hold the Security, the Collateral
charged thereby and the rights granted to it under each other Loan Document for
its own benefit and in its capacity as agent for the ratable benefit of the
Lenders. The rights vested in the Agent by any Loan Document shall be performed
by the Agent in accordance with this Article 13.

13.3      PROTECTION OF AGENT

          The Agent shall not be liable for any action taken or omitted to be
taken by it under any Loan Document or in connection therewith, except for its
own gross negligence or willful misconduct.

13.4      INTEREST HOLDERS

          The Agent may treat each Lender as the holder of all of the interests
of such Lender in respect of the Credit Facilities until a duly executed and
delivered Loan Transfer Agreement signed by such Lender and the Transferee,
completed in form and substance satisfactory to the Agent, has been delivered to
the Agent and the Agent has been paid its required processing fee for such loan
transfer.

13.5      CONSULTATION WITH PROFESSIONALS

          The Agent may engage and consult with the Lenders' Counsel,
accountants, consultants, financial advisors and other experts and the Agent
shall not be liable for any action taken or not taken or suffered by it in good
faith and in accordance with the advice and opinion of the Lenders' Counsel or
such accountants, consultants, financial advisors or other experts.

13.6      DOCUMENTS

          The Agent shall not be under any duty or obligation to examine,
enquire into or pass upon the validity, effectiveness or genuineness of any Loan
Document or any other agreement, document, instrument or communication furnished
pursuant to or in connection with any Loan Document, and the Agent shall be
entitled to assume that the same are valid, effective and genuine, have been
signed or sent by the proper parties and are what they purport to be.

13.7      AGENT AND ITS SUBSIDIARIES AND AFFILIATES

          With respect to its Revolver Commitment, its Term Commitment and those
portions of the Credit Facilities made available by it, the Agent shall have the
same rights hereunder as any other Lender and may exercise the same as though it
were not the Agent and the Agent and its Subsidiaries and affiliates may accept
deposits from, lend money to and generally engage in any kind of business with
any Gerdau Canada Group Member and its Affiliates and Persons doing business
with any Gerdau Canada Group Member or any of its Affiliates as if it were not
the Agent and without any obligation to account therefor.

<PAGE>
                                    - 112 -

13.8      RESPONSIBILITY OF THE AGENT

          The obligations of the Agent to the Lenders under each Loan Document
are only those expressly set forth in such Loan Document, subject as otherwise
provided in this Article 13. The Agent shall not have any fiduciary obligation
to any Lender. The Agent shall only have those contractual obligations expressly
set forth in each Loan Document. The Agent shall not have any duty or obligation
to investigate whether a Default or an Event of Default has occurred. The Agent
shall be entitled to assume that no Default or Event of Default has occurred and
is continuing, unless any officer of the Agent charged with the administration
of the Loan Documents has actual knowledge or has been notified by a Borrower of
such fact or has been notified by a Lender that such Lender considers that a
Default or Event of Default has occurred and is continuing, such notification to
specify in detail the nature thereof.

13.9      ACTION BY THE AGENT

13.9.1    The Agent shall be entitled to use its discretion with respect to
          exercising or refraining from exercising any rights which may be
          vested in it by and with respect to taking or refraining from taking
          any action which it may be able to take under or in respect of any
          Loan Document, unless the Agent has been instructed by the Required
          Lenders to exercise such rights or to take or refrain from taking such
          action; provided, however, that the Agent shall not release or
          postpone any guarantee of any Gerdau S.A. Group Member or release,
          discharge or subordinate any Lien created under any Security without
          the consent of all the Lenders, unless expressly permitted or required
          to do so by the provisions of any Loan Document. The Agent shall not
          incur any obligations under or in respect of any Loan Document with
          respect to anything which it may do or refrain from doing in the
          reasonable exercise of its judgment or which may seem to it to be
          necessary or desirable in the circumstances, except for its gross
          negligence or willful misconduct.

13.9.2    The Agent shall in all cases be fully protected in acting or
          refraining from acting under any Loan Document in accordance with the
          instructions of the Required Lenders, and any action taken or failure
          to act pursuant to such instructions shall be binding on all Lenders.

13.9.3    Notwithstanding anything else herein contained, the Agent may refrain
          from doing anything which would or might in its opinion be contrary to
          any Applicable Law or which would or might otherwise render it liable
          to any Person and may do anything which is, in its opinion, necessary
          to comply with any Applicable Law.

13.9.4    Without prejudice to the provisions of any other Loan Document, the
          Agent shall have the right, but not the obligation to insure any of
          the Collateral or to require any other Person to maintain any such
          insurance and it shall not be responsible for any losses and expenses
          which may be suffered by any Person as a result of the lack of or
          inadequacy or insufficiency of any such insurance.

<PAGE>
                                    - 113 -

13.9.5    The Agent shall have the right to institute, prosecute and defend any
          Litigation affecting the Agent, the Collateral or the Security and to
          compromise any matter or difference or submit any such matter or
          difference to arbitration and to compromise or compound any debts
          owing to the Agent as agent or any other claims against it as such
          agent upon being provided with such evidence as shall seem sufficient
          to the Agent.

13.9.6    The Agent shall have the right to give or enter into any obligation as
          it shall, with the approval of the Required Lenders and subject to all
          of the provisions of the Loan Documents, think fit in relation to the
          Collateral or the Security.

13.9.7    Notwithstanding Section 13.9.1, the Agent may refrain from acting in
          accordance with any instructions of the Required Lenders to begin any
          Litigation, or to take management or control of any Collateral,
          arising out of or in connection with any Loan Document until it has
          received such security as it may require (whether by way of collateral
          deposit or payment in advance or otherwise) for all losses and
          expenses and disbursements which it will or may expend or incur in
          complying with such instructions.

13.9.8    Where the Agent is obliged by the provisions of this Article 13 to
          give any notice or notification "promptly" or "forthwith", if it gives
          such notice or notification within two Banking Days of an officer of
          it charged with the administration of this Agreement becoming aware of
          the subject matter of such notice or notification, it shall be deemed
          to have given such notice or notification promptly or forthwith.

13.10     NOTICE OF EVENTS OF DEFAULT

          In the event that an officer of the Agent charged with the
administration of this Agreement is notified of any Default or Event of Default,
the Agent shall promptly notify the Lenders, and, subject to Section 13.9, the
Agent shall take such action and assert such rights under the Loan Documents as
the Majority Lenders shall request in writing, and the Agent shall not be
subject to any liability by reason of its acting pursuant to any such request.
Prior to receiving any instructions from the Required Lenders in respect of such
Default or Event of Default, the Agent may, but shall not be obliged to, take
such action or assert such rights (other than those matters requiring unanimous
Lender consent under any other provision of this Agreement) as it deems in its
discretion to be advisable for the protection of the Lenders, except that, if
the Required Lenders have instructed the Agent not to take such action or assert
such rights, in no event shall the Agent act contrary to those instructions.

13.11     RESPONSIBILITY DISCLAIMED

          The Agent in such capacity shall not be under any obligation
          whatsoever:

13.11.1   to any Gerdau Canada Group Member as a consequence of any failure or
          delay in the performance by, or any breach by, any Lender of any of
          its obligations under any Loan Document;

<PAGE>
                                    - 114 -

13.11.2   to any Lender, as a consequence of any failure or delay in performance
          by, or any breach by, any Gerdau S.A. Group Member of any of its
          obligations under any Loan Document; or

13.11.3   to any Lender for any statements, representations or warranties in any
          Loan Document or any other agreement, document or instrument
          contemplated by any Loan Document or in any other information provided
          pursuant to any Loan Document or any other agreement, document or
          instrument contemplated by any Loan Document or for the validity,
          effectiveness, enforceability or sufficiency of any Loan Document or
          any other agreement, document or instrument contemplated thereby.

13.12     INDEMNIFICATION

13.12.1   Each of the Lenders severally agrees to indemnify the Agent (to the
          extent not reimbursed by the Relevant Borrower on demand) pro rata
          according to their respective Rateable Shares from and against any and
          all losses and expenses or disbursements of any kind or nature
          whatsoever which may be imposed on, incurred by or asserted against
          the Agent in any way relating to or arising out of any Loan Document
          or any other agreement, document or instrument contemplated thereby or
          any action taken or omitted by the Agent under any Loan Document or
          any agreement, document or instrument contemplated thereby, except
          that no Lender shall be liable to the Agent for any portion of such
          losses and expenses or disbursements resulting from the gross
          negligence or willful misconduct of the Agent.

13.12.2   The Agent may indemnify itself out of the Collateral charged by the
          Security, or any funds received by the Agent pursuant to Section 13.20
          against all of the losses and expenses or disbursements suffered or
          incurred by the Agent in connection with any matter or thing done or
          omitted to be done in any way relating to any Loan Document.

13.13     PROTECTION OF EMPLOYEES, ETC.

          Each reference in Sections 13.1, 13.3, 13.9, 13.10, 13.11, 13.12,
13.15 and 13.20 to the Agent shall (to the extent the context so admits) be
deemed to include the Agent and its directors, officers, employees, agents,
solicitors, accountants, consultants, financial advisors, other experts and all
other representatives and the Agent shall be constituted as agent and bare
trustee of each such Person and shall hold and enforce their rights under those
Sections for their respective benefits.

13.14     CREDIT DECISION

          Each Lender represents and warrants to the Agent that:

13.14.1   in making its decision to enter into this Agreement and to make its
          Revolver Commitment, Term Commitment and its portion of the Credit
          Facilities available to the Borrowers, it has independently taken
          whatever steps it considers necessary

<PAGE>
                                    - 115 -

          to evaluate the financial condition and affairs of each Gerdau S.A.
          Group Member and that it has made an independent credit judgment
          without reliance upon any information furnished by the Agent; and

13.14.2   so long as any portion of the Credit Facilities is being utilized by a
          Borrower, it will continue to make its own independent evaluation of
          the financial condition and affairs of each Gerdau Canada Group
          Member.

13.15     REPLACEMENT AGENT AND REFERENCE LENDERS

13.15.1   The Agent (a "Resigning Agent") may resign at any time by giving
          written notice thereof to the Lenders and Gerdau Steel. Such
          resignation will not be effective until a replacement agent is
          appointed. Upon receipt of notice of any such intended resignation,
          the Majority Lenders and the Borrowers shall have the right to appoint
          a replacement to the Resigning Agent who shall be one of the Lenders.
          If no replacement to the Resigning Agent shall have been so appointed
          and shall have accepted such appointment within 15 days of receipt of
          such notice, the Lenders (excluding the Resigning Agent) shall within
          the following 15 days appoint a replacement who may, but need not be,
          a Lender. If the Lenders fail to appoint a replacement to the
          Resigning Agent within such 15 day period, without limitation of its
          rights under this Section 13.15.1, the Resigning Agent may, on behalf
          of the Lenders, appoint a replacement Agent which shall be a financial
          institution organized under the laws of Canada (or a Province) which
          has (or whose Holding Body Corporate has) combined capital and
          reserves in excess of Cdn $1,000,000,000 or the Equivalent Amount in
          foreign currency and has an office in Toronto. Upon the resignation of
          a Resigning Agent, the replacement administration agent shall
          thereupon succeed to and become vested with all the rights and
          obligations of the Resigning Agent and the Resigning Agent shall be
          discharged from its obligations under the Loan Documents. A
          replacement administration agent shall evidence its acceptance of
          appointment hereunder by signing and delivering a counterpart of this
          Agreement. After any Resigning Agent's resignation or removal
          hereunder as Agent the provisions of this Article 13 shall continue in
          effect for its benefit in respect of any actions taken or omitted to
          be taken by it while it was acting as Agent.

13.15.2   The Agent may nominate up to three Lenders to act as Reference Lenders
          under this Agreement. Any Reference Lender may resign at any time by
          giving notice thereof to the Agent. Upon receipt of such notice, the
          Agent may appoint a replacement Reference Lender who shall be one of
          the Lenders.

13.15.3   The Swing Line Lender may resign at any time by giving notice thereof
          to the Agent. Upon receipt of such notice, the Majority Lenders shall
          appoint a replacement Swing Line Lender who shall be one of the
          Lenders.

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                                    - 116 -

13.16     DELEGATION

          With the prior approval of the Majority Lenders, such approval not to
be unreasonably withheld, the Agent shall have the right to delegate any of its
rights, duties or obligations under the Loan Documents as Agent to any other
Person upon such terms and conditions as the Agent may think fit and the Agent
shall not be bound to supervise the proceedings or be in any way responsible for
any obligations or losses and expenses incurred by reason of any misconduct or
default on the part of any such delegate.

13.17     REQUIRED LENDER DECISIONS

          Where the Required Lenders are required to consent to any act or thing
under any Loan Document, the Agent shall ask all Lenders for such consent to do
any such act or thing. The foregoing shall not limit the right of the Required
Lenders to consent to any such act or thing. A copy of such consent shall be
sent by the Agent to all the Lenders.

13.18     WAIVERS AND AMENDMENTS

13.18.1   The rights of each Lender under each Loan Document shall be cumulative
          and not exclusive of any rights which each Lender would otherwise
          have, and no failure or delay by any Lender in exercising any right
          shall operate as a waiver of it nor shall any single or partial
          exercise of any right preclude its further exercise or the exercise of
          any other right. Subject as otherwise provided in Subsections 13.18.2
          and 13.18.3, any term, covenant, agreement, or condition of any Loan
          Document may only be amended with the consent of the Relevant Borrower
          and the Majority Lenders or compliance therewith may only be waived
          (either generally or in a particular instance and either retroactively
          or prospectively) by the Majority Lenders.

13.18.2   Without the prior consent of every Lender, no amendment, waiver or
          other action referred to in Subsection 13.18.1 shall:

          13.18.2.1 increase the aggregate amount of any Credit Facility, the
                    amount or term of any of the Revolver Commitments, the Term
                    Commitments or the proportion represented by the Rateable
                    Share of any Lender;

          13.18.2.2 postpone or defer the time for the payment of the principal
                    of or interest on any Advance, any Stamping Fee, Commitment
                    Fee or any other amount payable hereunder;

          13.18.2.3 decrease the rate or amount or change the currency of any
                    principal, interest or fees (including Stamping Fees and
                    Commitment Fee) payable hereunder or the requirement of pro
                    rata application in accordance with each Lender's Rateable
                    Share of all amounts received by the Agent in respect of
                    each Credit Facility;

          13.18.2.4 change the definition of "Required Lenders" or "Majority
                    Lenders";

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                                    - 117 -

          13.18.2.5 amend Sections 13.22, 13.25 or this Section 13.18; or

          13.18.2.6 release or postpone any guarantee of any Gerdau S.A. Group
                    Member under any Loan Document or release, discharge or
                    subordinate any Lien created under the Security except as
                    otherwise expressly permitted or required by the provisions
                    of any Loan Document.

13.18.3   No amendment or waiver of any provision of any Loan Document shall
          affect any of the rights or obligations of the Agent, the Swing Line
          Lender or Issuing Bank under any Loan Document without the prior
          consent of the Agent, Swing Line Lender or Issuing Bank.

13.19     DETERMINATION BY AGENT

13.19.1   Good Faith. Any determination to be made by the Agent under any Loan
          Document shall be made by the Agent in good faith and, if so made,
          shall be conclusive and binding on all parties, absent manifest error.

13.19.2   Certificate of the Agent as to Rates. A certificate of the Agent
          certifying any amount or interest or discount rate shall be conclusive
          and binding on the parties hereto for all purposes, absent manifest
          error. No provision hereof shall be construed so as to require the
          Agent to issue a certificate at any particular time.

13.19.3   Notification of Rates. Each Reference Lender and Swing Line Lender (if
          it is not the same Person as the Agent) shall promptly notify the
          Agent of each interest rate that is required to determine any rate of
          interest pursuant to this Agreement. Promptly following receipt of
          each such notice, or promptly after determination if the Agent and the
          Reference Lender or Swing Line Lender is the same Person, the Agent
          shall promptly notify the Lenders of each interest rate the Agent is
          required to determine and report to the Lenders pursuant to this
          Agreement.

13.20     INTERLENDER PROCEDURE FOR MAKING ADVANCES

13.20.1   Subject to the terms and conditions of this Agreement, each Credit
          Facility shall be available to the Relevant Borrower as follows: upon
          receipt by the Agent of a Borrowing Request, the Agent will promptly
          notify each Lender of the Agent's receipt of such notice and of such
          Lender's Rateable Share of such Borrowing. In the case of an issue of
          Bankers' Acceptances, the Agent will round allocations amongst the
          Lenders to ensure that each Bankers' Acceptance issued has a face
          amount which is a whole number multiple of Cdn.$100,000 (and such
          rounded allocations shall constitute the Lenders' respective Rateable
          Shares for the purposes of this Agreement). Subject to Section
          13.20.7, each Lender will make its Rateable Share of each Borrowing or
          its Acceptance Proceeds available to the Agent by paying, no later
          than 11:00 a.m. (Toronto time) on the Borrowing Date requested by the
          Borrower, its Rateable Share of such Advance or such Acceptance
          Proceeds to the Agent's Accounts. Subject to Section 5.6, the Agent
          will make such funds available, upon receipt, to the Relevant Borrower
          on the Borrowing Date by bank transfer to the Relevant Borrower's
          Accounts.

<PAGE>
                                    - 118 -

13.20.2   The obligations of the Agent under this Section 13.20 shall be limited
          to taking such steps as are commercially reasonable to implement the
          instructions described in Section 13.20.1, and the Agent shall not be
          liable for any losses and expenses which may be incurred or suffered
          by the Relevant Borrower and occasioned by the failure or delay of
          funds to reach the designated destination.

13.20.3   Unless the Agent has been notified by a Lender within two Banking Days
          prior to the Borrowing Date requested by a Borrower that such Lender
          will not make available to the Agent its Rateable Share of such
          Borrowing or its Acceptance Proceeds, the Agent may assume that such
          Lender has made such portion of the Borrowing or such Acceptance
          Proceeds available to the Agent on the Borrowing Date in accordance
          with the provisions hereof, and the Agent may, in reliance upon such
          assumption, make available (to the extent applicable) to the Relevant
          Borrower on such date a corresponding amount. If the Agent has made
          such assumption, to the extent a Lender has not so made its Rateable
          Share of the Borrowing or its Acceptance Proceeds available to the
          Agent, such Lender agrees to pay to the Agent forthwith on demand, to
          the extent that such amount is not recovered from the Relevant
          Borrower within seven days of demand (without in any way obligating
          the Agent to take legal action with respect to such collection), such
          Lender's Rateable Share of the Borrowing or its Acceptance Proceeds
          and all losses and expenses incurred by the Agent in connection
          therewith together with interest thereon (at the rate payable
          hereunder by the Relevant Borrower in respect of such Borrowing or at
          the rate per annum equivalent to the one month CDOR BA Rate plus the
          applicable Stamping Fee which would otherwise have been applicable to
          such Bankers' Acceptances) for each day from the date such amount is
          made available by the Agent until the date such amount is paid or
          repaid to the Agent.

13.20.4   Notwithstanding Section 13.20.3, if a Lender fails so to pay any
          portion of any Borrowing or its Acceptance Proceeds to the Agent
          pursuant to Section 13.20.3, the Relevant Borrower shall, without
          prejudice to any rights that the Borrower might have against such
          Lender, repay such amount to the Agent within three Banking Days after
          demand therefor by the Agent.

13.20.5   Any amount payable to the Agent pursuant to this Section 13.20 (other
          than Section 13.20.1) shall be set forth in a certificate delivered by
          the Agent to the Lender concerned and Gerdau Steel (which certificate
          shall contain reasonable details of how the amount payable is
          calculated) and shall be prima facie evidence thereof. If a Lender
          makes the payment to the Agent required by this Section 13.20, the
          amount so paid shall constitute such Lender's Rateable Share of the
          Borrowing or its Acceptance Proceeds for purposes of this Agreement.

13.20.6   The failure of any Lender to make its Rateable Share of any Borrowing
          or its Acceptance Proceeds shall not relieve any other Lender of its
          obligations, if any, hereunder to make its Rateable Share of the
          Borrowing or its Acceptance Proceeds on the Borrowing Date, but no
          Lender shall be responsible for the failure of any other Lender to
          make available its Rateable Share of any Borrowing

<PAGE>
                                    - 119 -

          or its Acceptance Proceeds to be made available by such other Lender
          on any Borrowing Date.

13.20.7   If on any date amounts would be payable under this Agreement by the
          Agent to any Lender and by that Lender to the Agent, then, on such
          date, unless the Agent notifies the Lenders that netting is not to
          apply to such payments, each such party's obligations to make payment
          of any such amount will be automatically satisfied and discharged and,
          if the aggregate amount that would otherwise have been payable by the
          Agent (after receipt from the Relevant Borrower or the Lenders, as the
          case may be) to that Lender exceeds the aggregate amount that would
          otherwise have been payable by that Lender to the Agent (for the
          account of the Relevant Borrower or the Lenders, as the case may be)
          or vice versa, such obligation shall be replaced by an obligation upon
          the Agent or the Lender by whom the larger aggregate amount would have
          been payable to pay to the other the excess of the larger aggregate
          amount over the smaller aggregate amount.

13.21     REMITTANCE OF PAYMENTS

          Forthwith after receipt of any payment of principal, interest, fees or
other amounts for the benefit of the Lenders pursuant to the provisions hereof,
the Agent shall remit to each Lender, its Rateable Share of such payment. If the
Agent, on the assumption that it will receive, on any particular date, a payment
of principal, interest, fees or other amounts hereunder, remits to each Lender
its Rateable Share of such payment and the Relevant Borrower fails to make such
payment, each Lender agrees to repay to the Agent forthwith on demand, to the
extent that such amount is not recovered from the Relevant Borrower within seven
days of demand (without in any way obligating the Agent to take any legal action
with respect to such collection), such Lender's Rateable Share of the payment
made pursuant hereto together with all losses and expenses incurred by the Agent
in connection therewith and interest thereon (at the rate payable hereunder by
the Relevant Borrower in respect of such amount) for each day from the date such
amount is remitted to the Lenders. The exact amount of the repayment required to
be made by the Lenders will be set forth in a certificate delivered by the Agent
to each Lender, which certificate shall be conclusive and binding for all
purposes, absent manifest error.

13.22     REDISTRIBUTION OF PAYMENTS

13.22.1   If any Lender shall exercise any right of counter-claim, set-off or
          bankers' lien or similar right with respect to the property of an
          Obligor or if under any applicable bankruptcy, insolvency or other
          similar law it receives a secured claim the security for which is a
          debt owed by it to such Obligor, it shall apportion the amount thereof
          proportionately between:

          13.22.1.1 amounts comprised in the Loan Obligations owing to such
                    Lender, which amounts shall be applied in accordance with
                    this Agreement; and

          13.22.1.2 amounts otherwise owed to it by such Obligor;

<PAGE>
                                    - 120 -

          provided that any cash collateral account funded by way of advances
          from an Obligor as collateral for a documentary or standby credit or
          letter of guarantee issued by such Lender on behalf of such Obligor
          may be applied by such Lender to such amounts owed by such Obligor to
          such Lender in respect of any such documentary or standby credit or
          letter of guarantee without apportionment.

13.22.2   If a Lender shall, through the exercise of a right, or the receipt of
          a secured claim described above or otherwise receives payment of a
          portion of the Loan Obligations due to it which is greater than the
          proportion received by any other Lender in respect of the aggregate
          amount of the Loan Obligations due to such other Lender (having regard
          to the respective Rateable Shares of the Lenders), the Lender
          receiving such proportionately greater payment shall purchase a
          participation (which shall be done simultaneously with receipt of such
          payment) in that portion of the Loan Obligations due to the other
          Lender or Lenders (the "Selling Lender or Lenders") so that the
          respective receipts shall be pro rata according to their Rateable
          Shares; provided, however, that if all or part of such proportionately
          greater payment received by such purchasing Lender shall be recovered
          from an Obligor by the Selling Lender or Lenders, such purchase shall
          be rescinded and the purchase price paid for such participation shall
          be returned by such Selling Lender or Lenders to the extent of such
          recovery, but without interest. Such Lender shall exercise its rights
          in respect of such secured claim in a manner consistent with the
          rights of the Lenders entitled under this Section 13.22 to share in
          the benefits of any recovery on such secured claims.

13.22.3   If any Lender does any act or thing permitted by subsections 13.22.1
          or 13.22.2, it shall promptly provide full particulars thereof to the
          Agent and the Agent shall promptly provide copies of such particulars
          to the other Lenders.

13.23     PROMPT NOTICE TO LENDERS

          The Agent agrees to provide to the Lenders copies of the information,
notices and reports received by it pursuant to Section 11.1.1.10 promptly upon
receipt of same.

13.24     SEVERAL DEBTS OF THE LENDERS

          Each Lender's share in each Borrowing constitutes a several debt owing
by the Relevant Borrower to such Lender.

13.25     ENFORCEMENT OF SECURITY

          Subject to the Security Co-ordination Agreement, to the extent that
the Agent receives or recovers monies pursuant to any right of enforcement under
the Security, such monies shall (without prejudice to the rights of the Agent to
credit any monies received by it to the Cash Collateral Account), be applied as
among the Syndicate:

13.25.1   first, in or towards payment of all of the Agent's losses and expenses
          and disbursements;

<PAGE>
                                    - 121 -

13.25.2   secondly, in or towards payment of all amounts which are due and
          payable at such time by each Borrower to the Lenders on account of the
          Loan Obligations owing by such Borrower pro rata to the respective
          aggregate amounts owing to the Lenders;

13.25.3   thirdly, if the Loan Obligations have been paid in full, in payment to
          any Person to whom the Agent is obliged to pay in priority to the
          Obligor otherwise entitled thereto, to the extent it is so obliged;
          and

13.25.4   fourthly, thereafter, in payment of the Obligor entitled thereto.

The fact that the Agent may make a payment pursuant to Sections 13.25.3 or
13.25.4 above or may determine that the Loan Obligations have been paid in full,
will not thereafter prevent the Agent from applying any further monies, or any
credit balance on any account, in the order set out in this Section 13.25.

13.26     SWING LINE LOANS

13.26.1   Unless the Swing Line Lender and the Majority Lenders agree otherwise,
          if an Event of Default occurs then the Swing Line Lender will promptly
          request the Agent on behalf of each Relevant Borrower (and for this
          purpose the Swing Line Lender is irrevocably authorized by each
          Relevant Borrower to do so) for an Advance by way of Prime Rate Loan
          or Base Rate Loan (as applicable) from the Lenders pursuant to Section
          2.4 to repay to the Swing Line Lender the Swing Line Loans. The
          Lenders are irrevocably directed by each Relevant Borrower to make any
          Advance by way of Prime Rate Loan or Base Rate Loan (as applicable) if
          so requested by the Swing Line Lender and pay the proceeds thereof
          directly to the Swing Line Lender. At all times thereafter the Swing
          Line Commitment shall be treated as reduced to nil, the Swing Line
          Lender's Revolver Commitment shall be increased by the amount of such
          reduction and the Lenders shall make such adjusting payments amongst
          them in the manner contemplated by Section 13.22.2 as may be required
          to ensure their respective participations in outstanding Advances
          under the Revolver Facility reflect their respective Rateable Shares
          of the Revolver Facility. If any Standby Instrument is thereafter
          drawn upon which results in a further Swing Line Loan the Swing Line
          Lender will again promptly request the Agent on behalf of the Relevant
          Borrower (and for this purpose the Swing Line Lender is irrevocably
          authorized by the Relevant Borrower to do so) for an Advance by way of
          Prime Rate Loan or Base Rate Loan (as applicable) from the Lenders
          pursuant to Section 2.4 to repay that Swing Line Loan and the
          foregoing provisions of this Section 13.26.1 shall equally apply to
          each such further Advance. Each Lender unconditionally agrees to pay
          to the Agent for the account of the Swing Line Lender such Lender's
          Rateable Share of each Advance requested by the Swing Line Lender on
          behalf of the Relevant Borrower to repay Swing Line Loans made by such
          Swing Line Lender.

13.26.2   Except as provided in Section 13.26.4, the obligations of each Lender
          under Section 13.26.1 are unconditional, shall not be subject to any
          qualification or

<PAGE>
                                    - 122 -

          exception whatsoever and shall be performed in accordance with the
          terms and conditions of this Agreement under all circumstances
          including:

          13.26.2.1 any lack of validity or enforceability of the Relevant
                    Borrower's obligations under Section 2.6 or Article 6;

          13.26.2.2 any of the matters referred to in Section 6.2 or 6.3;

          13.26.2.3 the occurrence of any Default or Event of Default or the
                    exercise of any rights by the Agent under Section 13.2; and

          13.26.2.4 the absence of any demand for payment being made, any proof
                    of claim being filed, any Security being enforced, any
                    proceeding being commenced or any judgment being obtained by
                    the Swing Line Lender or the Issuing Bank against the
                    Relevant Borrower.

13.26.3   If a Lender (a "Defaulting Lender") fails to make payment on the due
          date therefor of any amount due from it for the account of the Swing
          Line Lender pursuant to Section 13.26.1 (the balance thereof for the
          time being unpaid being referred to in this Section 13.26.3 as an
          "overdue amount") then until the Swing Line Lender has received
          payment of the overdue amount (plus interest as provided below) in
          full (and without in any way limiting the rights of the Swing Line
          Lender in respect of such failure):

          13.26.3.1 the Swing Line Lender shall be entitled to receive any
                    payment which the Defaulting Lender would otherwise have
                    been entitled to receive in respect of the Credit Facilities
                    or otherwise in respect of any Loan Document; and

          13.26.3.2 the overdue amount shall bear interest payable by the
                    Defaulting Lender to the Swing Line Lender at the rate
                    payable by the Relevant Borrower in respect of the Loan
                    Obligations which gave rise to such overdue amount.

13.26.4   If for any reason, determined by the Agent to be prejudicial to the
          interests of any of the Syndicate, an Advance may not be made pursuant
          to Section 13.26.1 to reimburse the Swing Line Lender as contemplated
          thereby, then promptly upon receipt of notification of such fact from
          the Agent, each Lender shall deliver to the Agent for the account of
          such Swing Line Lender in immediately available funds the purchase
          price for such Lender's participation interest in the relevant
          unreimbursed Swing Line Advances. Each Lender shall, upon demand by
          such Swing Line Lender made to the Agent, deliver to the Agent for the
          account of such Swing Line Lender interest on such Lender's Rateable
          Share from the date of payment by such Swing Line Lender of such
          unreimbursed Swing Line Advances until the date of delivery of such
          funds to such Swing Line Lender by such Lender at a rate per annum
          equal to the Federal Funds Rate (in the case reimbursement is to be
          made in U.S. Dollars) or the one month CDOR BA Rate (in the case the
          reimbursement is to be made in Canadian Dollars) for such period.

<PAGE>
                                    - 123 -

          Such payment shall only, however, be made by the Lenders in the event
          and to the extent such Swing Line Lender has not been reimbursed in
          full by the Relevant Borrower for interest on the amount of such
          unreimbursed Swing Line Advances.

13.26.5   The Swing Line Lender shall, forthwith upon its receipt of any
          reimbursement (in whole or in part) by the Relevant Borrower for any
          unreimbursed Swing Line Advances in relation to which other Lenders
          have purchased a participation interest pursuant to Section 13.26.4,
          or of any other amount from the Relevant Borrower or any other Person
          in respect of such payment (other than pursuant to Section 2.6 or
          6.2), transfer to such other Lender such other Lender's Rateable Share
          of such reimbursement or other amount. In the event that any receipt
          by the Issuing Bank of any reimbursement or other amount is found to
          have been a transfer in fraud of creditors or a preferential payment
          under any applicable insolvency legislation or is otherwise required
          to be returned, such Lender shall promptly return to such Swing Line
          Lender any portion thereof previously transferred to it by such Swing
          Line Lender, without interest to the extent that interest is not
          payable by such Swing Line Lender in connection therewith.

                                   ARTICLE 14
                                     GENERAL

14.1      RELIANCE AND NON-MERGER

          All covenants, agreements, representations and warranties of each
party hereto (other than the Lenders) made herein or in any other Loan Document
or in any certificate or other document signed by any of its directors or
officers and delivered by or on behalf of it pursuant hereto or thereto are
material, shall be deemed to have been relied upon by the Syndicate
notwithstanding any investigation heretofore or hereafter made by the Syndicate
or the Lenders' Counsel or any employee, agent or other representative of any of
the Syndicate and shall survive the execution and delivery of this Agreement and
the other Loan Documents until the Borrowers shall have satisfied, paid in full
and performed all of the Loan Obligations.

14.2      AMENDMENT AND WAIVER

          No amendment of any provision of any Loan Document or consent to any
departure by any other party thereto from any provision thereof is effective
unless it is in writing and signed by the Required Lenders. No amendment of or
consent to any departure from any provision of any Loan Document to which any
party hereto (other than a Lender) is party shall require the agreement of any
other party hereto, except the Required Lenders, to be effective and binding on
all parties hereto. Such amendment or consent shall be effective only in the
specific instance and for the specific purpose for which it is given. No failure
or delay on the part of the Syndicate in exercising any right under any Loan
Document or under any other instrument delivered to any Lender pursuant thereto
and no indulgence or forbearance by any of the Syndicate in respect of the
strict application of the provisions thereof shall operate as a waiver unless
made in writing and signed by an officer of the Agent in accordance with Section
13.18. Any written waiver by the Syndicate shall not preclude the further
exercise by the Syndicate of

<PAGE>
                                    - 124 -

any right hereunder or extend to or apply to any subsequent default of the same
or any other nature.

14.3      SET-OFF OR COMPENSATION

          In addition to and not in limitation of any rights now or hereafter
granted under Applicable Law, but subject to Section 13.22, if a Default or
Event of Default has occurred or is continuing, each Lender, may at any time and
from time to time without prior notice to any other party hereto or any other
Person, any such prior notice being expressly waived by each such party hereto,
combine, off-set, set-off or compensate and apply any and all deposits, general
or special, time or demand, provisional or final, matured or unmatured, in the
same or in different currencies, and any other indebtedness at any time owing by
the Lender, to or for the credit of or for the account of Gerdau Steel or any
Borrower, against and on account of Gerdau Steel's or that Borrower's Loan
Obligations notwithstanding that any of them are contingent or unmatured and
notwithstanding that any such deposit or indebtedness may or may not be
expressed in the same Currency.

14.4      NOTICES

          Any notice or other communication required or permitted to be given
hereunder shall be in writing and shall be given by prepaid first-class mail, by
telecopier or other means of electronic communication or by hand-delivery as
hereinafter provided. Any such notice, if mailed by prepaid first-class mail at
any time other than during or within three Banking Days prior to a general
discontinuance of postal service due to strike, lockout or otherwise, shall be
deemed to have been received on the fourth Banking Day after the post-marked
date thereof, or if sent by telecopier or other means of electronic
communication, shall be deemed to have been received on the Banking Day
following the sending, or if delivered by hand shall be deemed to have been
received at the time it is delivered to the applicable address of the addressee
either to the individual designated in Schedule A or F, as applicable, or to a
senior employee of the addressee at such address (and, in the case of any
Lender, at the same department within the Lender) with responsibility for
matters to which the information relates. Notice of change of address shall also
be governed by this Section 14.4. In the event of a general discontinuance of
postal service due to strike, lock-out or otherwise, notices or other
communications shall be delivered by hand or sent by facsimile or other means of
electronic communication and shall be deemed to have been received in accordance
with this Section 14.4. Notwithstanding the foregoing, no notice or other
communication to the Agent or the Swing Line Lender shall be effective or be
deemed to be received by the Agent or the Swing Line Lender unless it is sent by
telecopier or delivered by hand. Notices and other communications shall be
addressed to the addresses of the relevant party hereto specified beside its
name on Schedule A or F, as applicable.

14.5      BINDING EFFECT AND ASSIGNMENT

14.5.1    Benefit & Burden. The Loan Documents shall enure to the benefit of and
          be binding on the parties hereto, their respective successors and each
          assignee of some or all of the rights or obligations of the parties
          under the Loan Documents permitted by Section 14.5.4. Any reference in
          any such Loan Document to any

<PAGE>
                                    - 125 -

          party shall (to the extent the context so admits) be construed
          accordingly to include reference to such successors and permitted
          assigns.

14.5.2    Borrower. None of Gerdau Steel and the Borrowers may assign all or any
          part of any of its rights or obligations in respect of any Credit
          Facility or under any Loan Document. Where the context so admits, each
          reference in this Agreement to Gerdau Steel or any Borrower shall be
          construed so as to include the successors of Gerdau Steel or such
          Borrower.

14.5.3    Participation. Each Lender may grant a participation to any other
          Person (a "PARTICIPANT") in the whole or any part of its Revolver
          Commitment or Term Commitment (including its share in any Advances
          made by it hereunder) under which the Participant shall be entitled to
          the benefit of the same rights under this Agreement with respect to
          such participation as if it were a party hereto in the place and stead
          of such Lender provided that, in respect of such participated share of
          its Revolver Commitment or Term Commitment and as amongst all parties
          to this Agreement, such Lender shall remain entitled to enforce such
          rights, and shall remain responsible for the performance of all
          obligations, of such Lender under this Agreement with respect to the
          share of its Revolver Commitment or Term Commitment subject to such
          participation.

14.5.4    Assignments. Each Lender (a "TRANSFERRING LENDER") may assign its
          Revolver Commitment or Term Commitment (including its share in any
          Advances made hereunder), or any part thereof in a minimum amount of
          Cdn.$10,000,000, or such lesser amount as the Agent and Gerdau Steel
          may permit, to (i) any Person during the period of primary syndication
          of the Credit Facilities, (ii) any affiliate of the Transferring
          Lender, (iii) prior to the occurrence of an Event of Default, to any
          Person not referred to in clauses (i) and (ii), with the prior consent
          of the Agent and Gerdau Steel, such consent not to be unreasonably
          withheld or delayed or (iv) after the occurrence of an Event of
          Default, to any other Person without the consent of any other party
          hereto, other than the Agent whose consent shall still be required and
          which will not be unreasonably withheld or delayed. Any such transfer
          to any Person permitted pursuant to the preceding sentence (a
          "TRANSFEREE") shall be made pursuant to a loan transfer agreement (a
          "LOAN TRANSFER AGREEMENT") substantially in the form of Schedule H (or
          in such other form to similar effect as the Agent may approve). Each
          Loan Transfer Agreement must be delivered to the Agent at least five
          Banking Days before it takes effect accompanied, if such assignment is
          not being made to an affiliate of an existing Lender and is not being
          made during the period of primary syndication of the Credit
          Facilities, by payment to the Agent of a processing fee of Cdn.$3,500.
          Each party hereto hereby agrees that any such Transferee under any
          such Loan Transfer Agreement shall be entitled to rights identical to
          the rights assigned to such Transferee as if such Transferee were
          named in this Agreement as an original party in substitution for the
          Transferring Lender in respect of such Revolver Commitment and Term
          Commitment, or part thereof, assigned, and such Transferring Lender
          shall be released from all obligations in relation to its Revolver
          Commitment and Term Commitment, or part thereof, so assigned.

<PAGE>
                                    - 126 -

14.5.5    Schedule A Revisions. Schedule A attached to this amended and restated
          loan agreement records the Lenders and their respective Commitments
          and Lending Offices as of the date of execution and delivery hereof.
          The Agent shall from time to time revise Schedule A to record the
          Lenders and their respective Commitments and Lending Offices after
          giving effect to assignments and changes in Lending Offices referred
          to above. Any such revised Schedule A shall be prima facie evidence of
          the identities, Commitments and Lending Offices of the Lenders. The
          Agent shall provide a copy of any revised Schedule A to any Borrower
          or Lender upon request.

14.6      CONFIDENTIALITY

          Each Lender shall, subject as hereinafter provided, keep confidential
from any third party (excluding directors, officers, employees, agents,
solicitors, accountants, consultants, financial advisors and all other
representatives of the Lender) any data or information received by it from a
Borrower pursuant to this Agreement which is confidential or which is designated
in writing as such by a Borrower except to the extent that such information was
not confidential when received by the Lender, except as required by law, rule,
regulation or official directive or as may be necessary to protect the interests
of any Lender under this Agreement. Notwithstanding any other provision of this
Section 14.6, the Agent or any Lender may make available any confidential data
or information received by it pursuant to this Agreement:

14.6.1    to any other Lender;

14.6.2    to any Person referred to in Section 14.5 to whom the Lender is
          soliciting to purchase or has granted a participation or assignment of
          the whole or any part of any of the Lender's rights or obligations
          under this Agreement so long as that Person agrees with the Lender to
          be bound by the same conditions and obligations pertaining to
          confidentiality which apply to the Lender under this Section 14.6;

14.6.3    to any Person referred to in Section 13.15 to whom the Agent, Agent or
          the Issuing Bank is soliciting to be a successor agent, security
          trustee or issuing bank under this Agreement;

14.6.4    to the legal, accounting and other professional advisors to the Agent
          or any Lender on a privileged or confidential basis; or

14.6.5    after the occurrence of a Default and for so long as it is continuing,
          as such Lender or the Agent may in good faith determine to be
          necessary or of advantage in connection with the enforcement of this
          Agreement or any other Loan Document.

14.7      TIME

          Time is of the essence of each of the Loan Documents.

<PAGE>
                                    - 127 -

14.8      FURTHER ASSURANCES

          Whether before or after the happening of a Default or an Event of
Default, each Obligor party hereto shall at its own expense do, make, execute or
deliver all such further acts, documents and things in connection with the Loans
and the Loan Documents as the Agent may reasonably require from time to time for
the purpose of giving effect to the Loan Documents including for the purpose of
facilitating the enforcement of the Security, all immediately upon the request
of the Agent.

14.9      CURRENCY CONVERSION AND INDEMNITY

14.9.1    If any of the Agent and the Lenders receives or recovers any amount
          payable under any of the Loan Documents in a currency (the "RECOVERED
          AMOUNT") which is different than the currency in which the relevant
          Loan Obligations are required to be paid (the "CONTRACT CURRENCY"),
          the Agent or such Lender may convert the Recovered Amount to the
          Contract Currency at the Spot Rate or, if a Spot Rate is not
          available, at the rate of exchange for which the Agent or such Lender
          is able, acting in a reasonable manner and in good faith, to purchase
          the relevant amount of the Contract Currency. The amount of the
          Contract Currency resulting from any such conversion shall then be
          applied in accordance with the applicable provisions of this
          Agreement.

14.9.2    If, for the purposes of obtaining or enforcing judgment in any court
          in any jurisdiction, it becomes necessary to convert into the currency
          of the country giving such judgment (the "JUDGMENT CURRENCY") any of
          the Loan Obligations which are denominated in different currency (the
          "AGREED CURRENCY"), then the date on which the rate of exchange for
          conversion is selected by that court is referred to herein as the
          "Conversion Date". If there is a change in the rate of exchange
          between the Judgment Currency and the Agreed Currency between the
          Conversion Date and the actual receipt by the Agent of the amount due
          in respect of such Loan Obligations or judgment, Gerdau Steel or the
          Relevant Borrower (as applicable) will, notwithstanding such judgment,
          pay all such additional amounts as may be necessary to ensure that the
          amount received by the Agent (when converted at the rate of exchange
          prevailing on the date of receipt, in the case of any such amount not
          received by the Agent in the Agreed Currency) will produce the amount
          due in the Agreed Currency. Gerdau Steel or the Relevant Borrower's
          liability hereunder constitutes a separate and independent liability
          which shall not merge with any judgment or any partial payment or
          enforcement of payment of sums due in respect of the Loan Obligations,
          or under any of the Loan Documents.

14.10     TAXES

14.10.1   Each payment under each Loan Document shall be made without any
          deduction or withholding for or on account of any Tax unless such
          deduction or withholding is required by any Applicable Law, as
          modified by the practice of any relevant Governmental Body, then in
          effect. If Gerdau Steel or the Relevant Borrower

<PAGE>
                                    - 128 -

          (the "RELEVANT OBLIGOR") is required to deduct or withhold Tax from
          any such payment to any Lender or the Agent (the "AFFECTED LENDER"),
          then the Relevant Obligor will:

          14.10.1.1 promptly notify the Agent of such requirement;

          14.10.1.2 pay to the relevant Governmental Body the full amount
                    required to be deducted or withheld (including the full
                    amount required to be deducted or withheld from any
                    additional amount paid by the Relevant Obligor to the
                    Affected Lender under this Section 14.10.1) promptly upon
                    the earlier of determining that such deduction or
                    withholding is required or receiving notice that such amount
                    has been assessed against the Relevant Obligor;

          14.10.1.3 promptly forward to the Agent an official receipt (or a
                    certified copy), or other documentation reasonably
                    acceptable to the Agent, evidencing such payment to such
                    Governmental Body; and

          14.10.1.4 pay to the Affected Lender, in addition to the payment to
                    which the Affected Lender is otherwise entitled under such
                    Loan Document such additional amount as is necessary to
                    ensure that the net amount actually received by the Affected
                    Lender (free and clear of Tax, whether assessed against the
                    Relevant Obligor or the Affected Lender) will equal the full
                    amount the Affected Lender would have received had no such
                    deduction or withholding been required.

14.10.2   If any Relevant Obligor fails to pay to the relevant Governmental Body
          when due any Tax that it was required to deduct or withhold under
          Section 14.10.1 in respect of any payment to or for the benefit of any
          Affected Lender under any Loan Document or fails to promptly furnish
          such Affected Lender with the documentation referred to in Section
          14.10.1.3, that Relevant Obligor shall forthwith on demand fully
          indemnify such Affected Lender on an after-Tax basis from and against
          any Taxes (including interest and penalties), losses and expenses
          which such Affected Lender may suffer or incur as a result of such
          failure.

14.10.3   Each Relevant Obligor shall also indemnify each Affected Lender on an
          after-Tax basis, for any additional Taxes on net income that an
          Affected Lender may be obliged to pay as a result of the receipt of
          additional amounts under this Section 14.10.

14.10.4   If an Affected Lender is, in its sole opinion, entitled to claim a
          refund or able to apply for or otherwise take advantage of any tax
          credit, tax deduction or similar benefit by reason of any withholding
          or deduction made by a Relevant Obligor in respect of a payment made
          by it hereunder which payment shall have been increased pursuant to
          Section 14.10.1, then such Affected Lender will use commercially
          reasonable efforts (to the extent it has the administrative controls
          in place to enable it to do so) to obtain such refund, credit,
          deduction or benefit and

<PAGE>
                                    - 129 -

          upon receipt thereof will pay to the Relevant Obligor such amount (if
          any) not exceeding the increased amount paid by the Relevant Obligor
          as equals the net after tax value to such Affected Lender of such part
          of such refund, credit, deduction or benefit as it considers is
          allocable to such withholding or deduction having regard to all its
          dealings giving rise to similar credits, deductions or benefits in
          relation to the same tax period and to the cost of obtaining the same,
          provided that nothing herein shall (i) interfere with the right of any
          Affected Lender to arrange its tax affairs in whatever manner it deems
          fit and in particular no Affected Lender shall be under any obligation
          to claim relief from its corporate profits or similar tax liability in
          respect to any such deduction or withholding in priority to any other
          relief, claims, credits or deductions available to it and (ii) no
          Affected Lender shall be obligated to disclose to any Relevant Obligor
          any information regarding its tax affairs or tax computations.

14.11     JOINT ARRANGERS AND JOINT BOOKRUNNERS AND CO-SYNDICATION AGENTS

          None of the Joint Arrangers and Joint Bookrunners, Co-Syndication
Agents or their respective directors, officers, employees, agents, solicitors,
accountants, consultants, financial advisors, other experts or other
representatives shall be under any obligation whatsoever:

14.11.1   to any Gerdau S.A. Group Member as a consequence of any failure or
          delay in performance by, or any breach by, any Lender of any of its
          obligations under any Loan Document;

14.11.2   to any Lender as a consequence of any failure or delay in performance
          by, or any breach by, any Gerdau S.A. Group Member of any of its
          obligations under any Loan Document; or

14.11.3   to any Lender for any statements, representations or warranties in any
          Loan Document or any other agreement, document or instrument
          contemplated by any Loan Document or any other information provided
          pursuant to any Loan Document or any other agreement, document or
          instrument contemplated by any Loan Document or for validity,
          effectiveness, enforceability or sufficiency of any Loan Document or
          any other agreement, document or instrument contemplated thereby.

14.12     SURVIVAL

          The Loan Obligations payable under Sections 5.3, 7.6, 8.2, 8.3, 14.9
and 14.10 ("INDEMNITY OBLIGATIONS") shall survive the payment in full of all
other Loan Obligations and shall continue in full force and effect without time
limit until such Indemnity Obligations are irrevocably paid in full. The
survival of any Indemnity Obligations pursuant to this Section 14.12 which
relate to amounts that could become due or owing by reason of unknown facts or
unknown contingencies shall not relieve the Agent of any obligation to discharge
or assign the Security pursuant to Section 9.10.

<PAGE>
                                    - 130 -

14.13     ENTIRE AGREEMENT

          From and after the Effective Time, the Loan Documents will constitute
the entire agreement between the parties hereto pertaining to the subject matter
contemplated therein and there will be no warranties, representations or
agreements between the parties in connection with such subject matter except as
specifically set forth or referred to in the Loan Documents. Each Borrower
agrees to pay and satisfy its indebtedness, obligations and liabilities under
the Existing Loan Agreement outstanding immediately before the Effective Time in
accordance with the provisions of this Agreement, and that such indebtedness,
obligations and liabilities shall constitute Loan Obligations for the purposes
of this Agreement. Each of Gerdau Steel and the Borrowers hereby confirms its
obligations under the Existing Security and agrees that the Existing Security,
subject to the terms of this Agreement and the Confirmed Loan Documents,
continues in full force and effect in accordance with its terms. Each Obligor
party hereto hereby confirms that, subject to the provisions of this Agreement,
the Security shall secure, directly and/or indirectly, the obligations of each
of Gerdau Steel and the Borrowers incurred hereunder or pursuant hereto.

14.14     COUNTERPARTS

          This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original and all of which taken together shall be
deemed to constitute one and the same instrument, and it shall not be necessary
in making proof of this Agreement to produce or account for more than one such
counterpart. Delivery of an executed signature page of this Agreement (including
any amendment and Loan Transfer Agreement) by facsimile transmission shall be
effective as delivery of a manually executed counterpart hereof.

          IN WITNESS WHEREOF the parties have executed this Agreement as of the
date first written above.

                                        GERDAU STEEL INC.

                                        By:
                                            ------------------------------------
                                            Name:  Glen A. Beeby
                                            Title: Secretary and Treasurer

                                        GERDAU COURTICE STEEL INC.

                                        By:
                                            ------------------------------------
                                            Name:  Glen A. Beeby
                                            Title: Secretary and Treasurer

<PAGE>
                                    - 131 -

                                        GERDAU MRM STEEL INC.

                                        By:
                                            ------------------------------------
                                            Name: Glen A. Beeby
                                            Title: Secretary and Treasurer

                                        GUSAP PARTNERS
                                        BY ITS PARTNERS
                                        GERDAU COURTICE STEEL INC.

                                        By:
                                            ------------------------------------
                                            Name: Glen A. Beeby
                                            Title: Secretary and Treasurer

                                        - AND -

                                        GERDAU MRM STEEL INC.

                                        By:
                                            ------------------------------------
                                            Name: Glen A. Beeby
                                            Title: Secretary and Treasurer

THE LENDERS:

THE TORONTO-DOMINION BANK

By:
    ----------------------------------

By:
    ----------------------------------

P.O. Box 1
2nd Floor, 55 King Street West at Bay
Toronto, Ontario  M5K 1A2

Attention:  Relationship Manager,
            Corporate & Financial Institutions Group

<PAGE>
                                    - 132 -

Telephone:  (416) 982-7772
Facsimile:  (416) 982-6076

CITI BANK N.A.
CANADIAN BRANCH

By:
    -------------------------------

By:
    -------------------------------

123 Front Street West
Suite 1900
Toronto, Ontario   M5J 2M3

Attention:  Vice President

Telephone:  (416) 947-2917
Facsimile:  (416) 947-5674

JPMORGAN CHASE BANK
TORONTO BRANCH

By:
    -------------------------------

By:
    -------------------------------

JPMORGAN CHASE BANK
TORONTO BRANCH
Royal Bank Plaza, South Tower
Suite 1800
Toronto, Ontario   M5J 2J2

Attention:  Vice President

Telephone:  (416) 981-9123
Facsimile:  (416) 981-9138

<PAGE>
                                    - 133 -

GENERAL ELECTRIC CAPITAL CANADA, INC.

By:
    -------------------------------

By:
    -------------------------------

GENERAL ELECTRIC CAPITAL CANADA, INC.
c/o GE Capital - SFG
120 Long Ridge Road, 3rd Floor
Stamford, CT   06927

Attention:   Douglas Anderson / Maria Maslennikova

Telephone:   (203) 357-4636 / 357-4012
Facsimile:   (203) 961-2343 / 357-3962

GENERAL ELECTRIC CAPITAL CORPORATION

By:
    -------------------------------

By:
    -------------------------------

GENERAL ELECTRIC CAPITAL CORPORATION
c/o GE Capital - SFG
120 Long Ridge Road, 3rd Floor
Stamford, CT   06927

Attention:   Douglas Anderson / Maria Maslennikova

Telephone:   (203) 357-4636 / 357-4012
Facsimile:   (203) 961-2343 / 357-3962

<PAGE>
                                    - 134 -

INTESABCI CANADA

By:
    -------------------------------

By:
    -------------------------------

INTESABCI CANADA
One Financial Place
1 Adelaide Street East
Toronto, Ontario   M5C 2V9

Attention:   Glenn J. Hubert / Judy Ellis

Telephone:   (416) 313-4775 / 4753
Facsimile:   (416) 366-6041

BOSTON LATIN AMERICA FINANCE COMPANY
(BLAFCO) GRAND CAYMAN

By:
    -------------------------------

By:
    -------------------------------

BOSTON LATIN AMERICA FINANCE COMPANY
(BLAFCO) GRAND CAYMAN
c/o BankBoston
Rua Libero Badaro, 487 - 9th Floor
San Paulo, SP
Brazil, 01009-000

Attention:   Ricardo de Alencar

Telephone:   55-11-3118-6622
Facsimile:   55-11-3118-5699

<PAGE>
                                    - 135 -

THE BANK OF NOVA SCOTIA

By:
    -------------------------------

By:
     ------------------------------

THE BANK OF NOVA SCOTIA
40 King Street West, 62nd Floor
Toronto, Ontario   M5W 2X6

Attention:   Rob Lockie / Anastasia Kotsidis

Telephone:   (416) 866-3821 / 6983
Facsimile:   (416) 866-2010

COMERICA BANK - Canada Branch

By:
     ------------------------------

By:
     ------------------------------

COMERICA BANK - Canada Branch
Royal Bank Plaza, South Tower
Suite #2210
P.O. Box 62
Toronto, Ontario   M5J 2J2

Attention:   Geoff Morphy / Phillip Buxton

Telephone:   (416) 367-3113 ext. #242 / 222
Facsimile:   (416) 367-2460
<PAGE>
                                    - 136 -

LAURENTIAN BANK OF CANADA

By:
    -------------------------------

By:
    -------------------------------

LAURENTIAN BANK OF CANADA
130 Adelaide Street West
Toronto, Ontario   M5H 3P5

Attention:   Bill Galbraith

Telephone:   (416) 947-7477
Facsimile:   (416) 865-5717

BANK ONE, NA
CANADA BRANCH

By:
     ------------------------------

By:
    -------------------------------

BANK ONE, NA
CANADA BRANCH
BCE Place, P.O. Box 613
161 Bay Street, Suite 4240
Toronto, Ontario   M5J 2S1

Attention:   Michael Bauer / Jeffrey Coleman

Telephone:   (416) 365-8286 / 8278
Facsimile:   (416) 363-7574

<PAGE>
                                    - 137 -

NATIONAL BANK OF CANADA

By:
    -------------------------------

By:
    -------------------------------

NATIONAL BANK OF CANADA
130 King Street West, #3200
Toronto, Ontario M5X 1J9

Attention:   Ian Gillespie

Telephone:   (416) 869-6436
Facsimile:   (416) 869-6545

BANK OF CHINA (CANADA)

By:
    -------------------------------

By:
    -------------------------------

BANK OF CHINA (CANADA)
The Exchange Tower
130 King Street West, #2730
Toronto, Ontario M5X 1E1

Attention:   Don Bridge / Chunhua Gu

Telephone:   (416) 369-6029 / 6009
Facsimile:   (416) 362-3047

<PAGE>
                                    - 138 -

THE AGENT:
                                        THE TORONTO-DOMINION BANK

                                        By:
                                            ------------------------------------
                                            Vice President, Loan Syndications

<PAGE>
                                    - 139 -

                                 SCHEDULE A
                    LENDERS, LENDING OFFICES AND COMMITMENTS
<TABLE>
<CAPTION>

                                  REVOLVER                     TERM
           LENDER                COMMITMENT                 COMMITMENT                     LENDING OFFICE
           ------                ----------                 ----------                     --------------
<S>                           <C>                        <C>                        <C>
The Toronto-Dominion Bank     Cdn.$19,500,000            Cdn.$11,151,247.55         TD Centre Branch, 2nd Floor
                                                                                    55 King Street West, 2nd Floor
                                                                                    Toronto, Ontario   M5K 1A2
                                                                                    Attn:   Relationship Manager,
                                                                                            Corporate & Financial
                                                                                            Institutions Group
                                                                                    Tel:    (416) 982-7772
                                                                                    Fax:    (416) 982 6076

Citibank N.A.                 Cdn.$5,166,666.67          Cdn.$5,333,205.35          123 Front Street West
Canadian Branch                                                                     Suite 1900
                                                                                    Toronto, Ontario   M5J 2M3
                                                                                    Attn:    Vice President
                                                                                    Tel:     (416) 947-2917
                                                                                    Fax:     (416) 947-5674

JPMorgan Chase Bank,          Cdn.$7,633,333.33          Cdn.$7,127,101.70          Royal Bank Plaza
Toronto Branch                                                                      South Tower, Suite 1800
                                                                                    Toronto, Ontario   M5J 2J5
                                                                                    Attn:    Vice President
                                                                                    Tel:     (416) 981-9123
                                                                                    Fax:     (416) 981-9138

General Electric Capital      Cdn.$9,800,000             Cdn.$13,429,980.75         c/o GE Capital - SFG
Canada, Inc.                                                                        120 Long Ridge Road, 3rd Floor
                                                                                    Stamford, CT   06927
                                                                                    Attn:    Douglas Anderson /
                                                                                             Maria Maslennikova
                                                                                    Tel:     (203) 357-4636 /
                                                                                             (203) 357-4012
                                                                                    Fax:     (203) 961-2343 /
                                                                                             (203) 357-3962
</TABLE>
<PAGE>
                                    - 140 -

<TABLE>
<CAPTION>

                                  REVOLVER                     TERM
           LENDER                COMMITMENT                 COMMITMENT                     LENDING OFFICE
           ------                ----------                 ----------                     --------------
<S>                           <C>                        <C>                        <C>
IntesaBci Canada              Cdn.$5,000,000             Cdn.$9,939,155.43          One Financial Place
                                                                                    1 Adelaide Street East
                                                                                    Toronto, Ontario  M5C 2V9
                                                                                    Attn:    Glenn J. Hubert /
                                                                                             Judy Ellis
                                                                                    Tel:     (416) 313-4775
                                                                                             (416) 313-4753
                                                                                    Fax:     (416) 366-6041

Boston Latin America          Cdn.$7,000,000             Cdn.$9,939,155.43          c/o BankBoston
Finance Company (BLAFCO)                                                            Rua Libero Badaro,
Grand Cayman                                                                        487 - 9th Floor
                                                                                    San Paulo, SP
                                                                                    Brazil, 09009-000
                                                                                    Attn:    Ricardo de Alencar
                                                                                    Tel:     55-11-3118-6622
                                                                                    Fax:     55-11-3118-5699

The Bank of Nova Scotia       Nil                        Cdn.$9,939,155.43          40 King Street West, 62nd Floor
                                                                                    Toronto, Ontario,  M5W 2X6
                                                                                    Attn:    Rob Lockie /
                                                                                             Anastasia Kotsidis
                                                                                    Tel:     (416) 866-3821 / 6983
                                                                                    Fax:     (416) 866-2010

Comerica Bank - Canada        Cdn.$5,300,000             Cdn.$7,127,101.70          Royal Bank Plaza
Branch                                                                              South Tower, Suite #2210
                                                                                    P.O. Box 62
                                                                                    Toronto, Ontario  M5J 2J2
                                                                                    Attn:    Geoff Morphy /
                                                                                             Phillip Buxton
                                                                                    Tel:     (416) 367-3113
                                                                                             ext.#242 / #222
                                                                                    Fax:     (416) 367-2460

Laurentian Bank of Canada     Cdn.$5,300,000             Cdn.$7,127,101.70          130 Adelaide Street West
                                                                                    Toronto, Ontario  M5H 3P5
                                                                                    Attn:    Bill Galbraith
                                                                                    Tel:     (416) 947-7477
                                                                                    Fax:     (416) 865-5717

</TABLE>

<PAGE>
                                    - 141 -

<TABLE>
<CAPTION>

                                  REVOLVER                     TERM
           LENDER                COMMITMENT                 COMMITMENT                     LENDING OFFICE
           ------                ----------                 ----------                     --------------
<S>                           <C>                        <C>                        <C>
Bank One, NA                  Cdn.$4,000,000             Cdn.$5,333,205.35          BCE Place, PO Box 613
Canada Branch                                                                       161 Bay Street, Suite 4240
                                                                                    Toronto, Ontario   M5J 2S1
                                                                                    Attn:    Michael Bauer /
                                                                                             Jeffrey Coleman
                                                                                    Tel:     (416) 365-8286 / 8278
                                                                                    Fax:     (416) 363-7574

National Bank of Canada       NIL                        Cdn.$5,333,205.35          130 King Street West, #3200
                                                                                    Toronto, Ontario   M5X 1J9
                                                                                    Attn:    Ian Gillespie
                                                                                    Tel:     (416) 869-6436
                                                                                    Fax:     (416) 869-6545

Bank of China (Canada)        Cdn.$4,300,000             Cdn.$5,187,754.30          The Exchange Tower
                                                                                    130 King Street West, #2730
                                                                                    Toronto, Ontario   M5X 1E1
                                                                                    Attn:       Don Bridge /
                                                                                                Chunhua Gu
                                                                                    Tel:        (416) 369-6029 / 6009
                                                                                    Fax:        (416) 362-3047

</TABLE>

<PAGE>
                                    - 142 -

                                   SCHEDULE B
                                 DRAWDOWN NOTICE

TO:       The Toronto-Dominion Bank
          66 Wellington Street West, 38th Floor
          Toronto Dominion Bank Tower
          Toronto, Ontario
          M5K 1A2

          Attention: Vice President, Loan Syndications - Agency

RE:       GERDAU STEEL INC.

          Reference is made to an amended and restated loan agreement (the "LOAN
AGREEMENT") initially dated as of November 8, 1996, as further amended and
restated by agreement dated as of October 22, 2002, and as further amended,
supplemented, restated or novated from time to time, among Gerdau Steel Inc. and
Gerdau Courtice Steel Inc., Gerdau MRM Steel Inc. and GUSAP Partners, as
Borrowers, the Institutions named therein as Lenders and The Toronto-Dominion
Bank as Agent. All terms used in this Drawdown Notice which are defined in the
Loan Agreement have the respective meanings attributed to them in the Loan
Agreement.

          Pursuant to Section [     ] of the Loan Agreement, the undersigned
hereby requests an Advance as follows:

          1    Type of Advance:

          2    Amount of Advance:

          3    Currency of Advance:

          4    Drawdown Date:

          5    [Interest Period/Maturity Date]:

          6    Payment instructions (if any):

          The undersigned acknowledges and agrees that prior to obtaining the
Advance requested by this Drawdown Notice, it shall satisfy and comply with all
of the conditions in Section 6.1 of the Loan Agreement.

          DATED this [   ] day of [          ], [     ].

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

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

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

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

<PAGE>
                                    - 143 -

                           APPENDIX TO DRAWDOWN NOTICE

TO:       The Toronto-Dominion Bank
          66 Wellington Street West, 38th Floor
          Toronto Dominion Bank Tower
          Toronto, Ontario
          M5K 1A2

          Attention: Vice President, Loan Syndications - Agency

RE:       GERDAU STEEL INC.

          Reference is made to an amended and restated loan agreement (the "LOAN
AGREEMENT") initially dated as of November 8, 1996, as further amended and
restated by agreement dated as of October 22, 2002, and as further amended,
supplemented, restated or novated from time to time, among Gerdau Steel Inc. and
Gerdau Courtice Steel Inc., Gerdau MRM Steel Inc. and GUSAP Partners, as
Borrowers, the Institutions named therein as Lenders and The Toronto-Dominion
Bank as Agent. All terms used in this Appendix which are defined in the Loan
Agreement have the respective meanings attributed to them in the Loan Agreement.

          Pursuant to Section 6.1 of the Loan Agreement, the undersigned hereby
certifies to the Lenders:

          (a)  The representations and warranties made in Section 10.1 of the
               Loan Agreement are true and accurate, except to the extent
               modified by Section 10.2, with the same effect as if such
               representations and warranties had been made on and as of the
               date hereof and on the requested Borrowing Date.

          (b)  No Default or Event of Default has occurred and is continuing on
               the date hereof or will result from the Borrowing requested
               herein.

          (c)  To the knowledge of the undersigned, there is no Litigation
               referred to in Section 10.1.12 in progress or threatened which
               has not been disclosed to the Agent in writing.

          (d)  The undersigned will immediately notify you if it becomes aware
               of the occurrence of any event between the date hereof and the
               Borrowing Date which would mean that the statements in the
               immediately preceding paragraphs (a), (b) and (c) would not be
               true if made on the Borrowing Date.

          (e)  All other conditions precedent set out in Section 6.1 of the Loan
               Agreement have been fulfilled or waived in writing by the
               Lenders.

<PAGE>
                                    - 144 -

                  DATED this   o  day of   o   ,   o   .

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

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

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

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

<PAGE>
                                    - 145 -

                                   SCHEDULE C
                            FORM OF CONVERSION NOTICE

TO:       The Toronto-Dominion Bank
          66 Wellington Street West, 38th Floor
          Toronto Dominion Bank Tower
          Toronto, Ontario
          M5K 1A2

          Attention: Vice President, Loan Syndications - Agency

RE:       GERDAU STEEL INC.

          Reference is made to an amended and restated loan agreement (the "LOAN
AGREEMENT") initially dated as of November 8, 1996, as further amended and
restated by agreement dated as of October 22, 2002, and as further amended,
supplemented, restated or novated from time to time, among Gerdau Steel Inc. and
Gerdau Courtice Steel Inc., Gerdau MRM Steel Inc. and GUSAP Partners, as
Borrowers, the Institutions named therein as Lenders and The Toronto-Dominion
Bank as Agent. All terms used in this Conversion Notice which are defined in the
Loan Agreement have the respective meanings attributed to them in the Loan
Agreement.

          Notice is hereby given in accordance with Section   o   of the Loan
Agreement that the undersigned wishes to convert an Advance, and, in connection
therewith the undersigned hereby advises the Agent that the Advance made
[specify date of Advance] in the amount of [specify amount and Currency of
Advance] by way of [specify Type of Loan] and which has a Maturity Date of
[specify date] is hereby requested to be converted on such Maturity Date to a
[specify type of Advance] as follows:

          (i)   Amount of Advance:

          (ii)  Conversion Date:

          (iii) [Interest Period/new Maturity Date]:

          (iv)  Payment instructions (if any):

<PAGE>
                                    - 146 -

          The undersigned acknowledges and agrees that prior to obtaining the
Conversion requested by this Conversion Notice, it shall satisfy and comply with
all of the conditions in Section 6.1 of the Loan Agreement.

          DATED this    o    day of   o  ,   o  .

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

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

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

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

<PAGE>
                                    - 147 -

                          APPENDIX TO CONVERSION NOTICE

TO:       The Toronto-Dominion Bank
          66 Wellington Street West, 38th Floor
          Toronto Dominion Bank Tower
          Toronto, Ontario
          M5K 1A2

          Attention: Vice President, Loan Syndications - Agency

RE:       GERDAU STEEL INC.

          Reference is made to an amended and restated loan agreement (the "LOAN
AGREEMENT") initially dated as of November 8, 1996, as further amended and
restated by agreement dated as of October 22, 2002, and as further amended,
supplemented, restated or novated from time to time, among Gerdau Steel Inc. and
Gerdau Courtice Steel Inc., Gerdau MRM Steel Inc. and GUSAP Partners, as
Borrowers, the Institutions named therein as Lenders and The Toronto-Dominion
Bank as Agent. All terms used in this Appendix which are defined in the Loan
Agreement have the respective meanings attributed to them in the Loan Agreement.

          Pursuant to Section 6.1 of the Loan Agreement, the undersigned hereby
certifies to the Lenders:

          (a)  The representations and warranties made in Section 10.1 of the
               Loan Agreement are true and accurate, except to the extent
               modified by Section 10.2, with the same effect as if such
               representations and warranties had been made on and as of the
               date hereof and on the requested Borrowing Date.

          (b)  No Default or Event of Default has occurred and is continuing on
               the date hereof or will result from the Borrowing requested
               herein.

          (c)  To the knowledge of the undersigned, there is no Litigation
               referred to in Section 10.1.12 in progress or threatened which
               has not been disclosed to the Agent in writing.

          (d)  The undersigned will immediately notify you if it becomes aware
               of the occurrence of any event between the date hereof and the
               Borrowing Date which would mean that the statements in the
               immediately preceding paragraphs (a), (b) and (c) would not be
               true if made on the Borrowing Date.

          (e)  All other conditions precedent set out in Section 6.1 of the Loan
               Agreement have been fulfilled or waived in writing by the
               Lenders.
<PAGE>
                                    - 148 -

                  DATED this [   ] day of [         ], [     ].

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

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

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

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

<PAGE>
                                    - 149 -

                                   SCHEDULE D
                             FORM OF ROLLOVER NOTICE

TO:       The Toronto-Dominion Bank
          66 Wellington Street West, 38th Floor
          Toronto Dominion Bank Tower
          Toronto, Ontario
          M5K 1A2

          Attention: Vice President, Loan Syndications - Agency

RE:       GERDAU STEEL INC.

          Reference is made to an amended and restated loan agreement (the "LOAN
AGREEMENT") initially dated as of November 8, 1996, as further amended and
restated by agreement dated as of October 22, 2002, and as further amended,
supplemented, restated or novated from time to time, among Gerdau Steel Inc. and
Gerdau Courtice Steel Inc., Gerdau MRM Steel Inc. and GUSAP Partners, as
Borrowers, the Institutions named therein as Lenders and The Toronto-Dominion
Bank as Agent. All terms used in this Rollover Notice which are defined in the
Loan Agreement have the respective meanings attributed to them in the Loan
Agreement.

          Notice is hereby given in accordance with Section [         ] of the
Loan Agreement that the undersigned wishes to Rollover an Advance, and, in
connection therewith the undersigned hereby advises the Agent that the Advance
made [specify date of Advance] in the amount of [specify amount and Currency of
Advance] by way of [specify type of Advance] and which has a Maturity Date of
[specify date] is hereby requested to be rolled-over on such Maturity Date as
follows:

          (i)  Amount of Advance:

          (ii) Rollover Date:

          (iii) [Interest Period/new Maturity Date]:

          (iv) Payment instructions (if any):

          The undersigned acknowledges and agrees that prior to obtaining the
Rollover requested by this Rollover Notice, it shall satisfy and comply with all
of the conditions in Section 6.1 of the Loan Agreement.

<PAGE>
                                    - 150 -

          DATED this [   ] day of [         ], [    ].

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

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

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

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

<PAGE>
                                    - 151 -

                           APPENDIX TO ROLLOVER NOTICE

TO:       The Toronto-Dominion Bank
          66 Wellington Street West, 38th Floor
          Toronto Dominion Bank Tower
          Toronto, Ontario
          M5K 1A2

          Attention: Vice President, Loan Syndications - Agency

RE:       GERDAU STEEL INC.

          Reference is made to an amended and restated loan agreement (the "LOAN
AGREEMENT") initially dated as of November 8, 1996, as further amended and
restated by agreement dated as of October 22, 2002, and as further amended,
supplemented, restated or novated from time to time, among Gerdau Steel Inc. and
Gerdau Courtice Steel Inc., Gerdau MRM Steel Inc. and GUSAP Partners, as
Borrowers, the Institutions named therein as Lenders and The Toronto-Dominion
Bank as Agent. All terms used in this Appendix which are defined in the Loan
Agreement have the respective meanings attributed to them in the Loan Agreement.

          Pursuant to Section 6.1 of the Loan Agreement, the undersigned hereby
certifies to the Lenders:

          (a)  The representations and warranties made in Section 10.1 of the
               Loan Agreement are true and accurate, except to the extent
               modified by Section 10.2, with the same effect as if such
               representations and warranties had been made on and as of the
               date hereof and on the requested Borrowing Date.

          (b)  No Default or Event of Default has occurred and is continuing on
               the date hereof or will result from the Borrowing requested
               herein.

          (c)  To the knowledge of the undersigned, there is no Litigation
               referred to in Section 10.1.12 in progress or threatened which
               has not been disclosed to the Agent in writing.

          (d)  The undersigned will immediately notify you if it becomes aware
               of the occurrence of any event between the date hereof and the
               Borrowing Date which would mean that the statements in the
               immediately preceding paragraphs (a), (b) and (c) would not be
               true if made on the Borrowing Date.

          (e)  All other conditions precedent set out in Section 6.1 of the Loan
               Agreement have been fulfilled or waived in writing by the
               Lenders.

          DATED this  [        ] day of [          ], [     ].

<PAGE>
                                    - 152 -

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

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

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

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

<PAGE>
                                    - 153 -

                               SCHEDULE E - PART I
                     SUBSIDIARIES BEFORE THE EFFECTIVE TIME

                         (CORPORATE ORGANIZATION CHART)

<PAGE>
                                    - 154 -

                              SCHEDULE E - PART II
                      SUBSIDIARIES AFTER THE EFFECTIVE TIME

                              (ORGANIZATION CHART)

<PAGE>
                                    - 155 -

                                   SCHEDULE F
                              ADDRESSES FOR NOTICES

2.       if to Courtice:

               Orion Place
               Box 1734
               Cambridge, Ontario
               N1R 7G8

               Attention:        Glen Beeby
               Telecopier No.:   (519) 740-2601

3.       if to MRM:

               Orion Place
               Box 1734
               Cambridge, Ontario
               N1R 7G8

               Attention:        Glen Beeby
               Telecopier No.:   (519) 740-2601

4.       if to Gerdau Steel:

               Orion Place
               Box 1734
               Cambridge, Ontario
               N1R 7G8

               Attention:        Glen Beeby
               Telecopier No.:   (519) 740-2601

5.       if to USP:

               Orion Place
               Box 1734
               Cambridge, Ontario
               N1R 7G8

               Attention:        Glen Beeby
               Telecopier No.:   (519) 740-2601

<PAGE>
                                    - 156 -

6.       if to TD in its capacity as Swing Line Lender:

               Toronto-Dominion Centre Branch
               Commercial Banking
               King Street West and Bay Street
               Toronto, Ontario
               M5K 1A2

               Attention:        The Vice President & Manager
               Telecopier No.:   (416) 982-6076

7.       if to the Agent:

TO:            The Toronto-Dominion Bank
               66 Wellington Street West, 38th Floor
               Toronto Dominion Bank Tower
               Toronto, Ontario
               M5K 1A2

               Attention:        Vice President, Loan Syndications - Agency

               Telecopier No.:   (416) 982-5535

<PAGE>
                                    - 157 -

                                   SCHEDULE G
                          FORM OF BORROWING BASE REPORT

TO:       The Toronto-Dominion Bank
          66 Wellington Street West, 38th Floor
          Toronto Dominion Bank Tower
          Toronto, Ontario
          M5K 1A2

          Attention: Vice President, Loan Syndications - Agency

RE:       GERDAU STEEL INC.

          Reference is made to an amended and restated loan agreement (the "LOAN
AGREEMENT") initially dated as of November 8, 1996, as further amended and
restated by agreement dated as of October 22, 2002, and as further amended,
supplemented, restated or novated from time to time, among Gerdau Steel Inc. and
Gerdau Courtice Steel Inc., Gerdau MRM Steel Inc. and GUSAP Partners, as
Borrowers, the Institutions named therein as Lenders and The Toronto-Dominion
Bank as Agent. All terms used in this Borrowing Base Report which are defined in
the Loan Agreement have the respective meanings attributed to them in the Loan
Agreement.

          This Certificate is given to the Agent pursuant to Section 11.1.1.10
of the Loan Agreement in respect of the Fiscal Quarter ending on [           ],
[            ].

          The undersigned hereby certifies to the Syndicate that the attachment
to this Certificate shows the calculation of the Borrowing Base as [          ],
[            ] to be Cdn.$ [            ] which does [not] exceed the
Outstanding Amount of all Advances under the Operating Facility at that time.

          DATED this  [   ] day of [             ], [    ].

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

* same date as the fiscal month end

<PAGE>
                                    - 158 -

                                GERDAU STEEL INC.

(OUTSTANDING AMOUNT OF
    REVOLVER FACILITY NOT TO EXCEED SUM OF 80% ELIGIBLE
RECEIVABLES + LESSER OF
    $40,000,000 OR 50% ELIGIBLE
INVENTORY

<TABLE>
<CAPTION>
                                                         AUGUST '99
                                            ------------------------------------
                                            COURTICE       MRM      CONSOLIDATED
                                            --------    --------    ------------

<S>                                         <C>         <C>         <C>
ADVANCES UNDER REVOLVER:
Cdn.$ Concentration Acct
US$ Concentration Acct in Cdn.$
Short Term BA (net)
Tranche B
                                                                    ------------

Total

Accounts Receivable
Less:  > 90 days
Less:  intercompany
                                            --------    --------    ------------

% Allowed
                                            --------    --------    ------------

Add:  1/2 eligible inventory

Total Leverage

TOTAL MARGIN SURPLUS
</TABLE>

Attachments
A/R Reports
Payables Reports
Inventory Lists

<PAGE>
                                    - 159 -

                                   SCHEDULE H
                             LOAN TRANSFER AGREEMENT

                  THIS AGREEMENT is made the [   ] day of  [        ], [    ].

B E T W E E N :

                                     [    ]
                      (hereinafter called the "TRANSFEROR")

                                                               OF THE FIRST PART

                                     - and -

                                     [    ]
                      (hereinafter called the "TRANSFEREE")

                                                              OF THE SECOND PART

                                     - and -

                                     [    ]
        for its own benefit and in its capacity as agent for the rateable
          benefit of the Lenders under the Loan Agreement defined below

                        (hereinafter called the "AGENT")

                                                               OF THE THIRD PART

BACKGROUND

          Gerdau Steel Inc. and Gerdau Courtice Steel Inc., Gerdau MRM Steel
Inc. and GUSAP Partners, as Borrowers, the Institutions named therein as Lenders
and The Toronto-Dominion Bank as Agent entered into a loan agreement (the "LOAN
AGREEMENT") initially dated as of November 8, 1996, as further amended and
restated by agreement dated as of October 22, 2002, and as further amended,
supplemented, restated or novated from time to time. In addition, terms defined
in Sections 1.1 and 1.2 of the Loan Agreement (and not otherwise defined herein)
are used with the same respective defined meanings in this loan transfer
agreement.

          The Transferor is a Lender under the Loan Agreement with a Revolver
Commitment of Cdn.$[    ] and a Term Commitment of Cdn.$[    ], for a Total
Commitment of Cdn.$[     ]. The Transferor has agreed to transfer to the
Transferee [    ]% (the "REVOLVER TRANSFER PERCENTAGE") of its Revolver
Commitment and [    ]% (the "TERM TRANSFER PERCENTAGE") of its Term Commitment.
The portion of the Transferor's Commitment so transferred is hereinafter called
the "TRANSFERRED COMMITMENT".

<PAGE>
                                    - 160 -

          WITNESSETH THAT in consideration of the mutual covenants herein
contained and other valuable consideration now paid by each party hereto, the
one to the other, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto agree as follows:

1.        Transferred Commitment

          The Transferor confirms to each of the Transferee and the other
parties to the Loan Agreement that the Transferred Commitment relates to the
Revolver Transfer Percentage of its Revolver Commitment and the Term Transfer
Percentage of its Term Commitment (including the corresponding percentage of
each outstanding Loan under each such portion of its Commitment) represented as
of the date of this loan transfer agreement as set out in Appendix 1 to this
loan transfer agreement.

2.        Transfer

          As of and from [      ], [      ] (herein called the "EFFECTIVE DATE")
and subject to the terms and conditions herein contained:

          (a)  the Transferee assumes obligations identical to the obligations
               of the Transferor under the Loan Agreement arising on or after
               the Effective Date in relation to the Transferred Commitment
               (herein called the "TRANSFERRED OBLIGATIONS") and agrees to
               perform and be responsible for such obligations as if the
               Transferee were named in the Loan Agreement as an original party
               in substitution for the Transferor or its predecessor in title,
               as applicable, in respect of the Transferred Obligations;

          (b)  the Agent on behalf of each of the Lenders other than the
               Transferor (herein called the "OTHER LENDERS") hereby releases
               and forever discharges the Transferor of and from any and all
               losses and expenses and obligations arising on or after the
               Effective Date under, by reason of, or in connection with the
               Transferred Obligations;

          (c)  the Agent on behalf of each of the Other Lenders acknowledges and
               agrees that, except as otherwise provided in section 3 of this
               loan transfer agreement, the Transferee is hereby assigned and
               entitled to rights identical to the rights of the Transferor
               under the Loan Agreement existing on or arising after the
               Effective Date in relation to the Transferred Commitment (herein
               called the "TRANSFERRED RIGHTS");

          (d)  the Transferor hereby releases and forever discharges each of the
               Other Lenders of and from any and all losses and expenses and
               obligations arising under, by reason of, or in connection with
               the Transferred Rights or the Transferred Obligations.

<PAGE>
                                    - 161 -

3.        Transitional Provisions

          Subject to the terms and conditions contained herein:

          (a)  any payments due and payable by the Borrowers on or before the
               Effective Date in respect of the Transferred Commitment; and

          (b)  any payments due and payable by the Borrowers after the Effective
               Date, but payable in respect of the Transferor's participation in
               any LIBOR Loan or issue of Bankers' Acceptances outstanding on
               the Effective Date,

shall, upon receipt by the Agent, be paid to the Transferor. For certainty, the
Transferee acknowledges that its participation in Advances outstanding under the
Credit Facilities as at the Effective Date is subject to the maturity of
existing contracts on their respective Maturity Dates (to the extent there are
Bankers' Acceptances and LIBOR Loans outstanding on the Effective Date), and
that the Transferee's participation in outstanding Advances will increase in
proportion to its Rateable Share as such existing contracts mature.

4.        Copy to the Borrower

          Each of the Transferor and Transferee hereby authorizes the Agent to
provide a signed copy of this loan transfer agreement (without the attached
Appendices) to Courtice (to be received by Courtice for itself, each of the
other Borrowers and the Guarantors) in acceptance of the offer contained in the
Loan Agreement of the Borrowers and the Guarantors to the Transferee to become a
party to the Loan Agreement in respect of the Transferred Commitment. Upon
receipt thereof by Courtice, the provisions of Section 14.5.4 of the Loan
Agreement in respect of the Transferred Commitment shall become effective and be
binding upon all parties to the Loan Agreement.

5.        Interpretation

          This agreement shall be governed by the laws of the Province of
Ontario and the laws of Canada applicable therein and shall be construed as
supplemental to and form part of the Loan Agreement.

6.        Counterparts

          This loan transfer agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
taken together shall be deemed to constitute one and the same instrument, and it
shall not be necessary in making proof of this loan transfer agreement to
produce or account for more than one such counterpart. Delivery of an executed
signature page of this loan transfer agreement by facsimile transmission shall
be effective as delivery of a manually executed counterpart hereof.

<PAGE>
                                    - 162 -

          IN WITNESS WHEREOF the parties hereto have executed this agreement as
of the day and year first above written.

                                        ----------------------------------------
                                        as Transferor

                                        By:
                                            ------------------------------------

                                        ----------------------------------------
                                         as Transferor

                                         By:
                                             -----------------------------------

                                        THE TORONTO-DOMINION BANK
                                        as Agent

                                        By:
                                            ------------------------------------
                                            Vice President, Loan Syndications

<PAGE>
                                    - 163 -

                                   APPENDIX 1

                             TRANSFEROR'S COMMITMENT

                               AS OF [INSERT DATE]
<TABLE>
<CAPTION>

                                                                                               OUTSTANDING
                                               OUTSTANDING          OUTSTANDING BANKERS'    PARTICIPATIONS IN
AMOUNT OF COMMITMENT       UNDRAWN                LOANS                 ACCEPTANCES          STANDBY CREDITS
--------------------  ------------------    ---------------------   --------------------    -----------------
REVOLVER FACILITY

<S>                   <C>                   <C>                     <C>                     <C>
Cdn.$[      ]         [stipulate portion    [stipulate types of     [stipulate              [stipulate
                      undrawn]              Advances outstanding,   outstanding             outstanding
                                            amount, interest rate   Acceptances, amount     participations in
                                            and maturity of         and maturity]           Standby Credits]
                                            current Interest
                                            Periods]

TERM FACILITY

Cdn.$[      ]         [stipulate portion    [stipulate types of     [stipulate              [stipulate
                        undrawn]            Advances outstanding,   outstanding             outstanding
                                            amount, interest rate   Acceptances, amount     participations in
                                            and maturity of         and maturity]           Standby Credits]
                                            current Interest
                                            Periods]

</TABLE>

<PAGE>
                                    - 164 -

                             TRANSFERRED COMMITMENT

<TABLE>
<CAPTION>
                                                                                                   OUTSTANDING
AMOUNT OF TRANSFERRED          UNDRAWN              OUTSTANDING         OUTSTANDING BANKERS'    PARTICIPATIONS IN
COMMITMENT                                             LOANS                ACCEPTANCES          STANDBY CREDITS
---------------------   -------------------    ----------------------   --------------------    -------------------
REVOLVER FACILITY

<S>                     <C>                    <C>                      <C>                      <C>
Cdn.$[      ]           *[stipulate portion    *[stipulate types of     *[stipulate              *[stipulate
                         undrawn]               Advances outstanding,    outstanding              outstanding
                                                amount, interest rate    Acceptances, amount      participations in
                                                and maturity of          and maturity]            Standby Credits]
                                                current Interest
                                                Periods]

TERM FACILITY

Cdn.$[      ]           **[stipulate portion   **[stipulate types of    **[stipulate             **[stipulate
                          undrawn]               Advances outstanding,    outstanding              outstanding
                                                 amount, interest rate    Acceptances, amount      participations in
                                                 and maturity of          and maturity]            Standby Credits]
                                                 current Interest
                                                 Periods]
</TABLE>

*AMOUNT DETERMINED AS THE REVOLVER TRANSFER PERCENTAGE X CORRESPONDING AMOUNT
SET OUT ABOVE WITH RESPECT TO THE TRANSFEROR'S REVOLVER COMMITMENT.

**AMOUNT DETERMINED AS THE TERM TRANSFER PERCENTAGE X CORRESPONDING AMOUNT SET
OUT ABOVE WITH RESPECT TO THE TRANSFEROR'S TERM COMMITMENT.

NOTE: EACH PORTION OF THE REVOLVER COMMITMENT AND THE TERM COMMITMENT
TRANSFERRED MUST BE IN A MINIMUM AMOUNT OF CDN.$5,000,000.

<PAGE>
                                    - 165 -

                                   SCHEDULE I
                        BORROWER'S COMPLIANCE CERTIFICATE

TO:       The Toronto-Dominion Bank
          66 Wellington Street West, 38th Floor
          Toronto Dominion Bank Tower
          Toronto, Ontario
          M5K 1A2

          Attention: Vice President, Loan Syndications - Agency

RE:       GERDAU STEEL INC.

          Reference is made to an amended and restated loan agreement (the "LOAN
AGREEMENT") initially dated as of November 8, 1996, as further amended and
restated by agreement dated as of October 22, 2002, and as further amended,
supplemented, restated or novated from time to time, among Gerdau Steel Inc. and
Gerdau Courtice Steel Inc., Gerdau MRM Steel Inc. and GUSAP Partners, as
Borrowers, the Institutions named therein as Lenders and The Toronto-Dominion
Bank as Agent. All terms used in this Compliance Certificate which are defined
in the Loan Agreement have the respective meanings attributed to them in the
Loan Agreement.

          This certificate is given pursuant to Section 11.1.1.10 of the Loan
Agreement.

          The Borrowers hereby certify as follows:

          (a)  CURRENT RATIO. The attachment hereto shows the calculations of
               the ratio referred to in Section 11.1.1.13.1 of the Loan
               Agreement.

          (b)  DEBT SERVICE COVERAGE RATIO. The attachment hereto shows the
               calculation of the ratio referred to in Section 11.1.1.13.2 of
               the Loan Agreement.

          (c)  INTEREST AVERAGE RATIO. The attachment hereto shows the
               calculation of the ratio referred to in Section 11.1.1.13.3 of
               the Loan Agreement.

          (d)  TOTAL DEBT/EBITDA RATIO. The attachment hereto shows the
               calculation of the ratio referred to in Section 11.1.1.13.4 of
               the Loan Agreement.

          (e)  TERM DEBT/CAPITALIZATION RATIO. The attachment hereto shows the
               calculation of the ratio referred to in Section 11.1.1.13.5 of
               the Loan Agreement.

          (f)  TANGIBLE NET WORTH. The attachment hereto shows the calculation
               of the amount referred to in Section 11.1.1.13.6 of the Loan
               Agreement.

          Each of the calculations in the attachment hereto demonstrates
compliance with the relevant financial tests listed above as at, or for the
relevant period ending on [     ]  [      ].
<PAGE>
                                    - 166 -

          In addition, the Borrowers confirm that the representations and
warranties contained in Article 10 of the Loan Agreement are true and correct as
if made on the date of this Certificate.

          DATED this [   ] day of [         ], [    ].

          Yours very truly,

GERDAU STEEL INC.                       GERDAU COURTICE STEEL INC.

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

GERDAU MRM STEEL INC.                   GUSAP PARTNERS

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

<PAGE>
                                    - 167 -

                                   SCHEDULE J
                                LEGAL DESCRIPTION

PIN No. 03826-0209(R)
Part Lot 3, Concession 11 (Eleven),
City of Cambridge (formerly, in the City of Galt), Regional Municipality of
Waterloo, designated as:

FIRSTLY:

Part 5 on Reference Plan 67R-3397, save and except Part 1 on Reference Plan
58R-10199 and save and except Parts 2 and 7 on Reference Plan 67R-3585;

Subject to an easement in favour of the Corporation of the City of Cambridge
over Parts 1, 2 and 3 on Reference Plan 67R-1595 as in Instrument No. 562772;

Subject to an easement in favour of the Corporation of the City of Cambridge
over Part 1 on Reference Plan 67R-2662, as set out in Instrument Nos. 672505 and
719705;

Subject to an easement in favour of Ontario Hydro over Parts 10, 11 and 13 on
Reference Plan 67R-2555 as set out in Instrument No. 519440;

Subject to an easement in favour of Ontario Hydro over Part 3 on Reference Plan
67R-2744 as set out in Instrument No. 672553;

Subject to an easement in favour of Ontario Hydro over Part 1 on Reference Plan
67R-2721 as set out in Instrument No. 675358;

Subject to the restrictive covenants more particularly set out in Instrument
Nos. 664863, 666649 and 657448;

SECONDLY:

Parts 3, 4 and 6 on Reference Plan 67R-3397, save and except Parts 5 and 6 on
Reference Plan 67R-3585;

Subject to an easement over part of the lands being part of Part 10 on Reference
Plan 67R-2555 in favour of Ontario Hydro, as set out in Instrument No. 519440;

Subject to an easement over part of the lands being part of Part 1 on Reference
Plan 67R-1075 (now Parts 12, 13 and 14 on Reference Plan 67R-2555 and Part 2 on
Reference Plan 58R-8029) in favour of the City of Cambridge, as set out in
Instrument No. 562772;

Subject to the restrictive covenants as contained in Instrument No. 731985;

THIRDLY:

Parts 1 and 2 on Reference Plan 58R-8029;

<PAGE>
                                    - 168 -

Subject to an easement in favour of the Corporation of the City of Cambridge
over Part 2 on Plan 58R-8029 as set out in Instrument No. 562772;

FOURTHLY:

Parts 1 and 2 on Reference Plan 67R-3567;

Subject to an easement over part of the lands being part of Part 5 on Reference
Plan 67R-1595, as set out in Instrument No. 519440;

Subject to an easement over part of the lands being part of Part 1 on Reference
Plan 67R-1075 in favour of Ontario Hydro, as set out in Instrument No. 562772;

Subject to an easement over part of the lands being part of Part 1 on Reference
Plan 67R-2721 in favour of Ontario Hydro as set out in Instrument No. 675358;

Subject to the restrictive covenants as contained in Instrument No. 1272674;

FIFTHLY:

Parts 1 and 2 on Reference Plan 58R-10049;

Subject to an easement over Part 2 on Reference Plan 58R-10049, as set out in
Instrument No. 562772;

SIXTHLY:

Part of Orion Place (closed by By-law No. 160-96 registered as Instrument No.
1306011), City of Cambridge and designated as Part 1 on Reference Plan 58R-8704;

SEVENTHLY:

Part of Orion Place being part of Lot 3, Concession 11 (closed by By-law No.
159-93 registered as Instrument No. 1181142), City of Cambridge, (formerly in
the City of Galt), Regional Municipality of Waterloo and designated as Part 2 on
Reference Plan 58R-8704;

Subject to an easement over that portion of the lands being composed of Part 1
on Reference Plan 58R-8785 in favour of Union Gas Limited, as set out in
Instrument No. 1181141;

Subject to the restrictive covenants contained in Instrument No. 1181143; and

EIGHTHLY:

Part of Orion Place being part of Lot 3, Concession 11 (closed by By-law No.
160-96 registered as Instrument No. 1306011), designated as PARTS 2 and 3 on
Reference Plan 58R-10199.

Subject to an easement in favour of the Corporation of the City of Cambridge
over Part 1 on Plan 58R-10566 as set out in Instrument No. 1353996;

<PAGE>
                                    - 169 -

Subject to an easement in favour of Bell Canada over Part 3 on Plan 58R-10199 as
set out in Instrument No. 1314826.

ENCUMBRANCES OUTSTANDING AGAINST COURTICE STEEL INC. REAL PROPERTY

          AFFECTING THE LANDS FIRSTLY DESCRIBED

          (g)  Subject to an easement in favour of the Corporation of the City
               of Cambridge over Parts 1, 2 and 3 on Reference Plan 67R-1595 as
               in Instrument No. 562772;

          (h)  Subject to an easement in favour of the Corporation of the City
               of Cambridge over Part 1 on Reference Plan 67R-2662, as set out
               in Instrument Nos. 672505 and 719705;

          (i)  Subject to an easement in favour of Ontario Hydro over Parts 10,
               11 and 13 on Reference Plan 67R-2555 as set out in Instrument No.
               519440;

          (j)  Subject to an easement in favour of Ontario Hydro over Part 3 on
               Reference Plan 67R-2744 as set out in Instrument No. 672553;

          (k)  Subject to an easement in favour of Ontario Hydro over Part 1 on
               Reference Plan 67R-2721 as set out in Instrument No. 675358

          AFFECTING THE LANDS SECONDLY DESCRIBED

          (l)  Subject to an easement over part of the lands being part of Part
               10 on Reference Plan 67R-2555 in favour of Ontario Hydro, as set
               out in Instrument No. 519440;

          (m)  Subject to an easement over part of the lands being part of Part
               1 on Reference Plan 67R-1075 (now Parts 12, 13 and 14 on
               Reference Plan 67R-2555 and Part 2 on Reference Plan 58R-8029) in
               favour of the City of Cambridge, as set out in Instrument No.
               562772;

          AFFECTING THE LANDS THIRDLY DESCRIBED

          (n)  Subject to an easement in favour of the Corporation of the City
               of Cambridge over Part 2 on Plan 58R-8029 as set out in
               Instrument No. 562772;

          AFFECTING THE LANDS FOURTHLY DESCRIBED

          (o)  Subject to an easement over part of the lands being part of Part
               5 on Reference Plan 67R-1595, as set out in Instrument No.
               519440;

          (p)  Subject to an easement over part of the lands being part of Part
               1 on Reference Plan 67R-1075 in favour of Ontario Hydro, as set
               out in Instrument No. 562772;

          (q)  Subject to an easement over part of the lands being part of Part
               1 on Reference Plan 67R-2721 in favour of Ontario Hydro as set
               out in Instrument No. 675358;

<PAGE>
                                    - 170 -

          AFFECTING THE LANDS FIFTHLY DESCRIBED

          (r)  Subject to an easement over Part 2 on Reference Plan 58R-10049,
               as set out in Instrument No. 562772;

          AFFECTING THE LANDS SEVENTHLY DESCRIBED

          (s)  Subject to an easement over that portion of the lands being
               composed of Part 1 on Reference Plan 58R-8785 in favour of Union
               Gas Limited, as set out in Instrument No. 1181141;

          AFFECTING THE LANDS EIGHTHLY DESCRIBED

          (t)  Subject to an easement in favour of the Corporation of the City
               of Cambridge over Part 1 on Plan 58R-10566 as set out in
               Instrument No. 1353996;

          (u)  Subject to an easement in favour of Bell Canada over Part 3 on
               Plan 58R-10199 as set out in Instrument No. 1314826;

          AFFECTING ALL LANDS

          (v)  a reservation of all mines and minerals to Her Majesty the Queen
               registered as Instrument No. 16907;

          (w)  Instrument No. 1113692 is a site plan agreement registered April
               9, 1992 made between the Corporation of the City of Cambridge and
               Courtice Steel Inc. (affecting the lands FIRSTLY and SECONDLY
               described);

          (x)  Instrument No. 1186874 registered September 28, 1993 being a site
               plan control agreement made between the Corporation of the City
               of Cambridge and Courtice Steel Inc. (affecting the lands FIRSTLY
               and SECONDLY described);

          (y)  Instrument No. 1193190 registered November 18, 1993 being a site
               plan agreement made between the Corporation of the City of
               Cambridge and Courtice Steel Inc. (affecting the lands FIRSTLY
               and SECONDLY described);

          (z)  restrictive covenants registered as Instrument Nos. 593522,
               657448, 664863, 666649, 672553, 719704, 731985, 1181143 and
               1272674;

          (aa) Instrument No. 718821 is a demand debenture registered October
               31, 1989 made between Courtice Steel Inc. and The
               Toronto-Dominion Bank securing an original principal sum of
               $50,000,000 as amended by a supplemental debenture registered as
               Instrument No. 1258106 on June 28, 1995 and further amended by a
               debenture amending agreement registered as Instrument No. 1314747
               on November 12, 1996 (collectively, the "Courtice Original
               Debenture")

          (bb) Instrument No. 732365 is a demand debenture registered June 28,
               1990 made between Courtice Steel Inc. and The Toronto-Dominion
               Bank as amended by

<PAGE>
                                    - 171 -

               a supplemental debenture registered as Instrument No. 1258107
               registered June 28, 1995 (collectively the "Courtice Supplemental
               Debenture");

          (cc) Instrument No. 1342135 registered June 23, 1997 is an
               encroachment agreement made between the Corporation of the City
               of Cambridge and Gerdau Courtice Steel Inc. with respect to a
               right to allow Gerdau Courtice Steel's storm sewer pipe to
               encroach on the southerly limit of the public road allowance;

          (dd) Any reservations, limitations, provisos and conditions expressed
               in the original grant from the Crown, as the same may be varied
               by statute;

          (ee) Any right of expropriation, access or user or any similar rights
               conferred or reserved by or in any Statutes of Canada or the
               Province of Ontario;

          (ff) Any unregistered easements, rights of access or rights-of-way,
               not disclosed by the registered title;

          (gg) Any governing municipal by-laws other than those disclosed in
               this opinion;

          (hh) The rights of persons having unperfected liens under the
               Construction Lien Act to the extent of any deficiency in
               holdbacks required to be retained by the owner of the Property
               under that Act;

          (ii) Any unregistered statutory charge arising under the Bankruptcy
               and Insolvency Act (Canada) in respect of amounts expended by any
               governmental authority to remediate any environmental condition;

          (jj) Liens for taxes not due or payable.

          (kk) Liens for public utility accounts not due or payable.

          (ll) Any errors, omissions, encroachments or discrepancies which may
               be revealed by an up-to-date survey of the Property.

<PAGE>
                                    - 172 -

                                   SCHEDULE K
                                THE REAL PROPERTY

                           THE MANITOBA REAL PROPERTY

                 LEGAL DESCRIPTIONS AND REGISTERED ENCUMBRANCES

                   (all information is based upon Certified Titles dated
                 December 15, 1998, and all C/T's listed below evidence
                 registered ownership in "Gerdau MRM Steel Inc.")

C/T NO. 1398757

     ALL THOSE PORTIONS OF RL 21, 22 AND 24, PARISH OF ST CLEMENTS WHICH LIE TO
     THE WEST OF A LINE DRAWN WEST OF, PARALLEL WITH AND PERPENDICULARLY DISTANT
     1610 FEET FROM THE WESTERN LIMIT OF RIGHT OF WAY OF RLY PLAN 380 WLTO

REGISTERED ENCUMBRANCES

     Mortgage No. 1922866 in favour of The Toronto-Dominion Bank (the "TD
     Mortgage") Mortgage No. 1922867 in favour of The Canam Manac Group Inc.
     (the "Canam Mortgage")

C/T NO. 1398762

     ALL THAT PORTION OF RL 23, PARISH OF ST CLEMENTS WHICH LIES TO THE WEST OF
     A LINE DRAWN WEST OF, PARALLEL WITH AND PERPENDICULARLY DISTANT 1610 FEET
     PERP FROM THE WESTERN LIMIT OF RIGHT OF WAY OF RLY PLAN 380 WLTO

     REGISTERED ENCUMBRANCES
     The TD Mortgage and the Canam Mortgage (hereinafter together referred to as
     the "Permitted Mortgages")

C/T NO. 1398763

     FIRSTLY: ALL THAT PORTION OF RL 20, PARISH OF ST CLEMENTS LYING TO THE EAST
     OF THE EASTERN LIMIT OF RLY PLAN 380 WLTO, WHICH LIES TO THE WEST OF THE
     STRAIGHT PRODUCTION SLY OF THE EASTERN LIMIT OF LOT 8 PLAN 3527 WLTO EXC,
     PARCEL "A" PLAN 10373 WLTO

     SECONDLY: LOT 2 PLAN 21763 WLTO IN RL 19 PARISH OF ST CLEMENTS

     REGISTERED ENCUMBRANCES
     Easement No. J23544
     Caveat No. 217089
     The Permitted Mortgages

<PAGE>
                                    - 173 -

C/T NO. 1416136

     FIRSTLY:  LOTS 1, 2 AND 3 PLAN 3527 WLTO
               IN RL 21 AND 22 PARISH OF ST CLEMENTS

     SECONDLY: PARCELS 1 TO 5 PLAN 6736 WLTO
               EXC OUT OF SAID PARCELS 4 AND 5: PLAN 32978 WLTO
               IN RL 21 TO 28 PARISH OF ST CLEMENTS

     REGISTERED ENCUMBRANCES
     Caveat No. 144534
     Caveat No. 217089
     The Permitted Mortgages
     Caveat No. 2217728
     Caveat No. 2264931
     Builders Lien Nos. 2296942, 2311566 and 2312510

C/T NO. 1398765

     PARCEL 1: ALL THAT PORTION OF RL 24, PARISH OF ST CLEMENTS LYING TO THE
     WEST OF THE WESTERN LIMIT OF LORD SELKIRK HIGHWAY PLAN 3405 WLTO WHICH LIES
     TO THE EAST OF A LINE DRAWN SLY AT RIGHT ANGLES TO THE NORTHERN LIMIT OF
     SAID LOT, FROM A POINT IN THE SAME DISTANT WLY THEREON 660 FEET FROM SAID
     WESTERN LIMIT, EXC, FIRSTLY: PARCEL 3 PLAN 6736 WLTO AND SECONDLY: ROAD
     PLAN 10247 WLTO

     PARCEL 2: ALL THAT PORTION OF THE SLY 66 FEET PERP OF RL 25 OF SAID PARISH
     LYING TO THE WEST OF THE WESTERN LIMIT OF SAID HIGHWAY PLAN 3405 WLTO WHICH
     LIES TO THE EAST OF A LINE DRAWN NLY AT RIGHT ANGLES TO THE SOUTHERN LIMIT
     OF SAID LOT 25 FROM A POINT IN THE SAME DISTANT WLY THEREON 660 FEET FROM
     SAID WESTERN LIMIT.

     REGISTERED ENCUMBRANCES
     The Permitted Mortgages

C/T NO. 1398786

     LOT 9 PLAN 3527 WLTO IN RL 21 AND 22 PARISH OF ST CLEMENTS

     REGISTERED ENCUMBRANCES
     The Permitted Mortgages

C/T NO. 1398787

     LOTS 4, 5 AND 6 PLAN 3527 WLTO IN RL 21 AND 22 PARISH OF ST CLEMENTS
<PAGE>
                                    - 174 -

     REGISTERED ENCUMBRANCES
     The Permitted Mortgages

C/T NO. 1398788

     E 1/2 OF LOT 7 PLAN 3527 WLTO IN RL 21 AND 22 PARISH OF ST CLEMENTS

     REGISTERED ENCUMBRANCES
     The Permitted Mortgages

C/T NO. 1398804

     W 1/2 OF LOT 7 PLAN 3527 WLTO IN RL 21 AND 22 PARISH OF ST CLEMENTS

     REGISTERED ENCUMBRANCES
     The Permitted Mortgages

C/T NO. 1398805

     ALL THAT PORTION OF RL 23, PARISH OF ST CLEMENTS, BOUNDED AS FOLLOWS: ON
     THE NORTH BY A LINE DRAWN SOUTH OF, PARALLEL WITH AND PERPENDICULARLY
     DISTANT 99 FEET FROM THE NORTHERN LIMIT OF SAID LOT ON THE EAST BY THE
     WESTERN LIMIT OF PARCEL 3 PLAN 6736 WLTO ON THE SOUTH BY A LINE DRAWN NORTH
     OF, PARALLEL WITH AND PERPENDICULARLY DISTANT 66 FEET FROM THE SOUTHERN
     LIMIT OF SAID LOT AND ON THE WEST BY THE EASTERN LIMIT OF PARCEL 4 PLAN
     6736 WLTO

     REGISTERED ENCUMBRANCES
     The Permitted Mortgages

C/T NO. 1398806

     ALL THAT PORTION OF THE SLY 66 FEET PERP OF RL 23 PARISH OF ST CLEMENTS,
     LYING TO THE WEST OF THE WESTERN LIMIT OF THE LORD SELKIRK HIGHWAY PLAN
     3405 WLTO WHICH LIES TO THE EAST OF A STRAIGHT LINE DRAWN SLY AT RIGHT
     ANGLES TO THE NORTHERN LIMIT OF RL 24 OF SAID PARISH, FROM A POINT THEREIN
     DISTANT WLY THEREON 660 FEET FROM THE WESTERN LIMIT OF SAID HIGHWAY EXC,
     PARCEL 3 PLAN 6736 WLTO

     REGISTERED ENCUMBRANCES
     The Permitted Mortgages

C/T NO. 1398808

     LOT 8 PLAN 3527 WLTO IN RL 21 AND 22 PARISH OF ST CLEMENTS

<PAGE>
                                    - 175 -

     REGISTERED ENCUMBRANCES
     The Permitted Mortgages

C/T NO. 1398809

     ALL THAT PORTION OF THE SLY 66 FEET PERP OF RL 25 PARISH OF ST CLEMENTS
     WHICH LIES BETWEEN 2 LINES DRAWN AT RIGHT ANGLES TO THE SOUTHERN LIMIT OF
     SAID LOT FROM POINTS IN THE SAME DISTANT WLY THEREON 660 FEET AND 666 FEET
     FROM THE WESTERN LIMIT OF THE LORD SELKIRK HIGHWAY PLAN 3405 WLTO

     REGISTERED ENCUMBRANCES
     The Permitted Mortgages

C/T NO. 1398811

     ALL THAT PORTION OF RL 21, PARISH OF ST CLEMENTS, TAKEN FOR SUNNYSIDE ROAD
     PLAN 3527 (NOW CLOSED) WHICH LIES TO THE WEST OF THE STRAIGHT PRODUCTION
     SLY OF THE WESTERN LIMIT OF LOT 8 PLAN 3527 WLTO EXC, ALL MINES AND
     MINERALS

     REGISTERED ENCUMBRANCES
     Caveat No. 217089
     The Permitted Mortgages

C/T NO. 1398813

     PARCEL 1: ALL THAT PORTION OF RL 23, PARISH OF ST CLEMENTS BOUNDED AS
     FOLLOWS: ON THE NORTH AND SOUTH BY 2 LINES DRAWN SOUTH OF, PARALLEL WITH
     AND PERPENDICULARLY DISTANT 99 FEET AND 149 FEET FROM THE NORTHERN LIMIT OF
     SAID RL, ON THE EAST BY THE WESTERN LIMIT OF THE LORD SELKIRK HIGHWAY PLAN
     3405 WLTO AND ON THE WEST BY A LINE DRAWN SLY AT RIGHT ANGLES TO THE
     NORTHERN LIMIT OF THE HEREIN DESCRIBED PARCEL OF LAND FROM A POINT IN THE
     SAME DISTANT WLY THEREON 80 FEET FROM WESTERN LIMIT OF SAID HIGHWAY EXC,
     ROAD PLAN 10247 WLTO.

     PARCEL 2: ALL THAT PORTION OF THE NLY 99 FEET PERP OF SAID RL 23 LYING TO
     THE WEST OF THE WESTERN LIMIT OF THE LORD SELKIRK HIGHWAY PLAN 3405 WLTO
     WHICH LIES TO THE EAST OF A LINE DRAWN AT RIGHT ANGLES TO THE NORTHERN
     LIMIT OF RL 24 OF SAID PARISH FROM A POINT THEREIN DISTANT WLY THEREON 660
     FROM THE FEET SAID WESTERN LIMIT EXC OUT OF PARCEL 2, FIRSTLY: PARCEL 3
     PLAN 6736 WLTO AND SECONDLY: ROAD PLAN 10247 WLTO.

     REGISTERED ENCUMBRANCES
     The Permitted Mortgages
<PAGE>
                                    - 176 -

C/T NO. 1398815

     LOT 10 PLAN 3527 WLTO EXC, THE WLY 134 FEET OF THE SLY 150 FEET IN RL 21
     AND 22 PARISH OF ST CLEMENTS

     REGISTERED ENCUMBRANCES
     The Permitted Mortgages

C/T NO. 1398818

     ALL THAT PORTION OF RL 23, PARISH OF ST CLEMENTS, BOUNDED AS FOLLOWS: ON
     THE EAST BY THE WESTERN LIMIT OF THE LORD SELKIRK HIGHWAY PLAN 3405 WLTO ON
     THE WEST BY THE EASTERN LIMIT OF PARCEL 3 PLAN 6736 WLTO ON THE SOUTH BY A
     LINE DRAWN NORTH OF, PARALLEL WITH AND PERPENDICULARLY DISTANT 66 FEET FROM
     THE SOUTHERN LIMIT OF SAID RL AND ON THE NORTH BY A LINE DRAWN SOUTH OF,
     PARALLEL WITH AND PERPENDICULARLY DISTANT 99 FEET FROM THE NORTHERN LIMIT
     OF SAID RL EXC, FIRSTLY: ALL THAT PORTION OF THE NLY 50 FEET PERP WHICH
     LIES TO THE EAST OF A LINE DRAWN AT RIGHT ANGLES TO THE NORTHERN LIMIT OF
     THE LAND ABOVE DESCRIBED FROM A POINT IN THE SAME DISTANT WLY THEREON 80
     FEET FROM SAID WESTERN LIMIT AND SECONDLY: PUBLIC ROAD PLAN 10247 WLTO

     REGISTERED ENCUMBRANCES
     The Permitted Mortgages

C/T NO. 1398819

     ALL THAT PORTION OF RL 21, PARISH OF ST CLEMENTS TAKEN FOR SUNNYSIDE ROAD
     (NOW CLOSED) CONTAINED WITHIN THE LIMITS SHOWN PINK ON PLAN 3527 WLTO,
     LYING TO THE EAST OF THE STRAIGHT PRODUCTION SLY OF THE WESTERN LIMIT OF
     LOT 8 PLAN 3527 WLTO, WHICH LIES TO THE WEST OF THE STRAIGHT PRODUCTION SLY
     OF THE WESTERN LIMIT OF ELY 55 FEET OF SAID LOT 8 EXC, ALL MINES AND
     MINERALS

     REGISTERED ENCUMBRANCES
     The Permitted Mortgages

C/T NO. 1398820

     LOT 1 PLAN 20926 WLTO IN RL 28 AND 29 PARISH OF ST CLEMENTS

     REGISTERED ENCUMBRANCES
     The Permitted Mortgages

<PAGE>
                                    - 177 -

C/T NO. 1398821

     ALL THOSE PORTIONS OF RL 26 AND 27, PARISH OF ST CLEMENTS LYING TO THE WEST
     OF PARCEL 5 PLAN 6736 WLTO WHICH LIE TO THE EAST OF THE EASTERN LIMIT OF
     THE RIGHT OF WAY OF RLY PLAN 380 WLTO

     REGISTERED ENCUMBRANCES
     Caveat No. 198384
     The Permitted Mortgages
     Builders Lien Nos. 2296942, 2311566 and 2312510

C/T NO. 1398824

     ALL THOSE PORTIONS OF RL 19 AND 20, PARISH OF ST CLEMENTS WHICH LIE TO THE
     WEST OF THE WESTERN LIMIT OF THE RIGHT OF WAY OF RLY PLAN 380 WLTO

     REGISTERED ENCUMBRANCES
     The Permitted Mortgages

C/T NO. 1398826

     ALL THAT PORTION OF RL 25, PARISH OF ST CLEMENTS LYING TO THE WEST OF THE
     WESTERN LIMIT OF THE RIGHT OF WAY OF RLY PLAN 380 WLTO WHICH LIES TO THE
     EAST OF A LINE DRAWN WEST OF, PARALLEL WITH AND PERPENDICULARLY DISTANT
     1082 FEET FROM SAID WESTERN LIMIT

     PERMITTED LIENS
     The Permitted Mortgages

C/T NO. 1398827

     LOT 1 PLAN 18880 WLTO IN RL 21 TO 25 PARISH OF ST CLEMENTS

     REGISTERED ENCUMBRANCES
     The Permitted Mortgages

C/T NO. 1398830

     LOT 1 PLAN 16426 WLTO IN RL 27 AND 28 PARISH OF ST CLEMENTS

     REGISTERED ENCUMBRANCES
     The Permitted Mortgages

C/T NO. 1398831

     LOT 1 PLAN 26644 WLTO IN RL 27 TO 30 PARISH OF ST CLEMENTS

<PAGE>
                                    - 178 -

     REGISTERED ENCUMBRANCES
     The Permitted Mortgages

C/T NO. 1398833

     ALL THOSE PORTIONS OF RL 26, 27 AND 28, PARISH OF ST CLEMENTS LYING TO THE
     WEST OF A LINE DRAWN PARALLEL WITH THE WESTERN LIMIT OF THE RIGHT OF WAY OF
     RLY PLAN 380 WLTO AND ITS STRAIGHT PRODUCTIONS AND PERPENDICULARLY DISTANT
     WLY THEREFROM 99 FEET EXC OUT OF RL 27 AND 28, PLANS 16426 AND 26644 WLTO

     REGISTERED ENCUMBRANCES
     The Permitted Mortgages

C/T NO. 1398835

     LOT 1 PLAN 21763 WLTO IN RL 19 PARISH OF ST CLEMENTS

     REGISTERED ENCUMBRANCES
     Easement No. J23544
     The Permitted Mortgages

C/T NO. 1507428

     LOT 2 PLAN 34782 WLTO IN RL 28 TO 31 PARIS OF ST CLEMENTS

     REGISTERED ENCUMBRANCES
     The Permitted Mortgages
     Caveat No. 2059433
     Caveat No. 2059434
     Caveat No. 2087192
     Caveat No. 2162371

C/T NO. 1507432

     LOT 3 PLAN 34782 WLTO IN RL 28 TO 31 PARISH OF ST CLEMENTS

     REGISTERED ENCUMBRANCES
     The Permitted Mortgages
     Caveat No. 2059433
     Caveat No. 2059434
     Caveat No. 2087192
<PAGE>
                                    - 179 -

ENCUMBRANCES OUTSTANDING AGAINST GERDAU MRM STEEL INC. REAL PROPERTY

<TABLE>

<S>                                     <C>
1.   Secured Party:                     Greater Winnipeg Gas Company
     Date Registered:                   May 7, 1969
     Registration Number:               J23544
     Consideration:                     0
     Comments:                          Easement

2.   Secured Party:                     Manitoba Hydro Electric Board
     Date Registered:                   217089
     Registration Number:               September 23, 1970
     Consideration:                     0
     Comments:                          Caveat

3.   Secured Party:                     Manitoba Power Commission
     Date Registered:                   October 26, 1942
     Registration Number:               144534
     Consideration:                     0
     Comments:                          Caveat

4.   Secured Party:                     Manitoba Hydro Electric Board
     Date Registered:                   July 14, 1965
     Registration Number:               198384
     Consideration:                     0
     Comments:                          Caveat

5.   Secured Party:                     The Canam Manac Group Inc.
     Date Registered:                   June 29, 1995
     Registration Number:               1922867
     Consideration:                     $30,000,000
     Comments:                          Mortgage

6.   Secured Party:                     Royal Bank of Canada
     Date Registered:                   September 10, 1996
     Registration Number:               2059433
     Consideration:                     0
     Comments:                          Caveat as to equitable mortgage and
                                        charge of the interest of 658817 Alberta
                                        Ltd., as lessee

7.   Secured Party:                     Royal Bank of Canada
     Date Registered:                   September 10, 1996
     Registration Number:               2059434
     Consideration:                     0
     Comments:                          Caveat as to equitable mortgage and
                                        charge by virtue of Mortgage of Lease by
                                        way of Sub-lease, executed by 658817
                                        Alberta Ltd.

</TABLE>

<PAGE>
                                    - 180 -

<TABLE>

<S>                                     <C>
8.   Secured Party:                     Manitoba Development Corporation
     Date Registered:                   November 29, 1996
     Registration Number:               2087192
     Consideration:                     0
     Comments:                          Charge granted by 658817 Alberta Ltd. to
                                        Manitoba Development Corporation over
                                        its interest in an Option Agreement to
                                        acquire title to lands described in
                                        C/T1507428

9.   Secured Party:                     658817 Alberta Ltd. and Black Cat Blades
                                        Ltd.
     Date Registered:                   July 15, 1997
     Registration Number:               2162371
     Consideration:                     0
     Comments:                          Option to purchase lands described in
                                        C/T150728 in favour of 658817 Alberta
                                        Ltd. and Black Cat Blades Ltd.

</TABLE>

<PAGE>
                                    - 181 -

                                   SCHEDULE L
                                SECURITY SCHEDULE

PRIOR SECURITY

1.   Given by Courtice

     (a)  Guarantee of MRM's obligations dated as of December 18, 1998

     (b)  Guarantee of Gerdau Steel's obligations dated as of December 18, 1998

     (c)  Cdn.$50,000,000 Debenture dated October 31, 1989

     (d)  Debenture Pledge Agreement dated October 31, 1989

     (e)  Cdn.$50,000,000 Supplemental Debenture dated June 27, 1990

     (f)  Debenture Pledge Agreement dated June 27, 1990

     (g)  Debenture Amending Agreement dated November 8, 1996

     (h)  Debenture Delivery Agreement dated November 8, 1996

2.   Given by MRM

     (a)  Guarantee of Courtice's obligations dated as of December 18, 1998

     (b)  Guarantee of Gerdau Steel's obligations dated as of December 18, 1998

     (c)  Cdn.$80,000,000 Fixed and Floating Charge Debenture dated June 27,
          1995

     (d)  Hypothecation and Pledge of Debenture dated June 27, 1995

     (e)  U.S.$20,000,000 Working Capital General Security Agreement (Inventory
          and Receivables) dated as of November 8, 1996

     (f)  Guarantee of Porter's obligations dated as of December 18, 1998

3.   Given by Gerdau Steel

     (a)  Guarantee of Courtice's obligations dated as of December 18, 1998

     (b)  Guarantee of MRM's obligations dated as of December 18, 1998

4.   Given by Gerdau S.A.

     (a)  Cdn.$50,000,000 Guarantee of Courtice's obligations dated as of
          December 18, 1998

<PAGE>
                                    - 182 -

     (b)  Cdn.$50,000,000 Guarantee of MRM's obligations dated as of December
          18, 1998

5.   Given by Porter

     (a)  Guarantee of MRM's obligations dated as of December 18, 1998

6.   Given by GTL

     (a)  Subordination by GTL in respect of Gerdau Steel and Courtice
          promissory notes

7.   Given by Oruscom S.A.

     (a)  Subordination by Oruscom S.A. in respect of Gerdau Steel promissory
          note

OTHER EXISTING SECURITY

8.   Given by Courtice

     (a)  Guarantee of obligations of MRM and Gerdau Steel

     (b)  Guarantee of MRM Holdings' obligations

     (c)  Cdn.$350,000,000 Fixed and Floating Demand Debenture

     (d)  Debenture Delivery Agreement

     (e)  Security under Section 427 of the Bank Act (Canada) in favour of
          Citibank Canada

     (f)  Security under Section 427 of the Bank Act (Canada) in favour of The
          Chase Manhattan Bank of Canada

     (g)  Security under Section 427 of the Bank Act (Canada) in favour of The
          Toronto-Dominion Bank

     (h)  Working Capital Security Agreement (Inventory and Receivables)

     (i)  Guarantee of obligations of USP

9.   Given by MRM

     (a)  Guarantee of obligations of Courtice and Gerdau Steel

     (b)  Guarantee of MRM Holdings' obligations

     (c)  Cdn.$350,000,000 Fixed and Floating Demand Debenture

     (d)  Debenture Delivery Agreement

<PAGE>
                                    - 183 -

     (e)  Security under Section 427 of the Bank Act (Canada) in favour of
          Citibank Canada

     (f)  Security under Section 427 of the Bank Act (Canada) in favour of The
          Chase Manhattan Bank of Canada

     (g)  Security under Section 427 of the Bank Act (Canada) in favour of The
          Toronto-Dominion Bank

     (h)  Working Capital Security Agreement (Inventory and Receivables)

     (i)  Stock Pledge of all issued Porter, MFT and MRM America shares, with
          deposit of stock certificates

     (j)  Guarantee of obligations of USP

10.  Given by Gerdau Steel

     (a)  Guarantee of obligations of Courtice and MRM

     (b)  Guarantee of MRM Holdings' obligations

     (c)  Cdn.$350,000,000 Fixed and Floating Demand Debenture

     (d)  Debenture Delivery Agreement

     (e)  Security under Section 427 of the Bank Act (Canada) in favour of
          Citibank Canada

     (f)  Security under Section 427 of the Bank Act (Canada) in favour of The
          Chase Manhattan Bank of Canada

     (g)  Security under Section 427 of the Bank Act (Canada) in favour of The
          Toronto-Dominion Bank

     (h)  Working Capital Security Agreement (Inventory and Receivables)

     (i)  Share Pledge of all issued Courtice and MRM Holdings shares, with
          deposit of share certificates

     (j)  Stock Pledge of all issued Gerdau USA shares, with deposit of stock
          certificates

     (k)  Guarantee of obligations of USP

11.  Given by MRM Holdings

     (a)  Guarantee of obligations of Gerdau Steel and MRM

     (b)  Cdn.$350,000,000 Fixed and Floating Charge Debenture

<PAGE>
                                    - 184 -

     (c)  Debenture Delivery Agreement

     (d)  Share Pledge of all issued MRM shares, with deposit of share
          certificates

12.  Given by Porter

     (a)  Cdn.$350,000,000 Guarantee of obligations of Courtice, MRM and Gerdau
          Steel

     (b)  Security Agreement

     (c)  Working Capital Security Agreement (Inventory and Receivables)

13.  Given by Gerdau USA

     (a)  Cdn.$350,000,000 Guarantee of Gerdau Steel's obligations

     (b)  Stock Pledge of all issued FLS shares held by Gerdau USA, with deposit
          of stock certificates

14.  Given by FLS

(a)  Cdn.$350,000,000 Guarantee of Gerdau Steel's obligations

(b)  Stock Pledge of all issued Capital Stock of AmeriSteel held by FLS, with
     deposit of stock certificate

15.  Given by Gerdau S.A.

(a)  Cdn.$350,000,000 Guarantee of obligations of Courtice, MRM and Gerdau Steel

(b)  Subordination Agreements

16.  Given by GTL Netherlands

     (a)  Subordination by GTL Netherlands in respect of Gerdau Canada Group
          Indebtedness

17.  Given by Oruscom S.A.

     (a)  Subordination by Oruscom S.A. in respect of Gerdau Steel promissory
          note

18.  Given by all Gerdau S.A. Group Members (excluding the Intermediate Holding
     Company, the Gerdau Canada Subgroup Interim Holding Company and the Gerdau
     Canada Subgroup Holding Company) and the Agent

     (a)  Security Co-ordination Agreement among all the aforesaid Gerdau S.A.
          Group Members and the Agent

<PAGE>
                                    - 185 -

19.  Given by the Gerdau Canada Group and Gerdau S.A.

     (a)  Confirmation of Security Agreement, among the Gerdau Canada Group and
          Gerdau S.A. in favour of the Agent

20.  Given by USP

     (a)  Guarantee of obligations of each of Gerdau Steel, Courtice and MRM

     (b)  Security Agreement

     (c)  Stock Pledge, with deposit of share certificates representing all
          shares in NSULC

21.  Given by NSULC

     (a)  Guarantee of obligations of each of Gerdau Steel, Courtice, MRM and
          USP

     (b)  Stock Pledge, with deposit of stock certificates representing all
          special shares in Gerdau USA and all shares in Finco

22.  Given by Finco

     (a)  Guarantee of obligations of each of Gerdau Steel, Courtice, MRM and
          USP

     (b)  Pledge, with deposit of U.S.$182,000,000 promissory notes issued by
          Gerdau USA

23.  Given by each of Gerdau S.A., Gerdau Steel, Courtice, USP, MRM, MRM
     Holdings, Porter, Gerdau USA, FLS, NSULC and Finco

     (a)  Confirmation of Security Agreements in favour of the Agent

24.  Given by Gerdau USA

     (a)  Confirmation of Deposit of Share Certificate.

NEW SECURITY

25.  To be given by Gerdau Canada Subgroup Interim Holding Company

     (a)  Guarantee of obligations of Courtice, MRM, Gerdau Steel and USP

     (b)  Delivery of share certificates representing the Exchanged Co-Steel
          Shares

26.  To be given by Gerdau Steel

     (a)  Delivery of share certificates representing the issued Capital Stock
          of the Gerdau Canada Subgroup Interim Holding Company and the
          Exchanged Co-Steel Shares

<PAGE>
                                    - 186 -

     to be held by the Agent pursuant to the Gerdau Steel Cdn.$350,000,000
     Debenture

27.  To be given by each applicable Gerdau S.A. Group Member

     (a)  Confirmation of Guarantees and Security Agreements in favour of the
          Agent

<PAGE>
                                    - 187 -

                                   SCHEDULE M
                      FORM OF REPAYMENT/CANCELLATION NOTICE

TO:       The Toronto-Dominion Bank
          66 Wellington Street West, 38th Floor
          Toronto Dominion Bank Tower
          Toronto, Ontario
          M5K 1A2

          Attention: Vice President, Loan Syndications - Agency

RE:       GERDAU STEEL INC.

          Reference is made to an amended and restated loan agreement (the "LOAN
AGREEMENT") initially dated as of November 8, 1996, as further amended and
restated by agreement dated as of October 22, 2002, and as further amended,
supplemented, restated or novated from time to time, among Gerdau Steel Inc. and
Gerdau Courtice Steel Inc., Gerdau MRM Steel Inc. and GUSAP Partners, as
Borrowers, the Institutions named therein as Lenders and The Toronto-Dominion
Bank as Agent. All terms used in this Repayment Notice which are defined in the
Loan Agreement have the respective meanings attributed to them in the Loan
Agreement.

          [Notice is hereby given in accordance with Section [      ] of the
Loan Agreement that the undersigned wishes to cancel the [Revolver/Term]
Facility by the amount of Cdn.$[      ].]*

          Notice is hereby given in accordance with Section [      ] of the Loan
Agreement that the undersigned wishes to repay a Borrowing, and in connection
therewith, the undersigned advises the Agent that the [specify type of
Borrowing] in the amount of [specify amount and currency] will be repaid on
[specify date].

                  DATED as of the [      ] day of [      ], [      ]. *
                                        ----------------------------------------

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

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

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

* AS APPLICABLE

<PAGE>
                                    - 188 -

                                   SCHEDULE N
                        ENVIRONMENTAL DISCLOSURE SCHEDULE

                                      None

<PAGE>
                                    - 189 -

                                   SCHEDULE O
                          INTELLECTUAL PROPERTY RIGHTS

1.   Courtice and MRM License the use of the Gerdau name and marks from an
     affiliate of Gerdau S.A. Beheer-en Beleggingsmaatshappij Hagrola B.V.

2.   Trade-Mark: GERDAU & Design - Registration No. 410,293 - Registered April
     2, 1993

     Owner: Courtice Steel Inc.

     This mark is registered for metal products, namely, pig iron, continuous
     casting billets, concrete reinforcing bars, angles, channels, galvanized
     wire, annealed wire, etc.

<PAGE>
                                    - 190 -

                                   SCHEDULE P
                             CHIEF EXECUTIVE OFFICES

<TABLE>
<CAPTION>

GERDAU S.A. GROUP MEMBER                                              LOCATION
------------------------                                            ------------
<S>                                                                 <C>
Courtice                                                               Ontario

MRM                                                                   Manitoba

Gerdau Steel                                                           Ontario

USP                                                                    Ontario

MRM Holdings                                                           Ontario

Gerdau Canada Subgroup Interim Holding Company                         Ontario

Gerdau Canada Subgroup Holding Company                               Nova Scotia

Gerdau USA                                                            Delaware

AmeriSteel                                                             Florida

NSULC                                                                Nova Scotia

Finco                                                                 Delaware

Porter                                                              North Dakota

Gerdau S.A.                                                            Brazil

MFT                                                                   Delaware

MRM America                                                           Delaware

AmeriSteel Bright Bar                                                   Ohio

</TABLE>

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00045-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00045-of-00352.parquet"}]]